Cover Story: IoM joins the cluster race


In the latest in our round table debates, SMI brings together leading players in the Isle of Man shipping cluster to talk about the issues driving growth in the cluster. Moderated by Sean Moloney, SMI Editorial Director, the participants included: Tony Whittaker, Company Contacts Manager and Company Secretary, Shell Ship Management; Mark Robertshaw, Brightwell Payments and Chairman of the Isle of Man Shipping Association; James Stevenson, Managing Director of Döhle (IoM); Steve George, Managing Director, EMCS; Dick Welsh, Director of the Isle of Man Ship Registry; and David Furnival, COO of Bernhard Schulte Shipmanagement

Sean Moloney
The shipping industry is undergoing a period of change with the power of the internet and what is known as the fourth industrial revolution promising to drive in its own efficiencies. How important are clusters like the Isle of Man in ensuring that shipping and all its component parts remain ahead of the curve?

Tony Whittaker
I think that any cluster that has got a centre of knowledge has an important role to play because it can offer a different viewpoint. In any large organisation there are always leaders but if they don’t listen to the views of other clusters they are randomly missing out on best practice and information they could benefit from. 

Mark Robertshaw
A cluster like the Isle of Man brings different aspects of the maritime sector together and creates opportunities. So whether it is a traditional ship manager communicating with a technology business or a ship owner communicating with the software development company, this collaboration can lead to opportunities. Whether it is development of virtual reality for seafarers who are joining a new ship for instance, because some ship owners and managers have talked about the difficulties a Master has going onboard a vessel and familiarising himself with the vessel. It is the close cooperation and identifying opportunities and listening and communicating. But clusters attract a variety of other businesses to the island. You can look at how the island has developed from traditional ship and shipmanagement to other disciplines, whether it is the super yacht sector or for software development, all driven off the back of the shipping industry.

Sean Moloney
I guess the Isle of Man is also known for hosting the online gaming industry, so I guess that means that innovation and technology is strong here on the island.

Mark Robertshaw
It is, but I also think it can be operated and carried out in a better and more focused way. For instance, the business I’m involved in is processing payments and the Isle of Man has businesses which are very strong in processing payments. But I think the island can do more and I think we can collaborate with different sectors. I was smiling as you have actually linked two very important industries here on the island – the gaming industry and the shipping industry. Yes, there are aspects that can be developed by just taking the unique points of what the island is known for and combining them.

James Stevenson
Clusters, and the Isle of Man particularly, offer a depth of knowledge and experience which is very hard to build in a short period of time. Finding staff with the depth and extent of knowledge is therefore difficult. We have experience of that difficulty on the liner shipping side but here on the Isle of Man, a combination of the knowledge and the dynamic enthusiastic critical mass of shipping is what is important to maintain and grow the cluster. In the future with the new Isle of Man Maritime organisation, which is trying to embrace a variety of new areas, we will hopefully build on the relationship between the learning, teaching and ongoing knowledge base. Then, of course, you have the fourth industrial revolution, factors such as blockchain, and how all of this will affect shipping: who knows what we could grow here with a little bit of youthful enthusiasm.

Sean Moloney
Do you see big opportunities here? 

James Stevenson
I think we must jump on this particular bandwagon because if we don’t we will be left behind. So, it is more a case of needing to keep in front of the curve rather than just sitting back and waiting.

Steve George
The amount of experience and knowledge we have here on the island is very high. But you have to remember the rich heritage in seafaring in the Isle of Man and it goes back hundreds of years. Also, because we are a small island, we have our own government and parliament here. We have very close access to Government here – and they draw on the knowledge of the local shipping industry very closely. And if they need any information or assistance they will email you or even meet you in the street and ask you.

Sean Moloney
I have heard a statistic that says that 40% of the people on the island are Manx as opposed to 70% a couple of decades ago. Is this a problem and are you seeing a dilution of talent on the island?

Steve George
I think it is a good thing in attracting knowledge from outside.

Dick Welsh
I actually think it is a very positive thing because if you think of companies like LT Ugland and 7C Shipping, they came here because of the cluster. Okay, we have the flag state, but these people wouldn’t have arrived unless there were shipping people to deal with here already to provide services to the shipping industry. It was because of the strength and breadth of the sector here, and being able to be involved in what is a proactive sector. It helps us enormously but also helps to attract businesses in. The litmus test is, are we just delivering ship registry services or do we have much more than that? Have we got ship managers here, have we got lawyers here, have we got technical people here? Have we got the corporate services we need? It is all here in one package and that helps tremendously. You can talk about dilution but to other people it makes the island stronger.

Sean Moloney
When I travel around the world Dick, I keep bumping into you promoting the Isle of Man and promoting the Isle of Man flag. But what is the industry demanding of you; what does it want from a cluster like the Isle of Man?

Dick Welsh
It wants service, service, service. And we can move that to the next stage; you mentioned digitalisation. I was blown away last time I was in Singapore when we talked about putting out digital certificates with proper digital signatures. We have got a fantastic environment here where we can create change very quickly and make it happen. And I’m surprised at the amount of companies who are volunteering to do just that and who want to get on with it. This will put the Isle of Man in great stead in the future. The infrastructure we have here on the island and the data capacity and the resilience is amazing but we can’t do this on our own and if we partner up through the cluster organisation and we work this through, the Isle of Man will be issuing its own digital certificates, properly signed certificates. No longer will they be transferred by air couriers around the world. This is just the first stage. The next stage will be using cloud technology and we are ready for that.

Sean Moloney
David, what are your thoughts because you are COO of a very large shipmanagement company with centres around the world. How does the Isle of Man fit into all this?

David Furnival
When we brought the elements together to form BSM Shipmanagement, my job at the time was to help build the reputation of the company and its reputational base was different across the various centres. As far as the Isle of Man was concerned, the quality of the register underpinned everything that we wanted to achieve. Efficiency, no shortcuts, doing the right thing at the right time, appearing to support their clients, were all of the things we wanted to do with our ship owning clients. I felt well supported building that credibility across the entire organisation from a location like the Isle of Man. I knew what I was trying to achieve was right because of the success of the Isle of Man as a shipping cluster. The difference from 20 years ago when I first came here, to now, is that no single element of shipping dominates the cluster here. Everyone contributes to it and therefore everybody listens to what is being said. And I think the Isle of Man will benefit from this.

Sean Moloney
Looking at the Isle of Man as a shipmanagement centre, has it done enough to attract more shipmanagement companies onto the island? 

David Furnival
I think the Isle of Man is trying, but the reality is that third-party shipmanagement is a volume game. You need to have scale to be competitive because it is a marginal profit business. You have huge a resource requirement to meet the expectations not only of the client but from legislation, and you can’t even start thinking about digitalisation unless you have the competence and capability to digitalise and no one location can achieve that in my view. We may manage 600 ships but we have eight shipmanagement centres around the world. We have to share that work burden around the world in order to gain the required competency and resources to deliver what we are promising. 

Sean Moloney
But should the Isle of Man have grown bigger more quickly as far as shipmanagement is concerned?

David Furnival
It is a challenge for shipmanagement because there is a general migration towards the East. And that is driven by a number of factors, significantly because our seafarers come from the East. So, the future expertise coming from the ship to the shore is not so much European but is more Indian, Chinese and Filipino. And that is the reality. It may change of course, because we are seeing a balancing of wages across the world now, and I think there will be a migration back towards Europe. If we can maintain our position in the world, then growth will come again, particularly if we can be leaders in digitalisation because shipping is going in that direction. I don’t mean autonomy, I mean reducing workload by benefiting from ship-to-shore connectivity. The automatic analysis of incidents is one area we are investing a lot in at BSM, and there are a number of projects going on within shipping that are looking to improve safety performance through digitalisation and analysis. This is really happening and they are real projects out there that are industry-leading.

Sean Moloney
So if the Isle of Man continues down this path of digitalisation, you believe you will attract more ship owners and managers onto the island?

David Furnival
What I have seen over the years, is when you get good people locating to the Isle of Man, they often stay and that is fantastic. Here it is all about the quality of life and people seem to stay longer.

Mark Robertshaw
I completely agree with David’s comments. Having lived in Singapore for 15 years, it is the leading maritime cluster in the world, but the cost of doing business there is significant. The equalisation of wages and investment in digitalisation will, I think, make us a natural hub for which to relocate back into. Just to touch on the point of quality of life here, in this crazy world we live in, the Isle of Man is still one of the safest places in the world to live: without waxing lyrical about it, the quality of life here is amazing. It is an interesting place because it is both forward-looking and traditional. You can have a tremendous quality of life here and a lot of the young professionals find this a very attractive proposition.

Dick Welsh
There is one thing I noticed about this and it took me a long time to understand: if you talk to two shipping professionals in any of the other shipping clusters like Hong Kong, Singapore or Cyprus, they are generally sitting in a bar asking each other, ‘how long are you staying and where are you going next’. You never hear that conversation here. That contract mentality does not exist in the way it does in other places like Bermuda or the Far East. When it comes to the Isle of Man, the attitude is this is where I’m going to put my roots down.

Sean Moloney
Does the difficulty come in attracting people here in the first place?

Dick Welsh
The first sell can be quite difficult but we always recommend that they visit with their wives and their family and have a look around. Once that is done, the ‘stickability’ is quite incredible. But it is a step into something that many may not know about.

Mark Robertshaw
There is a sense of community here and everyone who’s ‘come over’, and that is a Manx term, tends to stay. The gaming industry has had an impact on this, indeed, 7% of our population is South African. We are a very open society here which is attractive.

Dick Welsh
The South Africans came over for the financial services sector and it has proved very beneficial for the Isle of Man rugby clubs. A big attraction is knowing that their families are safe here.

Mark Robertshaw
The Isle of Man Government has a £50m Enterprise Development Scheme to attract start-up businesses. If you have an interesting maritime start-up business and you are looking for investment or to operate in a low tax jurisdiction in an international community, then the Isle of Man is perfect. You can go in and talk to the Government and ask what is available to you in a very open way.

Dick Welsh
The Government has put aside this £50m because it is looking to invest to help develop businesses on the Isle of Man. There is also a message there that are saying we just don’t want to sit here and be what we are but we want to be something different; we want to bring in different sectors to the economy and we want to grow the population as well.

Sean Moloney
What are the challenges in living and working here on the Isle of Man?

James Stevenson
We were talking about knowledge base and I think artificial intelligence and the development of this will remove quite a tranche of demand for people (in current roles). The challenge is to move with the technology and to utilise the ingenuity of the human race – imagination is something weird and wonderful for us. The risks are also cost-related and whether we like it or not we have to recognise that we are competing with multiple locations around the world. Geographically we are probably not as close to the main trade lanes as others are, and this impacts on where companies position themselves. We must be careful not to over regulate ourselves, and one of the challenges is to educate people because the term ‘offshore’ is massively misunderstood. We are far better regulated on the Isle of Man than London. People talk about dirty money etc, but we are involved here with corporate service businesses and there is no comparison between the Isle of Man which is a highly regulated environment and London where you can set up a company for £70 today and the banks will ask you would you like to open a bank account tomorrow. So, the challenges here are the misunderstanding of ‘offshore’ which is a big problem and the banks who are under an enormous amount of pressure from external political forces, to become very risk averse.

Tony Whittaker
It is about having the right processes and the right people in place. Shell has been on the island now for 32 years and we have seen things change quite a lot over that that time. We were one of the first companies to come over here, we started small, we grew then we went back to being small again; the wheel does go in full circle but the political will is there. So, while the employment vehicle is overseas for our seafarers the management resource is based here. That does create a few problems for us, getting staff who are experienced is not always easy. The Government has helped over the years by relaxing work permit regulations with input from the island shipping community, and there are moves now to relax some of the rules on immigration, so we are going to be able to, more easily, bring people in with the expertise that we want.

Sean Moloney
David, what are your thoughts on this because the Isle of Man has always been a crew management centre?

David Furnival
From my perspective it is about specialisation, and the ships we manage are all specialist ships like LNG carriers, FPSOs etc and that requires a higher level of competence to manage effectively and we have people here who have worked here for quite a long time so we have that continuity. We also have the ability to bring people in from our Polish office for example, and over the years we have been able to bring people in from sea. Our Isle of Man office was always very focused on European seafarers.

Sean Moloney
Last year you talked about changing the structure of the Isle of Man Shipping Association into Isle of Man Maritime, resembling an entity that is more of a public-private partnership. Talk to me about developments here and about aspirations for the future?

Dick Welsh
This moving of the Isle of Man Shipping Association into an agency employing people who will actually promote the Isle of Man as a maritime cluster, and as a quality flag together, will be a very powerful tool and it will formalise everything that we have been through over the last few years and should move the cluster forward. And we need to be at the key global maritime centre events: we have to promote ourselves as you can’t wait for business to come to you. This will help enormously.

Mark Robertshaw
There has been a recognition that we are not just a shipping hub but a maritime cluster with a very diverse cross-section of businesses from software, fintech, shipowning, shipmanagement, naval architecture, marine engineering, payroll etc. So, the renaming of the Isle of Man Shipping Association to Isle of Man Maritime is recognition of that. But it is also an agency model where the Government will be working more closely with the private sector to promote the island’s unique selling points that we have touched on. Isle of Man Maritime will be a company by guarantee, it will have a combination of both private sector and Government stakeholders in that model, and it will have funding to go out and promote the Isle of Man. Not on a scale with Singapore but it will focus on attracting different niches to the island. Dick has done a tremendous job to date in flying the flag for the Isle of Man internationally but there is a great need to invest more into this and the idea is to have a dedicated Commercial Director or General Manager who will focus on bringing the cluster together, identifying further unique selling points and promoting the island to the international shipping community. The company guarantee has been incorporated and we are now in the process of working out the funding model with the Government and drawing up a job description for the Commercial Director/General Manager. The company has started but the target date for it to start operations is end of April/early May. The Isle of Man Shipping Association will move over and we will grow the off-island membership. 

Sean Moloney
So how will this entity be different from the existing Isle of Man Shipping Association 

Mark Robertshaw
Because it will have a dedicated person promoting it. The Isle of Man Shipping Association is manned by volunteers.

James Stevenson
It is about having joined up thinking so, hopefully, it will be a little bit more integrated in the delivery process.

Mark Robertshaw
Just having someone who can go and speak to Döhle or the Ship Registry and join those dots is important. We have done a great job so far on a part-time basis and that’s basically what the Isle of Man is all about in that people chip in, but having someone who can bring this all together can only be a good thing.

Sean Moloney
Gentlemen, thank you very much for your time today.