Scott Lines, left inset, said that the “Bermuda economy continues to struggle” even though Government has made a successful effort to show that the island is a place to do business. *File photos
Scott Lines, left inset, said that the “Bermuda economy continues to struggle” even though Government has made a successful effort to show that the island is a place to do business. *File photos

Bermuda is taking major hits in the job creation war.

This from Scott Lines, president of CEO of LOM in a letter to shareholders.

Mr Lines said that the “Bermuda economy continues to struggle” even though Government has made a successful effort to show that the island is a place to do business.

However, he said the island has to face two realities.

“Firstly, creating growth in any context takes much longer than destroying it. It can take 30 years to grow a tree, while chopping it down is the work of a morning. Secondly, Bermuda has experienced a technologically driven paradigm shift that will continue to significantly affect employment and job location.”

Mr Lines said the Internet and computing have dramatically changed how the world does business.

 “Most if not all of the work interaction is now flowing through computer systems. Internet connectivity between offices, utilizing voice and video over the internet, have dramatically improved communication between offices in separate countries, and has resulted in face-to-face meetings being held where many of the attendees are thousands of miles apart.

“This has dramatically improved productivity; however it also means that any size company can re-locate executive, administrative or support jobs to more attractive jurisdictions. Sometimes the decision is driven not by salaries, but due to ancillary benefits such as subsidies, office rents, medical costs, electricity, connectivity costs, lower friction costs (such as work permits and work visas), or even simply due to a perceived lower risk environment.

“So not only has technology made it possible to shift the production of services to more attractive centres, but governments around the world are actively competing for those jobs.

“There is a jobs creation war going on, with many developed nations implementing policies, tax breaks and subsidies in order to attract these now mobile and transportable service jobs.

“Bermuda is a service-based economy that is now fully exposed to the winds of international competition in attracting service jobs. This is not only directly impacting job creation in Bermuda, and verymuch impacting the creation of well-paid middle management or entry-level jobs, but that competition also has the potential to quietly siphon jobs out of Bermuda.

“We have lost over 5,000 jobs over the last five years. Without a substantive change in productivity, to have economic growth we need to add workers. That will not be an easy task given the global environment. Bermudians will need to accept that the world has changed, andthat necessitates dramatic and often uncomfortable changes for all of us.”