Cayman four to five decades ago was a different place to now, in those days populated by an entire generation willing to embrace change for the betterment of the whole country.
In recent times however, as a product of Cayman’s economic growth phase, people have had it easy and have become complacent and resistant to change. The Islands need to once again think innovatively if the population is to continue to enjoy the affluence of recent times. These are the views of lecturer and professor with Peterborough, Ontario’s Trent University, Tom Philips, in Cayman just recently to speak about Cayman’s economic journey. The Journal finds out more.
The period 1975 to 2003 was a time of tremendous growth for the Cayman Islands, unlike comparative populations of North America.
“If I were to compare my life, born in 1955 and growing up in a small town in Canada, compared to that of a Caymanian, there would be no contest as to who had witnessed the most change in their country,” Tom Phillips states.
“Change was fundamental to the success of the Cayman Islands and if the population had not embraced change it would not be where it is today.”
Phillips calls the fundamental shift in the socioeconomic foundations of the economy a transformation, which embraced rapid technological change as well as the liberalisation of international finance. Above all, there was an acceptance of change among the population.
From growth to competition
Phillips sees a shift in this transformation taking place in 2004; marked by Hurricane Ivan but not caused by it.
According to Phillips, Cayman’s economy moved from growth to competition and became pressured by the law of diminishing returns. At the same time, the affluent society of the Cayman Islands had taken on a different attitude towards change – believing it to be a threat rather than an opportunity.
“During the growth period people could make mistakes and still make money,” he says.
“Now during the competitive cycle if you make a mistake you lose money. People who got in at the beginning and have naturally moved up within an organisation just because of growth will find difficulties because now it is not just about growth; it’s about being competitive.”
Looking at the broad issue of Cayman’s economy as a product of the twin service industries of financial services and tourism, Phillips says that there are two ways of approaching Cayman’s economic future.
One way is to take the limiting view and simply look at what we already have and use it in the best way possible to continue on the same path while at the same time accepting the status quo and resisting change.
“This view is unsustainable in a changing economic environment,” Phillips comments.
The second approach is to invest (rather than consume) some of what we have today to position the country for change and growth.
The downside to economic monoculture
Using an agricultural analogy, Phillips said that like the huge farms of today that invest in single crops, Cayman can become subject to “disease” which could wipe out large swathes of its “crop”.
“Economic monoculture is vulnerable and needs diversity to become resistant to disease and thrive. Economies need to have counter-cyclical strategies so that when the economy is in recession, there are aspects of the economy, which will simultaneously boom,” he says.
The challenge that Cayman faces to embrace counter cyclical sectors of industry is for the population to avoid complacency and revive the culture of change inherent in generations of the past few decades.
“The generations of the past really had tremendous foresight,” he says. “But now with the next generation of Caymanians they have grown accustomed to their affluence and are afraid it will be lost if they accept change.”
Broadening the economy
Phillips sees two specific areas of industry in which Cayman could become highly successful as a service-orientated economy – healthcare and education.
“Cayman has already proved it can be a centre of excellence for financial services and it can do it again with healthcare and education,” he says.
Through education, training, and management the development of the health sector will serve Cayman and global demand, Phillips believes.
“I think the 2,000-bed hospital that Dr. Shetty is hoping to develop makes sense for the Cayman Islands,” he says, referring to the Narayana Cayman University Medical Centre, slated to begin construction next year, once certain legislation has been amended.
“Although there will be an influx of medical staff from overseas with this project I foresee great benefits for Caymanians as well.”
Education, clearly a topic close to Phillips’ heart, having lectured at the University College of the Cayman Islands from 2004 to 2006 and having studied in Canada with the president of the UCCI, Roy Bodden years ago.
“The Education Minister Rolston Anglin got it right when he recently said that Cayman has an employability problem, not an unemployment problem,” Phillips says. “This type of structural unemployment runs throughout all sectors of industry within Cayman. However, Phillips says it should be noted that there is a big difference between training and education.
“Education comes first,” he says. “Once education succeeds in creating a strong foundation then training can build upon this foundation. But you cannot simply train Caymanians without the basic education as this would simply create a narrow specialisation which cannot compete when the economy changes.”
In an affluent society such as the Cayman Islands’, Phillips says that it is a social obligation of society to provide opportunities for future generations via education.
“It is part of the history of success for sustainable economies,” he says.
Phillips believes that a cultural shift needs to take place whereby education is valued again within society. At the same time he also would love to see noted international academics attracted to Cayman’s UCCI, who would in turn attract scholars wishing to learn from these noted academics, as well as other professors and academics.
“You would need around 20 top notch professors, all the top of their field, from philosophy to physics, and this would make the Cayman Islands a focal point for education regionally,” he states.
“Cayman could become a top research centre and the economic benefits from this could be great. There is nowhere currently in the Caribbean that really excels as a centre for academic research.”
Change, according to Phillips, is an absolute necessity.
“The Cayman Islands economy of today won’t survive in five years time, let alone 10,” he confirms.
“To do this, existing business models need to be changed. Cayman has the opportunity to step into a new era of post secondary education as well as the healthcare sector. Cayman has enough resources and talent to make it happen.”