the treasury yn tashtey 20142016/2015-gd-0054.pdfthe treasury is committed to selling success...

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Marketing Initiatives Fund Annual Report 2014/15

GD 2015/0054

The Treasury

Yn Tashtey

Marketing Initiatives Fund Annual Report

For the Year Ended 31st March 2015

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(This page is intentionally blank)

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Contents 1. INTRODUCTION ............................................................................................................................... 4

2. NEW APPLICATIONS TO THE FUND ................................................................................................. 5

2.1 OPPORTUNITIES FOR ADDITIONAL GROWTH ............................................................................. 6

2.2 TOURISM STRATEGY 2015/16-2016/17 ...................................................................................... 8

3. CONTINUING APPLICATIONS TO THE FUND .................................................................................... 9

3.1 PROMOTION OF THE CAPTIVE INSURANCE INDUSTRY ............................................................. 10

3.2 SHIP REGISTRY MARKETING ...................................................................................................... 11

3.3 ICT SECTOR MARKETING STRATEGY .......................................................................................... 12

3.4 BRITISH NATIONAL ROAD CYCLING CHAMPIONSHIPS 2016 ..................................................... 13

3.5 E-GAMING EUROPEAN & UK MARKET ACCESS ......................................................................... 14

3.6 E-GAMING ASIAN & SOUTH AMERICAN MARKET ACCESS ........................................................ 16

3.7 FUNDS MANAGEMENT MARKETING STRATEGY ....................................................................... 17

3.8 COUNTRY STRATEGY – AFRICA & LATIN AMERICA.................................................................... 19

3.9 COUNTRY STRATEGY – CHINA, MIDDLE EAST, RUSSIA & INDIA ................................................ 20

3.10 PENSIONS INDUSTRY MARKETING STRATEGY......................................................................... 22

3.11 SPACE MARKETING STRATEGY ................................................................................................ 23

3.12 LANSON’S PR CONTRACT ........................................................................................................ 24

4. COMPLETED APPLICATIONS FROM THE FUND .............................................................................. 26

4.1 EXTERNAL PERCEPTION OF THE ISLE OF MAN ......................................................................... 27

5. GOVERNMENT STRATEGIC FIT ........................................................................................................ 28

6. FINANCIAL REPORT ......................................................................................................................... 28

7. OUTLOOK......................................................................................................................................... 28

APPENDIX 1 – FINANCIAL OVERVIEW ............................................................................................... 29

APPENDIX 2 – FINANCIAL OVERVIEW ............................................................................................... 30

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To the Hon. Clare M Christian, MLC, President of Tynwald, and the Hon. Council and

Keys in Tynwald assembled

1. INTRODUCTION This is the eighth report of the Marketing Initiatives Fund (MIF) since its establishment in

2005 by Tynwald as part of the annual budget. This submission covers the period from 1st

April 2014 to 31st March 2015.

The primary aim of the Fund is to provide funding for initiatives that promote the Island to

various markets and encourage access to business development opportunities. Bids are

invited where the costs and economic benefits are clearly defined and measurable. During

the last financial year, the Fund has been used to promote; the e-Gaming industry, Tourism

marketing campaigns, the Country strategies, the space industry and the ICT, insurance,

pensions, financial services and shipping industries.

At the beginning of the financial year, there was an opening balance of £5,112,613 available

to eligible new and existing marketing opportunities. The Application Process requires a

business case to be submitted to Treasury from the relevant Department via their Finance

Officer and Accounting Officer outlining the following information;

An itemised breakdown of the financial support requested

Anticipated benefits including details of how they will be measured

A reporting mechanism on the outcomes of the programme

Approval arrangements are governed by the value of the application. Any submissions under

£100,000 are authorised by Treasury. Applications in excess of this value receive Treasury

scrutiny and require further approval from the Council of Ministers.

Expenditure incurred against each successful bid is included within each Department’s

revenue budget and recovered from Treasury at the end of each financial year. Progress

reports detailing outcomes achieved are sought from applicants on an annual basis. This

forms the basis of a review process to ensure that funding continues to add value.

Going forward, the amount remaining in the Fund is fully committed from 16/17. It’s status

will be evaluated as part of the Medium Term Financial Strategy. Any recurring or annual

expenditure will be considered for transfer into Departmental revenue targets as part of the

annual budgeting process.

The Treasury is committed to selling success stories to potential new investors, and I am

firmly of the belief that the Marketing Initiatives Fund should continue to be used for this

purpose and to further stimulate economic growth.

Hon W E Teare ACIB MHK

Minister for the Treasury

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September 2015

2. NEW APPLICATIONS TO THE FUND

This section of the report contains a summary of each new application that has been

approved in the last financial year. Detail will be given on any progress made to date, any

measurable benefits that have been achieved so far and future plans for delivery.

The process for applying for financial assistance from the Fund has been simplified in

previous years to enable more efficient ways of being able to respond quickly to upcoming

market opportunities. The Department of Economic Development have the delegated

authority from Treasury to directly approve up to 10 applications a year for proposals under

£50,000. Any submissions approved using this pathway will still be included within this

report.

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2.1 OPPORTUNITIES FOR ADDITIONAL GROWTH DEPARTMENT OF ECONOMIC DEVELOPMENT

This marketing strategy covered a number of different proposals totalling £2,160,000. This

is a strategic initiative which will take years before the full benefits are known. That said,

overall the additional resources are being applied in the areas identified as offering good

growth potential – and they are already delivering tangible results. These include;

1. High Net Worth strategy to attract more such individuals to IOM

The Business Development Manager (BDM) has been recruited and has been in post since

September 2014. A local calling programme was instigated to highlight the new role of High

Net Worth (HNW) BDM which also provided referrals in the UK. The BDM has made regular

visits to the UK to follow up on these referrals, in addition to other UK potential introducers

targeted. To complement the visiting programme various editorials and press articles have

been submitted in key journals all increasing the awareness of the IOM for HNW individual’s.

The process will continue as further targets are identified along with follow up visits to those

introducers who are considered to be the most likely to generate leads.

2. UK Regional strategy to build business links with this largely untapped market

The UK Regional strategy started with the International Festival for Business in Liverpool

held during June & July 2014. The key event for the island during this festival was the DED

Family Office event which attracted over 100 business people from the North West area and

provided a real kick start to the UK Regional initiative. Following on from this, the new UK

Regions Business Development Manager started with the Department in 2015. Since

starting, the Financial Services team have worked with the Island’s Financial services

community to stage many events throughout the UK Regions and from January – April 2015

had already staged 17 separate events, ranging from larger conferences to more intimate

private client style events. This heavy activity strategy is forecast to continue throughout

2015 across different regions and covering many different sectors while staying in line with

the Vision 2020 strategy. Alongside this strategy DED have also been instrumental in

developing the IOM Fund Associations UK Regional calling programme in support of the

BVCA National Dinner Series, which has and will cover Birmingham, Leeds, Bath, Edinburgh,

Manchester and Belfast.

3. Country strategy to win new business from targeted countries

A 2 year LTA Administration Officer in support of Country Strategy was appointed in October

2014. Although not adding a BDM to this work as such, this support has become

invaluable. During the last 8 months they have made a significant contribution in particular

to our China work (as priority) and have enabled an additional visit to China to be carried

out with 40 new contacts made (January 2015) with a resulting MOU with Wuxi DED and

joint seminar (April 2015) for 35 people creating 3 new pipeline leads. A number of other

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(commercially sensitive) strategic projects are also being advanced with the region at this

time. This additional resource has enabled an accelerated approach to revising the Chinese

webpage/materials and freed up some BDM time to enable more quality attention to lead

follow up and IOM visit hosting (supported 8 delegations/25 people) and thus helped

increase our pipeline of interest from China to around 40 in total. A number of these have

the ability to generate substantial employment on the IoM.

4. Tourism & Visitor Economy

The Tourism & Visitor Economy Director joined the department in October 2014 and has

assisted DED to open up new marketing opportunities and to provide a focus and improve

the coordination of a highly fragmented industry. The overall objective of the appointment

is to grow the number of visitors and translate additional revenues into additional jobs and

spend in the economy. They have also accelerated other important opportunities including

seeking a private partner to operate the Villa Marina & Gaiety Theatre.

5. Marketing

The additional marketing funding enabled the Department to increase its support for PR

activity for the 2 remaining years of the contract with Lansons Communications for the

period January 2015 to December 2016 to £275,000 pa (up from £200,000). The Lansons

contract with the Department enables PR support and consultancy to assist our efforts to

secure growth in exports, inward investment, visitor numbers and visitor spend. Increased

funding meant that PR support for Financial Services could be increased to £60,000 per

year. For e-Business it enabled the sector to be incorporated within the core contract with

Lansons for the first time.

Key Measurable Outcomes

6 HNWIs relocated (original target was 3), with a similar number expected.

Estimate of 6-10 jobs, £100k pa exchequer benefits, £12m direct investment in IOM,

£200m in investment funds, plus use of local professional and services business.

£12million of FDI into the North West through property transactions between several

IOM Trust companies and North West law firms. Potential new £2m Fund.

40 new Chinese contacts made (January 2015)

MOU with Wuxi and a joint seminar (April 2015) for 35 people creating 3 new leads.

Jointly funded £100K marketing and digital campaign with the Steam Packet.

Jointly funded £50K PR and digital marketing campaign to target tourists using the

new air routes from Bristol and Stansted

Production of a Destination Management Plan and Marketing Strategy for 2016/20.

The additional funding has helped to increase the quantity and quality of promotion

of the Island’s economy, which has had a tangible benefit, for example:

PR value 2013/14 2014/15

Business £0.75m £2.1m

Tourism £1.2m £4.1m

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2.2 TOURISM STRATEGY 2015/16-2016/17 DEPARTMENT OF ECONOMIC DEVELOPMENT

Although this initiative was approved during the year, it covers the period from the 1st April

2015 to the 31st March 2017. This is a continuation of the ongoing, evolving Tourism

Strategy and may be moved into the Revenue budget next year given that it is an annual

recurring requirement. The amount committed to the delivery of this has reduced year on

year to reflect the review and identification of programmes that are less successful and the

scaling up of trialled projects that have been proven to work.

The current Visitor Economy Strategy finishes in 2015 and a full review of the strategy is

now underway. Looking back on the previous year, we have held back on some of our

marketing plans to allow for the strategy to be finalised and implemented first.

The Department has attended 3 exhibitions and implemented the Digital Niche Campaign. A

large amount of this expenditure was met from current revenue budgets. We have been

awaiting the commissioning of a new website however, this has taken much longer to

implement than originally planned. It is anticipated that this will form part of a much larger

Destination Management System project which is currently at business analysis stage. This,

along with the Strategy review means that we will look to utilise this spend at the end of

2015/16.

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3. CONTINUING APPLICATIONS TO THE FUND

This section of the report contains a summary of each application still in progress and those

which have been completed during the year. This includes details on what activities have

been undertaken and whether any measurable benefits have been realised.

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3.1 PROMOTION OF THE CAPTIVE INSURANCE INDUSTRY DEPARTMENT OF ECONOMIC DEVELOPMENT

£194,000 was committed to the promotion of this industry in 2009. The original brief was to

deliver a 2 year marketing programme to develop the sector on the Isle of Man and deliver

the recommendations of the Bennet Review.

This included the attraction of new businesses through publicity campaigns, attendance at

conferences and improvements to information and reporting systems.

The implementation of the strategy has continued beyond 2009/10 at a much slower pace

than anticipated. The market remains slow and the focus going forward remains on building

the Island’s profile in the short term, to ensure a good reputation and strong foundations

are in place once the market improves.

At the end of 2014/15, a request was approved by Treasury to boost the resources available

to this initiative by £30,000 and extend delivery to the end of 2016/17. Although some

improvement in the industry has been identified, this funding is conditional on significant

developments being made during this timeframe or the committed resources are to be

relinquished. The Isle of Man Captive Insurance sector remains positive with a strong

pipeline of new business expected. The MIF initiative has been an important part of winning

this new business.

The outlook for the Captive Insurance sector on the island is positive with the Insurance

Linked Securities coming into force during March. This is also assisting with the macro

strategy of showcasing the island as a specialist in all aspects of Insurance.


Attendance at International conferences has increased the Island’s profile

Registration of one major new captive undertaken with another in the pipeline

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3.2 SHIP REGISTRY MARKETING DEPARTMENT OF ECONOMIC DEVELOPMENT

This application is a continuation of the Far East Initiative delivered in 2011/12 and 2012/13

targeting ship owners and managers in the key Asian regions of Singapore, Japan, China

and South Korea. During the past year, the Director of the Shipping Registry has undertaken

two visits to Singapore to deliver presentations to local shipowners working with Captain

Raja Ray our Business Development Manager based in Singapore.

During the 2014/15 reporting period, the share of Asian-operated tonnage on the register

grew from 43% - 44%. 23 Asian-controlled ships were added to the register in the year

generating annual fees of £37,375 plus the registration fees. This does not include the

ongoing service based fees/income e.g. surveys, certificates the Ship Registry receives from

each vessel.

Annual fees for the total number of far eastern vessels which have registered since the Far

East marketing initiative are circa £400K. In addition to the fees /income the Ship Registry

generates directly, a conservative estimate of £202,000 in private sector income for

CSP's/representative person fees plus any income for professional services has been

generated by the addition of the 23 Asian ships to the Ship Registry through this funding. 9

of the new Far East vessels have re-flagged to the Isle of Man changing from their previous

ones of Panama and Marshal Islands.

Five new Far East clients were introduced to the Isle of Man in 2014/15 with up to 10

additional vessels interested in joining the register during the next year. This is in addition to

7 existing far east clients hoping to bring another 17 vessels of which 2 are confirmed.

The Ship Registry may be seeking further funding in 2015/16 to retain Business

Development resources to underpin the work and business relationships that have been

developed so far.


Asian operated tonnage on the Ship Registry increased from 43% to 44%

Over £400,000 generated to date from Asian-controlled registrations

Over £200,000 of administrative/management work driven into the local economy

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3.3 ICT SECTOR MARKETING STRATEGY DEPARTMENT OF ECONOMIC DEVELOPMENT

This initiative committed £350,000 over the 2 years of the programme to roll out and

complete the delivery of the ICT Sector Marketing Strategy in collaboration with the Manx

ICT Association.

MICTA have now appointed a CEO (April 1st 2014) and he has been engaged with IOM

Government representatives to deploy and execute the Isle of Man ICT Strategy and this

has proved satisfactory.

The additional new jobs target for the reporting period 2014/15 was 50 which was set as a

result of the provision of MIF funding. This target has been achieved as a major telecoms

call centre created 35 new positions in late 2014/early 2015 and this exceeds the 50 new

positions target when other ICT employer (data centres/software) statistics for additional

new jobs are taken into account. This is measured through the use of income tax codes

specific to this industry.

In addition to ICT new jobs growth, both IOM Gov and MICTA have been engaged in

attracting new business sectors to establish operations in the Isle of Man including

businesses in Digital Currencies, Computer Games and Cyber Security. MICTA has been

central to driving progress with several initiatives such as Education (IT third level,

Academies and Code Club), communications infrastructure, incubator companies, venture

capital funds and creative centres.


50 new jobs created in the industry

Exchequer benefits in the region of £300,000

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3.4 BRITISH NATIONAL ROAD CYCLING CHAMPIONSHIPS

2016 DEPARTMENT OF ECONOMIC DEVELOPMENT

The Department of Economic Development submitted a proposal for a bid to host the British

Cycling National Road Championships in 2016. The cost of the event was expected to be in

the region of £103,000 including the cost of transporting officials and equipment across to

the Island. The Department are keen to develop other non-motorsport related events and

the staging of this race would attract up to 2,000 from their 15,000 visitor target.

Unfortunately, the Department was unsuccessful in the bid for the 2016 National Road

Championships. The Island’s bid made the final shortlist of two. The feedback from British

Cycling on the bid was excellent. British Cycling has encouraged the Isle of Man to resurrect

an annual road cycle racing festival in 2016 combined with one of their National Series

events. A successful National Series event would provide a potential stepping stone to

hosting a full National Road Championship.

The Department is keen to work with Isle of Man Cycling Association on a Road Cycling

Festival and British Cycling National Series event for 2016. It would seek to achieve this

through existing revenue budgets via the DED Tourist Event Development Scheme. The

Department however has requested that the MIF National Road Race Championship funding

is left in place for a future bid for the 2017 Championship. This will require an additional

business case and approval from Treasury given that it is a new bid.

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3.5 E-GAMING EUROPEAN & UK MARKET ACCESS DEPARTMENT OF ECONOMIC DEVELOPMENT

In May 2011, Treasury approved an application to the Marketing Initiatives Fund for £75,000

towards representing and promoting Isle of Man e-Gaming operators in the UK and the EU.

The proposal requested funding towards research, professional costs and other expenses to

support discussions with regulators and legislators. This would ensure the Manx e-Gaming

industry was considered and protected in the development of policies and to provide access

to markets for companies registered in non-blacklisted countries rather than those

specifically in the EEA which would exclude the Isle of Man.

After further consideration, it was decided that as these activities can be elongated and

time-consuming, it would be appropriate to seek to widen the scope from just Europe and

the UK to include negotiations within any target market.

Attendance, travel and accommodation at the following events were paid for from this MIF

budget:

iGaming North America 2014 – Las Vegas (including a trip to Costa Rica and Panama

to support an IOM CSP who was going out looking for business)

National Indian Gaming Association 2014 - San Diego

Global iGaming Summit and Expo (GiGSE) 2014 - San Francisco

World Gaming Executive Summit (WGES) 2014 – Barcelona

Meeting with Maltese regulator in London

There are no pre-determined performance indicators attached to this MIF as this was only a

condition brought in on the later proposals however; attending officers have completed trip

reports for all trips except the meeting with the new Maltese regulator and WGES. These

reports are available for inspection if required.

The events are an opportunity to position the IOM as thought leaders in the e-Gaming

sector by leveraging speaker slots and panel; moderation opportunities.

In the e-Gaming sector, in some cases it can be over 2 years between first contact and a

licence application being made, so having our message consistently visible at a variety of

gaming events is a necessity. They allow the e-Gaming team to communicate our

proposition to the sector, and ensure we are always considered by boardroom decision

makers and start up entrepreneurs when researching jurisdictions.

Over the past year, significant progress has been made with the Native American Tribes. We

have established strong links with the Tribal Internet Gaming Alliance and are actively

pursuing how we can work together for mutual benefit. There is a lot more work to be done

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in this area, and work continues with the National Indian Gaming Association and with the

Global iGaming Summit and Expo to further promote and raise awareness of how the IOM

can help tribes to go online. We anticipate this activity may provide a significant new

business opportunity and a profitable income stream.


E-Gaming Agreements in place with Denmark and Malta

Consultation undertaken against the EU White Paper on e-Gaming regulations

Negotiations progressed with 3 EU Member states

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3.6 E-GAMING ASIAN & SOUTH AMERICAN MARKET ACCESS DEPARTMENT OF ECONOMIC DEVELOPMENT

Following on from the previous application, further development of the e-Gaming industry

has been targeted in Asia and South America. In recent years, the Island has been

successful in recruiting a number of businesses from the Far East and believes that with

consistent marketing, can continue to attract successful and expanding companies to

relocate.

Attendance, travel and accommodation at the following events were paid for from this MIF

budget:

iGaming Asia 2014 – Macau

Israel Business Development Trip – Tel Aviv

WGES 2014 – Barcelona

European iGaming 2014 – Berlin

iGaming Supershow 2014 – Amsterdam

KPMG Gibraltar 2015 Summit

Global Lottery Messenger Forum 2015 – Gibraltar

iGaming Asia 2015 – Macau

Being visible, demonstrating we are a major player and showcasing our proposition and

reputation is very important as there is fierce competition between the rival jurisdictions,

and we need to be able to put our proposition in front of the decision makers who are also

being courted by our rivals at these events. The events also allow us the opportunity to

meet with on-going leads and progress discussions face to face, discuss plans and

manoeuvre the leads towards the Isle of Man. The work undertaken includes attendance at

trade shows and events and high-level introductions and negotiations with senior leaders

and their intermediaries.

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3.7 FUNDS MANAGEMENT MARKETING STRATEGY DEPARTMENT OF ECONOMIC DEVELOPMENT

The purpose of this initiative is to develop and implement a new programme of marketing

and business development activity to support the Funds sector. The remit is to support

growth of the fund industry, increase the Island’s fund assets and increase the

establishment of new funds and investment businesses. Total funding approved was

£266,000 plus an additional £50,000 transferred this year through re-prioritisation from the

Pensions Industry marketing strategy.

There was a steady programme of events throughout the year resulting in many new

leads for the members of the IOM Funds Association who attended.

The Funds Association met with DED toward the end of 2014 to analyse the success

of the strategy to date and to agree how to maximise the ‘bang for buck’ going

forward. Both parties agreed to refocus on the Start-up Hedge Fund and UK Regions

as these provide the best fit for the current product base.

It was also agreed that the Funds Association are also using the events schedule to

promote the wider Isle of Man Professional & Financial Services sectors.

It was agreed to sponsor the British Venture Capital Association (BVCA) National

Dinner series for the calendar year 2015 as this overlapped with the UK Regional

strategy. This will include visiting programmes to Birmingham, Leeds, Bath,

Edinburgh, Manchester & Belfast.

The sector has suffered significant upheaval on the back of the credit crisis resulting in a

large drop off of existing business. The Funds Association are working closely with DED to

analyse the existing Funds schemes product base to identify which current schemes are not

proving ‘sellable’ in the market.

On the back of this challenging environment, we have however seen many new Funds being

launched, particularly in the Start-Up end of the market, with the Exempt Scheme being the

standout offering.

The Professional Services sector has also seen a lot of new business and solid pipelines have

developed on the Auditing side, which is business won when on the road with the Funds

sector.

The Funds sector has been under considerable pressure over the last number of years

however the sustained effort provided by DED and the IOMFA is helping to turn this corner

and in particular, protect many of the 200 jobs in this area alone.

The new strategy being implemented in 2015 is already proving valuable as we are reaching

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a Private Equity, Venture Capital and Hedge Fund base that was previously not on the radar.

The UK regional events are also proving positive with planned trips also being organised by

association members to return again to those cities to follow up on discussions. The end of

year 14/15 and throughout 15/16 should start to bear real fruit as the new strategy gathers

momentum.

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3.8 COUNTRY STRATEGY – AFRICA & LATIN AMERICA DEPARTMENT OF ECONOMIC DEVELOPMENT

Approval was obtained in October 2013 from Treasury and COMIN for reallocation of MIF

funding that had been approved for another purpose but was unutilised. This funding is

instead intended to be applied to the initiation and development of new Country Strategies

in Sub Saharan Africa and Latin America. The funding was budgeted to cover up to £50,000

pa x 3 years in each of these markets as they (Africa and Latin America) have become

important sources of business (for banking and life insurance) respectively.

During that part of the year i.e. November 2013/14 and since the strategy has been begun,

an extended phase of desk top research has been undertaken and an operations plan for

Africa produced. For Latin America, a number of delegations have been hosted in the Island

but to 31 March 2015 no expenditure against the MIF allocation has been called upon for

either of these regional markets and full implementation requiring such expenditure has

been further deferred into 2015/16.

So far, without any expenditure, DED has been able to make contact with over 200

professional intermediaries in Latin America by virtue of working with the industry to host

visiting delegations to IOM and help persuade them to place business here. This is as yet

unmeasurable with regard to business placed with industry.

However, KPIs based on a full year of projected activity and expenditure have been

established with a view to generating as follows:

50 -100 contacts pa 5 – 10 business meetings pa 5 – 10 pipeline leads pa 5 business conversions (value £250k pa)

Activity commencement on the Africa and Latin America strategies has been deferred due to

limited manpower resources /other priority markets but following an increase in the

Financial Services team in 2014, it is expected that work on these markets should be able to

begin in 2015.

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3.9 COUNTRY STRATEGY – CHINA, MIDDLE EAST, RUSSIA &

INDIA DEPARTMENT OF ECONOMIC DEVELOPMENT

Approval was obtained from Treasury and COMIN in November 2013 for funding which is to

be utilised to extend existing work in these countries with revised and updated strategies for

China, Middle East (ME), India and Russia from April 2014 to March 2016.

KPIs have been put in place for each of the years 2014/15 and 2015/16 for each of the 4

markets. China and the Middle East have been the priority focus in the year reflecting their

importance and poorer market conditions in India and Russia. In 2014, China yielded 351

contacts, 80 business meetings, 20 leads and 2 business conversions in the year (small

trading companies) worth 3 – 5 jobs and GDP of £300 – 600k pa broadly in line with target.

China is a notoriously difficult economy to infiltrate but it is believed that once one or two

companies have demonstrated a working business model, more will follow. There are some

large potential projects in the lead pipeline for potential conversion in 2015.

The work around the Middle East is focussed more on supporting the banking and life

industry each respectively obtaining millions of pounds worth of assets pa from the region.

Two key successes from the Middle East work have been the expansion of the ILS

Fiduciaries satellite office in Dubai and the opening of a new SMP satellite Office also in

Dubai.

There has been no expenditure on Russia or India from MIF in the period. However, using

revenue funding, the IOM has successfully attracted an Indian software company planning

to venture into e-gaming with the creation of several jobs. The deferment of expenditure on

Russia and India has been due to limited activity caused by Russia and its Ukraine/Western

sanctions position. In the case of India, political direction change following elections requires

the re-establishment of IOM USPs for the region. Nevertheless some work and activity has

been picked up to the IOM‘s benefit from these markets through our other activity in

London, but without necessitating expenditure from MIF. A recent success is the start- up of

an e-gaming business which will create several new jobs and came from a visit to India

financed from revenue just before the MIF related work began.

The Chinese representation engaged by the Department was re-tendered during 2014 and

the work here has been stepped up since 1 November 2014 reflecting the current high level

of potential emanating from China and thus its higher priority.

Going forward, the potential expenditure on China in 2015/16 is likely to increase to £200 -

220k to provide representation in China, and a quarterly visit programme (next one

November 2015). There has already been a Ministerial delegation this year led by the Chief

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Minister (April).

The Middle East strategy is more focussed on assisting IOM businesses to access market

opportunities through promotional support. Annual visits with regular support events are

therefore envisaged to continue, with the next in October /November 2015.

The Department have just conducted a review of the Indian market given that it has been

poorly performing in terms of outbound investment recently and based on this information,

the plan is to maintain a low budget in the year ahead and confine marketing activities to

London based Indian professionals. This is a similar situation with Russia and there will be a

primary focus on London based promotion (next activity August 2015).

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3.10 PENSIONS INDUSTRY MARKETING STRATEGY DEPARTMENT OF ECONOMIC DEVELOPMENT

The Council of Ministers approved £220,000 over 2 years in July 2011 towards the delivery

of the Pensions Industry Strategy. This aimed to provide funding to develop and deliver the

marketing strategy recommendations for the sector as outlined in the IOM Association of

Pension Service Providers (APSP) report, “Marketing Plan & Budget Proposals”. This work is

a joint project between the Department of Economic Development and the IOM APSP.

The Pension sector marketing initiatives have stalled over the last few years. This has been

predominantly due to the collapse of the QROPS market. Expenditure for both 2012-13 and

2013-14 was £0. Due to this, the Department have reviewed where they feel resources

would be better utilised and with the agreement of Treasury, have reallocated a large

portion of the Pensions MIF funding to leave an open balance of £50,000.

The Association of Pension Scheme Providers has not requested funding for any joint

marketing events or initiatives during the last 12 months. They do continue to ‘plough their

own furrow’ with International Corporate Schemes continuing to be popular however, this

has been on a standalone basis. We await a strategy document from the APSP on the way

forward for the Association and much negotiation is ongoing regarding this and the wider

scope of the Pension sector in general.

The Head of Retail Financial Services at DED, has taken over responsibility for the Pensions

sector and will be able to provide updates for all future MIF reports and correspondence.

The current unspent balance remains at £50,000.

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3.11 SPACE MARKETING STRATEGY DEPARTMENT OF ECONOMIC DEVELOPMENT

In October 2012, the Council of Ministers approved the transfer of £300,000 from the

budget for targeting the e-Gaming market in Asia and South America, to allow continuation

of the delivery of the Space Industry marketing strategy over the following 3 financial years.

The main aim of the funding provided was to support the DED Space Commerce

Consultative Committee’s business development efforts and increase the Government’s

sponsorship of the International Space University (ISU) in Strasbourg, France.

The Isle of Man Space sector has historically been very active in the pursuit of Space and

Satellite businesses. While this has been great for the islands profile it has resulted in limited

real jobs on island.

The decision to limit spending any further MIF until a new strategy based specifically on real

job creation was taken. To date that new strategy hasn’t been delivered to the department.

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3.12 LANSON’S PR CONTRACT CABINET OFFICE

The MIF supports the delivery of an ongoing public relations and public affairs programme with the UK based consultants Lansons. The ongoing programme is designed to meet communications objectives consistent with Government’s strategic priorities. During the period from April 2014 to April 2015, the key ongoing activities have included: 1. Protecting the Isle of Man’s reputation, with a considered and targeted

approach - The external political and economic challenges to the Isle of Man continued to be great. The economic landscape across the UK, Europe and America remained volatile. Political uncertainty in the UK in the run up to the 2015 UK General Election, further increased the need for an active and targeted political engagement programme for the Isle of Man. In addition, issues of banking reform, FATCA and beneficial ownership became international focus points requiring careful political management. Lansons provided advice on how, where and when to protect but also promote the Island’s position, to ensure the Isle of Man’s reputation benefited from the steps the Government had taken especially in relation to these issues. To counter ill-informed criticisms of the Island, Lansons and the Cabinet Office communicated its stance, views and actions to external stakeholders, while at the same time highlighting positive news and taking a considered approach to international media relations, in order to avoid being drawn into wider, negative debates fronted by other jurisdictions.

2. Intelligence, strategic counsel and issues management - To assist Government in

remaining responsive to international and domestic issues, Lansons continued to provide 24/7 political and media intelligence. With this information Lansons were able to advise on and help implement appropriate courses of action for effectively navigating risks and opportunities. Lansons gave the Isle of Man strategic advice on messaging for political and international media audiences around key external developments, issues and initiatives over this period, including: - G7 and G20 issues - Tax transparency - Beneficial ownership - FATCA - Banking reform - UK general election - The UK’s devolution agenda - Constitutional reform in the UK In addition to supporting the Government with specific issues management, Lansons worked closely with the Cabinet Office to review and refresh the Island’s core messages,

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particularly in the context of the Isle of Man’s Budget and international developments in the G20 and G7.

3. Engagement programme - Lansons worked with the Cabinet Office to advise and

implement a comprehensive programme of engagement for the Chief Minister and other key ministers and Government officials with influential leaders in Westminster, Whitehall, City of London and the North West of England as well as key UK media. Lansons worked with the Cabinet Office to develop and deliver an extensive political programme for Ministers at the 2014 autumn party political conferences. Ministers attended the Conservative, Labour and Liberal Democrat conferences to build relationships and improve understanding of the Isle of Man’s positions on issues. They also supported the External Relations team with updating the Island’s UK engagement framework in preparation for the UK general election.

4. Event management support - Lansons facilitated events in the UK that enabled

Ministers to discuss a broad range of issues with key business people. Lansons also worked with the Government on its presence at the International Festival for Business to build and further strengthen its ties with the North West of England.

It is recognised that it is difficult to measure specifically the impact of long term programmes to influence political, business and media leaders and to protect national reputation. One specific measure of the benefit of Lansons’ advice was the editorial content in an Isle of Man sponsored supplement in the UK Financial Times, in May 2014. This resulted in eight standalone articles in the supplement and two company profiles, as well as a standalone article on page 4 of the main paper. The total estimated Advertising Value Equivalent for the report was over £1.2 million.

The funding was initially approved for a period from January 2012 to the end of 2014, but as the full amount was not drawn down and work with Lansons is expected to continue until the end of 2016, the remaining funds may be available subject to Treasury approval.

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4. COMPLETED APPLICATIONS FROM THE FUND

This section of the report contains a summary of each application which have now

completed. This includes a final evaluation of results achieved, details on what activities

have been undertaken and whether any measurable benefits have been realised.

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4.1 EXTERNAL PERCEPTION OF THE ISLE OF MAN DEPARTMENT OF ECONOMIC DEVELOPMENT

The primary purpose of this activity was to increase the external perception of the Isle of

Man product offering through consistent and coherent marketing communications at a cross

sector level. The programme had a number of workstreams including improvements to

online information, development of a Customer Relationship system and the production of

user-friendly factsheets.

During 2014/15, £8,618 was spent developing the website specifically to add a jurisdictional

comparison table which plots the Island against different jurisdictions around the world; and

the promotion of digital currency and bitcoin. The comparison table has had nearly 6,000

views during the year and has helped increase visits to the site by 20% year on year. The

promotion of digital currency has helped position the Island as a technologically advanced

centre of excellence and was one of the most publicised stories of 2014 with a reach of

31,000 on one occasion on Twitter alone.

This project has completed this year culminating in improvements launched on the

whereyoucan.com website.

It is difficult to measure the amount of new leads that have been directly received as a

result of the above activities; however, we do know that one strong lead was received

directly as a result of an eGaming blog post. Feedback from the industry states ‘there has

been a marked improvement in the last few years in marketing material’ and the website

has seen an increase in the number of annual visitors from 36,000 to 40,000.


Development of a CRM system used by Business Development Managers to build up

leads, pipelines and contacts. This has been implemented throughout the business

and is a prime tool for customer insight and lead generation.

8 factsheets developed for industry promotion in Aviation, Yachting, Space, Banking,

Captives Insurance, Funds, Retirement Solutions and eGaming.

Improvements to the Where You Can website including averaging around 3,400

visitors per month

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5. GOVERNMENT STRATEGIC FIT The Agenda for Change document published in January 2011 outlined 5 key priorities to

support service delivery and the role of Government over the next few years;

Growing the Economy

Environment & Infrastructure

Good Government

Income & Expenditure

Wellbeing & Welfare Reform

It is considered that the initiatives which have been approved during this financial period

and those which have continued to draw down funds to support existing applications, will

contribution towards the Government’s aims on Income & Expenditure and Growing the

Economy. The criterion for investment includes quantifiable benefits to the economy that

can be measured to determine success.

6. FINANCIAL REPORT The Fund was established in 2005 with an initial allocation of £2 million from the General

Fund. Future budgets increased this available balance to £15 million with a further transfer

of £3 million from the Economic Development Fund. In addition to this, the unallocated

budget continues to accrue interest and this is added to the available balance at the end of

each financial year.

The closing uncommitted available balance at 31st March 2015 is approximately £1,616,000

however; this sum is fully committed in future years. The actual balance at 31st March 2014

is £4,321,281.

- Appendix 1 shows funds utilised since inception and an overview of future commitments

- Appendix 2 gives the projected spending profile of new applications approved this year

7. OUTLOOK As there will still be constraints on transfers from revenue over the next few years, the

evaluation process for approval of submissions will be thorough and robust to ensure funds

are allocated prudently. A higher level of focus will be placed on identifying the measurable

benefits and outcomes that are produced as a result of this funding. Support will still be

restricted to marketing initiatives only and will not extend to ongoing revenue commitments

which must be met by the existing revenue budgets held by each Department.

The purpose and underlying objective of the Marketing Initiatives Fund remains a keystone

in the strategy for economic development and the promotion of growth by attracting inward

investment and showcasing what the Island can offer in relation to its business prospects.

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APPENDIX 1 – FINANCIAL OVERVIEW

Fund Summary - Marketing Initiatives Fund

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 Onwards

£,000 TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL

Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Committed Committed

Balance Brought Forward 2,000 2,972 6,350 11,720 9,983 11,325 8,716 7,105 6,053 5,113 4,321 1,616

INCOME

Transfers from General Fund 1,000 4,000 6,000 0 5,000 0 0 0 0 0 0 0

Interest on Balance 194 193 1,069 1,005 197 123 104 58 25 18 15 6

TOTAL 0 1,194 4,193 7,069 1,005 5,197 123 104 58 25 18 15 6

EXPENDITURE

Funds drawndown for;Approvals made up to 2009/10 15,283 223 815 1,699 2,742 3,718 2,533 1,077 682 125 88 216 0

Approvals made in 2010/11 1,111 0 0 0 0 0 199 272 261 159 47 131 0


Approvals made in 2012/13 369 0 0 0 0 0 0 0 64 80 0 80 140


Approvals made in 2014/15 2,195 0 0 0 0 0 0 0 0 0 119 1,045 1,031

TOTAL 23,014 223 815 1,699 2,742 3,718 2,731 1,715 1,109 966 809 2,721 1,624

General Fund Transfers 0 0 0 0 137 0 0 0 0 0 0 0

Balance Carried Forward 2,972 6,350 11,720 9,983 11,325 8,716 7,105 6,053 5,113 4,321 1,616 -3

Approved

Bid Value

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APPENDIX 2 – FINANCIAL OVERVIEW

Total Bid

Value 2013/14 2014/15 2015/16 OnwardsReleased

back to Fund

Status Outstanding

at

Ref Dept Date Details Approved Actual Actual Committed Committed Not Required 31/03/2015

86 DED Apr 14 ICT & e-Business PR Strategy 45,000 - - 45,000 - 0 Not Started 45,000

87 DED Mar 15 Opportunities for Additional Growth 2,150,000 - 119,240 1,000,000 1,030,760 0 In Progress 2,030,760

2,195,000 0 119,240 1,045,000 1,030,760 0

NEW MARKETING INITIATIVES FUND APPLICATIONS

Up to 31/03/2015

Year to 31 March 2015

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