CEC “future-proofing” Cayman

This episode of Cayman Conversations saw Caymanian Times publisher Ralph Lewis host Charlie Kirkconnell, CEO of Cayman Enterprise City, and Caribbean Economist and Advisor Marla Dukharan. Ms Dukharan was employed by CEC to conduct an economic impact study on CEC and the findings from her report found CEC’s benefits to Cayman extended far beyond its financial contribution.

Ms Dukharan conducted the economic impact study to independently assess what impact CEC was having on Cayman’s economy – the private sector as well as government finances. She commended CEC for undertaking the study, which they were not required to do.

“It’s good that they do this because they elevate the level of transparency and set an example for other private sector players who don’t necessarily do that,” she stated.

Mr Kirkconnell said their project was an investment in the Cayman Islands government on behalf of the people in the Cayman Islands in a project designed to create a new economic sector for the purpose of economic diversification, away from such a heavy reliance on financial services and tourism. CEC attracted knowledge and technology-focussed businesses to set up a genuine physical presence in Cayman.

He confirmed: “We want people to understand that there is a very significant return for the government and the people of the Cayman Islands on their investment.”

Mr Kirkconnell said that Ms Dukharan prepared an independent report that was “warts and all” and that was exactly what they wanted.

“We want an honest assessment of how the programme is performing and what is the socio/economic impact of what is happening,” he explained.

Ms Dukharan said she found that the impact of CEC had had a cumulative impact of around USD1 billion over the 12-year period since inception. That sounded like a big enough figure, she said, but emphasised that that was probably not the most important figure or the most important impact.

“I think what’s more important than that: you are heavily invested in two sectors [financial services and tourism] that have challenges,” she stated.

While acknowledging that every sector had challenges, these two sectors meant that the economy of the Cayman Islands was vulnerable, especially in the middle of a climate crisis. Tourism was, she said, heavily dependent on the natural environment and Cayman did not have significant natural resources, so diversification was needed into sectors that were more knowledge-based sectors where people could earn higher incomes – both citizens and permanent residents. She believed that was the more important impact that CEC had had and would continue to have.

“You are bringing in new sectors that are more future-proofed and not reliant on sectors that have been around for the past few decades,” she said.

This created an eco-system where younger generations could find employment and chart a career path in a much more progressive sector than the traditional financial services and tourism sectors.

Mr Kirkconnell said for Cayman to avoid brain drain there had to be opportunities that were relevant to young people and their schooling.

CEC, he said, has a lot of technology-driven sectors, digital innovation sectors and entrepreneurships

Ms Dukharan spoke about the synergies between entities at CEC and traditional sectors and said banking had transitioned to financial services in a more general sense, and that had switched more towards the regulatory, compliance and cyber security space. She noted there was that slant at CEC as they offered those types of services.

“You can still service the financial services sector and be involved in that sector as a Caymanian but in a slightly different way. Instead of being a banker, you can think about the compliance space which is a growing space,” she said.

She said their study looked at sectors that were dying and those which were growing.

“Financial services and tourism are roughly dying sectors, but when you think about the technology and especially AI potential in those sectors, its huge. How many hotels, airlines have you had to call and when you call or text them, you’re not talking to a human, you’re talking to a bot, an AI,” she advised.

While the traditional sectors might not offer the salaries people are looking for, the sectors could still be serviced but from a technological standpoint.

“That’s what I see CEC bringing the potential of, as well of upskilling and taking the existing sectors in Cayman to a different level, and that’s where a lot of opportunities lie,” she said.

CEC’s new headquarters has recently opened off Fairbanks Road across from Triple C school. They completed the building in March and were going through the process of moving clients in, Mr Kirkconnell advised. The building was open and conducting business and they could bring larger events to the new building

“We’re in the process of creating a very vibrant, active and engaging knowledge and technology focused community all centred around our first building,” he advised, anticipating they would be under construction with their second building by the end of the year and onwards from there.

Ms Dukharan said the good thing about Cayman was that there was a healthy dialogue between private and public sector and that was why Cayman had been so prosperous compared to the rest of the Caribbean. She urged every successive government to maintain that healthy collaboration with the private sector.

Looking ahead, she said she saw what CEC had done to build a real platform to build a knowledge-based society, where people had high skills and could attract high wages - Caymanians and permanent residency holders - not just the expat labour force.

“I see this transformation taking place over time where you are much more focused on building a knowledge and capacity skills base in your country for your people. I think those sectors you will be diversifying into will be much more knowledge-based,” she confirmed.

Mr Kirkconnell said the average salary at CEC was higher than outside CEC in Cayman. Cayman needed to encourage young people to train in these knowledge-based sectors, he confirmed, and they had several initiatives to help young people train for such a career, as well as career development initiatives.               

With respect to tourism, she said Cayman needed to think more about a more community-based, local content-based tourism product that had a healthy respect for the environment, with beach erosion on Seven Mile Beach already happening.

“We know the environment is struggling to cope with the level and type of tourism we have in Cayman, so I think we need to switch the model up and make it less people intensive and more high-end luxury focused,” she said.