America’s Cup unlikely to return?

The Royal Gazette has an article up downplaying the potential for America’s Cup to return to Bermuda.  Those who have followed its progress would know that this has always been a possibility.

My understanding is that the decision of where to host comes down to 3 core considerations.

  1. The team who wins ultimately decides where they want to defend.
  2. The defenders need to find a venue willing to host who sees enough benefit in it (eg. San Francisco had the option and turned it down because it didn’t make financial sense for them)
  3. Most of the teams are trying to convert the America’s Cup into a profitable business and build viewership.  New Zealand is the only country that is presently fanatical about the America’s Cup and likely doesn’t need this as badly.  The winner still ultimately has a considerable amount of say in the direction and future of the event.
This leads me to a few thoughts on the business side of things.  It is widely known that many factions in the America’s Cup are trying to convert it to being a more profitable venture similar to Formula One.  In order to do so they are heavily reliant on building solid TV coverage.  
The few reports on coverage so far is that it has not been ideal. This suggests they need interest through encouraging more teams and more events spread out over time. Hence the world series events and the reduction in boat sizes to encourage more teams.  The more competition, the more potential interest and viewership.

Thus we’re seeing an aim to shorten the competition from a 4 year cycle to a 2 year one.  Likely more focus on the world series and enough focus on the finale to sustain a big climax.  I believe that ideally they’d aim for a host of the finale on the East Coast of the US or alternatively Bermuda as the timezone sites well enough for coverage of the US during the day and EU in the evening which has the best potential for building viewership.  Chicago or anywhere else on the east cost still stand out as potentials.
Once the viewership is large enough then it can really be hosted anywhere but for now, the America’s Cup is a fringe sport.  Google Trends shows it pretty clearly when you compare America’s Cup to Formula One over the last 5 years.  They clearly want to convert the blue line to be more like the red one and the tiny spike of the last event in San Francisco pales in comparison to the regular interest in Formula One.
One other thing. People having animosity towards hosting the America’s Cup and making it political certainly doesn’t help as I’m sure they’d rather see focus on the event itself, not articles about local politics.
Will they host the finale in Bermuda again?  Only the winner knows.

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Late August Election?

Back in February I speculated that an election would be called for mid to late July.  This was primarily based upon the momentum the OBA was building and the likely euphoria that would build up over the America’s Cup.

Since then, we’ve seen the opposition push for a vote of no confidence in the middle of the America’s Cup and the opposition leader suggest he thinks the election will be late July.  The timing of the vote of no confidence, the push for an election and the animosity that comes from it is less than ideal for the island.  The opposition has seemingly pushed fully into election mode, rolling out candidates and putting out daily press releases.  They’ve seemingly ramped up fully for a late July election.  Now today Shawn Crockwell has signaled that he’d vote against the government.

Even if the no confidence motion is successful, by my estimates the Premier would still have a 3 month window to call it.  As a result, I suspect the Premier may either opt to call an election before the vote of no confidence takes place or take his chances and call one if he loses it.  Given the strength in the recent polls and the OBA’s momentum, I suspect he’d be leaning towards calling an election anyway.

I suspect the Premier will now aim for an election in late August, just before students return to school.  As far as I’m aware, the OBA has yet to deliver on their promised changes to absentee voting, thus the reason for late August vs. early September. This would allow the OBA could both publicly decry the PLP for disrupting the America’s Cup with an election as well as push their own electioneering until after the America’s Cup is over.  Since the PLP has already entered heavy campaign mode, there is also the potential that the public would readily tire after nearly 4 months of heavy campaigning.  It is also likely that the after effects of the America’s Cup would still be present in the form of euphoria of having money in ones pocket and the event potentially having been bigger than originally forecast.  Beyond that, it’s allow for statistics and reports covering the outcome of the event to be published as well as many positive stories of who benefited.

On the PLP front I’m still a bit baffled as to why they opted to push for a vote of no confidence for June.  Pitting an election right after America’s Cup seems like a bad time when the alternative could be waiting out upwards of a year for more negative fallout or controversy to capitalize on.  The unions are always good for some sort of fallout and disruption every few months.  Also if the vote of no confidence is successful, it will invalidate their pushed legislation which could come back to haunt them if people realize pre-election that marijuana wasn’t actually decriminalized and that the statutory interest rates weren’t changed.  Ultimately the upside of forcing it now seems limited and either implies they suspect the next few months won’t be in their favor or I’m missing something.

So… a late August election?  We’ll see.

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How is the OBA leading in the polls if they don’t lead with black voters?

The recent poll conducted by The Royal Gazette suggested

A breakdown by race shows whites have increased their backing for the OBA, and blacks for the PLP.

 

Among whites, 93 per cent said they would vote OBA, up from 77 per cent; and 1 per cent would vote PLP, down from 4 per cent.

 

Among blacks, 63 per cent would vote PLP, up from 55 per cent; and 13 per cent would vote OBA, down from 16 per cent.

How could the OBA possibly be leading polls if they only have 13% of the black vote in a majority black country?  The problem?  Far too many people in our country only see things in black and white.

The big fat glaring omission from the Royal Gazette’s coverage of the poll was people who consider themselves neither black nor white.

For example we could use the 2010 census as a rough approximation of racial demographics which suggested nearly 15% of people in Bermuda are in the “other” category.

So when you compare only black vs. white support the results are rather confusing

The PLP clearly dominates the black support base so how could the OBA possibly be leading the polls by 6 percentage points when there is only a tiny gap between the two?

The “other” category is not included.  Thus it is wholly misleading.  So, through some approximation based upon the overall support numbers against the census racial breakdown, I’ve estimated what the vote of the “other” category would amount to.

In order for the OBA to have a 44% overall support level, the 56% of people in the “Other” category would support the OBA, with 24% supporting the PLP and 20% not expressing support for either.

If you take the census numbers and apply them to the 400 people surveyed and assume a pure random sample then roughly 215 respondents would have been black, 124 white and 58 other.

This provides a much clearer explanation.  Many black voters polled have yet to decide support either party. The OBA is successfully capturing the majority of the “Other” vote.

All too often we see things framed purely in black vs. white when it reality, there are quite a few gray areas overlooked.

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The Royal Gazette has commissioned a new poll and the results are telling

The Royal Gazette has commissioned a new poll and the results are telling.  Without looking at the full picture historically it is difficult to see why these results really stand out.

The big difference in this latest poll is that both parties have largely mobilized their support bases with the number of undecideds at 18% which is the lowest level all the way back to Sep 2011. This suggests many undecided voters have solidified their views vs wait until the actual election.

A big point of note about the 2012 election was that overall 1200 fewer voters bothered to turnout vs. the 2007 election.  The message was that people weren’t interested and reflects the rise in individuals who supported neither in the polls immediately prior to the election.  People were disillusioned with politics generally and worn out by the recession with limited hope.

Leading into the 2012 election the PLP’s support had plummeted in the polls.  The result proved to be a 52% to 46% victory for the OBA.  2600 fewer voters voted for the PLP overall vs. the 2007 election while nearly 800 more voted OBA.  This was also while there was a rise over nearly 1700 in the overall number of registered voters.  The big story wasn’t that people turned out in droves to vote OBA, it was that people didn’t turn out to vote PLP.

Contrast this with the latest poll results.  The OBA’s support level of 44% is the highest OBA level of all of their poll results and represents a strong level of support.  Compared against the Dec 2012 election, the OBA’s support level has strengthened 3 percentage points above it which could translate into a higher number of votes than the 2012 election.

The PLP also has a strong showing of 38% which matches their highest numbers if you discount the odd anomaly of July 2015.  Taking the anomaly at face value, it was the next lowest level of undecideds with many having sided with the PLP.  It placed PLP support at 46%, 6 points higher than they are now.  The big question is whether these people have shifted to support the OBA or if they’re waiting until election day to finalize their opinions.

July 2015 was the only poll in the chart done by Profiles of Bermuda and there is no particular explanation that I can think of for the wild change over previous trends.  Polling is not an exact science and relies on truly random samples to provide accurate results so it could be in error or it could tell us something.

How will this affect numbers?  In 2012, 15,949 votes were cast for the OBA.  Those extra 3 percentage points above the 2012 poll numbers suggest the OBA’s support level could be higher this time around.  By contrast, in 2007 16,800 people voted PLP.  Is the OBA’s 3 points is enough to break above the PLP’s strong 2007 number or will the PLP rally enough support?

Ultimately party support breaks down as

  • Staunch supporters – will vote for their party no matter what
  • Strong Supporters – will either vote for their party or abstain, would never consider voting for the other party
  • Weak swing voters – mostly lean towards one party but would consider voting for another
  • Strong swing voters – will vote for whomever speaks to their issues

Each party looks like they’re be able to rely on their staunch supporters.  They also seem to have rallied strong supporters and we can likely expect a strong turnout in the upcoming election.  The question is who will rally the swing vote to their cause?

Chart Methodology notes:

 

There are 4 different companies quoted for poll results, Global Research, Total Research Associates, Mindmaps.bm and Profiles of Bermuda.  Of particular note, the Jul 2015 spike for the PLP represents the only instance in the chart of polls supplied by Profiles of Bermuda.

 

Without getting too deep into the intricacies of survey sampling and polling methodology. Accurate surveys rely on a truly random sample of people.  Ideally, you put every registered voter’s name in a hat, pick out a percentage at random and ask their opinion.  Given a large enough percentage this would give you an accurate view of the overall population’s opinion, plus or minus a margin of error.

 

In the age of telephones, cellphones with caller id and the internet, it is much more difficult to get a truly random sample.  Some people don’t have telephones, others won’t answer unknown numbers.  How do you get a random sample if it is unnaturally selected based upon who answers the phone?  (This is one of the big reasons why internet and phone polls can differ quite a bit from actual results).

This is of course before getting into the whole explanation of how leading questions and push polling can influence results.  How you ask a poll question can lead people to one answer or another and give a different view when compared against a slightly different question.

These days survey companies tend to rely on polling a more limited pool of people and bias in constructing the questions can swing things.  Thus it is harder to get a random sample and the results can end up being skewed.  So, surveys are a guide much like looking at a partially completed jigsaw puzzle.  It gives you an idea of the bigger picture but if you only see pockets, you can think you see the whole picture when really you could be missing a crucial part.

 

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What is being done that will benefit ALL Bermudians?

A friend of mine on facebook lamented the following

It makes me so sad that only the black Bermudians that see that nothing the OBA does is for the benefit of ALL Bermudians… Yes tourism is on the up, yes America’s Cup will bring tons of rich people to our island, yes we will have a new airport(at a ridiculous price) but who will benifit from it? Is Bermuda really still that divided? The sad truth is yes

I felt compelled to respond because I believe it is important to look beyond the politics and fundamentally understand that recovering our economy does benefit all Bermudians.  It doesn’t matter who is in power. It does matter that everyone understands how precarious of a position we are in and how important it is that we raise our profile.  I do my best to call it as I see it, I call the OBA out for many things I don’t agree with.  However, I do wholly agree with the need to raise our profile.  We need to attract the kinds of tourists who can afford to come here and we need to attract the kinds of investment that can create new jobs.  If we can’t do that, we simply won’t have the resources to fix the many other underlying problems we have in our society.

The problem is we’ve created a situation that is scarily unsustainable. Our economy is struggling to recover, our cost of living is leading the world and we’re so deep down the rabbit hole we can’t simply throw everyone out. We need a solid recovery that can bring us back to prosperity and that wholly relies on attracting foreign investment to create jobs and opportunity.

International business is presently in a period of consolidation and decline. We’re not seeing substantial growth or recovery. Companies are merging, getting more efficient and jobs are not being created fast enough. We don’t have a new industry and we’re struggling to attract new businesses here that create jobs and sustain our economy. We need to attract new businesses to the island. If you look at the big picture, we’re struggling. We haven’t recovered from the recession regardless of what caused it. We cannot sustain ourselves without foreign investment. We have always been reliant on foreign trade all the way back to the days of onions and ship building.

Tourism has been dead for years and for the first time in like 30 years we have actual new hotels opening. Tourism is our only second leg to stand on and its in a terrible state. If IB collapses, and it could do so from any number of factors both within and outside of our control, what alternatives do we have? We need to rebuild our tourism industry alongside attracting others.

America’s Cup may not seem like much, but it kills multiple birds with one stone. It significantly raises our profile both to potential premium tourists that can afford to visit our island and premium investors who could move or create companies here.

If you read the tourism reports, people who haven’t been to Bermuda are more likely to equate our product with Jamaica than with BVI or Cayman. People don’t know we offer a significantly different and premium experience over the Caribbean (not to suggest the Caribbean doesn’t offer great experiences, just different from ours and at a far cheaper price). In Europe I’ve met quite a few people surprised that we’re actually a real place, they literally thought Bermuda was fictional.  I’ve traveled all over the world and most people don’t have a clue about Bermuda.

We are getting world class coverage to raise our profile. 40 hours over a month an a half of images and stories of our island being told. America’s Cup is a world class event that attracts interest from all over the world.  It is the pinnacle event in sailing, a sport that our island is undeniably linked to historically.  Many more people will know about us as a result.

Yes, the airport is a ridiculous price, too extravagant and frankly I’m not convinced it is future proof enough through modularity like some of the alternative designs proposed. There are certainly valid criticisms. However, fundamentally, we’re broke. We have a very poor track record completing things on time and on budget and if we want Bermudians employed to build it, we have to do it in a way that makes money for the investors. Otherwise we could have gotten a cheap one built by the Chinese government that shipped in a ton of Chinese workers to build it and still wouldn’t have had the money to pay them to do it.

It is hard to see the big picture when so many are still struggling each and every day. There is a big divide between the haves and the have nots. Not enough is done to lift and support those at the bottom and ensure that everyone is moving forwards together at the same pace. It is hard to see that all Bermudians will benefit from a recovery in our economy when it is clear that some Bermudians are benefiting more than the rest of us. That doesn’t mean we aren’t all benefiting though.

 

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What will happen if the vote of no confidence is successful?

What happens if a vote of no confidence is held and is successful?  Let’s take a look at the constitution.

Interestingly, a vote of no confidence affects the Premier and not the legislature itself.  By my interpretation, it does not automatically mean parliament is dissolved and an election is called.

An option is provided to consult with the Premier and dissolve the legislature if the vote of no confidence is successful.

If parliament is not dissolved, the Governor would determine if a member of the house of assembly commands the confidence of the majority of the members of the house.

If no member is found who commands the confidence of the majority then parliament may be dissolved at the discretion of the Governor.

If the legislature is dissolved, an election shall be held within three months.

Scenarios

1. The vote of no confidence succeeds, the Premier does not request and the governor opts to not dissolve parliament and an new Premier is appointed.

In this case, given the current minority government, the only likely outcome would be for the independents to side with the opposition leader and have him appointed as Premier. The PLP would still be required to hold an election by May of 2018 in this case.

2. The vote of no confidence succeeds, the Premier requests that parliament be dissolved and an election is to be held within 3 months.

If the vote were to take place this week then the election would have to be held by late August.

Observations

The ultimate decision whether to dissolve parliament is entirely up to the governor.  The Governor “may” dissolve parliament.  The Governor may opt to not dissolve parliament if it is not seen in to be in the best interests of Bermuda.

The date of the election in the case where the Premier requested that parliament be dissolved would be set on the advice of the Premier as long as it is within 3 months.

 

 

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Cannabis and late fees. This is what the PLP used their free pass on?

Of all the legislation that could have been brought forth, the PLP opted for pushing cannabis reform and reducing late fees.  Cannabis reform is inevitable and at this stage it is nothing more than a political football.  The statutory interest rate adjustment seemingly only impacts interest rates where none are defined by contract, in essence, late fees. It seems people are largely confusing the statutory interest rate with mortgage rates when they don’t seem to be the same.  So of all the legislation that could have been brought forth to take advantage of the minority government, why these?  Is it purely playing politics or is there more to it that isn’t apparent?

All the PLP has done by pushing cannabis reform is race ahead to be the ones who can claim credit for implementing it.  Let’s be frank, the OBA have dragged their feet on it and the PLP caught them off guard by introducing their own bill in January.  The OBA’s response of “oh, we’re already working on it” was seemingly an effort to save face.  The OBA’s subsequent tabling of their own decriminalization bill that the opposition wasn’t made aware of was facepalm worthy.  Cannabis reform is certainly important, but is it really so important that it needs to be rushed thorough when both parties seemingly already support it vs. other possible pieces of legislation?

Then there’s the statutory interest rate adjustment.  People seem to be getting excited thinking that this will impact mortgage rates.  Perhaps I’m mistaken, but I don’t see how they’re related.  The statutory interest rate as defined in the Interest and Credit Charges (Regulation) Act 1975 seems to only apply to interest rates charged in the case of where one was not stipulated in a contract.  In layman’s terms, if you hire me to mow your lawn and then you take months to pay me and we didn’t stipulate our contract what late fees would apply, then the statutory interest rate applies.  I can’t find any correlation between mortgage rates and the statutory interest rates as mortgage rates are clearly defined by contract. To be honest, I’m rather confused what the benefits are of this being changed. Thus, why is this legislation so important vs. all other possibilities?  People seem to be very excited thinking this will bring down mortgage rates when that doesn’t appear to be the case.

When the OBA ended up with a minority government I saw it as a great opportunity.  It was the PLP’s chance to demonstrate better governance by pushing forward crucial legislation.  As an example, strengthening good governance like forcing fixed term elections or right of recall of MPs, two promises the OBA have yet to deliver on and don’t look terribly likely to do.  Perhaps borrowing limits or deficit restrictions if they wanted to send a clear message that they mean to chart a new course different from their spendthrift ways of the past.  There were so many possibilities of what the PLP could have pushed through to demonstrate that they’re a new and different party ready to lead the country. How is pushing through cannabis reform and changing the statutory interest rate among them?  If anything, these changes seem highly politically motivated, quite possibly capitalizing on people’s ignorance to claim a win on cannabis reform and the mistaken belief that mortgage rates would come down.  What is missing here?  Why are these pieces of legislation the ones the PLP chose to push before all others?

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Local economist Craig Simmons doesn’t support a “living wage”?

Despite being featured prominently in the image caption for the Royal Gazette’s “Calls for a living wage in Bermuda” article, I noted with interest that it local economist Craig Simmons doesn’t seem to actually support the concept of a “living wage”.  The three options he does support are quite a bit different which makes it ironic how he is featured with the headline. Ultimately Mr. Simmon’s options help outline why a minimum or living wage can be a poor option economically while there are viable alternatives that would achieve the the same goals.

First off it is important to understand what exactly a living wage is.

A living wage is defined as the wage that can meet the basic needs to maintain a safe, decent standard of living within the community.

Certainly a noble aim. However, a “living wage” limits the scope of the goals to only providing for a decent standard of living through means of a wage which leaves anyone who is not fully employed caught short. There are also many arguments to be made about the negative economic impacts that a living wage or minimum wage can have.  A living wage acts as a tax on employers of low skilled workers and would actively disincentivize low skill job creation in Bermuda’s economy.  Bermuda’s economy is not like others and too many fail to realize that concepts that may work elsewhere won’t work here.

With that in mind a prudent individual should recognize that while economist Craig Simmons does seemingly support the goal of providing individuals in society with means to maintain a decent standard of living, he doesn’t suggest a minimum or living wage as a means to do it. None of the three options are wage minimums and economically that makes a huge amount of difference.

The article notes:

Turning his attention to the concept of a living wage, he said there were three options, including establishing a guaranteed income, creating a wage subsidy, or a cash transfer scheme.

Let’s cover each of these.

A cash transfer scheme is the concept of directly providing cash to eligible people.  This already exists in the form of financial assistance and could be expanded.  The big problem with financial assistance as it exists today is that the means testing used can discourage employment and can encourage abuse. We’ve already covered the example of people on financial assistance acting entitled to costly and unnecessary brand name medications. There are other examples such as financial assistance penalizing those with minor incomes encouraging them to stop working to get full benefits because no supplement is offered.

A wage subsidy moves a little closer to the mark.  Rather than penalizing employers with a minimum the government provides assistance with wages to help raise them.  It could be achieved through cash support to boost wages or through a negative income tax. A negative income tax is an extension of a progressive tax system where people earning below a threshold are paid money from the government rather than paying taxes.  While this is an improvement and reduces the negative economic disincentives related to a “living wage”, it adds complexity and only assists workers.

The third option Mr. Simmons outlined is a guaranteed income.  Also known as a basic income, a guaranteed income is a concept this writer first advocated 10 years ago.  It is defined as a scheme in which “all citizens or residents of a country regularly receive an unconditional sum of money”.  The purpose is simple, reduce bureaucracy and complexity and provide an unconditional cash stipend that can act as a rising tide to lift all levels of society.  It lacks the complexity of progressive taxation schemes and reduces the burden financial assistance so only those in genuine need can achieve help.  Economically this is far more fundamentally sound as it can be funded through more equitable flat taxation schemes that don’t unfairly punish employers who rely on low skill work.  It puts cash in the hands of everyone, not just workers.  People like the elderly, disabled, and children would all get a basic income.  Entrepreneurs would be encouraged rather than punished. It would incentivize job creation by making employing people cheaper and open the door to more part time work opportunities, lowering the cost barriers for lower skilled work. Exactly the opposite of a living wage which penalizes many for the benefit of workers.

The goals behind a living wage are noble ones though economically they just aren’t feasible.  Mr. Simmons’ has outlined 3 better options that are more economically feasible. A guaranteed income being the most promising of the options.  It is ironic and rather sad that Mr. Simmons’ has been featured in way that makes it look like a “living wage” in its defined form would be a good option for Bermuda.  It simply isn’t but that doesn’t mean there aren’t viable alternatives we should be considering.

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Fixing Bermuda’s internet: What if ISP’s had to guarantee minimum speeds?

It is no secret that our internet is rather appalling at times.  One of the more interesting approaches I encountered in my travels was in Hungary where ISP’s are legally required to advertise and adhere to minimum speeds.

Here’s an example: ISP’s advertise a 200 meg internet connection which has a minimum guarantee of 50 meg.  If they don’t supply the minimum they are subject to fines.  It keeps ISP’s honest and in my travels through Hungary I never saw the internet drop below the minimums.

Bermuda needs something like this.

 

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Will Bermuda’s economy be disrupted by “FinTech” and “InsurTech”?

A few weeks ago I attended a FinTech TechTalk at the Hamilton Princess.  The first question asked of the panel was “What is FinTech?”  The answers from most of the panelists surprised me as they varied quite a bit from my own interpretation.  The general sense was that the “Tech” in FinTech and InsurTech represents companies in the finance and insurance industries applying technology.  I believe this definition represents a flawed approach. “Tech” implies a company that has technology at the heart of its business to reduce friction across the business, not simply one that uses technology as part of its tool set.  It is a subtle but important difference. If we don’t truly understand this difference we are at significant risk of having our local industry disrupted.

I recently had a chat with a CEO of a reinsurance company who has been making a lot of noise about the industry’s need to embrace technology.  They are convinced they’re on the right track because they’re investigating and investing in the latest and greatest technologies like AI, Blockchain and other areas high in the hype cycle.  They think as a result they’re an InsurTech company but I disagree.  They’re a reinsurance company using technology which is fundamentally different from a technology company.  How is it different?  Technology is not a first class citizen in their organization.  Their board does not have a technology representative driving the vision of how they’re a technology company.  They have a Chief Risk Officer and a General Council but they don’t have a Chief Technology Officer and/or a Chief Software Architect. If technology is just a tool how can you possibly consider yourself a technology company?

In order to be a technology company is it not essential to have technology at the heart of your business?  For example, I would describe my own company as a “TravelTech” company.  While we’re firmly in the tourism vertical but we are a technology company doing tourism, not a tourism company doing technology.  We leverage technology to reduce operational friction for our large tour operator customers.  While certainly they may run tours and activities, their businesses are becoming fundamentally based on and powered by software.  In some cases it is disrupting their entire business models as they embrace the power that our software provides.

As an example, one of our clients used to be a large tour boat operator.  Today, they own no tour boats and don’t actually run any tours themselves but at the same time they’re a significantly larger and more diverse operator.  Rather like Uber or AirBnb, they rely on contractors to run the actual tours and focus on the bigger picture.  How? Technology.  Could we be using blockchain to record signed insurance waivers and machine learning to predict the best tour times and pricing?  Absolutely.  However we haven’t managed to automate enough of the core business yet. Our focus is using technology to reduce friction across the across all elements of our customer’s businesses.  That takes dedication to automating many different facets of the business without getting distracted chasing hype driven technologies as silver bullets.

Bermuda has a problem in that we don’t have enough of a focus on building truly technology driven companies while other jurisdictions are.  Technology companies require serious buy in, expertise and experience on solving the real technical challenges of building great hardware and software.  That kind of buy in has to come from the very top of an organization.  If you don’t have that, you end up being driven by hype, buzzwords and flashy concepts as the technology direction of the organization is set by non-technologists.  Understanding this is incredibly important as it becomes a reality that software is eating the world and most industry verticals are being transformed by software. Nearly every element of a business has the potential to be transformed by software.  Many companies are only barely grasping the idea that the business of doing software is not only difficult but exceedingly complex. Ignoring this puts you at a risk of developing a crisis of bad software and terrible culture.

Trunomi’s CEO Stuart Lacey was closest to the mark in suggesting FinTech is the intersection of technology and finance.  His company is one of the few in Bermuda who genuinely could be described as a technology company.  However, he had a scary thing to say.  He couldn’t find developers in Bermuda so he opened an office in Silicon Valley. If you’re a technology company, why be based in Bermuda over somewhere else like Silicon Valley if we lack appropriate talent here?  Why have more than a brass plate in Bermuda and few jobs if you even bother to be here?  If there are no jobs, what economy do we have?  Without a culture of software we can’t attract real talent.

You can’t have technology companies without a pool of technical expertise to draw from.  Building that pool requires a culture that nurtures and cultivates that kind of expertise.  It takes meetups, conferences and the ability to learn from one another.  It takes a critical mass of top technology professionals in the same location to really drive that sort of a culture.  Bermuda doesn’t have that and doesn’t attract it.  If anything, it is incredibly difficult to attract top technology talent to the island.  Especially when nearly every destination is attempting to do the same and Bermuda adds barriers and bureaucracy to hiring skilled talent that aren’t even effective.

Bermuda faces a serious risk of disruption.  Software will increasingly transform industries by reducing friction at all levels in many business verticals.  Bermuda’s leaders need to wake up and begin to understand that we need to transform our traditional businesses into software companies.  Doing so requires companies and leadership to take software seriously, not treat it as a cost center expecting rapid results without appreciating the total cost of ownership of any such investment.  Software needs C-Level attention, direction and culture within an organization to avoid being hype driven. Bermuda requires a change of pace to make it more attractive to development talent, reduce red tape and create more opportunity.  If we fail to make this transition then we’ll gradually see jobs and opportunity leave the island as industry verticals are consumed by software and there is less need or interest in having anything but a brass plate based here.

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