Carolyn Gelling, Head of the Isle of Man Office at The International Stock Exchange Group (TISEG), explains how The International Stock Exchange (TISE) is part of the island’s ecosystem for SMEs.
It is widely recognised that a thriving SME sector supports the long-term economic growth and prosperity of a jurisdiction.
SMEs create jobs, spur competition and drive innovation, including generating new ways of doing business. The successful growth companies of today grow to become the large companies of tomorrow.
In the UK, they are often described as the ‘powerhouse of the economy’. It is not difficult to see why SMEs, which are generally defined as any business with fewer than 250 employees, can have such an influence on the economy when we consider that there were 5.7 million SMEs in the UK in 2017, which represents more than 99% of all businesses. [Source: House of Commons Briefing Paper 06152, 28 December 2017].
Isle of Man strategy
In the Isle of Man, we have embraced a strategy that seeks to grow our local SME sector, including start-up enterprises. This not only looks to our economic future but in the short term creates new jobs and further diversifies our economy.
Creating an environment in which SMEs can establish and flourish is a critical factor for success. On their journey, SMEs call upon the services of many other businesses and professional advisers as they outsource and seek advice to help grow their businesses and facilitate their expansion plans. Key building blocks required include access to finance, markets, technology and a skilled workforce.
"Access to capital is particularly important to businesses as they progress through the different stages of their development."
Access to capital is particularly important to businesses as they progress through the different stages of their development. The Isle of Man offers the full range of financing options, including seed funding, angel investment, bank lending, venture capital, private equity and now also access to the capital markets, in the form of TISE.
Traditionally, listing debt or equity on a stock exchange would be considered the preserve of larger companies but TISE is able to provide SMEs with a viable route to access the capital markets. TISE has a fee regime and admissions criteria which are better suited to meeting the needs of growing businesses than those of some larger exchanges.
TISE is able to support both growing local Isle of Man businesses and those from further afield, such as UK-based SMEs.
Northern Powerhouse
The Isle of Man has forged strong links with the North of England and our business community continues to strengthen relationships in the region. This dovetails well with our work at TISE where our Isle of Man office is spearheading our business development activity in the Northern Powerhouse cities of Manchester, Liverpool and Leeds and with our plans to extend our reach into Scotland and Ireland. We are working closely with Isle of Man firms who have existing contact networks in those places, although we are very much at the start of a journey in showcasing our offering as a listing venue for UK SMEs, which is a business stream which will be income generative for other service providers in the Isle of Man.
"The stable, full-service ecosystem which we have in the Isle of Man should prove attractive to both local SMEs but also growth companies from the UK."
The attractiveness of this offering has been strengthened by Brexit. The UK Government is looking for SMEs to be the engine room of economic growth for the UK economy through Brexit. In order to achieve this, SMEs are going to need support to help facilitate their development but the UK itself continues to face extreme uncertainty. Conversely, the Isle of Man offers strength in its long term position of being outside of the EU and this certainty enhances the appeal of the financing and support services available from the island, including listing with TISE.
Conclusion
The stable, full-service ecosystem which we have in the Isle of Man should prove attractive to both local SMEs but also growth companies from the UK. It is important for us to collaborate in maximising the potential from these opportunities, not just for the short term benefits but the long term economic growth and prosperity of the island.
This article originally appeared in Isle of Man Portfolio Magazine, May 2018.