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Find solace in our position of strength
Ok! Enough of all the optimism. I've been trying to keep these columns focused on the positive stories about the technology sector, but it seems silly to continue to ignore the biggest story of year: the economy.
In fact, even Bank of England Governor Mervin King has finally used the dreaded 'R' word and the impact on Sterling was immediate.
Yes, we are in a recession and anyone who thinks it's not going affect the Isle of Man should have their head read.
Indeed, the National Institute of Economic and Social Research says the UK is on the brink of its first full year of recession since 1991.
It says Britain will suffer the worst setback of all leading economies.
As the Isle of Man's economy is strong linked to the UK's we must take note.
With everything going on in the global banking industry, few people in the Island have been untouched by the events of the past few weeks.
And, it won't be long before the ramifications trickle into most other industries, including technology.
The situation reminds me of the dark days of 2001 when the internet bubble burst almost overnight and the doors closed on hundreds of start ups, almost without warning.
The current layoff trend has already taken hold in Silicon Valley, the proverbial home of web tech.
Just last week internet search company Yahoo! announced more than 1,500 job cuts after posting disappointing interim results.
The company's net income fell by 64 per cent to US$54m for the past quarter.
These cutbacks amount to 10 per cent of the workforce, but the company had already cut 1,000 jobs earlier this year.
Seesmic, a popular video blogging service made 10 of its 24 employees redundant this week.
AdBrite, an online advertising network dismissed 40 per cent of its employees last week.
Ticketmaster has cut 35 per cent of its workforce, Sirius XM, the satellite radio operator has cut its team by 50 per cent and eBay has cut 10 per cent.
The list goes on and on.
There are reports of some 300,000 UK redundancies announced last week.
And we've started to see the trend here in the Isle of Man.
I know of several IT professionals made redundant by banks and financial services companies over the past few weeks.
Indeed one software house on the Island made layoffs earlier this month too.For those in the outsourcing market, it's bound to get worse before it gets better.
It seems that European outsourcing deals have dropped in value by two thirds, their lowest level since 1996, thanks to a decline in demand among financial services.
Reports from TPI, a business advisory company, show that number of new contracts signed in Europe fell from 75 to 56 from the second to the third quarter, with total contract value decreasing from 10.6 billion to $3.6 billion.
But perhaps we can take comfort from a recent initiative of the UK's Department of Business, Enterprise and Regulatory Reform (formerly the DTI).
They've published a report entitled 'Digital Britain' which describes how the department will focus accelerating growth of the digital and communications industries.
They are working on an action plan to open markets; empower and inform consumers and citizens, provide universal access to public-service content and establish a responsive regulatory framework.
Hopefully, this will be successful in stimulating the UK IT sector.
Maybe I'm just in a pessimistic mood. Others seem to think that the Isle of Man is well placed to weather the storm.
DTI Minister David Cretney has been quoted as saying the Island's economic performance for the year compares very favourable internationally. I agree.
The government has worked hard to diversify the Manx economy so we are less reliant on banking and finance.
But still, it would be nave to believe we'll be left unscathed.
Along with finance, technology and every other industry sector are going to feel the pinch.
I read this morning that there are doubts about whether another Bond movie will be made any time soon because of the credit crunch.
So even Hollywood is knuckling down in the face of bad times.
We should take a quantum of solace in knowing our economy starts from a position of strength to navigate tough times ahead.
Head down now, let's get through it.
>>Sherrilynne Starkie is the managing partner of Strive Public Relations, a strategic communications consultancy serving the Isle of Man. Visit her business blog, Strive Notes for frequent updates www.strivepr.com/notes or follow her on twitter.com/sherrilynne
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Weather for Isle of Man
Tuesday 07 February 2012
Today
Sunny spells
Temperature: 1 C to 7 C
Wind Speed: 16 mph
Wind direction: South east
Tomorrow
Sunny
Temperature: 3 C to 4 C
Wind Speed: 23 mph
Wind direction: South
