Today’s technology has “the potential to quietly siphon jobs out of Bermuda” and is one the principal reasons the island’s economy continues to struggle, says Scott Lines, president and chief executive officer of LOM Group.

He made the comments while reporting a small profit for the publicly-held, international financial services company — an improved set of results over last year, when they reported a loss.

“There is a jobs creation war going on, with many developed nations implementing policies, tax breaks and subsidies in order to attract these now mobile and transportable service jobs,” he said, adding Bermuda — a service-based economy — is now fully exposed to the winds of international competition in attracting those service jobs.

“This is not only directly impacting job creation in Bermuda, and very much impacting the creation of well-paid middle management or entry-level jobs, but that competition also has the potential to quietly siphon jobs out of Bermuda. We have lost over 5,000 jobs over the last five years.”

Mr Lines had explained: “Most if not all of the work interaction is now flowing through computer systems. Internet connectivity between offices, utilising voice and video over the internet, have dramatically improved communication between offices in separate countries, and has resulted in face-to-face meetings being held where many of the attendees are thousands of miles apart.

“This has dramatically improved productivity; however it also means that any size company can relocate executive, administrative or support jobs to more attractive jurisdictions.

“Sometimes the decision is driven not by salaries, but due to ancillary benefits such as subsidies, office rents, medical costs, electricity, connectivity costs, lower friction costs (such as work permits and work visas), or even simply due to a perceived lower risk environment.

“So not only has technology made it possible to shift the production of services to more attractive centres, but governments around the world are actively competing for those jobs.”

Among the changes LOM report they have made to improve their bottom line is to move their London-based subsidiary LOM (UK) Limited to the government enterprise zone in Bristol, in England’s west country, along with information technology staff, and they also plan to recruit support staff there.

In Bermuda, he said: “Without a substantive change in productivity, to have economic growth we need to add workers. That will not be an easy task given the global environment. Bermudians will need to accept that the world has changed, and that necessitates dramatic and often uncomfortable changes for all of us.”

Mr Lines also said the effort by the Government to polish our image as a place to invest and do business has been successful, and there is a real effort to attract capital and businesses to Bermuda. But: “ ... creating growth in any context takes much longer than destroying it,” he said, and used the analogy of growing a tree over a thrifty year period — “while chopping it down is the work of a morning.”