Years ago I read a book called Who Moved My Cheese?: An A-Mazing Way to Deal with Change in Your Work and Life by Spencer Johnson (https://www.amazon.com/dp/B004CR6AM4/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1#navbar). It’s an excellent book that tells an interesting allegory about dealing with change. Two characters in the book adapt to change well and move forward while two other characters struggle to change and wallow in frustration and unacceptance. Lately I can’t help but consider how Bermuda seems to be really struggling to accept and embrace change in a number of areas.

We all want the economy to improve. We all want the job market to levitate and offer more opportunities and wage gains. We all want an improved and vibrant tourism product. But all these wishes won’t just happen. They require change.

The recent legislation brought forward to introduce smaller rental cars seems to be poignant example of a necessary change for enhancing the tourism product on the island. In a recent e-mail from the Bermuda Tourism Authority, a very compelling analysis suggests it would be very beneficial to our tourism product.

“Visitor research commissioned last year by the Ministry of Tourism and Transport showed 53 percent of visitors were interested in renting an electric minicar in Bermuda,” the BTA stated.

“That’s significantly more than the 31 percent who said they would be interested in renting a scooter. Bermuda is one of the only destinations in the world not offering some sort of car rental programme. Having this new capacity will improve Bermuda’s marketability and positively impact the tourism economy.

“More specifically, the BTA believes this new offering will make us more competitive as a destination, it will significantly enhance safety for visitors not entirely comfortable on a scooter, it will increase visitor spending and it will build entrepreneurial opportunities for our community.

“All of these benefits can be achieved without negatively impacting the taxi and minibus industries because the size of rental vehicle proposed means a user would be required to travel without luggage and with only up to two vehicle occupants, similar to a typical scooter.”

Of course there is opposition from various groups on the island. Which brings me to an economic concept.

Rent-seeking

“Rent-seeking” was described in an Anne O Krueger paper, “The Political Economy of the Rent-Seeking Society”.

In economic theory, rent-seeking is essentially the attempt by a group or individual to enhance their share of the existing pie without creating greater new opportunities or wealth. Any industry, for example, that offers licences or regulations that somehow restricts free competition or invites excessive lobbying to maintain the status quo could be considered a form of rent-seeking. Rent-seeking, if prevalent and dominant, can reduce innovation and productivity by restricting new entrants and/or competing business developments. This can lead to further entrenchment and ever increasing resistance to change which, I believe, could ultimately harm the greater good of the island and its progression.

There are various forms or permutations of rent-seeking that seem to have developed in Bermuda that may be holding us back from having a more vibrant economy. The issues, however, are very complex and their historic connotations and considerations immense.

The 60/40 rule and immigration are two significant policies Bermuda will need to address in time, in order to move more fully in line with our changing world. Some flexibility of these two are likely to be increasingly necessary if we are to deal with the diversity of the economy and our “denominator problem” (rising obligations and entitlements paid for by a shrinking base of people). Failing to change only increases the risk of fostering a sclerotic social and economic environment unable to advance.

Rather than resist and rebuke those who are moving the cheese or have moved the cheese, Bermuda needs to accept change and foster an environment of expanding acceptance and flexibility. We need to all work together rather than becoming increasingly polarised and antagonistic.

In doing so the whole nation will benefit to a much greater degree both economically and socially. As Spencer Johnson notes: “Being in the uncomfortable zone is much better than staying in the cheese-less situation.”

Nathan Kowalski CPA, CA, CFA, CIM is the chief financial officer of Anchor Investment Management Ltd and the views expressed are his own.

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