The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s mission to establish a Grand Bahama “technology hub” yesterday received a major boost from an investor pledging an annual $50m economic impact by 2020.

GIBC Digital, a New York-headquartered technology firm, unveiled ambitions to triple its initial Freeport workforce to 150 staff within three years following the planned opening of its office this month.

The seven year-old company, in a press statement, said its initial $2.5m investment would result in 50 jobs at an office that will serve as both GIBC Digital’s global training headquarters and a data/artificial intelligence centre.

And its chief executive, Greg Wood, suggested The Bahamas could become “the Silicon Valley of the Caribbean” within ten years if it pursued its technology hub ambitions through to fruition.

Kwasi Thompson, pictured, minister of state for Grand Bahama, hailed the company’s promised investment as “a very significant step for our technology hub”, given that it could act as a magnet that draws like-minded companies to locate on the island.

He told Tribune Business that GIBC Digital’s interest proves the Government is “on the right track” with its “technology hub”, and that its arrival will motivate the Government to “double our efforts”.

Mr Thompson revealed that the Minnis administration aims to further promote Grand Bahama to the global technology industry via a June 2018 conference on block-chain and financial (Fintech) technology, following the recommendations of its “hub” steering committee.

Tribune Business understands that GIBC Digital’s investment will be formally unveiled at a press conference today, but the company touted its impending arrival in Freeport through a press release issued yesterday.

“GIBC Digital will establish the office with an initial $2.5m investment,” the company said. “The investment will enable the hiring of 50 people to do both local and regional work focused on automation, cyber security and data intelligence. In addition to this direct investment, the company will invest another $1m of its resources into training its new employees.”

It is unclear how many of these 50 jobs will go to Bahamians versus skilled expatriates that GIBC Digital will bring in. Mr Thompson, in remarks to be delivered at the press conference today, said the $1m investment would involve the “deployment of employees from the US, the UK, and other areas to The Bahamas to conduct training”.

The Minister added: “GIBC anticipates that for each skilled job created, another 2.5 jobs will result in our local service and tourism sectors, resulting in an estimated economic impact of over $10 million in the first year alone.

“Further, GIBC has expressed plans to expand its Bahamian operations to over 150 employees and build a state-of-the-art, sustainable data and artificial intelligence centre within three years, bringing an economic impact of $50 million by 2020.”

GIBC Digital’s investment is likely to be especially important for the Minnis administration given that it marries three key initiatives - establishing Grand Bahama as a ‘technology hub’; the Commercial Enterprises Act; and encouraging international companies to establish a physical presence/real operations in the Bahamas.

Mr Thompson confirmed that GIBC Digital was “among the first companies” to apply for, and be approved, under the Commercial Enterprises Act, which aims to smooth the path for investment in targeted industries by easing Immigration bureaucracy and ‘red tape’.

The Act allows approved companies to send key personnel to the Bahamas, and establish operations, without first being in possession of valid work permits. Such permits must be applied for within 30 days of these executives’ arrival in the Bahamas and, should no reply be received from the director of Immigration within 14 days, the permits are automatically deemed to have been granted.

The Act, together with the Grand Bahama ‘technology hub’ initiative, are major components in the Government’s plan to restructure and reposition the Bahamian economy by diversifying away from its reliance on tourism and financial services.

With liberalisation/deregulation, and full World Trade Organisation (WTO) membership, other important elements, the Minnis administration is focusing on attracting knowledge-based industries with the potential to be major foreign exchange earners and creators of high-paying jobs.

Mr Wood, GIBC Digital’s chief executive, said this was exactly what his company will bring to Grand Bahama. “We are hiring local people and providing them with the skills they need to be part of the digital workforce,” he said in a statement. “We aren’t just creating jobs; we are creating in-demand, high-paying careers. The positive economic impact for Bahamians will be incredible.”

He added: “We are excited to be a part of the Minnis administration’s vision to make Grand Bahama a tech hub. Ten years from now, it will be thought of as the Silicon Valley of the Caribbean. This is the perfect time to be part of the growth and reinvigoration that’s taking place here.”

Mr Wood’s statements are strikingly similar to Mr Thompson’s prepared press conference remarks, with the Government hoping GIBC Digital’s arrival will send a signal to the global technology industry that the Bahamas is open for business and merits consideration as a location for physical presence.

GIBC Digital was founded by Mr Wood in 2011 as an enterprise focused on the provision of operational and information technology (IT) strategy, with a focus on regulatory-driven change. As client demands changed, its business model has evolved into a focus on other sectors, including cyber security and fraud prevention, plus data intelligence.

The company’s website describes it as “having more than 35 people around the world”, indicating that the Freeport expansion may double the existing workforce. Clients are said to have included many of the world’s major financial institutions, including Citibank, J. P. Morgan, HSBC, UBS, Credit Suisse, Barclays, Deutsche Bank and AIG. Former high-ranking UBS and Citigroup staffers are said to be among its executives.

Apart from its New York headquarters, GIBC Digital also has offices in Boston, Stamford, Tampa, London, Hong Kong, and Singapore. Besides Freeport, it also plans to establish a presence this year in Dublin, Toronto, Johannesburg and Lagos this year, according to its website.

Tribune Business sought to contact and interview Mr Wood on the company’s Freeport plans yesterday. However, despite corresponding with GIBC Digital executives on the matter, no interview was arranged before press time.

Mr Thompson yesterday expressed hope that GIBC Digital’s investment signals Grand “is an ideal place for technology companies to set up an office, and investors have the confidence to do so”.

He added: “I think it sends a very positive message out to the rest of the world, for technology companies, when it comes to what Grand Bahama has to offer. They’ve [GIBC Digital] obviously seen there’s some strategic benefit from setting up an office, not just in the Bahamas but Grand Bahama.

“We hope this really signals to other, major technology companies; global technology companies, that Grand Bahama is a good space to be in and an ideal location to be in. We hope; we can’t obviously make any concrete predictions, but we’re very hopeful this goes to provide the necessary incentive for others to come in.”

The Government has invested significant resources in establishing Grand Bahamas as a so-called ‘technology hub’, and the ‘capture’ of GIBC Digital provides some early reward for its efforts and boosts the initiative’s credibility.

“We are at the beginning stage of this technology hub initiative,” Mr Thompson told Tribune Business. “It’s a positive sign to have a global company like this; it’s a really positive sign for the jurisdiction.

“We’re going to continue to work; continue to plan. It’s reinforcing and confirming we’re on the right track with this initiative. It motivates us to double our efforts because we’re making good progress. It’s a positive start.”

Mr Thompson confirmed that the Government is continuing to follow the recommendations of its ‘technology hub’ steering committee, which identified numerous reforms - ranging from ‘ease of business’ and regulatory improvements, to training, education and access to funding - as necessary to position Grand Bahama as a location for this industry.

He will say today: “In keeping with the recommendations made by our Technology Hub steering committee, the Government will host a blockchain and crypto-currency conference in June of this year.

“The purpose of this conference is to introduce the Bahamas, particularly Grand Bahama, as a jurisdiction which is favourable for investors, and to present Grand Bahama as an ideal location for technology companies and those focused on block-chain, cryptocurrency and fin-tech solutions.”

Mr Thompson yesterday told Tribune Business that the conference, which is currently “in the planning stages”, was intended to both promote Grand Bahamas as a location and bring together technology start-ups and entrepreneurs with potential financiers, such as venture capitalists and ‘angel investors’.

Mick Holding, the Grand Bahama Chamber of Commerce’s president, yesterday told Tribune Business he had met GIBC Digital’s executives at last week’s business-to-business expo, where they briefly spoke and informed him of their plans.

“It’s a start,” he said of the company’s investment. “Every initiative has to start somewhere. To have one of that size coming here within a relatively short time of it [the technology hub] being launched will hopefully encourage others to follow.

“They’ve obviously done their due diligence on coming here, and it opens the door for others. If companies like that think this is a great move, why wouldn’t it be good for someone else. It’s positive. It’s got to be.

“They’re a large company, as far as I’m aware. They seem very enthusiastic about coming to the Bahamas, and hopefully they’re going to be the first of many.”

However, some in the Bahamian technology industry reacted with caution to GIBC Digital’s potential investment. One source, speaking on condition of anonymity, argued that “Grand Bahama is not ready for it right now” because the island lacks the necessary supporting IT and other infrastructure to provide the proper supporting platform.

They warned that if the expectations of GIBC Digital and other ‘early movers’ were disappointed, it could undermine the whole ‘technology hub’ strategy. “Yes, it could work, but do you have the housing, the restaurants, are bank accounts going to be open in time?” the source said.

“Why would a company go to Grand Bahama when it is far more expensive? Living costs are expensive, and the ‘ease of doing business’ is non-existent.