Rebuild the Island Better Together: Island Economy Amid and Post COVID-19 Crisis
The COVID-19 crisis harmed island economies disproportionally hard, but it also presents immense opportunities for islands to rebuild safer, stronger, more diverse, and more equitable economies.
The US Virgin Islands is a US territory located at the crossroads of mainland U.S. and Latin America. Its pristine landscape and rich culture has made tourism the number one economic sector for decades. Tourism consists of 30% of the island’s GDP. However, the global pandemic COVID-19 has devastated the tourism industry due to the closure of cruise ship lines and air travels. This intensifies an already challenging economy in the USVI impacted by hurricane Maria & Irma in 2017.
In every risk, there are new opportunities. The COVID-19 crisis sends an alarming signal to economic developers and policymakers to diversify the economy, strengthen sustainability and resilience, and address systemic issues that have hampered economic development in the past. The pandemic generated urgency for stakeholders to collaborate for transformational changes.
Here are four areas the RTPark is actively working on with our partners in a myriad of industries to shape a more prosperous economy:
Small businesses are the backbone of our economy. As an economy that is heavily shaped by tourism, small business such as hotels, restaurants, and retails are at the heart of economic recovery. The RTPark keenly makes small business revitalization and transformation at the top of our focus for economic development. It is time to rethink small business strategies and restructure our business model to adapt to the new reality brought on by the pandemic. Particularly, community leadership should:
- Deploy new models to provide support to small businesses and entrepreneurs
- Support businesses and services to move online
- Update procurement processes and incentivize large businesses to source locally from small businesses
- Provide loans and subsidies creatively to save small businesses from bankruptcy
- Build capacity so that small businesses that reemerge from COVID-19 have the knowledge and connections needed to thrive
Workforce Reskilling and Development
Workforce reskilling is particularly critical in this unprecedented time. Technology industries and automation are thriving, while the traditional service industry is declining. To be competitive and resilient in the future workforce, workers and talents need to rethink their skillsets. The RTPark is working aggressively to structure programs that reskill displaced workers to find new jobs and help talents transfer their skills to careers that will be growing long into the future. In addition to adult workers, this crisis also highlights the importance of training youth and providing support and opportunities to the younger generation to be mindful of changes and ignite their interests and curiosity of learning skills that are promising in the future. Currently, we have several programs designed to meet these needs:
- Adult Coding Bootcamps
- STEM Kids Program
- Attracting new technologies and train local communities and businesses using those technologies
Historically, tourism is the principal private-sector economic activity in the US Virgin Islands. Tourism expenditures amount to approximately 30% of GDP and generate 42% of total exports, and on average, 8,000 direct jobs in an economy with a civilian workforce of 42,000. The pandemic devastated the tourism industry globally while shedding light on the urgency of transforming the tourism industry and diversifying the economy.
Economic Equity and Sustainability
The COVID-19 pandemic highlights the urgency of developing an economically viable, socially equitable, and environmentally sustainable economy. The potential of small islands pursuing a sustainable economy depends on maintaining the limited natural resources’ quality, and our economy is vulnerable to ongoing environmental challenges due to geographical isolation. Strengthening sustainable enterprises is critical in building the U.S Virgin Islands’ capacity to cope with environmental hazards, external financial shocks, and health crises. Economic developers need to also think about inclusion and integration of local communities’ voices, ideas, participation and support that tailor to community needs.