Advanced Search

Please click here to take a brief survey

Island Economies in a Globalized World
Alan AtKisson, 27 Feb 09


In Swedish, the word for "island" is a single letter, itself a small island: ö.

When one comes upon it in reading, this little "o" with two dots over it appears suddenly and alone in a surrounding sea of words — tiny, yet redolent with linguistic meaning and personal associations. Ö seems too long for company, and to be happily self-contained at the same time. Ö needs no other letters to be a word and to mean what it means. And yet, unless it is surrounded by other words and given a context, ö appears to be just another letter of the alphabet, and is meaningless.

The actual islands of our world are similarly self-contained and yet dependent, beautifully isolated and yet in need of contact, a combination that contributes to that hazy quality of specialness that seems to hover over nearly all of them, especially to the visitor. Island ecologies, fenced off by water, are known for their propensity to exert unique evolutionary conditions on the species who live there, producing pygmy elephants and other radical variations in phenotype. Smallness of scale, distance from "the rest of the world," and firm-yet-crossable boundaries define the island experience for nature and humans alike.

Island economies, on the other hand, are very different, especially in today's globalized world. Modernity has caused a wrenching transformation in island economies, which were once dependent on the trading and brokering acumen of their citizens, not to mention their ability to hunt, fish and farm. Island economies have always had the potential to "punch beyond their weight," using their smaller scale, highly developed social capital (supported by greater demands for mutual trust), and distance from greater powers to leveraged advantage. The histories of islands like Gotland, which grew wealthy as a Hanseatic trading center in the 1200's, and Nantucket, which concentrated Kuwait-like wealth onto its shores in the 1600s thanks to its mastery of the whaling business, are illustrative.

But modern technology has amplified these potentials to new, and increasingly risky, extremes. Frequently enjoying some level of autonomy, or at least a psychological sense that they can "go their own way," true island economies can more easily establish unusual policy frameworks and concentrated competence clusters, mirroring in a fascinating way their ecological systems' propensity for exaggeration and uniqueness. As banking centers, as tourism destinations, as home bases for shipping companies or insurance managers, island economies now often appear as unexpectedly weighty distortions in the overall gravitational field of the global economy. Like some unusually small interstellar phenomenon that nonetheless glows brightly and exerts surprising force, islands can draw in and spit back out astonishingly large flows of money. By then skimming off tiny percentages of those flows, their balance sheets can grow wildly.

But such high flow-volumes and pressures do not touch the island's shores without risks. The recent case of Iceland, whose glories in the financial markets were followed by the first and the worst of travails among nations in the aftermath of the financial collapses of late 2008, provides a crystalline case in point.

The Secrets to an Island's Success
Like their economies, island ecologies are often supercharged with a diversity that seems far in excess of what their size might cause one to predict. Pygmy elephants, Darwin's Galapagos finches, the bizarre and ancient organisms of the Socotra archipelago ... islands breed uniqueness in nature, just as their human inhabitants prize the uniqueness of their cultures, dialects, and vantage points on the wider world.

All islands are similar, however, in being excellent case studies in the concept of sustainability, and in the value of systems thinking. They have clear boundaries, and clear physical limits. What comes in must either fit into what already exists, or leave, or push something else out to make room. When the economy ruins the natural world, everybody can see it. If the social organization is not working, economy and nature both suffer (think Easter Island). And human health and well-being is a fundamental asset, whether the island's prosperity depends on tourists seeking peace and fun, or on the hunting prowess and ingenuity of a traditional people.

In systems terms, life on an island shortens the feedback loops between these elements, both for events limited to the island itself, and for events that "happen to" the island because of things happening elsewhere. Chains of cause-and-effect run their course quickly, and "side effects" become central. It is no accident that the first peoples to cry out about the destruction of their homelands due to global warming are islanders in warm, expanding seas. At the other extreme, it is also a sign of short (and therefore quick) feedback loops that some villages in Greenland -- each village a kind of island culture all its own -- have experienced "outbreaks" of suicide by young men who, very suddenly, cannot see a future for themselves that preserves their dignity as men.

While emerging problems are more quickly apparent on islands, solutions are likewise similarly speedy to implement – at least theoretically – for the same reasons that sustainability is a bit easier to understand, and to analyze, in an island context. Things can happen faster on islands. Cultures may be recalcitrant and reluctant to change; but once they adopt change, they can change overnight. I have been amazed, for example, at the rapidity with which the island of Gotland, where I spend my summers, has emerged as a center for sustainable energy, sustainability education, ecologically produced food, and more.

The globalization patterns noted earlier are, of course, a complicating factor. They can make the embrace of sustainability easier by making vast amounts of information available, quickly. But they also blur the island's otherwise stark boundaries, create new dependencies that may be difficult to wean away from, and open the island to various kinds of "invasions," from exotic species to exotic financial instruments (not to mention people with exotic hair fashions or body piercings).

Research that considers the special case of island economies – which so often have "unfavorable locations" (from a motorway perspective) and "limited accessibility – have come up with three avenues for the economic sustainability of islands: tourism, virtual work (e.g. operating call centers or on-line casinos), and education. But of course, other places compete in these domains, places that are not remote islands, nor evenly remotely island-like. So one word sums up how islands can create competitive advantage, using a process like their unique natural evolutionary patterns: differentiation.

Economically successful islands learn to harness their innate capacity for uniqueness. By being small-but-different, by making things differently and uniquely, islands can change their image. And creating an attractive image is the name of the game for islands in a global economy.

And what is attractiveness a function of? Desire. Islands have to make people want to be there ... even when those people are somewhere far away.

Many Kinds of Islands
Most of us have relationships to at least one island – if not as a home, then as a vacation destination, or even just as the dream of such a destination. It is not hard for people to relate to islands. The very concept of an island sits somewhere deep in the human psyche, perhaps because we ourselves are island-like: not "No man is an island," but "Everyone is an island."

So while one thinks first and foremost of an island, an ö, in physical terms, there are of course many kinds of islands. There are pockets of urban density that, in their economics and culture and even in aspects of their environment, are more like islands than not. There are cultural and linguistic islands, of course, which may be concentrated in one place, or may be scattered across the planet, connected by bonds of kinship, whether the language is a special dialect from tiny place, or the jargony language of a uniquely small profession (say, the "island" of lute players).

We can extend the concept of island almost indefinitely – and indeed, it is useful to do so. Planet Earth, after all, is an island. It floats alone in the sea of space, experiencing "limited accessibility" to the rest of the universe (or even to its nearest neighbors), even if its location appears quite "favorable" relative to the nearest star, our sun. And of course, it requires only a reminder – and not a lengthly explanation – that nearly all the properties of islands described above could be easily applied to our planet as a whole. We would not be suffering now from the problems of global warming, species extinction, and resource scarcity were we living considerably closer to other planets with ample resources and some extra room. We are forced to confront our global-island problems because of the island-like limits we face, and our island-like capacity for differentiation, also known as evolution.

Looking out still further our entire galaxy could be seen as an island, so vast are the distances between these clusters of stars. And more than one school child and astrophysicist has contemplated the possibility that the entire universe is itself a vast "island" floating in a sea of ... something else.

Zooming back down to Earth, and to the image of one specific island (you choose which one) struggling to find both prosperity and sustainability in the midst of a complex, globalized, environmentally stressed world, it is clear that "island thinking" is not just a fun little metaphor; it is absolutely critical to our success as a species on on this planet.

What Islands Can Teach Us About Sustainability
The case of islands is so special and important that it has merited the creation of an entire international bureaucracy focused on their special development needs. Studies of the "Small Island Development States," or SIDS in UN-parlance, are unsurprisingly revealing, but surprising nonetheless.

A comparison of their environmental situation, for example, makes it plain that islands are much more vulnerable to decaying natural conditions – an illustration of the "short feedback" principle noted earlier. More than 70 percent of SIDS analyzed for a UN-sponsored study were categorized as Highly Vulnerable or Extremely Vulnerable in environmental terms. This compares to only 41 percent for all countries. When it comes to water availability, the health of their biodiversity, and their susceptibility to the problems of climate change, islands get hit first.

Island economies are increasingly vulnerable as well. Energy price increases hit them first and hardest. Tourism can drop off drastically at a terrorist-moment's notice. And of course the feedback loops being short means that environmental wear and tear can produce economic weakening, as the island of Okinawa has experienced during the last decade. Researchers studying that situation report that while numbers of visitors have increased, the apparent cost is a decline in attractiveness – the quintessential asset of the island, the engine of desire. The visitors are still coming to Okinawa ... but the growth has slowed, and the expenditures per tourist have declined as well. Okinawa, it seems, just isn't as beautiful and desirable a destination as it used to be.

What happens when, instead, an island invests in increasing its attractiveness, meaning here that mysterious mixture of beauty, allure, fun and "difference?" Studies of Sri Lanka suggest that islands can thrive when they build a beneficial feedback loop out of their attractiveness and their economics: the development of "Eco-Tourism" has saved that island's elephant population, which in turn has increased its attractiveness as an eco-tourism destination.

Islands teach us that treating nature as the precious asset that it is can generate greater long-term economic sustainability.

This, of course, is an important lesson for thinking about Island Earth as well.

Conclusion: Islands of Ethics
Islands may at first sight seem an extreme example for all kinds of dynamics, and therefore not so relevant to the vast majority of people who live on the larger, continent-sized islands we call the "mainland." But as we have seen, this is such a wrong way to think as to be dangerous. Islands are the early warning systems of our planet. And they can be our "sustainability laboratories."

What's required of islands, in order to achieve long-term economic prosperity in ecologically healthy ways, is the same thing that is required of all of us: a willingness to understand limits, a willingness to live within them, a willingness to innovate and change so that the systems we create, as humans, fit comfortably together with the natural systems in which we are embedded.

That willingness is fundamentally an ethical choice. The word "ethics" does not mean that it is entirely optional: the survival of our species requires that certain behaviors be cultivated (cooperation, invention) while others are discouraged (murder, freeloading). Just as people in an island community live together in limited space, the "musts" of sustainability live tightly together with an emerging vision of ourselves as people who seek not just economic development or even sustainable development, but good development. Good people create good islands.

Good people are also at work all over the world, trying to make a better world. Islands can help show us the way. If islands cannot be made sustainable, nothing can. If islands can, then everything can.

And islands can.

This essay was developed from a keynote address delivered to an international conference on island sustainability in June 2008, on Åland, a semi-autonomous island (with a population of 27,000 and its own parliament) that is Swedish-speaking but part of Finland. You can read the essay in full on Alan AtKisson's blog, WaveFront.

Photo credit: flickr/Aaron Escobar, Creative Commons license.

Bookmark and Share


Wow, what an insightful essay, Alan! You've managed to put into words many of the feelings I've struggled to express to friends and relatives who question why we chose an island upon which to establish an ecovillage.

One thing you didn't really touch on was "island as a castle with a moat." If things get really bad, it may be good to have water around you, so that your unique survival strategies aren't dissipated by the outside world.

For example, our island has no "big box" stores, although a nearby community of similar population, just 20 minutes drive after crossing the water, is inundated with them.

As another example, my heart soars when I read in the police news section of our island newspaper that some person has been "banned from the island." You have a persistently troublesome visitor, you escort them to the ferry and ask them not to return. That's hard to do without a moat!

Much of the social beauty of an island is (as you note) the freedom from the shackles of the mainland, the freedom to implement unique solutions. We don't have "big box" stores here because islanders see what they do to small communities, and won't put up with such things. Mall*Wart has tried several times.

And yet, we produce less than 4% of our own food, and are heavily dependent on tourism. The amount of tourist spending is inversely proportional to the cost of the ferry, which is directly proportional to the cost of petroleum. Despite recent cheap gas, the long-term trend is clear.

But many of us islanders see this coming, and are working on coping strategies for when the ferries only run once a day, or perhaps once a week. We are busy preparing for food and energy self-sufficiency, and an island seems like an ideal place for such an experiment.

Posted by: Jan Steinman on 4 Mar 09

Post A Comment

Please note that comments will remain open for only 14 days after the article is posted. While previous comments will remain visible, attempts to post new comments after this period will fail. This helps stop comment spam, so your forebearance is appreciated.

The Worldchanging comments are meant to be used for further exploration and evaluation of the ideas covered in our posts. Please note that, while constructive disagreement is fine, insults and abuse are not, and will result in the comment being deleted and a likely ban from commenting. We will also delete at will and without warning comments we believe are designed to disrupt a conversation rather than contribute to it. In short, we'll kill troll posts.

Finally, please note that comments which simply repost copyrighted works or commercial messages will be summarily deleted.

Yes No







MESSAGE (optional):

Search Worldchanging

Worldchanging Newsletter Get good news for a change —
Click here to sign up!


Website Design by Eben Design | Logo Design by Egg Hosting | Hosted by Amazon AWS | Problems with the site? Send email to tech /at/
Architecture for Humanity - all rights reserved except where otherwise indicated.

Find_us_on_facebook_badge.gif twitter-logo.jpg