KPMG Islands Group has launched a new report, Beyond GDP – Sustainable Economic Growth in Island Economies, which highlights the unique pressures many island economies are facing today.
A critical moment for island economies
Small island economies are navigating a period of heightened global uncertainty. Slowing growth, demographic shifts and increasing exposure to economic and environmental shocks are placing added strain on these economies.
Against this backdrop, Beyond GDP – Sustainable Economic Growth in Island Economies provides timely insight into how island jurisdictions can respond, highlighting both the risks and the significant opportunities ahead.
Evidence-led research, grounded in local expertise
The findings are underpinned by robust academic research led by Professor Matthew Agarwala of the The Bennett Institute for Innovation and Policy Acceleration.
The analysis spans 12 jurisdictions, including the Crown Dependencies and while each island economy has its own unique context, the research identifies six common challenges shaping their future:
- Economic concentration
- Climate and environmental risk
- Inflationary pressures
- Demographic change
- Data gaps
- Limited global influence
These interconnected pressures are increasing complexity for decision-makers and reinforce the need for coordinated forward-looking strategies.
A roadmap for action
To address these challenges, the report sets out ten priority actions, structured across three themes:
- Strategic priorities
- Resilient foundations
- Global visibility and collective action
Moving beyond GDP
A central message of the report is the need to look beyond traditional measures of economic output. Instead, it advocates managing a broader portfolio of assets, including natural, human, social, institutional, physical and knowledge capital.
The power of collaboration
The report highlights regional collaboration as essential to unlocking growth.
For many island jurisdictions, the scale of investment required to build resilient infrastructure, strengthen data systems and attract capital exceeds individual capacity. By working together - sharing expertise, aligning strategies and pooling resources - the report suggests that islands can enhance their global competitiveness and attract long-term investment.
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