Canada's Maritime Islands' experience in stimulating tourism and knowledge-based services exports: Lessons for small island economies

Given the catalytic role of exports in economic growth, and the difficulty that isolated islands have in developing merchandise exports, an alternative is to focus on strengthening the exportable services sector. This paper studies the nature of business development incentives used in Canada's Maritime Islands to promote exports of services by encouraging growth in tourism and knowledge-based services industries. While the incentives appear to assist the growth of these industries in the Maritime Islands, their effectiveness accrues only if the prerequisite basic infrastructure is in place. Island economies are therefore encouraged to invest in these basic structures necessary to attract investments. A sustainable approach to developing the services sector growth is to build and maintain factor, specialization and productivity advantages.