An average of £1.4trn of capital is intermediated in Jersey each year, supporting £170.3bn of global economic output, 5.1 million jobs worldwide, and £73.3bn in associated wages through ‘global value chains’ facilitated by the island.
So says a report published today – Jersey’s Contribution to Global Value Chains – highlighting research undertaken by the Centre of Economics and Business Research (CEBR) and commissioned by Jersey Finance to understand the island's role in global value chains.
The report assesses Jersey’s global economic footprint, illustrating the island’s role as an international financial and economic conduit.
It shows that the UK is the most significant destination of capital across the period examined (2017-2020), while Europe is the most dominant continent, followed by Asia (including the Middle East) and North America.
Value chains
The value chains facilitated by Jersey’s financial services sector supported an annual average of £62bn of UK GDP between 2017 and 2020, representing approximately 2.9% of total UK output – a significantly greater share than in any of the regions analysed.
“Capital is pooled in Jersey and subsequently redistributed through value chains,” said Joe Moynihan (pictured), Chief Executive of Jersey Finance.
“This redistributed capital is utilised worldwide, generating further real economic activity, translating to employment opportunities and wage payments for individuals.
"Jersey plays a critical role as a facilitator of this economic activity – it improves the ease with which capital can circumnavigate the global economy.”
Fund administration record
Since the 1960s, Jersey has been a global destination for the administration of trusts. Each year on average, between 2017 and 2020, the estimated capital administered by the trusts and asset holding vehicles sector – encompassing private and corporate clients – was £1.14trn.
This supported 0.20% of global GDP and a scale of economic activity in line with the GVA of Hungary in 2020.
Jersey is a globally recognised centre of excellence for fund management and fund administration. The increase in Jersey’s fund sector’s capital base from 2017 to 2020 was 71.5%, from £164.5bn to £282.1bn, highlighting the strength of Jersey’s fund administration sector.
The banking industry in Jersey is another significant component of the economy’s financial services sector, serving markets across the globe.
On average, during the period examined, it is estimated that £142.2bn of assets were administered by the sector annually, supporting £14.9bn of global GDP via value chains.
Employment status
The research estimates that global employment supported by value chains intermediated in Jersey was 5.1 million on average over the period.
The analysis also indicates that on average for every job in Jersey’s financial services sector, the value chains facilitated supported an additional 380 jobs globally.
Owen Good, Managing Economist at CEBR, commented: “The figures show that, although Jersey’s GDP is relatively small compared to many nations, the island makes a very significant impact on the global economy.
"Our research also found that, despite the global economic turmoil resulting from the Covid-19 pandemic, the impact on Jersey’s role in supporting global value chains has been limited and that Jersey’s robust contribution looks set to continue.”
• The report can be downloaded here