Structure of the economy
The annual report Measuring Jersey’s economy – GDP and GVA – 2022 was published on 4 October 2023. The following table shows a breakdown of Gross Value Added (GVA) by sector in 2022.
For the first time the report uses the 2007 Standard Industrial Classification, which facilitates harmonisation of statistics and international comparisons. The report includes the following comments on the new presentation -
- Financial and insurance activities includes a number of sub-sectors such as banking, trust and company administration as well as other financial service providers. It does not include legal and accounting services which have been traditionally included within the Jersey “Financial Services” GVA figures. These sub-sectors are now included under the “professional, scientific and technical activities” sector making international comparisons easier.
- Real estate activities includes rental income of private households which was previously presented separately. This includes both rental income earned by private households as well as imputed rental costs of owner-occupiers – that is the amount owner-occupiers would pay to themselves to rent their properties. The imputed rental costs of owner-occupiers accounts for 64% of the “real estate activities” figure.
- Public administration includes the Government of Jersey, non-ministerial departments, as well as the twelve Parishes. It does not include trading entities such as the Ports of Jersey or Jersey Car Parks (which are classified under transport and storage).
- Professional, scientific and technical activities includes the activities of legal and accounting services.
The report on the size of the economy in 2022 included the following -
- GVA increased by 5.9% in real terms compared to 2021.
- Total GVA at was £5,761 million.
- The annual increase in overall GVA was driven by the financial and insurance activities sector as a result of increased net interest income in the banking sub-sector.
- The largest percentage increase in GVA was in the accommodation and food services sector, which increased in real terms by 24.7%, continuing the sector’s recovery from the Covid 19 pandemic.
- Several sectors recorded real-term GVA decreases, particularly agriculture, forestry and fishing (down 11%) and utilities (down 9%).
The Chief Minister’s Ministerial letters, published on 10 August 2022, included a letter to the Minister for Economic Development, the key part of which said –
I would like you to deliver a sustainable approach to our economy that's underpinned by strong strategic thinking, and objective tools to assess and target future economic interventions.
This includes supporting entrepreneurs and businesses, reducing red tape, and providing incentives to start-ups.
As part of a balanced approach, we need to encourage our traditional industries and support new and emerging industries in a way that complements wider strategies, including around carbon reduction. We must also work across government to enhance skills and productivity throughout our economy, including tackling skills shortages, and to protect and promote our Island's unique heritage and culture. You will also work to support our digital sector, creating new opportunities for businesses and new careers for Islanders.
As an Island, we have a strong history of innovation, providing good livelihoods for Islanders, and we should focus on harnessing this tradition.
The chapter for the Minister of Economic Development in the Ministerial plans for 2024 published on 19 September 2023 identified six priorities in respect of the economy –
1. Implementing an economic framework which will champion a sustainable and inclusive approach and drive an economy that is consistently high-performing, environmentally sustainable, entrepreneurial and technologically advanced. I will work with other ministers to develop policies and mechanisms to alleviate the current problems of staff shortages and helping Islanders cope with the rising cost of living
2. I will work with ministerial colleagues to champion and realise the full potential of Jersey’s economy in every aspect of Government of Jersey’s work plan
3. Working with stakeholders to ensure that Government interactions are simple and efficient for new and existing businesses, entrepreneurs and social enterprise.
4. Identifying new international opportunities for Jersey businesses and work to deepen our Island’s economic ties to our closest neighbours
5. Working with our key partners to ensure our Island maintains robust economic infrastructure including transport and digital connectivity, improving resilience and expanding choice for consumers
6. Recognising the importance of our marine and agriculture sectors, by supporting these industries to improve productivity, environmental performance and Jersey’s food security
Outline Economic Strategy
In May 2022 the Government published the executive summary of a report Outline Economic Strategy for Jersey – a vision for 2040. The conclusion of this report is set out below –
As a small, highly internationalised economy in a world which is expected to be in constant change over the next two decades, Jersey will look different in 2040 compared to today. The population will be larger, older and more diverse; digitalisation and the use of technology will intensify; and we should be well on our way to achieving a net zero economy.
Our bold vision, to be a consistently high-performing, environmentally sustainable and technologically advanced small island economy looks beyond GDP alone, to include other measures of prosperity which will create the right conditions for Islanders to prosper and lead fulfilling lives. An economy where people can use their skills to innovate and bear the fruits of their efforts, and where new technologies drive higher levels of life satisfaction.
In the next phase, we will work with partners across Government, industry and society to prepare a mission-orientated implementation plan. To do this we will:
1. Data collection
Address data gaps needed to measure progress towards the 5 missions (resilient, innovative, skilled, fair and international) outlined within this document.
2. Sector strategy alignment to the vision
Assess sector strengths and weaknesses against the five mission areas; and review sector support strategies to understand the overall direction of travel - using the Policy Prioritisation Tool and the Strategic Alignment Tool to do this.
3. Answering big questions
Working with the planned Political Oversight Group and Future Economy Partnership, we will set out to answer key questions related to each of the mission areas, including:
- How can we increase workforce participation, while also encouraging a healthy birth rate?
- What is the optimum size and shape of each sector of the economy against the five missions?
- What can be done to increase technology adoption and economy-wide investment?
- What sector opportunities should we prioritise?
- How can we optimise migration to take advantage of ‘anywhere’ jobs?
- How can we align skills training with our economic ambition?
- How can we improve housing and rental affordability?
- What is the role of consumer competition in driving down the cost of living?
- What, if any, is the role of tax in driving Jersey’s competitive advantage in the sectors of the future?
- How can we improve our international profile using this vision for the future?
4. Setting targets
Set bold, measurable, and time bound targets which are ambitious but realistic for the future economy, based on the indicators of economic success set out in this document, or similar.
5. Direction setting policies and the Government Plan
Identify and agree direction setting policies and specific interventions to affect change in the economy - working with the Political Oversight Group and Future Economy Partnership. Appraised using the Policy Prioritisation Tool and the Strategic Alignment Tool.
Strategy for Sustainable Economic Development
On 17 October 2023 the Government published a Strategy for Sustainable Economic Development and a Delivery Framework for Sustainable Economic Development 2023-2026 as part of the Future Economy Programme.
The Strategy sets out a vision –
To be a consistently high performing, environmentally sustainable and technologically advanced small island economy by 2040.
The vision is underpinned by five themes –
- International economy - protect our global reputation and diversify our export opportunities.
- Fair economy - an economy with growth that benefits all Islanders. Equitably.
- Skilled economy - a culture of lifelong learning supporting the future needs of the island.
- Innovative economy - an economy with a culture of entrepreneurialism and innovation.
- Resilient economy - an economy resilient to economic shocks and global trends and agile to change.
The Future Economy Programme champions a holistic approach. Three areas that help to identify a holistic approach are identified –
- Identifying how all our decisions in government are interconnected.
- Identifying how decisions have a time element.
- Identifying the realities of the scale of Jersey's economy .
The Executive Summary of the Delivery Framework states –
Economies evolve gradually, and by 2040 we can expect our economy to be quite similar to today, including a strong and growing Financial Services sector. The opportunities for growth lie in the discovery of new sectors to complement our existing economy, while optimising the strengths of our existing sectors. This will be achieved through three initiatives:
1. Develop Growth Enablers.
2. Increase Existing Sector Productivity.
3. Support from an Effective Public Sector.
Each sub-section has a list of actions that have been indicated as short (by end-2024), medium (by end-2026) or long (beyond 2026).
The Framework has a useful summary of desired outcomes.
Vision: To become a consistently high-performing, environmentally sustainable and technologically advanced small island economy by 2040.
- Improved living standards: Everyone enjoys a better standard of living in 2040.
- Young people want to live in Jersey: Jersey is seen as an exciting and rewarding place to live, work, and set up businesses.
- Everyone has the support they need: The economy adapts to serve the changing needs of the Island, ensuring our elderly population is adequately cared for.
- Decoupled from carbon: Our growth does not compromise our carbon neutral commitments.
- Decoupled from population growth: Our growth does not rely on unsustainable levels of inward migration.
Resilient: An economy resilient to economic shocks and global trends, and agile to change.
- A strong public sector: The public sector is efficient, agile and an enabler for businesses and growth. Public finances are strong and can respond to economic disruptions.
- An economy with productivity-driven growth: Jersey’s economy grows and thrives through productivity increases.
- Diversification within existing sectors: Ensuring existing sectors continue to be resilient to external shocks and changing global trends, particularly Financial Services.
Innovative : An economy with a culture of entrepreneurialism and innovation.
- An economy with new and emerging high-value sectors: Jersey’s economy responds to global trends and new high-value industries emerge.
- A reignited entrepreneurial spirit: An island that promotes entrepreneurialism and is not afraid to innovate.
- A public sector that leads by example: A public sector at the forefront of improving efficiency and productivity, that enables business and growth opportunities.
Skilled : A culture of lifelong learning, supporting the future needs of the Island.
- The education and skills system in Jersey fosters home grown talent: Islanders have a range of education opportunities, setting them up with the skills needs of the Island labour market.
- An economy that embraces lifelong learning: Islanders at all stages of their life and career are upskilling and reskilling, taking advantage of new employment opportunities.
- Industries can attract and retain the talent they need: The labour market is agile to change and attracts the talent needed for new opportunities.
Fair : Economic growth that benefits all Islanders equitably.
- Public services serve the need of all Islanders: that everyone is supported with good quality education, health and care services.
- An Island where everyone has a comfortable home: We all have access to good quality, secure, and affordable housing.
- Economic growth that benefits all Islanders: An Island where growth opportunities are shared amongst all Islanders.
International:• Protect our global reputation and diversifies our export opportunities.
- A thriving trading nation: An economy with exciting export value, variety, and opportunities.
- Attract the right inward investment and high-skill immigration: International businesses and skilled workers see Jersey as the right place to relocate to.
- Maintain Jersey’s strong international reputation: Jersey maintains its international reputation by upholding our environmental, regulatory, and legislative responsibilities.
On 28 July 2023 the Government published an Export Strategy. This sets out six strategic themes.
Increasing the understanding of current exports by greater use and combination of existing data sets and including a speciﬁc export question in future Annual Business Surveys. This is an enabler of all other themes as a robust knowledge base will help drive eﬀective future decision making.
Creating a one-stop shop for export advice and support for new to well-established exporters, with a focus on identifying opportunities and removing barriers to trade. This network of key organisations will trial methods of support to develop going forwards.
Raising the proﬁle
Celebrating the quality of Jersey’s products by increasing the proﬁle of our export successes both on and oﬀ Island by supporting applications to renowned awards programmes and exploring promotional opportunities internationally.
Working with leads across Government, States-Owned Entities, and industry to identify and overcome ineﬃciencies in connectivity. This includes a focus on sea links and seeking to connect Jersey to international payment and development platforms.
France and Europe
Recognising the sustainable and eﬃcient potential that will come from our economic links with France and capitalising on our comparative strengths to create goods and services trade opportunities.
Making the best use of our international engagements across Government to create opportunities for Jersey businesses and to help focus activity where an industry need is identiﬁed, whilst helping to raise the Island’s international proﬁle.
Digital Economy Strategy
On 28 September 2023 the Government published Consultation on proposed Digital Economy Strategy. This stated that the vision for the digital economy is for -
- Jersey’s digital businesses to be confidently operating in domestic and global markets with competitive, high quality services and products.
- Other business sectors to become digitally enabled, confidently using digital tools and services to innovate and prosper.
- Islanders to be skilled and confident users of digital technologies, embracing the changes the technologies bring to their learning, leisure and working lives.
- Jersey’s public services to be continually improved through effective use of digital delivery.
The strategy has six themes -
- Making the most of Jersey’s data assets
- Support for digital adoption
- Making Jersey start-up and scale-up friendly
- Support for digital businesses
- Future proofing regulation.
On 2 January 2024 the Government published Changing perceptions, shaping the future – a strategy for the visitor economy . The Government press release on the strategy said that it set out “the long-term vision, goals and priorities that need to be addressed for the continuing success of the tourism and hospitality sectors in the Island” and that the strategy “has been developed by the Government in partnership with the industry and other stakeholders and sets the vision for Jersey to be a “globally recognised, sustainable and enriching destination that Islanders are proud to share"”.
The strategy sets four goals:
- Growth of a vibrant, sustainable and productive visitor economy, increasing export revenues and supporting the delivery of the Future Economy Programme and its goals
- Visibility: widening international awareness of “Brand Jersey", showcasing our unique and varied natural and cultural heritage
- Community: securing a vibrant future for Jersey as a community, providing services and experiences that benefit Islanders and contribute to making Jersey an attractive place to live, work, and do business
- Environment: putting sustainability and responsible tourism at the heart of our policies
The strategy defines the visitor economy and identities all the businesses sectors that are part of its success. It sets 48 policy priorities, grouped under eight strategic objectives:
- Connectivity: We will support efforts to grow the existing route network and high-value air connectivity (in particular to Europe) through development of awareness of Jersey as a destination and development of our on-Island offering
- Unlock investment in accommodation:We will unlock investment in critical infrastructure, in particular accommodation, to ensure its long-term viability and provide capacity to grow the whole Visitor Economy and support the growth of connectivity
- Unlock investment in product:We will enable the development and renewal of a unique product and experience that benefits visitors and Islanders alike, and enables everyone to enjoy Jersey's cultural and natural assets in a way that works for them
- Sustainability: We will make sure the growth of tourism and hospitality is sustainable – for our economy, our environment, and our community. We will showcase and protect our natural environment by putting responsible tourism at the heart of all our policies, and aligning with the Island's Carbon Neutral Roadmap
- Build brand awareness:We will promote the Island internationally and develop its reputation through clear branding and destination positioning
- Digitalisation & people: We will unlock the potential of digital skills and solutions to improve customer experiences, drive business productivity and harness the potential of data
- Enabling regulatory framework: We will make sure Regulation and Governance is shaped in a way that enables the industry to achieve its goals and provides a supportive business environment
- Working together:We will work collaboratively with stakeholders to deliver a world class experience for visitors
Barriers to business
Research undertaken by Jersey Business identified eight main barriers faced by businesses in Jersey –
1. Availability of skills and people.
2. Interactions with government.
3. Government administrative processes.
4. Logistics and customs.
5. Legislation and regulation.
7. Lack of vibrancy in St Helier town centre.
8. Issues which specifically affect small businesses and startups availability of skills and people.
The Report made 20 short-term, nine medium-term and nine long-term recommendations. They are split into three pillars -
- A clear long-term road map focusing on the economy, enabling legislation and regulation tailored to provide a fair and competitive environment with clear accountability, integrity, priorities and understanding.
- Two-way collaboration within Government, and between Government and businesses and industries, where all understand their roles, responsibilities, commitment and purpose.
- Simplicity and simplification of processes, regulation, legislation, and communication.
The Minister for Sustainable Economic Development, Deputy Kirsten Morel said: "Some recommendations are already being addressed, but there is still work to do and I will be working with other ministers to remove or reduce barriers, enabling Jersey businesses to start, to grow and to flourish."
The independent members of Jersey’s Economic Council published its report New Perspectives in December 2020. The report identified five interrelated strategic themes as the most significant drivers to future economic prosperity -
1. Jersey should stimulate growth by encouraging a more vibrant entrepreneurial culture and enhancing local innovation.
2. Sustainability is a huge force in shaping society and economies globally which Jersey needs to place at the centre of its economic policy.
3. Jersey must truly embrace the importance of the ‘new economy’, being created globally through technology, artificial intelligence and data.
4. For Jersey’s economy to flourish the Island needs regeneration from an infrastructure and quality of life perspective.
5. Unless Jersey innovates and aspires to the highest levels in education and skills development across our entire population, our economy will not prosper.
The report included eight messages for Government -
1. Jersey’s economy needs an inspiring and clear vision for its economic development with a twenty-year plus horizon.
2. The Government’s new “Economic Framework”, which is under development, needs to be accelerated and must include clear strategies for all key economic segments and industries (the ‘verticals’), that are maintained to ensure they remain current.
3. Government primarily needs to be a true enabler and facilitator of innovation – to help create the right environment – and needs to accelerate its own orientation in this respect. The role of Government is not always to be the funder of initiatives as the private sector and private/public partnerships can sometimes provide more viable solutions.
4. Government’s enabler role requires it to provide opportunities for the highest levels of collaboration amongst suitably qualified local residents and people with diverse backgrounds. Our intellectual capital is a powerful asset that should be harnessed to help shape strategies.
5. The engine of good decision making is the presence of reliable data, which allows rigorous and proper analysis.
6. Jersey’s international reputation and its local identity are precious, and should be actively managed, both for economic and cultural reasons.
7. The Economic Council could provide the Government with an on-going source of challenge and guidance.
8. Government should actively elicit reactions and responses to this paper from organisations and citizens as additional input and provide its own considered response.