A new report released by Cayman Enterprise City (CEC) has put the special economic zone’s economic impact during the first 10 years of its operation at US$502 million.
Economist Marla Dukharan, the author of the study, wrote that this demonstrated Cayman’s ability to innovate and diversify its economic base.
“72.3% of the SEZ companies at CEC have set up in the Tech City, which gives Caymanians the opportunity for the first time to work with and engage in emerging Tech sectors from right here in Cayman, such as Software Development, Advanced Analytics, Fintech, Medtech, Biotech, Cybersecurity, Green Technology, and Media Companies, adding new skills and jobs to the Caymanian workforce,” she wrote.
Aside from the direct impact, the company said, 108 local vendors provide services and supplies to CEC’s special economic zones and thereby create economic activity and employment in adjacent and complementary local industries.
Last year, just under 15% of jobs at special economic zone companies were filled by Caymanians. The employment of expats, in turn, meant more local spending and consumption, the report said.
The salaries paid to staff at more than 250 SEZ companies over the years generated $100-$115 million in economic activity on island through general consumption and spending on housing, schools, utilities, restaurants, entertainment and other services.
Moreover, expat employees of zone companies had made real estate and land purchases worth $153 million over the last decade and spent an estimated $11.1 million in stamp duties, the report said.
In addition, the construction of CEC’s main campus had resulted in a substantial increase in construction industry jobs and a $24.1 million economic impact over 10 years.
Because real estate and construction have estimated multiplier effects on the economy of 1.92 and 2.56, respectively, the report concluded the economic effect was more than double these amounts.
Cayman Enterprise City said a further $437.5 million would be directly invested in the coming years.
Since 2011, zone companies have also spent approximately $900,000 on legal advice, $640,000 on incorporation fees and $500,000 in initial registered office fees. The renewal of incorporation and registered office fees over the years amounted to $2.45 million.
CEC emphasised in a press release that it has publicly reported each year since 2013 on how the concessions it receives are deployed and how the financial contribution of its activities impacts the wider economy.
The latest report is the first independent analysis of the economic effect of Cayman’s special economic zone.
“It was important for us to reach out to Dukharan, someone who could provide an impartial assessment of the project,” said Charlie Kirkconnell, CEC’s chief executive officer.
“Our mission is to further drive the creation of a high-growth knowledge-based economy by bringing diversity to Cayman’s industry mix, fostering knowledge-transfer, and keeping the Cayman Islands a highly competitive jurisdiction.”
The report concluded with recommendations for policy reform and emphasised the need for further job creation for Caymanians in a post-COVID environment.
Dukharan wrote the current crisis and the new government present valuable opportunities to address issues that affect Cayman’s society. “Sustainability and inequality are two themes that featured heavily in the recent election – and with good reason.”
She said initiatives like Cayman Enterprise City were needed “to promote inward investment and the economic activity that accompanies it, to support knowledge transfer and skills development to create a highly skilled workforce, and to create an ecosystem where businesses and people can thrive”.
Policy decisions that work to close the digital divide, strengthen Cayman’s technology infrastructure and facilitate job opportunities in new market sectors were key to reducing the island’s vulnerability and empowering its people in the post-pandemic era, the report said.