As the world crept out of the rubble of a wide-ranging banking collapse, building a new technology industry in Cayman seemed to many an audacious idea. There’s already so much competition from regions throughout the developed world, and Cayman would be starting pretty much from scratch.
Attracting big investments in innovative business development centers seemed an unlikely possibility. But Charlie Kirkconnell, CEO of the public-private special economic zone, says that as the year turns from 2014 to 2015, Cayman Enterprise City continues to grow.
CEC, which is home to some 133 zone companies, had contributed about $20.1 million to the Cayman economy in the 12 months ending September 2014.
According to figures presented by CEC, the direct economic impact of $14.28 million consists of money spent directly by CEC in Cayman’s economy. This includes the zone companies’ set-up and maintenance costs, such as attorney fees, annual registered office fees, incorporation and annual registration fees, as well as money spent by zone companies for real estate, stamp duties and purchases to fit out office space.
In addition, CEC estimates an indirect economic impact of $5.83 million from money spent by the 226 zone employees during the year, adjusted for their respective starting dates. This figure is based on an estimated average salary, derived from industry-specific data for the U.S. and Canada, and the relatively conservative assumption that zone employment certificate holders spend half of their wages in the local economy.
“We have had a significant growth and a significant economic impact – exponentially growing from last year – and we expect that to continue into the future,” Kirkconnell says. “A $20 million impact has to be considered significant in anyone’s book.”
CEC was conceived as a nurturing place for knowledge-based industries whose companies might have only a nominal presence in Cayman to establish job-intensive operations here and help grow the local economy.
Last fall, CEC purchased a 50-acre site near the airport for its permanent campus. The enterprise zone will consolidate operations, providing space and support to the companies it draws into its fold, a few of which are in various temporary office locations around Grand Cayman.
As an economic development tool combined with an educational component to prepare local workers for jobs requiring skills in science, technology, engineering and mathematics, Cayman Enterprise City aims to “capture the interest of our young people and keep them engaged in learning these STEM skills, and that way we’ll build a technology economy here,” Kirkconnell said.
Already, CEC has forged a partnership with the University College of the Cayman Islands to sharpen its focus on STEM education as preparation for when many of the companies in the zone grow and take on design, engineering and even manufacturing roles on Cayman.
“Getting businesses to relocate is a pretty involved proposition,” he said. “It’s just not easy for a company to say, well, today we’re in X country, and we’d like to be in the Cayman Islands tomorrow. But as we work on corporations that have, say, a very small involvement with, say, our offshore banking industry, and get them to move some actual operations here, we’re going to find some success.”
CEC began drawing smaller companies with one or two employees, but now expects to see operations of 15 or 20 employee moving here, and eventually, much larger companies.
Kirkconnell says many of the companies he and his colleagues have sought to influence are early-stage enterprises with new technology.
“Finding the access to capital so they can bring their products to the world is a crucial issue for them,” he says. “But as the world economy continues to recover, these companies are finding it easier to move forward.”
As the STEM-related educational initiatives get rolling, Cayman will develop an available workforce, ready to step into high-tech jobs, that will provide further incentive for companies that now consider Austin, Texas, or Boston, or the technology corridors in Great Britain to consider setting up shop in the Cayman Islands.
In December, a new company that provides seed capital and mentorship programs to tech ventures aims to bring dozens of cutting-edge startup companies to Cayman. Latitude aims to begin its program in CEC in January, subject to the necessary approvals.
The firm will bring groups of tech companies to the special economic zone for mentoring and development to help the startups attract their first round of venture capital funding. All of the tech ventures will register as special economic zone companies, and team members will obtain zone employment certificates.