Knowledge is power

As the saying often attributed to Sir Francis Bacon goes, knowledge is power, and as Neil Armstrong commented some years later in quite a different context, 'Research is creating new knowledge'.

Both are statements we firmly believe in. Evidence-based research is what gives Jersey Finance the ability to strengthen the jurisdiction's position on the international stage, correct some of the misinformation that is often propagated surrounding international finance centres (IFCs), and ensure our key messages, embedded honestly and clearly in fact, are communicated to current and potential investors, the media, political groups, and those focused on our transparency programme and merits as an IFC.

That's why, over the past few years, we have taken the initiative to build a strong library of research, in order to position Jersey at the forefront of thought leadership around international financial services and tax and transparency.

We've also tried to set clear water between ourselves and other IFCs as a destination of choice for managing and facilitating high quality cross-border financial flows.

In 2013, Jersey Finance put this plan into action and commissioned its first research-based report (Jersey's Value to Britain), carried out by Capital Economics, an international macro-economic research company, in order to showcase the many benefits Jersey provides to the UK.

Among its findings were that Jersey is a conduit for nearly £500bn of foreign investment into the UK, helping generate around £2.3bn in annual tax revenues and supporting an estimated 180,000 British jobs.

Further reports were then commissioned, including the 'Moving Money' paper published by two leading US academics, which provided a powerful answer to the critics of IFCs, and demonstrated the value of having an open global financial market in helping to boost global trade and economic growth.

It explored different approaches to tax policy and regulation, and ultimately found that IFCs help to increase international financial flows, facilitate trade and investment, and allow the reduction of overall financial risk.

Then came the 'Jersey's Value to Africa' report last year, also carried out by Capital Economics. This report confirms the fundamental role that Jersey can play in facilitating foreign direct investment into the continent, helping Africa fulfil its economic potential by 2040. It calculated that around $6.1trn of foreign direct investment through trusted IFCs like Jersey is the only way Africa is likely to be able to plug its funding gap of $11.4trn.

The most recent piece of commissioned research stems from the Africa report and explores 'Jersey's contribution to foreign direct investment (FDI)', highlighting how IFCs are playing an increasingly important role in facilitating FDI, reinforcing Jersey's role in acting as a conduit for FDI, and emphasising the positive contribution it makes to the global economy.

Jersey's contribution to both local and global job creation is significant and complements the jobs and growth agenda. 'Greenfield' FDI distributed from Jersey, for instance, prompted 94 projects to be completed between 2003 and 2014, valued at $13.34bn, creating over 39,000 foreign jobs and raising a potential $445m in foreign tax revenues.

We know that private clients and investors find Jersey an attractive centre because of the strengths of its financial markets and the quality of the services it offers, but this latest report provides concrete evidence that Jersey not only attracts significant financial inflows, but also enables outflows that stimulate significant economic growth in a range of countries across the globe.

Gaining this invaluable knowledge of Jersey's place in the global economy and how much it contributes has given us the power to further strengthen our core investment, private wealth management and banking platforms, and enhance our reputation as a thought leading, cutting-edge jurisdiction.

Knowledge certainly is power. We know what we are doing is working, we know that our credentials stack up and ongoing specialist research is equipping us with the knowledge and insight to help forge the way with new opportunities.

Through the stance it has taken towards research and with a future programme set to build on the library that has been achieved already, Jersey is in an extremely strong position to continue to forge ahead, surpass jurisdictional standards, and support the global private client sector.

Geoff Cook is the CEO of Jersey Finance

He writes a regular blog about Jersey for Private Client Adviser