The significance of the Ocean Cluster for the Icelandic Economy

  • Contribution to the economy amounts to 26% of GDP
  • Up to 20% of the country's jobs are connected to the cluster
  • Enterprises increasingly exporting their services

In collaboration with the project Iceland Ocean Cluster, Íslandsbanki has published a report on the significance of the ocean cluster for the Icelandic economy. The report is based on research carried out during the past two years. The Iceland Ocean Cluster is a joint project of numerous enterprises in marine-related activities, aimed at improving their co-operation, increasing value and reinforcing understanding of the significance of the activities included in this cluster. Íslandsbanki is one of the founders of the project and has been its principal sponsor from its establishment.

Building on a heritage of lending to the seafood industry in Iceland, the Bank has developed specific expertise in the industry. With its focused approach in these fields, Íslandsbanki's fully owned subsidiary, the New York based Glacier Securities LLC, provides M&A advisory to leading seafood companies in the world.

The Íslandsbanki and Glacier team will attend the International Boston Seafood Show 11th - 13th March and will be available to discuss opportunities related to seafood advisory services at their booth #573.

Total contribution of the Icelandic ocean cluster to the GDP

As the report points out, the total contribution of the ocean cluster to Iceland's GDP in 2010 was 26%, or around ISK 400 billion. This percentage consists of four factors, direct contribution (10.2%), indirect contribution (7.3%), demand effect (7,0%) and the contribution of independent exporters in connection with the fisheries industry was approximately 1.5%. Statistics Iceland measures the direct contribution for fisheries and processing as a proportion of the Icelandic GDP. This therefore adds about 16% on the GDP contribution. The fisheries sector is a base industry in the Icelandic economy. Therefore, a wide range of companies, connected with the sector has gradually developed in Iceland and these companies are responsible for supplying the sector with some of its resources and take its products for further processing and distribution. These companies contribution to the GDP is almost as great as the direct contribution of the fisheries sector itself.

Export sector growth

In addition to exports of traditional seafood products many independent companies connected to the fisheries industry begin their own export. One of the clearest examples of this is the growth of enterprises which originally served primarily Icelandic fisheries companies but have now to a growing extent been exporting their services and products. Studies indicate that these enterprises have produced exports valued at ISK 42 billion in 2010, and that these activities involve around 2300 jobs. These include technology companies, which export equipment for fisheries and seafood processing, marketing and sales companies and transportation companies, to mention a few examples. Many of these companies anticipate annual growth of 10-15% in their exports in coming years.

More jobs linked to fisheries

All areas of the fisheries sector, with the exception of aquaculture, have witnessed an increase in employee numbers in recent years. In the primary industries of the ocean cluster profit is generally greater than other economic sectors and wages generally above the average in Iceland. Up until now, discussion centred primarily on jobs in fisheries itself, without examining the diverse range of services which have developed in various sectors in connection with fisheries. Taking these various sectors into account the Icelandic ocean cluster directly and indirectly provides as much as 20% of the jobs in Iceland, or up to 35,000 jobs.

The report is available on Íslandsbanki's webite.

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