Orkney - Economy

Economy

The soil of Orkney is generally very fertile and most of the land is taken up by farms, agriculture being by far the most important sector of the economy and providing employment for a quarter of the workforce. More than 90% of agricultural land is used for grazing for sheep and cattle, with cereal production utilising about 4% (4,200 hectares (10,000 acres)) and woodland occupying only 134 hectares (330 acres).

Fishing has declined in importance, but still employed 345 individuals in 2001, about 3.5% of the islands' economically active population, the modern industry concentrating on herring, white fish, lobsters, crabs and other shellfish, and salmon fish farming.

Today, the traditional sectors of the economy export beef, cheese, whisky, beer, fish and other seafood. In recent years there has been growth in other areas including tourism, food and beverage manufacture, jewellery, knitwear, and other crafts production, construction and oil transportation through the Flotta oil terminal. Retailing accounts for 17.5% of total employment, and public services also play a significant role, employing a third of the islands' workforce.

In 2007, of the 1,420 VAT registered enterprises 55% were in agriculture, forestry and fishing, 12% in manufacturing and construction, 12% in wholesale, retail and repairs, and 5% in hotels and restaurants. A further 5% were public service related. 55% of these businesses employ between 5 and 49 people.

Orkney has significant wind and marine energy resources, and renewable energy has recently come into prominence. The European Marine Energy Centre (EMEC) is a Scottish Government-backed research facility that has installed a wave testing system at Billia Croo on the Orkney Mainland and a tidal power testing station on the island of Eday. At the official opening of the Eday project the site was described as "the first of its kind in the world set up to provide developers of wave and tidal energy devices with a purpose-built performance testing facility." Funding for the UK's first wave farm was announced by the Scottish Government in 2007. It will be the world's largest, with a capacity of 3 MW generated by four Pelamis machines at a cost of over £4 million. During 2007 Scottish and Southern Energy plc in conjunction with the University of Strathclyde began the implementation of a Regional Power Zone in the Orkney archipelago. This scheme (that may be the first of its kind in the world) involves "active network management" that will make better use of the existing infrastructure and allow a further 15MW of new "non-firm generation" output from renewables onto the network.