David Whelan speaks to Conor Patterson, Chief Executive of the Newry and Mourne Co-Operative and Enterprise Agency about the area’s economic transformation in recent decades and the threat to development posed by the potential re-installation of a hard border.
Founded originally as a community co-operative in 1972, Newry and Mourne Enterprise Agency was set up as a division of the organisation in 1983 with a mission to promote jobs and create wealth in the Newry and Mourne area, an area which had for decades suffered from chronic unemployment.
A key focus of the Agency was the provision of workspace in a number of locations in the border area both to accommodate new and growing businesses and as a source of income in the form of rents which could be recycled into other economic development initiatives. Patterson explains that the retention of these assets has been key to enabling the organisation to develop the economic prospects of the area. A good example of one of these assets is WIN (Work In Newry) Business Park in Newry, which currently hosts 82 businesses boasting a total of 500 jobs.
The scale of success which the Agency has achieved is recognisable in the contribution which it is has made through its support to new start and growth businesses to the shift from a 30 per cent unemployment rate in 1972 to the current rate of just 2 per cent, which is now below the average rate both in Northern Ireland and the whole of the UK.
Patterson explains that a number of significant factors have played a part in changing the economic fortunes of the region, not least the softening of the Irish border, which encouraged a huge expansion of cross border trade and investment in major retail developments attracted by Newry’s prime location in relation to the Republic of Ireland market.
However, he believes that aspects of the transformation story of the area are unique: “The story here is interesting because much of the transformation is attributable to locally generated business ventures. Newry hasn’t historically been a benefactor of large scale inward investment. As well as the well-known, large, locally-owned company successes like First Derivatives, Norbrook, MJM/Mivan and Glen Dimplex, there are hundreds of micro-enterprises which have found and exploited market niches and which are now employing thousands of people.
“I believe we can offer a route map for other communities who need to reinvent themselves to turn around a negative image problem and promote positive change. However, this doesn’t happen overnight. It takes a lot of time, high levels of commitment, pride and crucially, ambition.”
Newry’s unique selling point in recent decades has been its location, predicated on the movement of people and goods. Undoubtedly, the liberalisation of border controls marked a significant turning point in the area’s fortunes. Patterson admits that the potential risks of Brexit have been a cause of concern.
“In the last 10 years especially, Newry has been able to exploit the great advantage of its location between the two big economic centres on the island (Belfast and Dublin) and our east coast access to Britain; and on to the continent through our out-port at Warrenpoint. We were clear from the off in the Brexit debate that all borders are bad economically. This region has shown what can be achieved when movement of people and trade is liberalised and how entrepreneurs emerge in numbers to take advantage of that liberalisation.”
On the impact the uncertainty is having, he adds: “In common with other areas across these islands, there seems to be a collective pause on decision-making. Businesses are holding off on making major investments especially in buildings and large capital equipment. We hope that whatever the final Brexit deal is, that it replicates the current freedoms we enjoy as a result of membership of the single market and customs union.”
Quizzed on whether he sees any value in the new market opportunities promoted by those in favour of Brexit, Patterson says: “The fact is that many of our large exporters already access markets beyond the EU and have adapted to the regulatory requirements necessary to achieve access.” Outlining what is essentially a gravity of markets model, he adds: “The challenge lies in balancing the risk of losing access to the EU with the opportunity to access new markets. However, taking New Zealand and Australia as examples, these markets are relatively small in comparison to the EU and are much more expensive to transport to.
“We need to invest in the incubation of entrepreneurs across Northern Ireland to ensure future harvests of jobs and prosperity in all communities.”
“There has been a lot of focus on tariffs but the prospect of non-tariff barriers to EU market access is also a worry for many businesses. Increased bureaucracy slowing down trade in a ‘just in time’ global economy is a threat. It’s difficult to see the benefit for this region from anything other than open access to all markets.”
One of the main catalysts of Newry, Mourne and Down’s economic development has been the high level of SME start-ups, one of the highest rates per capita in the whole of the UK. However, Patterson believes that across Northern Ireland the contribution which micro-enterprises make to the economy is undervalued within economic development policy and has called for it to be prioritised.
Pointing to the very small proportion of national economic development spend being allocated to aid start-ups and develop businesses in their early stages, he says: “Our objective should be to generate as many home-grown, locally-owned businesses as possible. It is indisputable that the economic multiplier from businesses that are embedded in their local communities is very significant. Undoubtedly, FDI has a role to play where it complements these local enterprises but experience has shown that in the last decade there is less FDI available globally and FDI investors increasingly target very specialist skills.”
Highlighting that the services sector within the council area is the primary source of jobs within the start-up sector, he adds: “We’re not, and Northern Ireland shouldn’t be, snobbish about job creation. While only a small fraction of start-ups are on a high-speed growth trajectory, it doesn’t mean that the others should be undervalued. All employment creation is important. We need to invest in the incubation of entrepreneurs across Northern Ireland to ensure future harvests of jobs and prosperity in all communities.”
Patterson compliments the work being undertaken by the council in Newry, Mourne and Down. “Our council has shown strong leadership and a commitment to community planning. It understands that it cannot deliver on its commitments in isolation and has worked well with partners who can help to it to achieve them. In addition, it has taken a lead on Brexit focusing on gathering evidence and making it available to negotiators. The Council has prioritised relationship building across the District and further afield, which has allowed us as partners to be ambitious in tackling the challenges that we face.”
Looking to the future Patterson would like to see wider recognition of the achievements of the council area and its contribution to the Northern Ireland economy. He believes, the ‘Newry model’ should be the template for a wider economic transformation strategy.
“Our outward-looking, open-minded and knowledge-sharing approach is what Northern Ireland should be about. Our council values the local entrepreneur and understands the scale of the effort which is needed to support business start-up and growth across all sectors. Central government should focus more on resourcing the development of locally inspired and owned businesses especially in these uncertain times.”