Our economic direction
Five opinion-formers discuss the way forward for Northern Ireland’s economy, including the role of inward investment, infrastructure, R&D and their desired destination for the province in 2019.
Where should Northern Ireland be in 10 years’ time, politically and economically?
Alan Taylor
In Northern Ireland we’re a bit unique. We’re coming out of a period of difficulty in terms of political and social unrest, and against that backdrop we’ve probably had a suppressed economy. But one of the things on the positive side is that it gives us the opportunity to build and to look at how other economies have grown around the world.
For me, political stability is one thing but a more sophisticated political stability is needed. Critically, to give politicians the right direction, we need to help them with their thinking. There needs to be a political stability where there’s real access to government and vibrant decisionmaking with good transparency. But critically it has to be decision-making that’s based not on a short-term goal but a more long-term strategy.
In an economic sense, our economy must be based on knowledge with levels of investment going into sophisticated ventures. We need to look at corporation and financial structures that allow people to take the benefits of tax planning and investment returns.
Brian Ambrose
Where we’ll be in 10 years’ time will be predicated by how we do in the next 12 to 18 months. I think we did the first part well; we got a Programme for Government. Now we’re at the implementation phase, and having to take tough decisions and make trade-offs and do real politics. Depending how we perform in the next year or so will determine what’s different in 10 years.
Alastair Hamilton
Where I’d like to be in 10 years is having delivered the majority of those goals that sit in the Programme for Government. Execution is a critical piece. People have been saying: “The economy needs to be at the centre of our government not just for the next three years but for a long time to come.” And I‘m very much in that camp.
If you look around the five goals that were set in the Programme for Government, I think they all ring true today and therefore my hope politically and economically 10 years down the line is that we have embraced the challenge of delivering those goals.
David Gavaghan
I think it’s not only where we will be in 10 years’ time but where will the rest of the world be in 10 years’ time. The overriding concern I have is that we spend quite a lot of time looking inwards. We need to focus on how the world is turning in a very difficult period. It really is breathtaking to see how, in particular, the Japanese are responding to the crisis. That’s a real alarm bell for us, as competitiveness seems to be the key.
In 10 years’ time we will have to be very clear where our alliances are and where we can create the most competitive advantage, and I’m not sure we really have analysed that. I also think we do desperately need to let go of things that have given us some comfort over the last 50 to 100 years.
Peter Dixon
Politically, many people in business and young people don’t vote because there’s nowhere for them to register their wishes. Only with a mix of GB politics can you get strategic direction for both Northern Ireland and from central government, where we are controlled from.
On the economic side we need to find somewhere in the UK where they had similar problems and look at what they’ve done to get out of them and to see what they look like now. We should align our economy to a region like that of similar size. So from an economic point of view I would try and align myself with somewhere like the North West of England or Wales and replicate what they’ve done.
If you had to write a business plan for Northern Ireland PLC, what would be the key priorities?
Alastair Hamilton
I would come back to two of the five priorities that we set in the Programme for Government. One of them, which is the central piece – economic development – that’s about all we do across Northern Ireland, whether it’s government or private sector, being focussed towards that overall goal of raising the quality of our jobs, higher value skills that lend themselves towards either indigenous companies or FDI, and to ensure that all those things tie together to improve our economy and therefore the social benefits that we will derive from that.
The second one is purely infrastructure. One of the key enablers to allow that to happen is infrastructure development. One of the things I’d like to see is making sure that infrastructure development is weighted toward those areas that will drive and support the development of the economy within Northern Ireland.
Brian Ambrose
Skills and up-skilling will drive the economy on. We need to challenge universities on the types of popular courses that are producing young graduates with the wrong qualifications. If you look at the emerging markets that we really want to specialise in, what skills need to feed into that so that we have existing supply chains of graduates, technicians or apprentices for companies coming into the region?
We particularly need to focus on exports. Even if we do better in 10 years, if we’re not doing better than other regions, we’re standing still or going backwards and exports will be one of the key drivers to help us out-perform other regions.
Peter Dixon
If you take the Chamonix region of France, it’s barren, it’s mountainous. But what they have got to offer is outstanding skiing. So they developed the biggest, most expansive ski area in the world. Half an hour to 45 minutes’ travel from everywhere at any point in Northern Ireland, we have the most fantastic coastline and countryside. We need to focus on tourism as this is a fantastic place.
We should also look to build-up the private sector which is smaller now than it was last year; it has responded to the economic downturn in a different way than everyone else i.e. reduce people in the business and reduce costs.
Alan Taylor
We need to make sure the technological infrastructure is right.
One of the things we do have is a small, well-connected community, and business is all about relationships. And actually the economy will only grow if all relationships start to function correctly. It’s an advantage for doing business here.
David Gavaghan
I wonder whether we cherish small businesses adequately. One of the things we have got a lot of is small businesses and maybe we could do more to highlight and cherish that. There’s a slight lean toward ‘big is good’ in Northern Ireland and taxation is great from big investment, but the small business sector is where we’re going to make a difference.
Alan Taylor
I think we need to expand what FDI means. It’s not just about the Googles and the Dells. I see it as more. It should include the little piece of technology which actually is being developed in Boston, or wherever, but it would help a Belfast-based company with only three people, but actually if they had a licence for that technology, that three may become eight and they then might have another product line into Europe. It might only be four or five jobs but those could become 20 in 10 years.
Brian Ambrose
The business I’m working in would typically attract male Protestants in east Belfast, so your talent pool is one quarter of the overall pool. The only way to attract Catholics into east Belfast is to engage with the Catholic community and with schools.
Then you have to look at why more females are not involved in business? Look at some of the working practices. Until you can make the workplace attractive to males, females, Protestants and Catholics, you’re going to limit your talent pool.
Is FDI the Holy Grail for our economy?
Alastair Hamilton
We are obsessed by it in some quarters. There’s a perception that the majority of what we do in Invest NI is FDI. Last year, over 50 per cent of funding that was given out was to indigenous companies and that’s a trend that’s accelerated over the last three years.
FDI is a vital element of the overall plan, which is wealth creation over job creation. It would be wrong of us to think we’re not going to achieve our goals without it.
Brian Ambrose
In the Dublin economy, the fact that they have seven of the world’s top 10 pharmaceutical companies creates a whole spin-off. You’ve got Bombardier and there are a dozen or so million-pound turnover businesses there purely because you’ve a big global company.
Whether something can be delivered in the next 24 months on a big scale is questionable but don’t underestimate the value of having global players in your region.
What role is infrastructure investment playing in the economy now, given the credit crunch?
David Gavaghan
The infrastructure investment programme is critical in terms of addressing arguably decades of underinvestment. It’s now palpable that as the infrastructure programme appears out of the ground – and we’ve got a number of tangible examples – it is building confidence.
My great concern about infrastructure investment is that because we have the best kit in the world, we suddenly think we’re the best cyclists or the best golfer in the world. Having the infrastructure in itself isn’t what it’s about; it’s our ability to ‘sweat’ that infrastructure.
We need to be really clear sighted that with having great hospitals or great schools, it’s only what we do with it that counts.
Peter Dixon
If you take energy, and if you go back 12 years ago, Northern Ireland still had an energy source which was 100 years old in terms of oil. And in the last 10 years, you’ve had the ‘industrial revolution’ in Northern Ireland of bringing gas to the main conurbation. In itself, it doesn’t sound fantastic but actually that’s caught up on 50 years of being behind the rest of Great Britain.
The greater part of greater Belfast now has gas. Fifty per cent use it. It’s expanding all the time. All of that money is privately funded. All of that’s getting paid through people’s gas bills. And the argument to expand that same industrial revolution to the rest of Northern Ireland is now obvious.
Brian Ambrose
We need to make tough decisions and spend this money wisely. If you leave it for everybody – the school in every village, the hospital in every town and the police station in every village – we don’t need that. We can’t afford to run seven acute hospitals. An intelligent, hardnosed debate into how to spend that money wisely will deliver twice the benefit of just simply spending the money.
What is the answer to getting more R&D and innovation? Have we forgotten how to innovate?
Alan Taylor
I don’t think so. My view would be the number of new small companies with niche technology players which are borne out of a big player like Bombardier means that we have an aerospace industry in Northern Ireland, which has largely come out of people learning things in Bombardier.
I do some work in aerospace and there are at least four companies that I know very well that are international export companies with a small number of employees but in very critical niche products based on patented technology which are going all round the world.
We’re going to have to compete with Dubai, who also want to have an aerospace industry, so how do we do that? Well, we’ve got Bombardier. We’ve got all these other companies. What do we not have that we need and how do we connect to it? And once you answer that with a small number of well-connected people, it happens quickly.
Brian Ambrose
Within the last 12 months, the Matrix Report was produced and identified five or six sectors where we had the potential to play such a role in the future. Now they’re looking at the implementation stage of that and rather than start from scratch, it’s taking those ideas and driving them through into execution and delivery that will make the difference.
Alastair Hamilton
If we want to grow the private sector, we have to invest in it and one of the key ways to invest in that growth is by supporting and driving R&D. For all business, and especially in the high value area, R&D must be embedded at the centre of the organisation.
Currently our support for R&D is going up significantly. I think we will look back in a year’s time and see some of the positive consequences of that. One of the key benefits in the current climate is that it is a good way for a company to avail of some extra support – to retain key workers in their organisation today and to get the benefit of R&D programme for the future.
David Gavaghan
It’s not just the private sector. Within the public sector, there are some very good things. A business that is a ‘gem beyond gems’ is the Agri-Food and Biosciences Institute (AFBI). In a Northern Irish heads together to collaboratively develop the R&D. It costs a lot of money to set these things up. It takes a lot of time and effort to actually develop, and why not get all of those networks of companies together at the very start on that journey?
Peter Dixon
We also have to be happy with failure from R&D and innovation. You hear so many people say: “It might go wrong. It might not work.” That’s the reason to not start it. One of the things is getting over the De Lorean days where people are more worried about getting things right than creating something new.
One final question, what single action would you like to see happen that would get the economy back to growth?
David Gavaghan
The other day I looked up what the word ‘crisis’ meant; it comes from Greek and it means ‘to decide’. There are probably 50 decisions that need to get taken in the next period so I think the single action is take decisions and build peace.
Brian Ambrose
Taking decisions builds confidence and also reduces your in-tray. Some of these things have been four or five years in the making, and they still haven’t made the decisions. Part of that is to make the decisions more strategically. If you leave it to local authorities and local elected representatives – on a national stadium or where to build a leisure centre in Belfast – they can’t get beyond their local ward or district.
Peter Dixon
And that flows round the Programme for Government. What are the 50 decisions which deliver these five core areas? We need to go through them and – right or wrong – make the decision because it’s advancement, it gives confidence and it projects the whole thing forward massively.
Alastair Hamilton
Confidence. It’s about building confidence within individuals, within companies, within the wider support institutions that are there and confidence within government.
From my point of view, my job is made infinitely easier by having a committed Minister who is visibly engaged in what we are trying to achieve in the Programme for Government and bringing that to life by her actions but also by the confidence that she builds, both within the wider government organisation but also within the businesses that she interfaces with.
Alan Taylor
For me, it is pick the ‘low-hanging fruit’ within the Programme for Government and then decide to do it. The one single thing is to decide who the decision-maker is and then make that person take a decision and have a date when it’s actioned. We can talk about the decisions but if you go to try and get decisions made, you sometimes find the decisionmakers are difficult to find. Let’s have decisions and good decision-makers.
