NI economic evolution takes time

Comment: The Northern Ireland economy is evolving. Its path is towards a better balance between tradeable services and manufacturing, towards more integration with the world economy, and towards a stronger private sector with less dependence on the public sector.

The change is evolutionary rather than revolutionary and it will take time to deliver the required results. How soon we get there depends on many variables, including government policy, political stability, business success and individual will.

Turning the North's economy from one that is public-sector dominated to one that is private-sector led demands a partnership among the public and private sectors, politicians and the voluntary sector.

The first steps have been taken with the review of public administration initiated by secretary of state Peter Hain, which plans to cut the number of public sector bodies from 154 to 75. But a reduction in the size of the public sector must be matched by growth in the private sector. That means both economic growth stimulated by business success and a decrease in the level of economic inactivity, which is currently much higher than in the UK.

Invest Northern Ireland's role is to support business growth and, specifically, to accelerate wealth creation by helping to boost the level of exports and to attract inward investment.

This week we announced the results of the agency's fourth year. Despite competition from low-cost economies, we have stimulated more than £560 million (€816 million) of investment commitments in the local economy, generating more than £200 million a year in additional salaries and supporting the creation of more than nine new businesses every day.

This brings the total investment supported by Invest NI to more than £2 billion in the past four years. The North's economy is now growing faster than many other regions in the UK, but there is much work to be done to realise its potential.

We need our companies to compete at the top end of the marketplace. To develop the competitive edge needed in an ever-tougher global economy, our economy needs high productivity, higher value-added activity, more new product development and an enhanced supply of developed skills.

In 2005-06 we made more than 1,300 separate innovation interventions, helping companies to improve their processes, develop new products and explore opportunities for export. This included a significant number of companies seeking research and development assistance for the first time.

As well as supporting nearly 140 companies to become first-time exporters, we helped a further 270 to broaden their existing export-market base. We provided skills training in languages, selling and negotiations to over 160 key sales personnel.

North/South co-operation offers our companies an early entry into exports and remains a significant market for them. Relationships were further developed when some of our client companies participated in an all-island trade mission to India in January.

Long-term economic growth depends on Northern Ireland integrating further with the wider global marketplace. Social and political stability and a healthy supply of well-educated, committed, English-speaking people situated in the best commercial time-zone has contributed to securing new inward investment.

Sponsors of the 14 new inward investment projects secured in 2005-06 will invest almost £155 million in the economy. They are expected to generate 1,756 new jobs and some £30 million in annual direct salaries.

Invest NI has developed a healthy pipeline of potential projects, which will secure further significant investments in the year ahead.

The North is now seen as a prime location for near-shore operations in internationally traded services such as software development, network services and financial services.

The recently announced investment by Polaris Software Lab, the first greenfield technology investment in Ireland by an Indian company, adds to our emerging financial-services software sector which already includes Citigroup, Liberty Mutual, Northbrook Technologies, and HML.

Invest NI's activities are wide-ranging and complex, and there is a time lag between initiatives, activities and their tangible impact on the economy.

We recognise the need to be transparent in terms of our outputs and outcomes and, for this reason, will shortly be publishing a framework developed to provide a systematic approach to measuring the impact of our activities on the Northern Ireland economy.

We have learnt much from the Celtic Tiger, including its focus on embracing the digital economy to eliminate the disadvantage of our edge-of-Europe location.

The North is now the leading broadband region in Europe, achieving 100 per cent coverage in 2005, and has a telecommunications infrastructure capable of supporting high-growth, high-technology companies.

We live in an excellent place to do business and intend to grow and prosper in close co-operation with our neighbours. The Northern Ireland economy is evolving and evolution is the survival of the fittest. Invest NI is helping business in Northern Ireland to understand and embrace that concept.

Leslie Morrison is chief executive of Invest Northern Ireland, the main economic development organisation in the North.