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Where knowledge is power

The economic future for Northern Ireland lies in the knowledge economy, which generated £5 billion in sales during 2016

 

Grooming products designed to keep your hairy, furry or feathered best friend looking their best might seem a world removed from Northern Ireland’s ambitions to become one of Europe’s most entrepreneurial knowledge economies by 2030.

But the success of one Ballymoney-based business, which has grown to become the third largest online pet grooming site in the world, successfully highlights how the North is harnessing hi-tech creativity and talent to reposition its economy.

Christies Direct exports to more than 30 countries and within the next five years wants to become the number one pet-grooming website in the world.

It has got to where it is today with the help of another Northern Ireland headquartered company, which developed an ecommerce platform which to date has transacted more than £1 billion in online sales.

IRP Commerce may not yet be as recognisable a brand as Amazon, Apple or Netflix – but they are the organisations it was shortlisted against earlier this year in the UK’s prestigious E-Commerce Awards for Excellence.

IRP’s ability to help its customers, like Christies Direct and Chain Reaction Cycles, realise their ecommerce ambitions – in one case it enabled a client to grow its sales from zero to more than £170 million online – is one of the reasons it is currently causing a stir far afield from its home town of Belfast.

But IRP, which is located in Catalyst Inc, (formerly the Northern Ireland Science Park) is far from the exception in the North when it comes to entrepreneurial knowledge-driven businesses.

According to the 2016 Knowledge Economy (KE) report, compiled by Catalyst Inc organisation Connect, one in every 11 people in the North is today employed directly or indirectly by the knowledge economy, which is responsible for 85 per cent of all sales outside of Northern Ireland.

The latest annual KE report also highlights that currently almost 10 per cent of the local economy depends on the knowledge economy while this year alone it supported 435 new business start-ups.

New economic future

According to Connect, the North’s KE is the second fastest growing in the UK, ranked second behind Scotland, and generated £5 billion in sales during 2016.

Steve Orr, director of Connect at Catalyst, believes the North’s KE has the potential to create a new economic future, one where “ideas are the new linen, software development the new ship-building and brainpower our new muscle”.

According to Orr, for the first time this year the KE report identifies that while Belfast and Derry are centres of excellence, there are emerging towns and cities such as Newry and Larne where knowledge-focused businesses are a driving force.

He says the North’s KE is halfway to achieving a target of delivering 80,000 high-earning jobs by 2030 and there is the potential for it to support 160,000 jobs directly and indirectly in the same timeframe.

But this is very much dependent, Orr warns, on “public and private interventions” to create the right conditions for growth.

In order to do this, Connect recommends that Northern Ireland must focus on a few sectors and areas of platform technology where it can be “world-leading” – such as healthcare, cyber security and data analytics as well as advanced engineering.

It also advocates that the North should encourage the creation and scaling of indigenous companies and that it must create research institutes that can “genuinely claim to be world-leaders” in their respective fields and of sufficient size and scale to drive and develop these sectors.

Connect fundamentally believes the North needs to modernise its education system and invest more in higher education.

But head of business with Derry City and Strabane District Council Kevin O’Connor believes the council is already ahead of the pack because it has a well-developed, KE-friendly infrastructure and is actively helping to grow a “KE talent bank” that will attract new investors who will create jobs in the area.

“We may be located in the north-west of the island but that doesn’t matter when it comes to the knowledge economy because we have both the raw material – people who possess the necessary skills – and superfast broadband connectivity to support highly innovative creative and digital industries,” he says.

“We have thousands of great start-ups throughout the council area and we are attracting new investors to locate in the Derry City and Strabane District area because they recognise that we already have highly successful digital and creative industries and we have readily available talent.”

‘Thousands of jobs’

O’Connor says the council is also supporting creative- and knowledge-focused hubs from the Catalyst Inc Innovation Centre, which houses more than 30 high-tech businesses, to the Intelligent Systems Research Centre (ISRC) at the University of Ulster Magee Campus and the North-West Regional College.

“These are the physical manifestations of the dynamic KE we are developing, supporting and nurturing and we believe that this will in turn help create thousands of jobs over the next five years as part of our economic strategy,” O’Connor adds.

According to Invest NI, the North’s regional business development agency, there is strong evidence to suggest that local vibrant hi-tech clusters and technology-focused universities combined with a ready pool of talented graduates are among the key reasons foreign direct investors choose to locate in Northern Ireland.

In the last five years, the number of new investors has grown by 40 per cent and according to one recent investor, Metaswitch – which designs and develops cloud-native communications software for telecommunications software providers – they come because of “the stable supply of highly educated people, high quality telecommunications and lower operating costs”.

But Connect’s 2016 (KE) Report also identifies that the challenge for Northern Ireland is to increase local knowledge economy activity at a rate that outperforms other region and in turn propel this activity to deliver positive economic outcomes in terms of jobs and wage growth.

According to Aidan Gough, strategy and policy director with InterTradeIreland, this will be demanding.

“The phenomenal growth of the knowledge economy in Northern Ireland over this past few years has been exceptional. The challenge, however, is to replicate the success of the knowledge-intensive export-oriented sector that comprises the knowledge economy into the wider economy.

“Northern Ireland needs more companies to recognise the critical link between innovation, exports and business growth. In InterTradeIreland, one of the key ways we promote cross-border trade and business development is through the provision of innovation supports for SMEs. Programmes such as FUSION , Challenge, Horizon 2020 and the All-island Innovation Programme all provide the necessary structures for business innovation and growth,” he says.

Black Duck search ends in Belfast

When the Massachusetts-based global security firm Black Duck Software went looking in Europe to find a new location to create an open-source security research group, it stopped searching once it came to Belfast.

Black Duck chief executive Lou Shipley, says: “We recognised very quickly that Northern Ireland has both the high-quality tech professionals to meet our open-source research needs and a growing cluster of cybersecurity-focused businesses which will continue to attract more attractive candidates as we scale our business there.

“We worked closely with Invest NI, which played a key role in helping us establish in Northern Ireland, and will be a key strategic partner, helping us scale our activities here in the future. This makes Northern Ireland the optimum location for us.”

Invest NI says the North has become the number one international investment location for American cyber security firms. As well as Black Duck, other recent investors include WhiteHat Security, Rapid7, Proofpoint and Alert Logic.

The 2016 Knowledge Economy report also highlights that in a period of just three years Belfast has become one of the world’s top centres for cyber security.

Catalyst Inc’s Connect attributes this to the “eco system” that has developed around the Centre for Secure Information Technologies (CSIT), which is part of Queen’s University’s Institute of Electronics, Communications and Information Technology and based at the Catalyst east Belfast campus.

CSIT is the UK’s largest cyber security research centre and has played a crucial role in helping to generate 1,200 cyber security-related jobs in the North with a potential 500 more in the pipeline.

It is estimated that CSIT is responsible for injecting about £40 million a year into the North’s economy.