THOUGHT LEADERSHIP
Creating an Industrial Strategy for Northern Ireland
by Iain Hoy, Senior Policy Adviser, CBI Northern Ireland
O
ne of the last acts of the Minister for the Economy prior to the March election was the publication of Economy 2030: A draft industrial strategy for Northern Ireland. If adopted, this document will be the foundation stone of Executive economic policy over the coming decade.
At its heart, the strategy incorporates a vision of a globally competitive economy that works for everyone. In a welcome step forward, this ambitious vision is underpinned by equally ambitious targets. By 2021 the Executive aims to have created 50,000 new jobs and made Northern Ireland the No. 1 FDI destination outside London. By 2030, the Executive wants Northern Ireland to be in the Top 3 most competitive small advanced economies and increased the annual spend on R & D to £ 1.5 billion.
Achieving these goals in the timeframe set out in the strategy will be challenging. However, success will lead to a genuine transformation of our economy resulting in greater prosperity and employment for our citizens. This remains the most effective way to lift people out of poverty and reduce health inequalities.
However, while the Executive is right to be ambitious, turning Northern Ireland into a leading, internationally competitive economy will be no easy task and requires laser like focus on the key policy actions that will deliver the greatest economic return.
It is in this area that the strategy demonstrates a number of weaknesses, as despite the ambitious headline vision, the strategy fails to back it up with equally ambitious policy commitments or by conveying any real sense of urgency.
The strategy contains 53 policy commitments. While all are worthwhile, there is an overreliance on vague sweeping policy commitments such as“ Increase efforts in supporting noninnovative companies to engage in innovation” without any real focus on delivery. If the Executive is serious about reaching those targets, then the strategy must be amended to include clear projected timelines for the delivery of each policy commitment.
There also is little sense of priority within the document. This raises the question as to whether the truly vital policy commitments will be given the priority attention they deserve. Success requires focus and so the Executive should pick six key flagship policy commitments that will deliver the greatest economic impact and then ensure, above all else, that they are achieved. This also has the advantage of providing much needed
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budgetary guidance in an increasingly difficult environment for public finances.
The CBI recommends that those flagship policy commitments should include: A. The delivery of a lower corporation tax rate at the earliest possible date B. The construction of the second North / South Interconnector by December 2021 C. The introduction of a Flexible Skills Fund accessed by those firms impacted by the Apprenticeship Levy D. By 2021 Northern Ireland’ s investment in Transport Infrastructure is comparable with other UK jurisdictions E. Higher education funding is put on a sustainable footing F. A renewed focus on primary and secondary education. The study of maths and English should be made compulsory up to age 18 for all those remaining in education or training, computing is taught as a core subject for children in all levels of schooling, plus an increased uptake of STEM subjects must be facilitated. However, the most glaring issue with the draft strategy is its failure to address the UK’ s decision to leave the European Union. Northern Ireland is more vulnerable than the rest of the UK to the type of structural changes triggered by an UK exit, yet despite the potential impact, there is only one singular mention in the entire strategy.
The strategy recognises the potential impact of Brexit on exports, but fails to refer to the potential impact on skills availability, research collaboration, infrastructure funding or security of electricity supply.
Compare this approach with the approach taken by the UK Government in its own draft industrial strategy. It is made very clear in the Prime Minister’ s foreword that she envisions the UK Industrial Strategy as a critical component of the government’ s plan for a postBrexit Britain.
The Executive should follow her example and present their strategy as a plan for a successful postBrexit Northern Ireland and the document needs to be rewritten to reflect that. As a bare minimum the strategy should include a short summary of the key issues facing each sector.
Businesses are not expecting all the answers as we recognise that much depends upon the terms of the final UK / EU deal. However, identifying Northern Ireland’ s vulnerabilities will infer much needed urgency to address those weaknesses and improve our competitiveness through measures that will enhance our economic resilience.
Failure to address this issue undermines the strategy’ s credibility. Businesses can have little confidence in a strategy that does not acknowledge the dramatically changing economic environment with all the associated challenges and opportunities which are presented by the UK’ s decision to leave the EU. In addition, there is no commitment to revisit the economic strategy once the result of the UK / EU negotiations is known. This must be addressed.
In conclusion, businesses should remember that the draft industrial strategy is exactly that a draft strategy. As with all initial drafts there is much work still to be done. However, it is hard not to conclude that while the Executive has a grand vision, it is not quite ready to commit to the policy actions required to turn that vision into reality. So while the Executive must be commended for its ambitious economic vision, what we need now is delivery rather than words.
MOREINFORMATION
CBI Rural Economy Summit
On the 13th of June, the CBI will be hosting a Rural Economy Summit in Dungannon to identify how best to encourage greater economic growth in rural areas. For more information, please contact Anthea Savage at anthea. savage @ cbi. org. uk