Business First Summer 2017 Business First Magazine Summer 2017 | Page 26

THOUGHT LEADERSHIP
Regional Productivity Growth in
Northern Ireland: Unlocking our
Economic Potential
T
by Angela McGowan, CBI Northern Ireland Director
he CBI recently published a report
Unlocking Regional Growth:
Understanding the Drivers of
Productivity across the UK’s Regions and
Nations, focussing on the role that improving
regional growth can play in boosting the UK
economy. In total, the report found that there
was a potential £208bn prize to be had for
unlocking higher regional productivity across
the board – equivalent to a 10 per cent
increase in the size of the UK economy.
Attempts to understand the geographic
drivers of productivity growth and how to
mitigate large differences are nothing new.
We have witnessed the rise of the Northern
Powerhouse and, in his most recent Autumn
Statement, the Chancellor set out to tackle
regional imbalances by pursuing an industrial
strategy fuelled by infrastructure and support
for innovation.
We saw this approach again mirrored in
Northern Ireland when the Minister for the
Economy published Economy 2030: A draft
industrial strategy for Northern Ireland in one
of his last acts before the local Executive
collapsed.
Some of the statistics outlined in Unlocking
Regional Growth will give business and
political leaders in Northern Ireland pause for
thought. Overall, Northern Ireland ranks
among the lowest grouping of UK regions and
devolved nations for productivity performance
and was the only region or devolved nation
which witnessed a slight decline in productivity
from 2007 to 2014.
Similarly, Northern Ireland’s average
regional productivity was the lowest of all
devolved nations and English regions
measured by the CBI.
While this may suggest a pessimistic overall
picture, we know that there is also much to
celebrate in the Northern Irish economy.
We must recognise how far we have come
in such a short time. Peace and stability now
taken for granted have prevailed for two
decades and the double­digit unemployment
suffered in the 1980s is a distant memory.
We are a small economy now lauded for our
food and culture, our film and television
output and our capacity to host major
international events. We have a diverse
economy with sectors like agri­food, cyber
security, fin­tech, manufacturing and services
all flourishing, gaining acclaim and building
an international profile.
Improving productivity can help to take us
to the next level. Productivity gains boost
24 www.businessfirstonline.co.uk
wages, improve living standards and present
new business opportunities. Indeed, the
regional growth figures are not all doom and
gloom – there are grounds for cautious
optimism. In headline productivity growth,
Northern Ireland consistently outperformed
Wales over the 2000­14 period.
While there are good news stories in the
Northern Irish economy, improving regional
growth and securing a share of that £208bn
productivity growth prize would undoubtedly
be very welcome.
Four drivers of regional growth
In Unlocking Regional Growth, the CBI
provides a blueprint for boosting regional
growth by outlining four key drivers of
regional productivity difference across the
UK. The four drivers are as follows:
1. Educational attainment of young people
at 16 and skills.
2. Transport links that widen access to
labour.
3. Improved management practices.
4. Raising the proportion of firms that
innovate and export.
These are the key areas policymakers and
business leaders need to focus on if they want
to create the kind of sustainable, inclusive
growth we need to create future prosperity. It is
also the only way that we can meet the
challenge set out by the Northern Irish
Executive to be one of the Top 3 most
competitive small advanced economies in the
world.
While there is undoubtedly great political
will to achieve better regional growth, there
is an irony that instability in the political
arena might make this more challenging that
we had otherwise hoped. A General Election
which was intended to create stability over
Brexit has arguably created even more
instability by returning a minority
Conservative Government.
Against the backdrop of Brexit, with its
heightened impact upon the Northern Ireland
economy, and in the absence of a fully
functioning Executive, business leaders are
right to be circumspect about the kind of
political leadership they can count on.
For Northern Ireland to fire on all cylinders,
raise its productivity and raise our levels of
economic growth, we desperately need for
policy makers and business leaders to work
together.
That means Westminster, a newly
functioning Executive and the business
community all playing their role. Productivity
affects wages, living standards, opportunities
and prosperity – we owe it to future
generations to start making progress on
critical issues now.
We need to show the world that Northern
Ireland is an open and innovative economy,
that it is safe destination for investment and
can provide a high standard of living for its
citizens.