Wednesday, October 03, 2007
Call for all-Ireland inward investment body…
THE chairman of the Ulster Bank Group, Dr Alan Gillespie, has called for a merger between the two inward investment promoters - Northern Ireland’s Invest NI and the Republic’s Industrial Development Agency. The former chairman of the Northern Ireland Industrial Development Board (Invest NI’s predecessor) said: “I believe that to market Northern Ireland effectively we should align the inward investment marketing activities of Invest Northern Ireland (INI) with the Republic of Ireland’s IDA. We should promote an all-island economy through a single joined-up effective agency, with the IDA and INI no longer competitors, but fully collaborative.”
Belfast Gonzo @ 05:34 PM
Northern Ireland needs to have its own investment agency - quite often we are in competition with the Republic of Ireland e.g. Aer Lingus
Posted by on Oct 03, 2007 @ 07:32 PMI definitely like the idea in principle but hasn’t NI received a pretty raw deal from the equivalent pointed out to in the above article, the tourism board? If that was repaired it would be easier to persuade people to do this.
P&J;- we are still currently separate sovereigns.. if it benefits us both to merge investment agencies then cool, but otherwise, not so sure competition is necessarily a bad thing.
Posted by on Oct 03, 2007 @ 07:43 PMLove the quote from the Irish Times : “ Dr Gillespie, from a Unionist background !!”
But, seriously, this is wonderful stuff.
Posted by on Oct 03, 2007 @ 07:48 PMIf we are in competition with the Republic, then we are losing badly.
Posted by on Oct 03, 2007 @ 08:00 PMIn Alan’s all-island economy would we just have one bank? ;)
Tourists seem to manage quite well despite the woeful Tourism Ireland and NITB ...
Posted by on Oct 03, 2007 @ 08:02 PM“Northern Ireland needs to have its own investment agency - quite often we are in competition with the Republic of Ireland e.g. Aer Lingus”
There will always be competition within the catchment area of any investment agency. The most significant thing about the Shannon example is that the Irish Government declined to intervene
Posted by on Oct 03, 2007 @ 08:23 PM“Tourists seem to manage quite well despite the woeful Tourism Ireland and NITB ... “
Although the last time I looked it up tourism as a % of GDP in Northern Ireland was around 2%, compared to 6% in Scotland and the Republic. Obviously an opportunity Tourism Ireland has yet to exploit.
Generally speaking the competition for FDI is pan-European or global - NI vs ROI would be quite a long way down the shopping list of criteria an investor toys with.
The IDA has world-class expertise and networks which could benefit Invest NI, however if more investments like the 1,100 job, billion euro Amgen deal in Cork hit the buffers, then the IDA will be targeted exclusively on replacing jobs in the Republic, particularly with the downturn in construction.
This sort of idea is only likely to take off if full employment is maintained in the Republic and the IDA is tasked with chasing surplus FDI for use in Northern Ireland. Even then, it also requires very supportive government institutions (read the rest of his article on the structure of the Executive: scary); great infrastructure; attractive fiscal policies and an education system that supports all children (streamed comprehensives?).
The payoff for the Republic is a stable and prosperous neighbour. Greater economic interdependence on an all-island basis would reduce NIs dependence on the UK (or the Republic) as a market - this sort of FDI would lead to exports across the world.
Posted by on Oct 03, 2007 @ 08:39 PMMr Gillespie may be a clever dick but he is naive. Why does he suggest the Republic joins the UK or the US. Load of crap
Posted by on Oct 03, 2007 @ 08:41 PMAlan Gillespie is being naive politically. Northern Ireland as part of the UK has many differences with its foreign Eurozone neighbour. I believe the DUP will not let this happen. It works towards the Pan-Nationalist agenda and would cause Northern Ireland to lose its identity. If there is to be any realignment then the IDA should be working with the rest of the British Isles to promote a British Isles economy - but keeping the different investment agencies.
Posted by on Oct 03, 2007 @ 08:55 PMProbably the most important post on here in the last “historic” three years.
Posted by on Oct 03, 2007 @ 08:56 PMDr. Gillespie had a much more detailed article inside the paper where he looks at the issue in more detail.
Naturally, he supports the campaign to lower corporation tax to 12.5 per cent but asks what has made Ireland so successful.
He cites Craig Barrett, chairman of Intel:
“He noted three things make a country’s economy competitive - a good education system; investment in new technologies and R&D; and a regulatory and tax regime which is conducive to doing business.”
He then goes on to discuss the Varney review on the corporate tax issue, outlining three possible scenarios.
1. “The treasury says yes and we move into high gear to use this new competitiveness to win foreign direct investment (FDI).We will compete with Ireland and the IDA with the same tax regime.”
2. What if the treasury says no?
“In this case “what is plan B?” For a few days we will blame the treasury, the prime minister, Varney et al for not delivering a significant package. After that we will quickly need to get back to work promoting Northern Ireland without a dramatic change in corporate tax.”3. This is what Gillespie is possibly the most likely outcome and involves marginal adjustments to corporate tax, some allowances and incentives.
“Possibly Inland Revenue permission to establish a financial services centre-type implant in Belfast docks? So we need a plan B, and possibly a plan C, and we will need to be nimble if we are serious about moving from debate to delivery.”
He says attracting FDI is critical but that FDI is very demanding and requires a broad competitiveness package, not just tax.
How to deliver this in Northern Ireland?
“First we must acknowledge that a mature economy is not just based on FDI. We recall from the 1970s that FDI is very mobile and can move out of a region just as quickly as it moves in. Northern Ireland enjoyed a period when it was the man-made fibre centre of Europe with DuPont, Courtaulds, Enkalon, Chemstrand, ICI and others creating a significant cluster of FDI, bringing employment and stimulating exports.
Today these companies are almost all gone.
So alongside the foreign multinationals we hope to attract, we should also encourage local businesses to establish and grow.”
Secondly, NI needs to grow its existing businesses.
“We must nurture a balanced, diversified economy where there is a place for large- and small-scale enterprises, for companies of both local and foreign origin.”
to be cont…
Posted by on Oct 03, 2007 @ 10:46 PMP&J;- In the words of Bill Clinton “Its the economy stupid!”.
The Politics will sort themselves out in due course and I don’t see this as a Trojan Horse to undermine the Union as having read Alan Gillespie’s comments I don’t see them as a blue print for a political union with ROI.
That said, in economic terms it makes a lot of sense, the various UK economic development agencies all compete at present for the same foreign direct investment. We also have to compete with the ROI, with whom we already have strong infrastructural links.
The Celtic Tiger can either be our most fierce competitor or our best ally as the SE of England will never take a dewy-eyed view of their troublesome NI compatriots where the economy is concerned.
So, bottom line is do we want to grow our economy on our own terms (talk to NI industrialists as I have and you will find that under the surface it is a pretty bleak picture), hope for crumbs to fall from the UK table (no Westminster Labour or Conservative seats = damn all help from Westminster) or forge a strategic partnership to work with the ROI where we can add huge value (eg our Universities’ research is in some cases genuinely world-class) and as yet barely tapped potential for high value added jobs.
Elements of the ROI economy have hit a barrier due to lack of suitably qualified workers - we have them and can keep the ROI bubbling along and give our economy a much needed shot in the arm with a decent boost in high value-added employment as opposed to yet more call centres and low end service jobs.
The bottom line is that if we want to make a step change to the NI economy we can cross our fingers and muddle along as before or be courageous and confident and forge a mutually beneficial partnership. To me this is a no brainer.
Posted by on Oct 03, 2007 @ 10:51 PMGillespie then outlines how he believes NI can develop its competitiveness package in addition to tax:
“1) Skills in the workforce, supported by an effective education system;
2) Modern infrastructure of roads, ports, airports and telecoms giving access and connectivity;
3) Efficient, cost-effective energy supplies;
4) Innovation and R&D;anchored in university research;
5) Adequate availability of capital, both debt and equity;
6) Culture, housing, schools, recreation.”
He believes improved competitiveness will be helped if the region pursues the most effective international marketing and if the IDA is “best in class” and a “world leader” why not use it?
“Would it work? Such an approach would offer the most effective reach to decision-makers at the top of the world’s multinationals. We could offer choices of location, jurisdiction, currency and culture.
This is not a homogeneous island and even with differential tax rates between North and South, it is worth offering FDI a well articulated case that each part of the island has its relative attractiveness. A joined-up INI/IDA should be a win/win for both parts of the island.”
Also urgently needed is a strong entrepreneurial culture where risk and enterprise are nurtured and speed, agility and flexibility are valued.
“Today we do not have an operating environment characterised by speed, agility and flexibility. That is why the visitors’ centre at the Giant’s Causeway, our No 1 iconic tourist destination (and Unesco World Heritage Site), has not yet been rebuilt seven years after it was destroyed by fire.
In half this time the Cliffs of Moher visitors’ centre in Co Clare has been designed, approved, built and opened to receive tens of thousands of visitors!
Here in Co Antrim we have an effective deadlock between Moyle Council, DETI, DRD, the National Trust and other local interests. We are seriously stuck and yet place the development of “tourist product” and “visitor experience” high on the agenda for the economy!”
After that it’s the old chestnut of public sector reform, including reducing the overall percentage of NI’s workforce involved in it (currently nearly a third and the reform of local government.
He also highlights the seemingly bizarre situation where there actually isn’t a single department of government with responsibility for economic strategy and policy delivery.
Instead nine out of 11 departments of government carry some responsibility for the economy.
“Economic policy is developed in the Office of the First Minister and Deputy First Minister. Finance is responsible for regional economic strategy and budget. Enterprise is responsible for strategic economic development, energy, business regulation, inward investment, tourism. Employment is responsible for workforce skills, Agriculture for agribusiness and Culture for the creative industries. Planning sits within Environment, urban economic regeneration within Social Development and Regional Development provides the physical infrastructure. Such a lack of coherence hinders economic development and delivery.”
Titanic quarter and public sector working with the private sector is also recommended.
Posted by on Oct 03, 2007 @ 10:56 PMI suppose it’s only a matter of time before Alan has a round of golf with Brigadier McDonald. How can he expect folks here to work together for the good of all within a ‘nationalist’ straight-jacket? It’s bad politics and so maybe not brilliant economics.
Posted by on Oct 03, 2007 @ 11:02 PM“Today we do not have an operating environment characterised by speed, agility and flexibility.” - and sleaze - but I think we’re getting there - on sleaze, that is!!
Posted by on Oct 03, 2007 @ 11:11 PMCurrently the economy of the Republic of Ireland is doing well. That doesn’t mean it will be good for all time. So an economic take over for short term gain doesn’t make sense.
Northern Ireland is just coming out of a period of economic turbulence caused by Sinn Fein IRA terrorists bombing economic targets and murdering business people.
It will take time to build up the confidence required for investment.
Dewi - “Probably the most important post on here in the last ‘historic’ three years.”
I wouldn’t get too excited. The DUP will never allow this to happen. Alan Gillespie may have good experience in the business world, but he obviously doesn’t know much about politics. The push needs to be towards a British Isles economy which includes the RoI.Posted by on Oct 04, 2007 @ 12:05 AM“Currently the economy of the Republic of Ireland is doing well. That doesn’t mean it will be good for all time. So an economic take over for short term gain doesn’t make sense.”
A fact of life: rich countries tend to stay rich.
Economic take over for short term gain makes sense over, er, the short term. I’m glad you think any moves that bring us closer to the South are irreversible though.
“I wouldn’t get too excited. The DUP will never allow this to happen. Alan Gillespie may have good experience in the business world, but he obviously doesn’t know much about politics.
In a sense it doesn’t matter. If the economic gravity is towards closer links with the Republic, the DUP can block things like this but it’ll be powerless to stop the overall trend. The same logic applies in reverse.
“The push needs to be towards a British Isles economy which includes the RoI.”
It really doesn’t. The Republic is the only area within the British and Irish Isles to match or exceed the growth of SE England. There are plenty of examples of successful small economies, and the pull throughout the UK is towards more devolution and more separation/specialisation.
The UK represented a large common market, but it’s been dwarfed by the EU.
Posted by on Oct 04, 2007 @ 12:49 AMkensei -
You can dream all you want - it’s not going to happen. But the push should be for working together within the British Isles. In world wide terms, the British Isles is just a couple of main islands. Global companies need a menu of options within the British Isles - promoted by the relevant agencies.
Posted by on Oct 04, 2007 @ 01:49 AMPandJ,
“Global companies need a menu of options within the British Isles - promoted by the relevant agencies.”But as Gillespie points out, the IDA would be perfectly capable of providing this menu of options and while INI is struggling the IDA is a world leader - “best in class”.
That is the reality. The UK has been a top global destination for FDI for years and Northern Ireland has got crumbs. So it seems the “relevant agency” as you call it isn’t delivering within a UK context.
A leading economist argues that the IDA would be much better at delivering the goods than the current situation. We already have Northern Irish businessmen and women hanging on to the coat-tails of Irish-government led business delegations throughout the world.
Gillespie hasn’t come up with this idea in a vacuum. He is seeing the reality on the ground.
He is seeing who is being successful in getting investment into the island of Ireland, the Irish government, and who isn’t, the British government.
Can you put forward an argument as to why the IDA couldn’t do a better job rather than what seems to be your current position of simply not wanting them to do a better job?
Posted by on Oct 04, 2007 @ 08:36 AMGeorge, history shows that our dispute is political, about the control of territory, rather than about economics. Unionists put forward the economic argument over a century ago; now it’s the domain of nationalists.
If we’re to be able to work together constructively then strand 2 of the 1998 Agreement should be incorporated in strand 3 and there should be shared sovereignty for NI.
Our ‘external’ relationships with the rest of these two islands need to be developed in tandem, otherwise our various expressions of apartheid will continue to flourish - to the detriment of all.
IMO ‘international’ funding is favouring our relationship with RoI at the expense of our relationship with GB and organisations such as the CBI and Chambers of Commerce are probably following the money.
In general, short term greed will not meet long term need.
Posted by on Oct 04, 2007 @ 09:13 AMIn my opinion this is an excellent suggestion. Within the UK we are one region, one that offers somewhat lower costs, but is a bit out of the way. In an all-Ireland context we are a product offering: with significantly different tax and benefits structure, not to mention currencies, the two parts of Ireland can meet the needs of more businesses than one can alone.
“Hello Mr Business - corporation tax important to you: try brand green. Want access to sterling infrastructure: try brand orange.”
How many investment agencies can bring such a variety to the table?
However, there are negatives: as soon as the united investment agency gets a company to locate in Belfast rather than Dublin you will get a stink from the TDs of the magnitude of the recent Aer Lingus row. The government will not be happy with this - so political interferance will be something the agency will get hit with, and NI will lose out here since half our politicians are only half-hearted about NI being a success and the rest are more intersted in their Bible studies.
Posted by on Oct 04, 2007 @ 09:15 AMIn a wider context, Gillespie’s logic fits within a United States of Europe - no nations but a multiplicity of regions - small is beautiful from a EU mandarin perspective - it’s a bit like Belfast telling Derry to be quiet and do what your told.
Posted by on Oct 04, 2007 @ 09:27 AMNevin,
our relationship with Great Britain has never been better and is most certainly flourishing. East-West is doing fine. The major problems remain with North-South and internally in NI.We are currently flying on one wing economically on this island and need the Northern part to prosper if Ireland is to move to next stage.
As for the “dispute”, how does marketing the island of Ireland as a whole impinge on sovereignty? That issue has been settled by the Principle of Consent.
Naturally, there is still distrust but nothing is going to happen to NI politically unless a majority wish it to happen.
But to ignore the reality that we are together on a small island makes no sense. It also makes no sense for NI not to make use of the global brand that is “Ireland”.
The IDA can just as easily market NI as a sterling area within the UK, which might be exactly what a particular investor wants and needs.
As I said, the UK is probably the top FDI destination in Europe but Northern Ireland is getting virtually nothing.
So we have a situation where one of the world’s top development agencies could be called upon to improve this situation because those currently doing the job or responsible for seeing the job is done simply aren’t up to it or simply aren’t in a position to deliver.
Why wait for Godot?
Instead, if the IDA, which is here and now, can market this particular area of the UK, bringing jobs and prosperity why not?
It will benefit all of Ireland Inc.
How can making Northern Ireland a more vibrant and economically successful region within the UK undermine its sovereignty?
Unionist fear of the future and a resultant failure to act will undermine it much much more.
Posted by on Oct 04, 2007 @ 09:49 AMI think that you will find tourist numbers declined after certain people offered to firebomb the police over a march in Drumcree.
Who would these people have been?
Posted by on Oct 04, 2007 @ 10:00 AMSlightly naive, no? Of course the two development/investment agencies are competitors, the corporate tax will go to different governments....
Posted by on Oct 04, 2007 @ 10:09 AM
