Manufacturing slump drags INI’s performance

There was another great quote from one of our commenters recently, that ran (and apologies for paraphrasing): ‘there is no shortage of people looking for power, but they all disappear when it comes to taking responsibility”. The nine year talking shop in Stormont has done little to address the ebb and flows of the local economy, though there is no shortage of constitutional arguments of over same. The Newsletter today notes that despite Invest Northern Ireland spending “over £400 million was spent supporting economic projects between 2002 and 2005 while overall employment in its client companies dropped by 4,700”.

An agency spokesman said the drop in employment in its client companies was due to the huge fall-off in employment of around 50 per cent in the manufacturing sector, in particular textiles, adding that similar falls were recorded by Enterprise Ireland in the Republic and other UK agencies. Without the job creation efforts, he said the situation could have been worse.

“There are clearly many factors which influence the performance of our clients, only one of which is assistance received from Invest NI,” said Mr Morrison. “We acknowledge that further work is required to understand better the connections between our interventions and their consequences.”

Check earlier economic stories on Slugger.

  • I respectfully suggest that a big part of the problem is that 90% + of those charged with ‘economic development’ haven’t spent a day working in the commerical world in their lives.

  • Brian Boru

    Inevitable consequence of partition.

  • IJP

    The Alliance Party is often criticized for being “in the middle”, but the truth is usually to be found near the middle, and this case is no different!

    The idea of an enterprise agency which steps in temporarily to boost private-sector firms is far from unknown. Bavaria’s very successful “mixed economy” has a fair whack of that.

    The problem in NI is the *total dependency*, to the extent that even the private sector can come to expect hand outs! And that’s not sustainable.

    I’m just not sure what the purpose of Invest NI really is, and I’m not sure Invest NI is either. It’s not really the fault of the people who work there, but rather than lack of guidance from Government. Which in turn suffers from not knowing, 12 months’ hence, who’ll be doing the guiding!

    On RTE’s Questions and Answers yesterday, Kevin Myers said that a country that builds the Red Cow Roundabout and motorways without service stations cannot be trusted to implement an ID card scheme for immigrants.

    Similarly, a country that builds the single-carriageway Newry Bypass and then realizes it has to replace it within 10 years (how long do you give the roundabouts at Toome?) can hardly be trusted with long-term, sustainable economic development!

    And the truth is until we get stable government, such things all look somewhat bleak.

  • JR

    The ‘Sick Counties’ will never be viable when a part of the UK.
    Political instability and the narrow minded politicians will guarantee another 70 years of drudgery for the stupid and gullible who vote for them.

  • Mick Fealty

    JR adn BB:

    I did say that “there is no shortage of constitutional arguments of over same”. I should, of course, have added the condition that many of them rarely get developed beyond mere slogans.

    Bearing in mind Urquhart’s point, do you think Blair was flawed in his thinking back in 1994 in reaffirming Labour’s 1944 committment to full employment:

    …we must conquer the weaknesses of our economy that hold our country back. It won’t be done by state control. But it won’t be done by market dogma.

    It can only be done by a dynamic market economy based on partnership between Government and industry between employer and employee and between public and private sector

    .

  • Greenflag

    Urquhart,

    I tend to agree. Government agencies have a role to play in overall job creation but when an economy’s GDP is already 70% public sector dependent then it’s an uphill struggle to wean what’s left of the private sector off the public purse so to speak. The public sector ‘mentality’ pervades the economy to such an extent that the negative aspects of it’s effect are taken for granted . I’m not suggesting it’s all negative BTW .

    IJP,

    ‘And the truth is until we get stable government,

    Stable government by itself is not a solution . We had stable government in the Irish Republic 1922 through 1957 and our economic performance was far behind that of other comparable small european economies during that period . Northern Ireland had stable Government between 1920 and 1939 and yet it’s economic performance during that period also compared poorly with other small states .

    What’s needed in NI is the right mixture of private sector investment , FDI , and taxation . education and health policies which enable NI people to take advantage of the opportunities presented .

    I assumed you meant ‘stable government ‘ within the present Northern Ireland State . The rest of the UK has had stable government during the greater part of the last 40 years . The lack of a stable government in NI results from

    a) The fundamental demographic and constitutional built in instability of the State itself in it’s present format.
    b) The failure of the locally elected politicians to rise above sectarian considerations to do the necessary .
    c) Even if the latter problem (b) were to be resolved , it’s questionable whether any region of the UK would be given enough economic powers to initiate the kind of policies that would lead to a major economic resurgence in NI’s private sector .

    It’s catch 22 .

  • Crataegus

    Urquhart

    those charged with ‘economic development’ haven’t spent a day working in the commercial world in their lives.

    Too true and it shows. Wind up INI the money could be better spent. On wider civil service careers I often wonder if the concept of a career in the Civil Service should be a lot more fluid.

    Greenflag

    Yep there are a lot of reasons, but until those who are elected to govern raise their sights there is no possibility of meaningful coordinated change unless luck favours us. My opinion of the political class remains uncomplimentary. Where we differ is you see stability in Unity but I’m not so sure nor do I see it as the only possible way forward.

  • IJP

    The argument on the other thread is that all the Board members are Directors of private companies, therefore there’s a clash of interest; and here it is that the people who work for INI have never been in the real, corporate world!

    Is the argument that economic development agencies are, by definition, a waste of time and money? People who are good as business are making money in business, and people who are bad, well, they’re hardly suitable to advise people on how to start a business, are they?

    What does IDA do differently that makes it apparently so much more effective? Or is it more to do with the Republic as an investment location as a whole – in other words, is it simply that IDA has a lot more to sell than INI has?

  • George

    IJP,
    the IDA was established with responsibility for attracting foreign direct investment into Ireland. No one can say it hasn’t been successful.

    According to PriceWaterhouseCooper, one of the key reasons for its success was “its ability to identify the country’s strengths and match those with growth industries”.

    As Ireland is a small country, the IDA “was able to synchronize all the pieces, including training people for the required skills in targeted industry sectors”.

    In addition, “Ireland also ensured that the appropriate infrastructure was built up around those sectors including the support of and integration with Ireland’s academic community.”

    I suppose the bottom line is that the IDA were able to go to the Irish government and say “we need you to deliver A, B and C” and the government was able to say “you got it.”

    The success, in my view, is down to the fact that it was supported in its endeavours by a very flexible government.

    I asked this before here: what are Northern Ireland’s strengths and what niche can it find?

    The best reply I got was tax haven.

    Has any party come out and said where they see Northern Ireland’s economy going and they intend helping it?

    Also, was Myers any good on Q&A. He has disappeared off the earth in recent months.

  • David

    Now we begin to reap the harvest of years of political inertia.
    In 1998 our politicians had the chance to transform the local economy. Instead they opted for tribalism. Now we reap what they sow.

  • Frustrated Democrat

    Q. Without INI what would the reduction in jobs have been.

    It is good to see in depth analysis being replaced by predictable knee jerk reactions.

    NI had one on the largest concentrations of clothing manufacturing anywhere in Europe, the fact that only 5,000 net jobs were lost as it was decimated is truly amazing.

    INI has had an uphill struggle and the fact that due to the situation here NI lost must of the international investment going around in the 70 & 80’s after being one on the most successful operators in the 60’s when Brian Faulkner and Robin Baillie travelled the world garnering jobs on their way.

    It is now bizarre to see many of those who are members of or support the party that is closely linked with the organisation that spent 20 odd years trying to destroy NI businesses saying what a basket case NI is when that is exactly the outcome their fellow travellers tried to achieve.

    Isn’t history very very strange.

    P.S. I don’t have any associations whatsoever with INI

  • I’m not so familiar with the bigger picture, economics n’ all dat puts me to sleep, but I work in manufacturing and have seen hundreds of jobs lost in our company because of the costs of manufacturing. Manufacturing here will continue to get hit in the coming years, hopefully the medical industry will stay strong though as it’s a big supplier of jobs. I think Ireland (the state) and especially the IDA has been quite successful at bringing in foreign investment by selling Ireland’s strong points, as a skills based country and then also as a knowledge based country.
    I think NI needs to follow suit. They won’t get lots of manufacturing jobs so they may need to look IT or elsewhere.

    (don’t really have a clue what i’m talking about to be honest)

  • George

    The IDA marketed Ireland as “The Young Europeans” to get Intel and the rest.

    Any suggestions for Northern Ireland out there?

  • IJP

    Thanks, George.

    So would the House agree that INI’s apparently poor performance is primarily down to the inability of Government to interact with it flexibly and appropriately, rather than anything innate to INI as an organization itself?

    And does the House then agree that INI’s existence is called into question not because of innate poor performance, but because economic enterprise agencies are pointless under colonial or “involuntary coalition” rule?

  • Better have them (INI) than not IMHO. They can at least market whatever it is N.Ireland has and can identify what N.Ireland needs in order to boost future development.

  • Mick Fealty

    Good points from FD and IJP.

    The IDA’s success was in part built on demographic gift, good edcuational levels and serious government belt tightening, which was enabled by the opposition’s decision to pass tough fiscal reforms by the minority Haughey government of the late eighties.

    Notwithstanding some of Urquhart’s criticism, the INI, and the IDB et al before, it never had that kind of local (or national) governmental backing.

  • Greenflag

    Crataegus ,

    ‘Where we differ is you see stability in Unity but I’m not so sure nor do I see it as the only possible way forward. ‘

    You’re misinterpreting my post . What I’m saying is that the present political format /demographics /constitutional conflict /lack of agreement -between the major parties and tribes in NI is inherently unstable and thus not conducive to the broad scale cooperative support needed from all the ‘social partners in NI ‘ to break out of the present relative decline in NI’s economy at least compared to it’s neighbours. If you can’t get the two main political leaders to sit at the same table how can you have a coherent economic policy agreed by both ? Apart altogether from the preferred policy differences of each party?

    I’m not stating that Irish unity would or would not solve NI’s economic problems . My position is that given the widespread opposition to a UI by the vast majority of Unionists such a Union would not be beneficial to the Irish Republic . We don’t need a large embittered minority . We have more than enough to do integrating the 500,000 new immigrants . If however a majority of NI Unionists were to advocate a UI along with a majority of NI Nationalists and Republicans then that could have synergistic effects to everyone’s benefit . This is as you know is about as likley as a manned landing on Uranus next month by the Republic of Burkina Fasso !

    Thus my belief that a fair and agreed repartition is the only way that Northern Unionists can be part of a State on this island where the vast majority 90% in such a State could be supportive of their government’s economic program . Whether such a program would conflict with a smaller NI’s position in the UK would be a matter for Unionists alone to decide . Those Unionists favouring full political and economic integration into the UK would presumably be opposed by those who would want more regional powers for an NI (2 county State ) .

    Whichever way you look at it there is no point in looking back except to see where there were failures in economic policy and planning and learning from that . NI has missed out on the investment boom which the Republic enjoyed for many reasons and not all were political .So another way forward has to be worked on. Some of what worked for the Republic will work in NI and some will not . But without sufficient political ‘unity ‘ within NI then I fear that diametrically opposed political objectives will trump economics every time to the detriment of all the people of NI .

  • Frustrated Democrat

    INI are bound by a set of EU rules as to what they can and can’t do to attract investment and they stick to them.

    The IDA are also bound by the same set of rules, but has anyone told them?

    The UK Government’s slavish adoption and implementation of EU rules is in stark contrast to
    the lip service paid by the Irish government. I prefer the Irish thought process ‘let’s cherry pick the EU for our own benefit’.

  • IJP

    maca

    Not disagreeing, but INI doesn’t come for free you know.

    Its budget is around £170m a year.

    So it is legitimate to ask: could we spend that more wisely?