Building on FDI success
fDi Intelligence’s Glenn Barklie talks to agendaNi about how Northern Ireland can make more progress on foreign direct investment.
As the level of foreign direct investment in Northern Ireland increases, Glenn Barklie is suggesting that the region can make more gains by turning its attention to high value sub-sectors.
Barklie is Head of Benchmarking Services at fDi Intelligence, a division of the Financial Times Ltd. Northern Ireland, he explains, is “performing better than ever” and has performed particularly well in software and ICT. He expects this trend to continue but sees a need for policy-makers to seek out areas of growth within the main sectors which attract foreign direct investment.
Software, finance and business and professional services are “growing so vastly that there are so many sub-sectors that are emerging within that.” Legal services is an example of such a sub-sector. He adds: “The important thing is to actually start targeting sub-sectors and the actual business functions within those.”
fDi had forecast 32 foreign direct investment announcements in 2014 and 33 had been announced by early October. The USA remained the main source of investment (17 projects) and software and ICT accounted for 14 projects. A skilled workforce has been cited as the main reason for investing in the region – mentioned by 35 per cent of investors.
“This continues to be very successful year for Northern Ireland,” he comments, “so it’s about building upon that in the future and starting then to look at expansions of existing companies.”
Barklie’s conclusion is that Northern Ireland must continue to actively target high value added sectors and sub-sectors, and keep up its core focus on the software, IT and US markets.
fDI’s recommendations on policy are largely based on its 2012 report on how Northern Ireland can improve the quality of foreign direct investment. It predicted that a reduction in corporation tax to 12.5 per cent would double job creation from foreign direct investment, particularly in financial services and biotechnology.
However, the report also found that corporation tax was not the sole success factor for the economy. Education and skills were “critical” and government policy needed to increase the number of high quality graduates and improve the level of vocational skills which could attract more investments in aerospace and renewable energy. Northern Ireland also needed to invest in institutions which could create economic clusters and consider how to develop high profile catalyst projects – exemplified by Dublin’s IFSC and Manchester’s Media City development.
