Continued investment?
Gary McDonald looks at how Northern Ireland could capitalise further on investment from the US and India.
Either side of the millennium, Northern Ireland indisputably punched above its weight in terms of attracting foreign direct investment (FDI), especially from the US and more recently India.
From 1997-1998 to 2006-2007, for instance, North American client companies of Invest NI (and previously IDB) made 100 investment announcements, pumping £1.174 billion into the local economy which in turn created 13,660 new jobs and safeguarded a further 9,397.
Those figures don’t even include non-client companies of Invest NI such as retail giant Wal-Mart, which has invested tens of millions of pounds in opening a chain of Asda stores in the north. Among the major US investors in Northern Ireland have been Seagate, Caterpillar, Du Pont, Nacco, Perfecseal, Copeland, Northbrook, Liberty IT and CitiGroup.
Since 2006, India global business process outsourcing giant FirstSource has also pumped in tens of millions of pounds in a series of investments in centres in Belfast and Derry, where its payroll is more than 1,400.
FirstSource’s latest investment last November – helped by another sizeable support package from Invest NI – further enhances the strong links between Northern Ireland and India, which has led to a string of inward investments from large Indian companies such as HCL, Polaris and Tech Mahindra. To further cultivate these links, Invest NI even opened an office in Mumbai in 2008.
Historically, however, such investments here depended largely on selective financial assistance rather than the underlying competitiveness of the Northern Ireland economy. And while the nature of foreign investments has had a significant impact on employment levels, in general terms it hasn’t had an impact on productivity levels and closing the gap with the rest of the UK.
Now the well could be running dry, with access to selective financial assistance likely to be limited in the near future due to changes in EU state aid rules.
There are also emerging fears that the opportunity has not been taken to address the underlying structural problems of the Northern Ireland economy.
However, Stormont Economy Minister Arlene Foster and her DETI and Invest NI cohorts would vehemently argue with that. They insist Northern Ireland has developed a growing reputation for developing software for telecoms, to locate financial services and business applications and increasingly to undertake sophisticated financial processing, including funds management.
The economy, they also tell us, is transitioning successfully towards tradeable services and niche manufacturing and continues to be “a prime location” for international investment.
Global reach
FirstSource is a leading business process outsourcing (BPO) company, headquartered in Mumbai, and provides customised business process management services to FTSE 100 and Fortune 500-listed global leaders across a number of sectors including financial services, telecoms, media and healthcare.
It has 34 centres worldwide and employs nearly 20,000 employees across five countries in four continents.
“Investment and repeat investment announcements by companies of the calibre of FirstSource clearly demonstrate the competitiveness of the Northern Ireland proposition and the confidence it has in this region,” the Minister said.
“Having forged a strong partnership with Invest Northern Ireland, FirstSource has become a major business services employer, strengthening the sector locally and contributing towards the further development of transferable skills, a trend which I believe will continue.”
FirstSource President Matthew Vallance says the company’s Belfast and Derry centres provide high-end business processing services that have achieved very high levels of customer satisfaction. “We expand here because we want to build on that success and create another European centre of excellence that will help to advance FirstSource Solutions’ global reach,” he says.
Northern Ireland’s growing links with the sub-continent complement its many longer-standing relationships with US investors.
Foundations
Drogheda-born but Washington domiciled Dr George Moore is chairman of Erne Heritage Holdings, owners of the Belleek Pottery Group, which it purchased in 1990.
Although Belleek has operated for more than 150 years as Northern Ireland’s leading manufacturer of porcelain giftware, he and his management team have successfully steered it through the choppy waters of the last decade.
The business has not only been rescued, but has been reinvigorated since the launch of its Belleek Living range. The group now controls Galway Crystal, Aynsley China and Donegal China, turns over more than £35 million annually and employs close to 600 people.
Dr Moore says: “America, like most of the world, is still picking itself up from the worst recession most people can remember. But don’t let anyone tell you Northern Ireland isn’t on its radar as far as foreign direct investment is concerned.
“Yes, you are competing head-on with Eastern Europe and Asia for our dollars, but people in Washington can see just how far Northern Ireland come in the past 10 years – economically, socially and politically – as the foundations of a more prosperous and confident region are laid.”
On the US Economic Advisory Board to the Taoiseach, Dr Moore has been a consistent advocate for championing trans-Atlantic economic ties, and insists: “US business people simply love dealing with the Irish.”
He is Chief Executive of Virginia-based consumer and business information database company TARGUSinfo, which he co-founded in 1993 to develop a new generation of information products using intelligent call processing. It means he has now founded three separate IT companies on radical patented innovations, each of which has exceeded revenues of $100 million.
Two Christmases ago his unstinting work in aiding the Northern Ireland economy was recognised by the Queen. That award of an honorary CBE was formally announced to Dr Moore by the then-First Minister Dr Ian Paisley – fittingly, perhaps, during a dinner of key business leaders in Washington DC.
