Economic Strategy: ambitions for prosperity
| The Northern Ireland Executive’s Economic Strategy (2011-2015) aims to rebuild the economy as it emerges from recession and create a step change in its performance by rebalancing the private and public sectors. agendaNi sums up its key targets and messages.
Boosting competitiveness The overarching goal of the Economic Strategy is to improve Northern Ireland’s competitiveness, Arlene Foster has stated. To achieve that, it focuses on export-led economic growth i.e. “prioritising the need to deepen and diversify our export base in order to increase employment and wealth across Northern Ireland.” Lowering corporation tax is set out as a priority but the strategy is designed to continue regardless of the Treasury’s decision. The strategy, naturally, considers how the turbulent global economic conditions will affect the performance of local companies. “Notwithstanding the external threats that may hamper economic growth, we have outlined the strengths and opportunities of the Northern Ireland economy that give us confidence for the future,” the Minister comments. “In developing a more competitive economy, we have identified the twin goals of rebalancing the economy towards higher value added private sector activity, and the need to undertake a more immediate rebuilding phase to address the impact of the global downturn on the local economy and labour market.” £375m Foreign direct investment Visions “An economy characterised by a sustainable and growing private sector, where a greater number of firms compete in global markets and there is growing employment and prosperity for all.” Economic Strategy “A peaceful, fair and prosperous society with respect for the rule of law.” Programme for Government Eight new university spin-out companies by 2013 Skilling up Freezing tuition fees for local students in higher education and adding new student places in potential growth sectors are the Executive’s top two priorities for improving the workforce’s skills and employability. STEM subjects, sales, marketing, and management and leadership are viewed as especially important subjects. A total of 210,000 qualifications should be delivered through higher education, further education, essential skills and training over the strategy’s timeframe, and the number of foundation degrees should increase. Companies will be encouraged to invest £110 million in skills. The Executive, for its part, will continue to invest £18 million per year in education, knowledge and technology in agriculture and the wider rural economy. The new NEETs strategy also forms part of this work and Belfast and Derry city councils will develop strategic employment strategies for each city. £300m Business R&D investment Rebuilding in the downturn
New jobs: 5,900 from inward investment 6,300 in local companies 6,500 in start-ups 25,000 target Global best practice Improving export performance is the clear success factor in developed economies, according to the Independent Review of Economic Policy. Sweden and Finland achieved success by investing heavily in innovation and R&D. Singapore and the Republic of Ireland instead opted for low corporation tax and cutting business regulations. Across the board, a “world class” education and skills system is “critical for economic growth.” Small economies benefit by focusing innovation policy on sectors where they have competitive advantages and historic strengths. Support for R&D undertaken by individual companies is becoming less common, with a shift towards collaboration between businesses, higher education and government. Indeed, the strategy notes that “most successful small, open economies have a dedicated innovation agency, and many are setting up public research institutes.” Investing in vocational and technical training helps economies to rapidly respond to changing skills needs. Working closely with large investors (whether local or foreign) to develop supply chains improves the prospects of indigenous companies. Strong infrastructure underpins growth, especially in transport, telecoms, education and health. Social enterprises are particularly useful for creating jobs in deprived neighbourhoods. 160 new social enterprises Main economic infrastructure
70% of school leavers with 5 GCSEs Potential FDI growth areas
Global best practice Improving export performance is the clear success factor in developed economies, according to DETI’s assessment of global best practice. Sweden and Finland achieved success by investing heavily in innovation and R&D. Singapore and the Republic of Ireland instead opted for low corporation tax and cutting business regulations. Across the board, a “world class” education and skills system is “critical for economic growth.” Small economies benefit by focusing innovation policy on sectors where they have competitive advantages and historic strengths. Support for R&D undertaken by individual companies is becoming less common, with a shift towards collaboration between businesses, higher education and government. Indeed, the strategy notes that “most successful small, open economies have a dedicated innovation agency, and many are setting up public research institutes.” Investing in vocational and technical training helps economies to rapidly respond to changing skills needs. Working closely with large investors (whether local or foreign) to develop supply chains improves the prospects of indigenous companies. Strong infrastructure underpins growth, especially in transport, telecoms, education and health. Social enterprises are particularly useful for creating jobs in deprived neighbourhoods. 160 new social enterprises Threats Internal
External
Key strengths
Devolve corporation tax from London |
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