Investing for the future
Invest NI Chairman Mark Ennis discusses its recent achievements with Owen McQuade and sets out his priorities for economic development for the next three years.
As Mark Ennis starts his second term as Chairman of Invest NI, he is expecting the next three years to be a volatile time for Northern Ireland’s economy but also one full of opportunities.
One of the foremost challenges is the possibility of the UK voting to leave the European Union which would have “a major adverse impact on our ability to attract investment.” Invest NI’s overall approach, though, is positive with the agency being keen to build on its achievements to dates.
Looking back over the last three years, he notes that the Independent Review of Economic Policy “set in motion a change programme” – described internally as Transform – and a set of new values was brought forward with a particular emphasis on the customer focus.
“We’ve just been awarded our Customer Service Excellence award and the assessor said that he found Invest NI one of the most driven and professional organisations,” Ennis remarks.
Customer satisfaction rose from 68 per cent to 80 per cent while stakeholder satisfaction was up from 63 per cent to 86 per cent. He affirms: “We’ve moved from being an organisation that was seen to be obscure and maybe not very forthcoming to transparent and one that is now becoming trusted among our politicians. I think that’s vitally important.”
Ennis puts the improvement down to organisational restructuring i.e. processing case work in 15 days, paying customers within 30 days of a grant award (down from 50 days), and ensuring that 86 per cent of suppliers are paid within 10 working days.
“We actually don’t create jobs ourselves,” Ennis points out. “We don’t do the R&D ourselves. We have to be an enabling organisation and a support organisation – and a sales organisation as well in terms of FDI. You can only do that if, again, you’ve got the customer focus.”
The Transform programme has been all-invasive and, for example, considered the organisation’s performance management system, which previously only rated work as ‘good or bad’ and did not quantitatively measure performance. Invest NI now measures every element of its Programme for Government commitments.
Every VAT-registered business is now considered a customer and therefore the same solution is not possible for everyone. “It forced us to rethink how we did our business,” he comments. A lot of SME customers were looking for more information and understanding, thus implying greater access to
Invest NI as an organisation and better communication with them.
Reform
After local government reform takes effect on 1 April, the new councils will effectively take responsibility for the
‘Go for it’ campaign to encourage entrepreneurship and support for social enterprise. “We’re not abandoning it,” Ennis says of this package of programmes. Instead, the key question is: “How can we partner with you and how can we continue that support, particularly in the handover phase?”
When it’s put to him that the 11 councils could go ahead with 11 very different programmes, he comments that each council will have a different level of capability and different views on taking policy forward. Invest NI has ensured that all councils will adhere to a core content based on the existing programmes with the rest of their activity tailored to their local circumstances.
Job promotions represent the number of jobs announced. The Programme for Government target was 25,000 jobs and the total, as of last September, is 34,000. Around 20,000 of these are from indigenous companies with the remainder from foreign direct investment. More than 20,000 jobs have been created since 2011 as a result of announcements.
“People have this perception that we tend to focus everything on FDI but actually over 90 per cent of our job offers are to local businesses,” Ennis remarks. The press “quite rightly” pick up on new names coming in from overseas but local investment is the “bread and butter” for the organisation.
Exports has been the most challenging area. Invest NI measures manufacturing exports based on HMRC data. Ennis wants to change the evidence base so that it includes external sales to Great Britain – a strong growth point for construction companies. Manufactured products from Northern Ireland which are consolidated in Britain for shipping purposes and subsequently exported also fall outside the statistics.
The “massive” level of service exports is not measured at all: “If our numbers are being used to influence policy, one of the challenges we have there is we’re basing the policy on the wrong dataset. We need to grab that dataset and look at external sales in the first instance and also look at the service sector.”
Lower corporation tax is not a “silver bullet” but it is a “very useful weapon in the armoury”. To date, Northern Ireland has competed on the basis of cost-value propositions. Under that model, investors firstly look for talent and then the cost of property – which compares very favourably to London, Dublin or Edinburgh.
The province, though, has not “fished in the pond” for highly profitable companies which are investing for tax planning or looking at somewhere that gives them a better return on their profits.
The timing of a reduction, in his view, is secondary provided that a concrete and definitive implementation date is set out and a “clear and transparent” path leads up to that point. “You’ve got to take the uncertainty out of the proposition,” he remarks, “and provided we can do that, I don’t think putting it in in a phased way would damage us because companies will inevitably be 18-20 months down the line before they make these decisions.”
Future
Ennis has three personal goals for the next three years:
1. a best in class development agency;
2. a strong focus on health and life sciences; and
3. an effective skills policy.
The first involves focusing on developing its staff – who already constitute “a very talented pool of people” – and building on its Investors in People gold award and its new leadership and development programme.
On the second point, Ennis wants Northern Ireland to look at its capital and services spend on health (£1.5 billion) as “an investment opportunity” rather than a cost. The province has the rare advantage of a combined health and social care system which is “small enough to be agile but big enough to matter to big pharma companies.”
Invest NI has a close working relationship with DEL but he wants more focus on measuring the quality and effectiveness of that training. Companies need to receive high quality, validated training programmes alongside a consistent flow of graduates and the prospect of lower corporation tax.
China focus
Invest NI has successfully delivered on Ennis’ challenge of making its operation in China as effective as that in the USA. All of its Asia-Pacific operations are now directed from Shanghai with strong backing from visiting Executive ministers. A Northern Ireland Executive office in Beijing is now planned. In his previous career with Boxmore, he set up a number of businesses in China and recognised the need to show a “consistent sense of purpose” in order for Chinese customers to take a foreign investor seriously. He expects that the new structure will result in improved trade in the coming years.
