Business First May-June 2017 Business First May 2017 | Page 16

THOUGHT LEADERSHIP

Creating an Industrial Strategy for Northern Ireland

by Iain Hoy , Senior Policy Adviser , CBI Northern Ireland

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ne of the last acts of the Minister for the Economy prior to the March election was the publication of Economy 2030 : A draft industrial strategy for Northern Ireland . If adopted , this document will be the foundation stone of Executive economic policy over the coming decade .
At its heart , the strategy incorporates a vision of a globally competitive economy that works for everyone . In a welcome step forward , this ambitious vision is underpinned by equally ambitious targets . By 2021 the Executive aims to have created 50,000 new jobs and made Northern Ireland the No . 1 FDI destination outside London . By 2030 , the Executive wants Northern Ireland to be in the Top 3 most competitive small advanced economies and increased the annual spend on R & D to £ 1.5 billion .
Achieving these goals in the timeframe set out in the strategy will be challenging . However , success will lead to a genuine transformation of our economy resulting in greater prosperity and employment for our citizens . This remains the most effective way to lift people out of poverty and reduce health inequalities .
However , while the Executive is right to be ambitious , turning Northern Ireland into a leading , internationally competitive economy will be no easy task and requires laser like focus on the key policy actions that will deliver the greatest economic return .
It is in this area that the strategy demonstrates a number of weaknesses , as despite the ambitious headline vision , the strategy fails to back it up with equally ambitious policy commitments or by conveying any real sense of urgency .
The strategy contains 53 policy commitments . While all are worthwhile , there is an overreliance on vague sweeping policy commitments such as “ Increase efforts in supporting non­innovative companies to engage in innovation ” without any real focus on delivery . If the Executive is serious about reaching those targets , then the strategy must be amended to include clear projected timelines for the delivery of each policy commitment .
There also is little sense of priority within the document . This raises the question as to whether the truly vital policy commitments will be given the priority attention they deserve . Success requires focus and so the Executive should pick six key flagship policy commitments that will deliver the greatest economic impact and then ensure , above all else , that they are achieved . This also has the advantage of providing much needed
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budgetary guidance in an increasingly difficult environment for public finances .
The CBI recommends that those flagship policy commitments should include : A . The delivery of a lower corporation tax rate at the earliest possible date B . The construction of the second North / South Interconnector by December 2021 C . The introduction of a Flexible Skills Fund accessed by those firms impacted by the Apprenticeship Levy D . By 2021 Northern Ireland ’ s investment in Transport Infrastructure is comparable with other UK jurisdictions E . Higher education funding is put on a sustainable footing F . A renewed focus on primary and secondary education . The study of maths and English should be made compulsory up to age 18 for all those remaining in education or training , computing is taught as a core subject for children in all levels of schooling , plus an increased uptake of STEM subjects must be facilitated . However , the most glaring issue with the draft strategy is its failure to address the UK ’ s decision to leave the European Union . Northern Ireland is more vulnerable than the rest of the UK to the type of structural changes triggered by an UK exit , yet despite the potential impact , there is only one singular mention in the entire strategy .
The strategy recognises the potential impact of Brexit on exports , but fails to refer to the potential impact on skills availability , research collaboration , infrastructure funding or security of electricity supply .
Compare this approach with the approach taken by the UK Government in its own draft industrial strategy . It is made very clear in the Prime Minister ’ s foreword that she envisions the UK Industrial Strategy as a critical component of the government ’ s plan for a post­Brexit Britain .
The Executive should follow her example and present their strategy as a plan for a successful post­Brexit Northern Ireland and the document needs to be rewritten to reflect that . As a bare minimum the strategy should include a short summary of the key issues facing each sector .
Businesses are not expecting all the answers as we recognise that much depends upon the terms of the final UK / EU deal . However , identifying Northern Ireland ’ s vulnerabilities will infer much needed urgency to address those weaknesses and improve our competitiveness through measures that will enhance our economic resilience .
Failure to address this issue undermines the strategy ’ s credibility . Businesses can have little confidence in a strategy that does not acknowledge the dramatically changing economic environment with all the associated challenges and opportunities which are presented by the UK ’ s decision to leave the EU . In addition , there is no commitment to revisit the economic strategy once the result of the UK / EU negotiations is known . This must be addressed .
In conclusion , businesses should remember that the draft industrial strategy is exactly that ­ a draft strategy . As with all initial drafts there is much work still to be done . However , it is hard not to conclude that while the Executive has a grand vision , it is not quite ready to commit to the policy actions required to turn that vision into reality . So while the Executive must be commended for its ambitious economic vision , what we need now is delivery rather than words .
MOREINFORMATION
CBI Rural Economy Summit
On the 13th of June , the CBI will be hosting a Rural Economy Summit in Dungannon to identify how best to encourage greater economic growth in rural areas . For more information , please contact Anthea Savage at anthea . savage @ cbi . org . uk