Speech to the NI Assembly
In giving this report general support there is the recognition that the Northern Ireland economy and the economic structure are not fit for purpose. There is a wealth gap between NI and GB that is constant over many years. NI has a Gross Value Added (GVA) per head of around 80% of the UK average. Scotland, our closest neighbours are about average.
There have been changes in the NI economy, but in the opposite direction to the creation of the high added value economy which is the declared aim of the job creation agencies under the remit of DETI. Job creation is via a large number of jobs being produced at the low end of the chain; very little added value. On this basis closing the wealth gap, between NI and GB, even leaving aside the RoI, is unlikely. Productivity is 82% of the UK average over the years 1998 –2004.
The conclusion is obvious. Northern Ireland needs a much increased, export led private sector, with increased higher added value, higher productivity. The NI economy needs to compete in the global market place meeting the challenges head on, but on a level playing field.
This report says that is the case – but then so did a report published in 1997.
I would like just to mention briefly three areas of the report within Section 1 : Impediments to Economic Growth
1.Low rate of business start-up and difficulties with development and maintenance after start-up
2.Skills deficit and poor correlation between business needs and education provision especially vocational and technical skills
3.Low Research and Development, innovation and take-up by business of local research
Education in Entrepreneurship
THE European Commission in Brussels is targeting school children as the potential entrepreneurs of tomorrow in a new plan just tabled for the European Union countries.
This is a significant step in the right direction the proposal is that all levels from primary school to universities be involved.
The EU is proposing the creation of an entrepreneurial culture in our schools, which, starting at an early age, would stimulate youngsters’ awareness of the many benefits that could flow from developing such skills.
I agree with the European Commission vice president, Gunter Verheugen in his suggestion that enhancing the role of education in promoting a business spirit at schools and universities would help our young people to be more creative and self-confident in whatever they undertake.
The idea IS also TO encompass universities and technical colleges with business enterprise being an important part of the curriculum, spread across different subjects, requiring and encouraging students into becoming the business success stories of tomorrow.
Northern Ireland’s long established dependence on the public sector is not sustainable in the medium and long term, and that our own economic progress depends on new business creation, especially in the small and medium enterprises sector (SMEs).
I believe that education in entrepreneurship dramatically increases the chances of such start-ups and self employment in SMEs and note that around 20% of participants in mini-company activities in European secondary schools actually go on to create their own company after their studies.
As I have been advocating stronger links between our colleges and businesses already, I also support the ground-breaking proposal on ‘teacher mobility’ between university and the commercial world, which would involve business people in actual teaching as well.
Skills
All successful western economies are underpinned by a working age population with skills and knowledge at all levels of attainment.
Northern Ireland once had a vocational training and skills programme that was the envy of Europe. Statutory training boards covered all major sectors of industry and Government Training Centres (GTCs) provided excellence in training for apprenticeship skills. This successful training system was demolished and replaced by voluntary arrangements.
However, the Government has now developed with employers, an alternative: the UK-wide Sector Skills Development Agency (SSDA) and local Sector Skills Councils. Whilst this is a welcome move it does not completely fill the gap, as employers are recruiting eastern European skilled labour to meet manpower shortages.
And we all know about he Government’s recent skills training programme – Job Skills – described as one of the worst initiatives the Public Accounts Committee had ever examined.
Embedded within Job Skills was the programme of training for Modern Apprentices. The scheme did few favours for our brightest young people who wanted professional careers as engineers, electricians or plumbers. Many left the programme without qualifying. It is essential the replacement scheme offers those who want “to serve their time”, high quality training in real jobs not just in training establishments.
The Department for Employment and Learning (DEL) in their Skills Strategy for Northern Ireland: A Programme for Implementation in putting into operation their skills strategy must approach it as – a demand driven not a supply driven strategy - with employers’ needs taking precedence.
In Northern Ireland we have many excellent schools; we have two world-class universities, the Queen’s University and University of Ulster.
It is essential to develop embryonic associations between the research centres of both universities and industry. This will provide opportunities to foster the creation of more new incubation companies working at leading edge projects for world markets and would also allow the release of talented university staff with entrepreneurial skills. We need to find ways; we must provide encouragement and offer appropriate incentives to allow the brightest and best to set up and exploit the fruits of their R&D outcomes. The economy needs a business culture that is infused by the spirit of innovation, put simply we need more risk takers, we need more entrepreneurship. Provided stringent but fair, assessment criteria has been established, then failure of some of these entrepreneurial initiatives must not be perceived as disaster.
Northern Ireland’s knowledge-based economy needs to grow so that any further blows to our traditional industries are felt to a lesser degree than might otherwise be the case. We must generate and fashion the conditions in which wealth creators can prosper and not underpin one where entrepreneurial spirit is stifled.
For over a century Northern Ireland businessmen have had the vision, skills and leadership to create world-class companies in a variety of industries – textiles, engineering, pharmaceuticals. These are still the qualities and skills required to create initiatives that in the “right environment” can bring prosperity and underpin peace.
Research and Development
There is a need for Invest Northern Ireland senior staff to recognize that there needs to be a more effective means of encouraging and engaging the business community in what has been described at the ‘life blood’ of industrial innovation, Research & Development (R&D).
It is acknowledged that the levels of Research and Development projects are currently too low and there is especially a need to increase the number of projects from the Small to Medium Enterprise (SME) sector.
While there may well be schemes available for local businesses to use in addressing the need for more focused R&D, there is a need to make the schemes more “user friendly” as the complex nature of some support programmes is off putting for small firms.
I have put it to Invest Northern Ireland that there is an urgent need for existing availability of R&D help to be better explained and therefore utilized more often. We need to convince SMEs of the need for R&D and this will only happen when they can see their way through the maze of financial and other available scheme support from the job creation agency.
R&D is declining overall, with official figures recording that the UK’s spending for the year 2004-2005 was down for the first time since 1997, despite an emphasis on the importance of innovation in general and science and technology in particular.
Further work is needed and I back a recent ‘think tank’ report – published in November 2005 - which suggests the creation of a business culture which ‘is infused by the spirit of innovation’.
