HomeArticles»How can we rebalance the Northern Ireland economy?
How can we rebalance the Northern Ireland economy?
Posted on Thursday 12 May 2011 byUlster Business
By Pádraig Canavan
We all know these are challenging times for the Northern Ireland economy. We have been hit by a double whammy of public sector cuts in a society over-dependent on the public finances and the knock-on effect of the financial crisis in the Irish Republic. That is especially true for those businesses in the border areas, where retail activity has suffered acutely from the fall in cross-border trade.
While the English economy is showing signs - inconsistent and weak, agreed - of growth, the Northern Ireland economy is in a worsening recession. This is why the phrase 'rebalancing the economy' has to mean much more than simply correcting our local over-dependence on the public sector.
Yes, we need to grow the private sector and ensure it is the driver of our prosperity.
But we also need incentives - such as the corporation tax cut - to encourage business relocation and economic activity displaced from England to Northern Ireland. There is an imbalance of prosperity across the UK as a whole and Northern Ireland is, at present, the main loser in that imbalance.
But there is a third dimension to the challenge of balancing the economy, which is the regional imbalance within Northern Ireland. Belfast has suffered from the collapse of the property sector and unemployment has risen. Yet we can see welcome signs of new investment and new jobs being created in the city. It is a very different picture across much of Northern Ireland.
Take, in particular, the North West region. The three highest claimant count figures are all in the North West - the council areas of Derry, Strabane and Limavady. Much of our traditional employment base has shrunk - specifically clothing and engineering. Retailing has grown, but it has suffered badly from the economic problems both sides of the border.
This is not merely a local issue. What is good for the North West is positive for Northern Ireland as a whole. When visitors come from Great Britain for UK City of Culture 2013, many of them will fly into Belfast and visit our capital city, the North Antrim coast and the Fermanagh Lakes.
Equally, what is bad for the North West is damaging for all of Northern Ireland. Derry-Londonderry does not want to be a financial drain on the taxpayers of Northern Ireland or the UK. We want to be financially self-sufficient, to be a vibrant city and region and to slash unemployment.
UK City of Culture 2013 will mark a symbolic turning point in the fortunes of Derry-Londonderry and local businesses here are determined to exploit this. But while the designation is excellent, it will not transform the city's economic fortunes on its own. It is just one part of a package that requires investment to create a long-term positive financial and social return.
At the core of that necessary investment is the need to boost the local skills base. Many employers here want to grow their workforces, but the city does not have sufficient graduates with the relevant STEM (science, technology, engineering and maths) skills. We need to create the capacity in Derry for inward and indigenous growth, but that is difficult, and perhaps impossible, without a sustainable and large university campus. Such a campus needs to offer 21st century skills in the STEM subjects and the creative and digital technologies, while focusing also on sustainable industries and supporting the growth of the healthcare sector locally.
The single most important investment to transform our city would therefore be the substantial expansion of the University of Ulster's Magee campus in Derry-Londonderry. This would provide the enlarged skill base that is needed and attract new employers and investment. It would lead the physical, social and economic regeneration of the city. The Ilex Urban Regeneration Company's plan for the city puts the expansion of the university campus at its heart, because this would achieve the most positive economic and employment impact of any intervention.
University expansion is not the only thing the North West needs of course - we also need better road and rail links with Belfast and Dublin, a new radiotherapy centre at Altnagelvin hospital and support for those schools that under-perform. But when it comes to addressing the continued regional imbalance of the economy, it is clear that turning Derry-Londonderry into a true University City is the number one priority.
Pádraig Canavan is President of Londonderry Chamber of Commerce and Chief Executive of Singularity