Posted on Sunday 2 September 2018 by Ulster Business

Industrial Revolution

With Northern Ireland on the brink of fourth industrial revolution in IT, John Simpson looks at what’s needed to get it off the ground and ensure we have the right people to do it

Northern Ireland faces a series of critical challenges not only to catch up with key IT advances and technology changes, incorporating the digital economy, but also to build a new position of comparative advantage for businesses. The knowledge and digital economy should now be accelerating with wide ranging implications affecting much of the commercial sector as well as strengthening living standards for the next generations and beyond.

The application of IT techniques is not new. However, globally, the rate of application and development of IT techniques is offering significant and early changes on a scale that can be seen as the equivalent of the fourth industrial revolution.

Helped by ever improving techniques and technology, year by year the make-up of the range of potential IT related businesses is changing. So also, and as a consequence, the essential skills of the labour force need to be developed in newly defined ways. The new highly skilled employees will help to introduce modern products, services and techniques. Many older or displaced businesses will either fade away or modernise quite sharply.

The rate of change and the necessary scale of the preparation for change is large. Innovation and product (or service) developments will stimulate investment. Some of these investments will change the shape of the economy. All of the changes will bring important changes to the jobs market, the role of the education and training specialists and, if successfully encouraged, have the potential to generate higher value added roles and higher real earnings levels.

As the post-Brexit economy emerges, particularly if it emerges in a disrupted trading environment, the best business anticipation is both challenging and opportunistic. Business analysts are already coping with forecasts of a quickening of automation, along with efforts to shake off the damage of an over-long period when productivity growth has been missing, and concern that, unusually, real earnings for employees have tended to decrease.

The increased momentum in the application of IT and related new technology will bring a wide ranging series of developments. First, there is an understandable fear that improved technologies could mean a reduction in the number of job opportunities.

That fear, if there is a logical response by innovators and policy makers directed at ‘keeping ahead of the game’, should be dispelled. The regions that remain passive as IT changes take place will lose their competitive strength with unhappy consequences.

Those that keep ahead, especially if there is already an educational and training base which can be transformed, have a chance to build an enhanced comparative advantage.

The critical requirement for public policy makers, educationalists and training organisations, business development agencies, businesses investing in critical infrastructure services, and decision makers in Government, authorities and public utilities is an acceptance that we will be living through a wide-ranging series of changes which will interact on one another. If collectively we all fail to respond coherently, the potential gains may be lost.

In the last decade Northern Ireland has experienced the early stages of an injection of businesses relying heavily on IT services. There has been a demand for numerate competent employees in a series of businesses variously described as providing ‘back office’ services.

In many cases these are extensions of business services to companies based elsewhere: they are genuinely services of a back office nature. Some of these businesses are potentially suitable to attract investment for a broader and more highly skilled range of professional services. Northern Ireland must beware of the danger that, if more professional staffing at senior levels is not available and there are insufficient higher quality IT technical experts, the IT revolution will not mature: the local success might only be to supply modestly qualified skilled people for ‘bread and butter’ routine type occupations.

Taking the IT and new technology agenda to a higher level is a critical process. While it is critical, importantly, it can be achieved with the availability of only a smallish number of key industry high fliers. A handful of enterprising leaders can leverage large changes.

Northern Ireland already has a small number of key people. Some have helped to build success for businesses such as First Derivatives and Kainos. Both of these companies now have an international footprint and they are both now quoted companies on the stock market. In a parallel application of new techniques, the success (and takeover) of Andor Technology, now part of Oxford Instruments, illustrate the benefits of access to Northern Ireland university know-how.

An international standard broadband network and service is becoming more critical for the changing economy. The ambition to enhance the existing broadband network is already on the infrastructure agenda. An allocation of funding at an early date is now a priority.

The enhancement of broadband services may be expected to link with smaller business units in the ‘gig’ economy: the self-employed boffins who can hope to be specialist subcontractors. Indeed, to facilitate the ‘gig’ economy in the context of an increasing range of services provided by very small enterprises, the role of adequate (at international standards) broadband services is a complementary support. It is central to the modern enhancement of communications.

How far is the IT and technology revolution going to extend? An important lead is being given by Catalyst Inc, the former Northern Ireland Science Park. The ‘knowledge economy’ project, led by Catalyst, has demonstrated the progress being made but also confirms the gap still to be made up if Northern Ireland makes good progress.

The scale of the sensible ambition is large. There is no easy specification of ‘who will do, what, and when’. However, there are sufficient indicators to feel confident about the scale of the changes and to re-orientate business development agency policies, set priorities for education and training expansion as well as promote NI as a modernising region that can get ‘ahead of the curve’. To passively fall behind ‘the curve’ by neglect in official policy is more than a dereliction of duty.

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