If you create environment businesses will do the rest
Economy Watch by Neil Gibson
I had the privilege of giving a short speech at the Belfast Telegraph Business of the Year awards last Thursday. As always it was a fabulous event and my congratulations to all the entrants and of course to the winners.
It is challenging for an economist to speak at as the 'celebrating success' mood could easily be damaged by a speech focused on risks we face. I have on occasion been criticised for being too upbeat but time spent with leading companies always lifts the mood and reminds me that firms are resilient, opportunity seeking and not prone to using high level gloom to curb their enthusiasm or drive.
That said, Brexit and the lack of an Executive were the most common debating points over dinner. The forthcoming election appeared to generate little enthusiasm, and firms were brimming with new ideas and plans for the year ahead despite their concerns.
Once again I was struck by the wide range of sectors represented at the event. Brilliant businesses exist throughout the economy and it is a reminder to our economic development policy practitioners that a focused and targeted economic policy must also leave room for the 'off piste' and unheralded sectors and ideas. Picking winners is as hard as it has ever been.
But themes do emerge and looking at how businesses have succeeded does bring out some policy relevant messages:
Leadership and management: Long cited as a weakness in Northern Ireland (as far back as the 2009 McKinsey report 'Management Matters') the need for dynamic leaders is all too apparent at awards events. The ability to react to changes, of which Brexit is just one, and to motivate and support staff through challenging times was a hallmark of many of the winners. A need to support the development and nurturing of leadership talent must remain a policy priority.
Nimbleness and flexibility: Many of the most successful businesses had shown a fleet of foot in response to a market opportunity. Sometimes the opportunity was just a small niche but the firms seized upon it and often created a whole new market. Policy needs to support risk taking and new ventures that cannot point to other examples or past experience as the rationale for demonstrating likely future success.
Willingness to get on with the job: Many firms suggested that they required very little from government. The mantra appeared to be 'set a fair and level playing field and help keep costs as low as possible'. This suggests a need for greater focus on the business environment and less specific firm level interventions. Given how often we observe an adverse reaction to policy change, it was interesting to listen to how the successful firms take most of this in their stride and simply 'do business'. A focus on competitiveness and delivering the fertile soil in which businesses can grow in seemed the priority, rather than hand-outs and aid.
Staff and talent: Many firms discussed the need for talent and this was across the skills spectrum from entry level positions to more senior management posts. A genuine concern was raised by many that getting and retaining talent was their top priority and concerns over new migration policies or the precarious education funding position highlighted the need for policy to focus heavily in this area.
As the Secretary of State's indicative budget suggested, if NI prioritises elsewhere then education is likely to suffer. Businesses spoke loudly and eloquently that this set of choices will leave the region with too small a tax base to accommodate the spending choices it may wish to make in health and welfare in the future.
These themes are well known and perhaps do not require huge shifts in policy direction to support but it was interesting to hear less about access to finance, difficulties in getting grants and support than perhaps might be expected. It is important to bear in mind who is in the room at awards dinners, namely the best firms in the economy. These are the drivers of change and their growth is critical to widen and deepen the tax base here so that it can support our public services.
Many businesses struggling to survive are not in attendance and they matter too. Policy faces a tough choice, support all firms (many of whom will make passionate pleas to avoid any form of tax increases or advocate more extensive funding and reliefs) or focus more narrowly on the most successful firms as potential 'game changers'. This is not an easy choice and the history of picking winners is very patchy to say the least, but clearly there is insufficient resource to fund each and every firm so prioritisation is likely.
The overarching theme I took from a wonderful evening at the Crowne Plaza, Belfast was create the environment for the best to succeed and the firms will do the rest.
- In next week's Economy Watch, we hear from Esmond Birnie of the UU economic policy centre