Entrepreneurship is key for fast track economic growth
Nic Stirk, co-founder and CEO of Belfast-based mobile solutions firm, SLA Mobile, explains what NI needs to do to fast track economic growth
If well executed, the Programme for Government (PfG) and the Economic Strategy — drafts of which were recently released — will lay a strong platform for the future development and prosperity in Northern Ireland.
However, achieving the key specifics of the PfG will not be easy, so to deliver effectively, ministers have focused on five strategic priorities with ‘Growing a Sustainable Economy and Investing in the Future’ as the key. This priority ultimately seeks to achieve long-term economic growth by improving competitiveness and building a larger and more export-driven private sector.
At SLA Mobile, we export 100% outside NI and have clients in Australia and Indonesia. It is my belief that entrepreneurship should be at the centre of the strategy to deliver this goal but, disappointingly, it is only referenced once in the PfG and five times in the Economic Strategy. It is vital that NI should be providing an environment that encourages aspiring entrepreneurs to make the leap to starting their own enterprise.
We are based in the Northern Ireland Science Park and support the NISP Connect Generation Innovation initiative, which has been designed to give young people an insight into what it takes to succeed in the knowledge economy space — something which is paramount for budding entrepreneurs of the future.
Our entrepreneurs need to start to ‘think big’. I have just completed the Enterprise Ireland/Invest NI-sponsored Leadership 4 Growth programme delivered by Stanford university’s business school. During the sessions we were exposed to some of the world’s leading entrepreneurs who are not afraid of failure — it’s accepted in the US as part of the learning process.
All Silicon Valley entrepreneurs have strategies to scale and to go global — so locally we need to start thinking of how we can also create global businesses of scale.
My next point relates to the £300m of foreign direct investment (FDI) that the PfG has committed to finding. Northern Ireland faces strong competition from other world economies for FDI, so we need to work smart. What does the market want from FDI? What have we got to do to meet that demand? Where are the gaps? And what’s the plan to close them?
The Ernst & Young’s 2011 European attractiveness survey states that companies see transport and logistics infrastructure (63%), telecommunications infrastructure (62%) and the stability and transparency of the political, legal and regulatory environment (62%) as the most important factors when investing. With local labour skill level (50%) and labour costs (50%), corporate taxation (46%) and flexibility of labour legislation (42%) as the next.
The PfG makes reference to a reduction in corporation tax, but I think this is an unlikely outcome during the agreed timeframe 2011-2015.
Any reduction, however, will not bring maximum benefit to FDI or to the broader economy. Our focus should be on skills — the right skills.
At SLA Mobile we invested in Malaysia because it offered us a low-tax regime, but also had the high-quality, low-cost resource pool that we needed to scale our business. The local economy cannot compete with the Far East in terms of volume so we need to focus on high-end domain expertise and technologies. Long-term value will not be created by FDI that invests in low-end software- development jobs.
Finally, I firmly believe that we need ‘alignment’. My business needs to be aligned for competitive growth in terms of our people, architecture, routines and culture.
This framework should be extended to a NI context to assess our own alignment and readiness to maximise FDI opportunities. The PfG and Economic Strategy are both ambitious but achievable if we align our strengths to the needs of the market and all play our part in delivering.