The annual report for the year to March 2013 for Invest NI has been published: a difficult year when business news was dominated by a continuing recession. An unwanted extra came with the continuing instability of civil tensions on parades and flags.
In that environment, Invest NI faced considerable challenges.
Could its indigenous clients be expected to maintain and increase investment and employment? Could non-indigenous clients, existing and newcomers, offer significant expansion?
To the credit of the client companies, they did, even if alongside serious problems in over 60 client businesses.
The evidence in Invest NI's report makes better reading than might have been expected. First, indigenous and non-indigenous clients did better than the targets set. Second, Invest NI adopted some helpful policy innovations.
The investment and job promises in 2012-13 exceeded the targets. Investment by externally-owned businesses, including some foreign direct investment, signed up for £183m linked to 2,203 jobs. The target was 2,155.
Investment by locally-owned businesses was contracted for £167m linked to 1,781 jobs. The target was 1,491.
A more helpful test of these achievements needs to ask whether the targets set were sufficiently demanding.
For locally-owned businesses, the outcome in 2012-13 is modest when compared to the results in 2011-12 – 1,781 jobs was unremarkable compared to 1,755 a year earlier. The target looks undemanding.
The outcome for externally-owned businesses is more significant. Contracts signed in 2012-13 were for 2,203 jobs which compares very favourably with 1,102 jobs in the previous year.
Did Invest NI know something of the prospects to be able to make the 2012-13 target both ambitious and easy?
The headline policy innovations in 2012-13 were:
* further expansion of the Jobs Fund alongside normal selective investment criteria
* the early stages of policies to improve equity and loan access to finance by businesses
* encouraging new enterprises through improved delivery of start-up assistance
* extending financial assistance through the issue of innovation, and research and development, vouchers and the addition of voucher finance support for preparation of start-up business plans.
The Jobs Fund is now a more market-responsive test of the criteria for Invest NI assistance than applied to normal (pre-recession) assistance.
The long-term ambition to attract high value-added jobs remains but, to counter some of the impact of recession, the Jobs Fund looks for extra employment with less emphasis on its nature. The Jobs Fund contracted to promote 2,657 jobs compared to 2,390 a year earlier.
Invest NI was less successful in marketing the extra resources earmarked for loans, equity and joint ventures. The report does not show the detail of these flows but, by Invest NI's own tabulation, only 30 loans to SME businesses were confirmed, against a modest target of 50.
Invest NI now supervises five investment funds (managed by specialist businesses on contract terms) with nearly £150m.
The impact of these funds is growing and will be a key feature in the years ahead.
The new emphasis on start-up assistance is an overdue development which, unfortunately, was delayed by an administrative challenge. However, the bad news was that there were only 749 jobs in new start-ups compared to a target of 1,625.
The good news is that the scheme is now functioning normally.
A major debate is taking place on the future provision of selective financial assistance (SFA) from Invest NI to encourage investors.
Invest NI has worked, successfully, to persuade the UK Government and the European Commission to continue to treat Northern Ireland as a single region. However, there remains some uncertainty on how the conditions to use SFA might be tightened.
Negotiators on behalf of Northern Ireland will be hoping to reject a European Commission proposal that SFA to large businesses might either be eliminated or restricted to discretionary activities such as diversification. The challenges facing Invest NI remain formidable.
In the latter half of this year, this will be a negotiating challenge.