How we're climbing ladder of the knowledge economy
Expanding the knowledge economy is critical to a more prosperous Northern Ireland drawing more businesses using more highly skilled people that, in turn, can afford to offer higher earnings. The dynamics might be described as enhancing productivity, improving competitiveness or exploiting higher skills along with better knowledge and training.
This combination represents what is now described as growing the knowledge economy.
The phrase knowledge economy is a useful short-hand for a group of industrial, professional and service activities which has been developing in the past decade.
The ambition is that the knowledge economy can offer an appropriate response to the challenge of lifting the local economy into a regime where modern, higher skilled, improved technologies and export-orientated businesses give an important stimulant to help the local economy catch-up and exceed the competitive strengths of other competing areas or regions.
The NI Science Park has recognised the potential benefits stemming from support for the knowledge economy and in co-operation with the Economic Policy Centre of the Ulster University has made a useful assessment of the emerging impact of the knowledge economy in Northern Ireland which has now been published.
The knowledge economy directly employs 35,900 people which when suppliers and induced consequences are taken into account, shows that the total impact affects the employment of 76,000 people and generates about 10% of the regional economic output (or gross value added).
The knowledge economy is larger than is often appreciated. Whilst there is no unique definition of what should be deemed to be a knowledge-based sector, for statistical purposes, the authors have included businesses in pharmaceuticals and biotechnology, medical devices, software and IT services, telecommunications, creative and digital media, aerospace and transport equipment and high-tech financial services.
With as much statistical data as is available, the assessment of the knowledge economy has been based on information showing how these businesses have been performing in the last five years using a range of 21 different characteristics or performance indicators.
These indicators were brought into four performance groups which, in different ways, identify what might be the characteristics of knowledge-led changes in economic performance, scale of targeted investment activity, associated research and development (R&D) actions and, finally, the evidence of innovation and patent activity.
The university and official statisticians have built a statistical base line by which Northern Ireland's performance can be assessed using the 21 different characteristics and then aggregated to offer an overall performance measure.
It will come as no surprise that Northern Ireland has started from a relatively low position in the statistical league table of performance in terms of the knowledge economy.
What comes as more of an encouraging surprise is that, from the initial position, Northern Ireland is starting to climb the ladder and is off the bottom.
In comparison with other UK regions the performance indicators show that in the last six years Northern Ireland has emerged as the second fastest improving UK region.
In that period, the knowledge economy index improved by 40% exceeded only by a 48% improvement for the North West of England.
Expressed differently, the Ulster University team, led by Richard Johnston, point to the conclusion in 2014 that Northern Ireland has achieved 73% of the overall UK level after starting in 2009 at just 56% of the comparable UK baseline.
Businesses in Northern Ireland are now more aware of the need to build up their input from activities that reflect the growth of a knowledge economy.
The pessimists draw attention to the continuing performance gap still to be closed.
The better informed observers now point to evidence that helpful changes are taking place and there is a better appreciation of the need for, and benefits from, the development of competitive investment based on well informed R&D linked to scientific and new technologies.