Stormont must grasp nettle to improve competitiveness
Sometimes it takes a reality check to bring realism into Government statements. The Economic Policy Centre at Ulster University has established a record of 'telling it as it is', popular or critical.
The centre, on a commission by the Economic Advisory Group (EAG), has compiled a major assessment of the local economy that presents a discomforting review of competitiveness. For ministers and policy makers, now is a time to consider this important updated data and re-invigorate policies.
'Shooting the messenger' would be utterly inappropriate. As Professor Frances Ruane, a member of the EAG, has commented, this emphasis on competitiveness is not perfect but is a great improvement on an earlier approach.
There is an inherent tension in the reconsideration of effective policy making. For obvious reasons, there is an inherited optimism bias. Successful marketing of our economy calls for an emphasis on the laudable strengths of the local scene. Making the economy more successful calls for recognition of the existing weaknesses, and their correction. Northern Ireland now knows what the existing weaknesses are. The next step for organisations such as the EAG is to identify how they should be corrected.
Serious policy makers, including government ministers, will contribute more effectively to growing the economy if they start with an acceptance of the distance still to be travelled alongside reiterated speeches pointing to recent modest achievements.
The Ulster University review of the Competitiveness Scorecard for Northern Ireland, prepared by Richard Johnston and Laura Heery, shows that on a base of 150 different indicators, Northern Ireland is less competitive than over 60% of comparable areas. The review draws on data from up to 35 countries and examines evidence from the last five years.
There is much to be learnt from this evidence. First and foremost, Northern Ireland is less favourably placed competitively than we would like to believe and also less favourably placed than is a necessity.
To be more competitive than nearly 40% of the areas used for comparison is not reassuring alongside evidence that we are less competitive than over 60% of comparator areas.
This finding is consistent with the conclusions of a previous study, compiled using material prepared for the annual Davos economic summit. Northern Ireland ranked 42nd (out of 145 countries) but was well behind the Republic of Ireland, ranked 27th, and the UK ranked as eighth. Much of the value of this Scorecard lies in the detailed statistics reviewing a range of aspects of performance and policy related to competitiveness. There are different degrees of divergence when compared with elsewhere.
Sadly, none of the specific 'pillars' of evidence shows top of the class results.
At best, Northern Ireland is in the middle ranges for groups of features assessing our business environment and the quality of life. The best scoring evidence for the business environment points to the availability of loans for SMEs, the lack of barriers to enterprise and the ease of doing business. Reflecting the quality of life here, there was a high score for our satisfaction with local lifestyles.
At worst, our comparative scores were least welcome for indicators of productivity, good employment and labour supply, along with the combined macro and fiscal policy mix.
There is some encouragement from the changes in the last five years. Whilst the end results are still unsatisfactory, there have been relative improvements in aspects of business performance, the contribution of the physical infrastructure, and aspects of macro and fiscal policy.
Unhappily, some slippage in the wrong direction was noted in the employment and labour supply features and also in the results of education and skills policies. The line by line detail offers key performance indicators for careful review.
These are challenging issues. Competitiveness and productivity must be central to the next Programme for Government. Is the EAG ready to contribute to the forthcoming Programme for Government by identifying what should be done?
Company report: Randox Holdings Ltd
The Randox Holdings annual report and accounts consolidates the results for the full range of activities and subsidiaries of this progressive business, headquartered in Crumlin. The Randox group has continued the expansion of its medical diagnostics business and has captured a domestic and international market for a range of over 2,000 products. Many are important in laboratory applications of medical assessments and relevant to treatment remedies.
The main production unit is at Crumlin. In addition the group is developing a large new site at Massereene in Antrim and has other production located in Co Donegal.
Turnover has more than doubled in the last decade from £40m in 2005 to nearly £96m in 2015. Operating profits in 2014 fell slightly compared to 2013. However, in 2015 operating profits increased more than in line with the higher levels of turnover and reached a new high. In 2015, operating and pre-tax profits as a ratio to turnover were the best of recent years.
The strategic report says that the company brings more new products to market in a single year than any other diagnostic company in the world. Large amounts have been invested in fixed assets in recent years, including £16m in 2014 and £17.3m in 2015, along with large additions to intangible assets linked to R&D activity now valued at nearly £26m at the end of 2015.
Randox products are sold in 145 different countries. The international business is supported by a large network of overseas sales subsidiaries and the backup resources to ensure products are performing.