Belfast Telegraph

Friday 26 December 2014

Taking a view on Invest NI

Is the economic development agency’s role to be operational or to be a leading edge think tank?

A review of the effectiveness of Invest NI, whose chairman is Stephen Kingon, is being carried out by Professor Richard Barnett, the vice-chancellor of the University of Ulster and his panel of four experts. The review is an opportunity to sharpen the impact of local business development policies
A review of the effectiveness of Invest NI, whose chairman is Stephen Kingon, is being carried out by Professor Richard Barnett, the vice-chancellor of the University of Ulster and his panel of four experts. The review is an opportunity to sharpen the impact of local business development policies

After seven years of Invest NI effort, how much has the competitiveness of businesses in Northern Ireland improved and to what degree can that improvement be credited to action by Invest NI?

Invest NI is a large organisation: 576 people with an annual budget of £150m are asked to strengthen the size and competitiveness of businesses in this economy.

The board of Invest NI is intellectually heavyweight.

The members bring skills, insight, experience and appreciation of the dynamics of economic processes to their decision making forum.

Invest NI has over six years of experience: now is an appropriate time to ask testing questions about its structure, remit and operational methods.

That task has been delegated to Professor Richard Barnett, vice-chancellor, University of Ulster, and his team of four appointed experts.

For the people who already work in Invest NI and the sponsoring Department (DETI) this is an opportunity to sharpen the impact of local business development policies.

The insiders have first-hand knowledge and are well-equipped to see how the competitiveness of businesses might be improved taking account of choices tested for value for money.

People on the inside are likely to have a defensive bias. Better to emphasise achievements than be an internal critic.

Making the same point in a different way, there is little tradition of openness for public debate and, indeed, board opinions are rarely revealed.

Each year the annual report of Invest NI contains self-congratulatory sections from the chairman, Stephen Kingon, and the chief executive which, whilst serving to attract positive publicity, inevitably are far from a professional impartial evaluation of achievements.

Three comments on the form and content of the reports are merited.

  • The annual report is stereotyped to meet the presentation that satisfies the reporting requirements of the Exchequer. Whilst that is necessary it is a long way short of a useful evaluation of the economic impact.
  • The performance indicators used for publicity tend to be basic input and output measures. The board of Invest NI (and the Minister) may have other indicators of impact and outcome but they are not published.
  • Very little segment analysis of outcomes and outputs pointing to the differing impact of the main forms of Invest NI assistance is published.

Perhaps one of the surprises for observers of Invest NI and its board is that there is no tradition of the board publicly making suggestions for policy changes that could contribute to public debate.

A passive interpretation would be that the board either does not assess the effectiveness of its delivery policies or, more likely, that the board relays its criticisms and ideas privately: neither would be good enough!

Such reticence is unhelpful. If the board briefly, but openly, talked about its in-house research on business development policies that would be more constructive.

This suggestion is not to challenge the need, in casework, for commercial confidentiality. The procedures must ensure that confidentiality is respected and allegations of any conflicts of interest avoided. Three years ago, Invest NI prepared and published a wide ranging performance report recognising the need for some better measures of impact.

However, it stopped short of aggregate measures of changing profitability and productivity that could be linked to selective Invest NI actions. It needs to be further developed.

One particular topic must be addressed by the Barnett review. The awkward way in which tourist development policies are implemented, merits a new approach..

The Barnett review is a welcome initiative: better performance indicators would be beneficial.

There is also a need to review governance arrangements, reconsider the degree of delegation and clarify the working of an arms-length relationship with a politically appointed Minister.

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