Like many, I recognise the potential of a lower rate of corporation tax to provide a step-change in the economic transformation of Northern Ireland and share the frustrations at the continued delays by the UK Government in making a decision on devolving the related power.
It is important that we do not now sit back and await others to take decisions which will shape our economic future. I and my colleagues on the Executive have no intention of doing so.
The Executive already has a comprehensive economic strategy in place, which seeks to develop the local economy through growing the indigenous private sector, continuing to attract inward investment, and to increase exports.
A lower level of corporation tax would, of course, significantly accelerate this transformation.
The strategy also recognises the need to invest in the key economic drivers, such as skills, employability and innovation.
With regard to a lower level of corporation tax, it has always been clear that it would not operate within a vacuum.
Accordingly, in June 2012, I published research on the potential impact of a lower corporation tax on the demand for skills, entitled Preparing for a Lower Corporation Tax Environment.
The report indicates that a reduction in the corporation tax rate to 12.5% could double the jobs that would otherwise be produced locally – 58,000 additional jobs by 2030.
However, the research emphasised that a change in corporation tax will not transform the economy in isolation of investment in and a coherent focus around the key economic drivers. Much work has been conducted by my department and others to invest in upskilling and employability.
The report was clear that many of these steps that are already being taken to improve our competitiveness and to help attract investment are highly relevant to a lower corporation tax environment. However, they can be intensified.
There is a pressing requirement to change the skills profile of the current and future workforce, with a much greater predominance of higher level skills and an increased knowledge of Stem (Science, Technology, Engineering and Mathematics) subjects.
By 2015, there will be an increase of 1,200 undergraduate places in local universities – all in Stem subjects. This will be complemented by a 60% increase in publicly-funded PhDs in economically relevant areas.
Academia is not the only pathway to higher level skills. Some of the key anticipated outcomes of the current review of apprenticeships are to develop a broader level of frameworks and to involve training at higher level skill levels.
We must also work to increase labour market participation. Unemployment and the problem of economic inactivity must be addressed.
New interventions, such as the Youth Employment Scheme and the NEET Strategy Pathways to Success, plus the forthcoming new Employment Programme and Economic Inactivity Strategy, are all critical.
We can also identify many of the key sectors that already offer strong prospects for growth and which, in turn, could flourish under a lower corporation tax rate. These include: information and communications technology, engineering and advanced manufacturing and agri-foods.
Dedicated working groups embracing business, universities/colleges and government either already have, or are working on, action plans for these sectors.
My department's Assured Skills programme provides training packages to inward investors, or expanding local companies in support of Invest NI.
In the event of a lower rate of corporation tax, some specific adjustments can be made to skills and employability investments.
For instance, a greater emphasis would be placed on management and leadership skills, attracting back lost talent and further diversification of language training.
Northern Ireland is already taking many of the right steps and these will make our economy more competitive. There is a low risk in over-training, or upskilling too far. By far, the greater risk lies in doing too little, too late.