Economy Watch: Belfast in constant challenge to retain its competitiveness
As a society we seem to have an insatiable appetite to know where things rank, be it with school league tables, hospital performance tables, best place to live tables, business performance rankings or football leagues.
Whatever your interest, there's no doubt there will be a league table you can find about it.
For those of us with an interest in the economy, city competitiveness provides a feast of ranking opportunities.
As cities become ever more important to national economic performance, tracking how competitive they are falls squarely into the 'if you can measure it, you can manage it' school of thought. Belfast is no different.
The Belfast Agenda, the community plan for the city, prioritises inclusive growth through the creation of jobs and business opportunities.
Creating an additional 46,000 jobs by 2035 and increasing the population of the city by 66,000 over the same timeframe is going to require an almost unprecedented shift in the pace of growth.
This will mean Belfast will have to be at the top of its game - think Manchester City or Liverpool, as opposed to Everton.
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The councillors elected for the new term that begins in May will have their work cut out, but the task shouldn't daunt anyone.
Although the city suffers from a series of ingrained weaknesses, such as lower levels of productivity, high economic activity and consistently high areas of deprivation across parts of it, there is much to suggest that Belfast's ambitions can be met.
Strong employment growth, significant private sector investment in hotels and office developments, and a global reputation in new sectors such as cyber security, has nurtured confidence.
The Financial Times named Belfast as the world's most business-friendly city of its size, and it has achieved notable successes in attracting inward investors such as Baker & McKenzie, Deloitte, PwC and A&L Goodbody.
Behind these headline successes, there are a host of indicators where Belfast needs to make sure it is performing at its peak.
One of the higher-profile city league tables is the UK Competitiveness Index, which takes a basket of indicators, such as economic activity rates, entrepreneurship rates, skills levels, productivity, employment and salary levels output, and ranks locations against each other.
Among 12 competitor UK cities, Belfast ranked seventh, well behind Edinburgh, Bristol and Manchester, but ahead of Liverpool, Newcastle and Birmingham.
The factors holding the city back appear to be:
- lA demographic challenge: Belfast has a relatively small labour market (compared to UK city competitors), which is growing more slowly than others. There is the added challenge of losing a significant proportion of the skilled population to universities outside Northern Ireland, with many people not returning..
- A skills challenge: Belfast has a significant skills challenge. It has too few highly skilled workers and too many with no qualifications.
- An entrepreneurial challenge: While there is a sense of an emerging entrepreneurial ecosystem, supported by a buoyant knowledge economy and a growing private sector, key indicators still highlight that Belfast lags behind its peers in relation to creating and growing successful businesses.
- Labour market disengagement: Belfast (and Northern Ireland) still has the largest proportion of economically inactive people of all UK cities (and regions). This is drag on the economy's competitiveness.
Added to these competitiveness vulnerabilities, among its UK peers, Belfast feels the added competition from other Irish cities more acutely, given the shared island.
The all-island competitiveness story is particularly pertinent in the context of Brexit and the (as yet) unknown terms of trade across the island.
Will Dublin continue to pull ahead? Will regional growth ambitions in the South see cities such as Cork, Limerick, Galway and Sligo gather growth momentum?
These issues are of particular personal interest as I take up my all-island role as Grant Thornton's chief economist.
Our recent research, which looks at Belfast's competitiveness over 50 different indicators, suggests that the Dublin economy is stretching ahead in terms of inward investment and skills attainment.
Half of people aged 25 to 65 in Dublin have a third-level qualification. This is 35% in Belfast. In the war for talent, Dublin is winning.
Dublin also wins out on broadband infrastructure, increasingly the backbone of business.
Belfast's 'wins' over Dublin come in areas such as salary levels and business premises costs.
By way of context, the Financial Times notes that an average accountant's salary in Belfast is just over £30,000, compared to approximately £50,000 in Dublin.
Similarly on premises costs, Colliers suggests that office space in Dublin is around £700 per square metre, compared to less than £300 in Belfast.
Belfast also ranks particularly well on what we might consider to be 'softer' metrics, such as quality of life and happiness.
So, there seems to be pluses and minuses for both main cities on the island. Perhaps collaboration, rather than competition, could harness each city's strengths to mutual benefit.
As the two major cities on the island, the opportunities to develop the eastern corridor are now being explored in earnest.
The potential of that could be significant.