John Simpson: Better remedies needed to help knowledge economy
The following quote is from the 2018 Knowledge Economy report, published last week. "If we don't increase our efforts … there is no question that our economy will continue to fall behind. And we all have a role to play."
Catalyst Inc, the successor to the former NI Science Park, has been working with Ulster University to examine how a stronger contribution from the knowledge economy is helping progress in the Northern Ireland economy.
Growth in the knowledge economy would bring together business developments using advanced knowledge and techniques, employment opportunities for people with higher skills and better earnings potential, and in consequence would build a more competitive and profitable business sector.
Catalyst Inc has now published its 2018 report codifying the evidence collected by the Ulster University Economic Policy Centre. The challenge for the local policy makers is to decide what needs to be done so that we close the considerable gap between the contributions of knowledge-based industries here when compared to the results found elsewhere in the UK.
There is now good evidence on how Northern Ireland is performing. The headline claim by Catalyst is that NI is the fourth-fastest growing KE region in the UK. The underpinning of this conclusion comes from a combination of relevant statistical indicators measuring, first, the increasing level of KE employment, second, the improving comparative level of R&D spending by businesses and, third, the rather less encouraging evidence on business innovation (and patent) activity.
Using 25 selected performance indicators, NI's position in comparison with the other UK regions shows a relative improvement in seven features, and also that in two-thirds of the indicators there has been growth.
Although Catalyst emphasises the positive results, the scale of the performance gap still to be closed is clear when NI is observed to be in tenth place of the 12 UK regions. Catalyst comments on the identification of "some positive aspects of the KE as well as concerning trends and gaps".
Correcting adverse trends and closing gaps becomes the focus for the policy conclusions. The potential outcomes would add £3bn to the NI GVA, 80,000 more jobs and would mean that we needed net immigration of about 2,500 people each year.
The delivery of improved policies to grow the KE becomes the responsibility of many interested parties living and working here. Delivering an even faster growing KE also faces the challenges of the arrangements in the aftermath of Brexit and the evolution of Westminster influence.
Catalyst asks that policy initiatives should:
• Translate activity into outcomes faster
• Stay focused on excellence
• Build on the R&D base
• Educate for tomorrow today
• Increase innovation and patent activity
• Maintain investment performance
• Maximise the impact of the Belfast Region City Deal, and
• Establish a knowledge economy policy matrix
These aspirations are non-controversial.
However, far from setting an operational agenda, they only serve, initially, to set the baseline from which operational plans need to be devised, allocated to appropriate people and agencies, secure delivery commitments, gain financial support and, most critically, generate a collective committed response on behalf of the community.
In the absence of an effective working form of regional Government, gaining momentum for a stronger, faster growing KE will be difficult. A 'do nothing' stance could emerge.
In summary, Catalyst shows that the KE is still growing, is still significant, but adds that growth is slowing. There is a challenge here for the leadership of the public and private sectors. The least that the senior civil servants can do is use the discretionary decision making that lies within their remit in focused, priority setting, ways. For necessary major capital projects and schemes calling for larger financial sums, Catalyst should act as a critical voice so that political decision makers hear clearly what distortion and damage their 'absence' is causing.
Company Report: John Hogg Ltd
John Hogg Ltd, a diverse group of companies with its registered office based in Holywood, is under the control of the Webb family. The group report describes it as being in transition, with operational control passing to the next generation of family directors.
The main business of the group is described as the manufacture and marketing of dyestuffs and markers to the petroleum industry, the design and sale of household textiles and soft furnishings, property rental and warehousing, a finance company and a travel agency.
The group is the main shareholder in seven subsidiary trading companies and holds a large minority shareholding in an eighth. One trading subsidiary is registered in Croatia.
The group of businesses continues to trade profitably.
Turnover in the year to April 2018 increased by 8%, although operating and pre-tax profits were down on 2017 but still higher than those recorded in 2016.
When fair value movements in the value of investment property are taken into account, operating profits in 2017 would be £690,000 lower, meaning that the
underlying trading profits were slightly lower.
Capital expenditure has varied slightly from year to year. The figures quoted here include sums spent on investment properties of over £1.5m in 2018.
Employment in the group has increased more recently to average 134 people.
The group operates a defined-benefit pension scheme which holds an actuarial deficit of £6.2m, down from £8.3m a year ago. In each recent year the group has paid dividends to shareholders costing about £746,000.