A cash injection and more publicity for Northern Ireland’s ‘Knowledge Economy’ — businesses and start-ups focused on sectors like computers, science, engineering and maths — could generate an additional £5bn for the Northern Ireland economy annually.
The second Knowledge Economy Index report for the Northern Ireland Science Park’s CONNECT project by Oxford Economics, was launched at Stormont last week.
It follows the inaugural baseline report in 2011 and the latest findings show a slight increase in the number of knowledge economy jobs, businesses and wages in Northern Ireland, despite wages remaining fairly stagnant in many sectors.
Statistics also showed that the knowledge economy sector represented 4.6% of total employment here, compared to 6.1% in all other UK regions, while a knowledge economy worker earns, on average, 42% more than the Northern Ireland mean wage and is 48% more productive.
However stumbling blocks include a low level of patent activity.
The key recommendation of the report is the implementation of a new approach to risk capital intervention by the Northern Ireland government to enable many more companies to form and develop high value products that would be in demand around the world.
The report added that Northern Ireland needs stronger management teams in new start-up companies, better measures to inspire children to aspire to careers in the knowledge economy rather than the professions.
Steve Orr, director of NISP CONNECT, said that such intervention would mean more job opportunities and rates of economic growth would surpass that experienced during the last boom.
Mr Orr graduated from the University of Northumbria in 1994 with a degree in Business Information Technology and for the following six years worked in Buckinghamshire, San Diego and San Francisco.
In 2000, Steve co-founded Kineticom Inc, a San Diego, California based technical talent firm which in 2006 Kineticom was ranked at number 33 on the Inc 500, the list of the fastest growing privately held companies in the US.
Steve has now returned to his roots and hopes to use his experience in California to help entrepreneurs from Northern Ireland.
He said that San Diego managed to transform its own fortunes by developing a Knowledge Economy after facing the “burning floor” of a collapse in the defence budget which threatened thousands of jobs.
He said that the collapse of big engineering firms like FG Wilson are Northern Ireland’s “burning floor” from which the economy needs to escape, adding that if the Knowledge Economy can create 39,000 direct jobs by 2030, a further 22,500 can be created in the supply chain.
“If the Northern Ireland economy is to reach its full growth potential, the Government needs to commit £25m a year, every year for 20 years, to a programme of risk capital intervention,” he said.
“We need to create new products that people around the world want to buy. What are we going to make, how are we going to solve problems for people all over the world? We need to promote the creation of innovative new companies.
“We need to move away from the old industrial age of infrastructure, labour, land and capital into the new knowledge age of ideas, capital and talent. We need to turn Northern Ireland into one of the most entrepreneurial Knowledge Economies in Europe by 2030.
“Our biggest blockers are talent, culture and risk capital. We need to brand the tech lifestyle and sell a different lifestyle, we need kids to aspire to get involved and we need businesses to collaborate to compete.
“Too many schools are pushing kids into professions — some seem to be competing as to how many children they can get into medicine when we need something different. We need to make Northern Ireland a more interesting place to live and work to attract and keep our best people.”
Concern was expressed in the report that Northern Ireland is dependent on a relatively small number of large firms for a significant proportion of its research and development expenditure, whereas in other innovative economies most R&D is concentrated in small companies.
Another finding identified the level of patent activity in 2012 as comparatively low compared to the rest of the UK, as was the level of investment activity, despite a historical high of £20m in venture capital in 2011.
Incoming finance minister. DUP MLA Simon Hamilton said people need to look to Northern Ireland’s past to see the potential for growth in the future.
“People say that Northern Ireland is too small to succeed compared to other knowledge economies like San Diego,” he said.
“But they forget our past. 100 years ago, where the Northern Ireland Science Park is located now, we built the biggest ship the world had ever seen. Down the road, we built aircraft that won a war. The electric defibrillator, the pneumatic tyre, the ejector seat, all invented and made here.
“We need to build upon that innovation. It is in our DNA and we just need to tap into it.
“Recent big business wins for Bombardier and Montupet in the manufacturing sector show that sustained investment in research and development does pay off.”
About NISP Connect
NISP CONNECT is an independent, nonprofit organisation fostering entrepreneurship by accelerating the growth of promising technologies and early stage companies.
A collaboration between Northern Ireland Science Park (NISP), the University of Ulster, Queen’s University, Belfast and AFBI (Agri Food and BioSciences Institute), NISP CONNECT acts as an ‘honest, neutral broker’ within the region.
NISP CONNECT focuses on:
NISP CONNECT is part funded by the European Regional Development Fund under the European Sustainable Competitiveness Programme for Northern Ireland 2007–2013.
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