Is NI really good for business?
Sean Mahon, managing director of Cable&Wireless Worldwide enterprise for Europe, Middle East and Africa, looks at how Northern Ireland could gain a competitive edge
There has been a lot of press coverage recently about the Northern Ireland economy and how we are going to cope with the legacy of one of the worst recessions in living memory.
First, let’s look at some of the positives. Declan Kelly, the US Economic Envoy to Northern Ireland, made the case that Northern Ireland has a lot to offer. He said: “It’s time to make a brave step forward to start investing in the future and if you do that you have all the things at your hand to dominate in several categories.”
The “things” that Mr Kelly was referring to include our advanced telecommunications network, access to ports, 2,000 business graduates, the lowest operating costs in Europe and the fact that a number of foreign companies are already located here and backing Northern Ireland.
In Mr Kelly’s view, the local hi-tech sector has responded well and is now better positioned than its counterparts in a number of other countries.
As the managing director for Cable&Wireless Worldwide enterprise business across Europe, Middle East and Africa, I concur with his views.
I recently had to decide where in Europe to locate the new Cable&Wireless Worldwide global sales team and I am pleased to say that Belfast won out for the very same reasons Mr Kelly illustrated so well.
But if we set aside these positive sentiments, and consider some of the areas that may need attention to allow us to grow and be one of the leading choices for foreign direct investment, one begins to see a few real opportunities that could assist us in this quest.
Our public service has served us well, but the need to modernise, and the drive to be more efficient and effective is something that everyone in public life acknowledges.
There is an underlying desire to change how we, as a region, connect with the global market and this is illustrated by the excellent work Invest NI and NI-CO do for the province.
In fact, elements of the public sector here are leading the way in terms of innovation when it comes to change and driving transformation.
We have an economy that is mainly comprised of micro and SME businesses. Could family owner-managed businesses benefit from the opportunities provided by alternative sources of funding, such as private equity and venture capital, and utilise this to propel themselves to the next level on the global stage? It is also true that the traditional banking sector will need to continue to support small-business lending.
Access to direct travel links has vastly improved during the past 20 years, but during difficult economic times airlines may be faced with tough decisions over which routes to keep open. We need to champion the cause for the retention and development of key strategic transport routes, especially the direct route we have to the US and the other locations throughout continental Europe.
It is true that we all need to tighten our belts, but we need to take a thorough look at the cuts being enacted on the likes of Invest NI and even on tourism. How can we work smarter to ensure these cuts don’t stifle the very innovation we are trying to stimulate?
A Champion for Business
We have a number of Commissioners in place, for example, a Children’s Commissioner and an Information Commissioner, who provide excellent expertise. Should we consider a Commissioner for Enterprise? This individual could champion the cause of business and enterprise at a global level to support the work Invest NI and NI-CO do so well.
Competitive Tax Rates
For too long, we have had to open our sales pitch to potential investors on the defensive against the Republic of Ireland’s corporation tax rate.
Having witnessed the recent experiences in the South, there are now arguments for and against our own competitive rate and the ability of the local administration to establish its own tax powers. We should urgently explore this topic and possibly go one better than the Republic with a tax rate of 10% instead of 12.5%.
What would this do for NI Plc? Well, at the very least it will enable us to have an economic foundation which would make it easier to convince the large global players to invest in our region.
I see at first hand what multi-national global businesses demand from the regions they invest in. I will leave it for the economists to argue the various models and scenarios that may result in terms of a reduced block grant from Westminster versus a lower/higher overall tax take.
From a ‘selling Northern Ireland’ perspective, however, let’s at least be in control over this important issue. Wouldn’t it be great to not go on the defensive at the beginning of discussions with potential investors and key influencers and have a Northern Ireland that is recognised as a location that is good for business?