One thing that has never been in any doubt is the resilience of the Northern Ireland business community. It’s been a really testing last couple of years and obviously Covid-19 continues to have an impact on us all.
Our economy is still very much in recovery mode, but businesses have been getting on with it. We’re all aware of the challenge of recovery, and of course the risk of further Covid-19 lockdowns.
There are also challenges in terms of the ongoing skills shortage in Northern Ireland, as well as concerns about inflation and consumer spending. As we look ahead, though, there are some genuine reasons to be positive about the post-pandemic future.
In a world where global tax reform, climate change and digitalisation will dominate political and business agendas, there is a great opportunity for Northern Ireland. As a small, open economy, being able to focus internationally will be key to boosting growth in Northern Ireland. With the right policy tools, foreign direct investment (FDI) could be a vital driver of economic growth here.
There have already been some great success stories. Northern Ireland has attracted some of the world’s fastest growing and innovative industries including data analytics, cyber-security and life and health sciences.
Our appeal as a location for foreign direct investment remains strong, with 6,000 more companies registered in Northern Ireland today than in 2016. This appeal translates into a lasting affinity – 70% of new investors choose to subsequently reinvest in the region.
Recent findings published by FinTechNI show that Northern Ireland could benefit from over £25m in new FDI, the set-up of over 20 new companies and the creation of thousands of jobs in just three years. The fintech cluster is currently estimated to be worth almost £400m a year to the NI economy.
We are also in a unique position compared to the rest of the UK as the only region sharing a land border with an EU member state. We already know that Northern Ireland is a great place in which to live and to work. What we need is a unique tax offering to retain established companies and attract further FDI, which would also drive investment and expansion by local companies.
The fiscal opportunity
Northern Ireland already has the legal power to set its own corporation tax rate under the Corporation Tax (Northern Ireland) Act 2015 subject to activation by the NI Assembly.
The activation of corporation tax rate setting powers would allow the Northern Ireland Assembly to set a lower rate to attract FDI and to also drive investment and expansion by local companies.
We need the Government to follow through on its commitment to “level up” Northern Ireland and the activation of our power to set our own corporation tax rate is the most effective means we have of levelling up.
The Protocol opportunity
While the Protocol itself remains a topic of heated debate at political level, it is clear from our engagement with our 5,000 members in Northern Ireland, that many businesses are already reaping the benefits of Northern Ireland’s unique position. Many see the Protocol as a major strategic advantage for businesses.
Post-Brexit, trade in goods has continued largely as it did before the UK’s departure from the EU with no customs duties or customs paperwork on the sale of goods to both Great Britain and the EU (including Ireland) from Northern Ireland.
There has been a focus to date in discourse around the Protocol on the consumption economy, and this focus puts us at the risk of missing out on the significant production opportunities that it can afford.
The sustainability opportunity
Perhaps the most difficult and most vital challenge facing all of us is finding a way to achieve sustainable development.
The impact of climate change – and the effort to fight it – is no longer on the fringe. It has become mainstream. It is now a corporate imperative. It is a daunting problem, but like every coin, the climate challenge has two sides. One side is hardship. The other side of the coin is boundless opportunity and large-scale investment.
For example, The European Commission estimates that to meet its 2030 target, an additional investment of €180m each year will need to be spent on energy efficiency and renewable energy.
There are answers to the climate challenge and there are opportunities for businesses to carve their niche. Sustainability is a new competitive environment.
Realising the opportunity
The Northern Ireland Assembly must take on the responsibility of enhancing Northern Ireland as a first-class business environment.
Investment must be made in lifelong learning and research capabilities to allow people across society to benefit from better jobs with better wages and an improved quality of life. At the moment, Northern Ireland has the lowest levels of income compared to England, Scotland and Wales and its fiscal deficit per person is higher than the rest of the UK. Increased FDI has the potential to change all of that.
We need to continue to build on our education system and fund it to a level that makes Northern Ireland competitive. We need to encourage our graduates to come back to the region to work and live. With the right investment, this momentum can spread to all parts of our economy and create opportunities for people and allow them to prosper.
Maeve Hunt is chair of Chartered Accountants Ireland Ulster Society