Strategic Policy Division
Department for the Economy
Room 124
Netherleigh
Massey Avenue
Belfast
BT4 2JP
[email protected]
25th April 2017
Dear Strategic Policy Division
FSB Northern Ireland’s response to “Economy 2030: a
consultation on an Industrial Strategy for Northern
Ireland”
The Federation of Small Businesses (FSB) is the UK’s largest business
organisation with around 170,000 members from across all sectors of
industry, including 6,000 in Northern Ireland. We promote and protect the
interests of smaller businesses and, to that end, work with decisionmakers to create a better business environment.
We welcome the development of an economic strategy and the
opportunity to comment on this draft. We believe such a strategy is
essential for taking the Northern Ireland economy forward over the next
decade and beyond. However, an economic strategy, with its associated
Vision, Priorities, and Pillars, will only be effective in the context of an
agreed Budget, with a Northern Ireland Assembly, Executive and
Ministers to deliver it.
Our 6000 members have told us very clearly that the most pressing
concerns of the small business sector for the future are those of political
and economic uncertainty1, which leads to hesitation around growth and
expansion. As the UK re-negotiates its relationship with Europe, a united
voice from Northern Ireland politicians is urgently needed to protect our
unique interests.
We are of the view that the draft Northern Ireland Industrial Strategy will
need to be reviewed and revised to take account of the UK’s negotiations
and exit from the European Union, and in light of the UK’s Industrial
Strategy 2030, which includes proposals for all parts of the UK. Northern
Ireland needs to consider these proposals and determine how they can be
1
FSB NI, 2015, The Contribution of Small Businesses to Northern Ireland
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incorporated or addressed at a local level. Having said that, we offer some
comments on several aspects of this draft “Economy 2030: Industrial
Strategy for Northern Ireland”.
FSB NI accepts the Strategy’s draft Vision, “To be a globally competitive
economy that works for everyone” and the five identified Pillars for
Growth. We welcome the international research into successful small
economies, which helps to look at Northern Ireland in a global context.
We agree that it will be important to regularly monitor Northern Ireland’s
performance against other small advanced economies.
However, the Ambition Statements under each Pillar are somewhat
generic and most of the actions (‘what are we going to do?’) included
under each Pillar require much more detail. A number of new Strategies
(such as a “Business Growth initiative”) are proposed but it is difficult to
comment on these until they are drafted and greater detail is available.
Naturally, we would welcome the opportunity to input and shape these,
and look forward to meaningful engagement from the early stages of their
development.
Other strategies and actions included have already been agreed in the
course of the last Northern Ireland Assembly term: some are ‘live’ (‘Going
for Growth’) and others are yet to be implemented or fully implemented
(Securing our Success: NI Apprenticeship Strategy; new business start-up
programme, etc), requiring budgets to be agreed.
All have involved extensive consultation and considerable input from
stakeholders such as ourselves and other business community
representatives and organisations, and it is incumbent upon those elected
to govern Northern Ireland to deliver the strategies and actions to which
they have committed.
We are pleased to note that many of FSB’s comments and proposals
made in response to the draft Programme for Government and Call for
Evidence on a draft Economic Strategy have been taken into account and
adopted, including monitoring business demography as a key
measurement of the health of an economy.
Sectoral Focus
We agree that there is a need to support both “strong and emerging
sectors” and high-growth and exporting companies, but we caution that it
is also necessary to ensure support for all businesses in all sectors and at
all stages of growth in Northern Ireland. The majority of businesses
service local markets and communities, and focusing only on the
performance of certain types of business or sectors underestimates a
huge part of our potential. Supporting small businesses in identified
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sectors must not come at the expense of the majority of private sector
firms who provide local goods and services.
There is a need to link ambitions and actions in relation to
innovation, entrepreneurship and enterprise. FSB recognises that
companies that innovate and collaborate are more productive, more
inclined to export, and employ more highly qualified people than others,
and that innovation is critical for the economic well-being of the NI
economy.
FSB’s view is that the best way to encourage innovation is to remove
barriers to small businesses and increase access to business support.
There is good evidence to suggest a connection between higher rates of
entrepreneurship and overall economic prosperity, particularly in
innovation-driven economies like Northern Ireland.2 Enterprise is an
important driver for competitiveness and job creation.3 To rebalance the
NI economy and achieve a sustainable and growing private sector,
attention must be given to increasing the number of small firms.
Further, if innovations developed here are also to be progressed and
commercialised here, rather than being bought by foreign investors for
exploitation elsewhere, this will require investment in the development of
more entrepreneurial people with the necessary traits and competencies
to launch new ventures and develop existing ones. Northern Ireland has
considerable potential for more business venturing and ambition for selfemployment opportunities. Women, minorities and graduates are just
some of the untapped potential which has yet to be fully leveraged.
Numerous initiatives have started and stopped in the past, but a much
greater commitment to the continuity of these is needed if change is to be
effected.
Enterprise parks and digital hubs; Tech hubs
We welcome the proposal to create six new SME support centres –
enterprise parks - and six new digital hubs, and to develop new tech and
science parks and campuses. However, it is not clear whether these are to
be separate initiatives or if the digital hubs are to be incorporated in the
enterprise parks and / or science parks. Much more information is
required in relation to eligibility, application, terms and conditions etc.
We also express caution in relation to restricting business support to
particular or defined geographical areas, or indeed, sectors, as this risks
treating some businesses more or less favourably than others and
reduces the support available. We would draw your attention to our
2The
Global Entrepreneurship Monitor (GEM), GEM: Northern Ireland Report 2013, Mark Hart, Karen
Bonner and Jonathan Levie
3 Mark Hart and Maureen O’Reilly, ERINI, Global Entrepreneurship Monitor 2005 (August 2006)
3
recommendations in our recent paper on Business Support, especially on
the creation of a Small Business Advocate and a network of Small
Business Advice Centres4. FSB also strongly recommends the
development of an Enterprise and Entrepreneurship Strategy for Northern
Ireland.
Corporation tax
We welcome the commitment to “lower corporation tax and promote
Northern Ireland internationally as a top destination for inward
investment ...”; FSB research5 indicates that there is strong support for a
reduction in Corporation Tax amongst small businesses, and that it would
significantly contribute to generating confidence amongst small
businesses, as well as attracting and encouraging Foreign Direct
Investment, increase the level of profitable companies in NI, stimulate
innovation and investment in research and development, and boost
employment in Northern Ireland.
It is essential that the Assembly delivers political stability and
demonstrates budgetary responsibility in order to meet the conditions
required to devolve the relevant powers to set a new lower level of
Corporation Tax, with actions to achieve it.
Enhancing Education, Skills and Employability
FSB continues to stress the need to match the skills profile of the
population with the skills needs of the economy. We welcome the
commitment in the Industrial Strategy to this, and to providing greater
support for businesses who upskill their workforce. This is of particular
importance in the context of a lower rate of Corporation Tax and an
accompanying increase in inward investment which will require a highly
skilled workforce.
The proposed action to “deliver new models of youth training and
apprenticeships which facilitate progression up the skills ladder across a
wide range of occupational areas”, while welcome, is a prime example of
the inclusion of a commitment which has already been made and agreed.
Rather than this repetition of current policy, we would like to have seen a
specific commitment to the provision of adequate resourcing to encourage
small employers to participate in Securing our Success: NI Apprenticeship
Strategy and Generating our Success: NI Strategy for Youth Training.
4
5
FSB NI, Business Support in Northern Ireland, 2016
FSB NI, The Contribution of Small Businesses to Northern Ireland, 2015
4
Regulatory Reform
We welcome the reiterated commitment to comprehensive regulatory
reform and would press for the implementation and delivery of the NI
Executive’s existing and agreed Better Regulation: An Action Plan for
Reform6, rather than the development of a new ‘Open for Business
Strategy’. Given that the cost of regulation on business in Northern
Ireland is not measured, though the collective cost is estimated to be
more than Corporation Tax and Value Added Tax combined, we also
recommend that consideration is given to FSB’s proposals for the
introduction of a regulatory budget7.
Connectivity: Building the Best Economic Infrastructure
To achieve a sustainable, inclusive, globally competitive economy that
works for everyone, the NI Industrial Strategy needs to ensure that all
parts of the economy are effectively connected to each other and to all
key markets beyond.
We support targeting Belfast and Derry/Londonderry as regional drivers of
growth, and we would support the conferring of a ‘city deal’ on them to
help maximise their potential.
However, we urge the Executive to ensure that infrastructure needs
across Northern Ireland are addressed. The cities of Northern Ireland
should be much better connected to each other, as well as to the rest of
the UK, and to Dublin and the Republic of Ireland, which is an essential
market for the UK.
Successive administrations have been unable to deliver on important
infrastructure improvements such as the A5, the A6 and the York
Street Interchange, but given their importance to helping Northern
Ireland to achieve its potential and increase its productivity and
prosperity, we would urge the Department for the Economy to support
and encourage the Department for Infrastructure to progress – indeed to
complete - these projects as soon as possible.
We would also advocate expediting, in conjunction with the Irish
Government, a regular high speed rail service that can transport
passengers between Belfast and Dublin Airport and City in under an hour.
We welcome the commitment to enhance the security, sustainability and
cost-efficiency of our energy supply, as well as the creation of a new
Energy Strategy. Businesses in Northern Ireland pay 10% more for
electricity than the rest of Europe. While we respect the need to attend to
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7
March 2016
FSB, Regulatory Reform in Northern Ireland, 2016
5
the sustainability and security of our energy system, we believe it is
important to monitor these costs and to evaluate the competitive impact
of Northern Ireland energy costs on investment and growth.
FSB recommends that consideration is also given to the regional balance
of energy infrastructure within Northern Ireland. There is a current under
investment in the transmission system in the western and northern parts
of Northern Ireland, which places a barrier to new economic
developments in the west and north of Northern Ireland. Addressing this
imbalance is essential to achieving regionally balanced growth.
Universal broadband coverage is essential to delivering a regionally
balanced economy, and there are still large areas of Northern Ireland,
particularly in the west, where superfast broadband is almost nonexistent. FSB welcomes the renewed commitment to make Northern
Ireland Europe’s best connected region for broadband and digital
infrastructure by 2030.
FSB looks forward to continuing to working in partnership with the
Executive, the Assembly and the Department for the Economy to deliver
the Economic Strategy, and as a key stakeholder in the development and
implementation of action plans.
Please do not hesitate to contact us if you have any queries in the
meantime.
Kind regards
Wilfred Mitchell OBE
Northern Ireland Policy Chairman
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