The Economic
and Social Review,
Vol. 19, No. 3, April,
1988,
pp.
177-178
The Comparative Performance of Small
Manufacturing Companies Located i n the
M i d West and Northern Ireland
D.M.W.N. HITCHENS
The Queen's
University
of
Belfast
P.N. O ' F A R R E L L *
Heriot-Watt
University,
Edinburgh
Abstract; Specific dimensions of the performance and characteristics of a matched sample of small
manufacturing firms in the Mid West of Ireland and Northern Ireland are compared. The analysis
examines comparative growth rates, markets, price and non-price competitiveness, premises, machinery,
labour and productivity. Findings are contrasted with earlier comparisons of the two parts of Ireland
with British mainland regions.
I
T
INTRODUCTION
his p a p e r is o n e o f a series c o m p a r i n g t h e p e r f o r m a n c e , c h a r a c t e r i s t i c s ,
and p r o b l e m s affecting small firms l o c a t e d i n peripheral regions o f B r i t a i n
a n d I r e l a n d . T h e o b j e c t is t o i s o l a t e a n d assess t h e i m p o r t a n c e o f l o c a t i o n a l
disadvantages arising f r o m m a n u f a c t u r i n g i n p e r i p h e r a l regions (e.g., h i g h e r
t r a n s p o r t costs t o d i s t r i b u t e t o w i d e r m a r k e t s ) w i t h t h e a i m o f i d e n t i f y i n g h o w
t h o s e d i s a d v a n t a g e s c o n s t r a i n t h e g r o w t h o f f i r m s , a n d t h e r e b y suggest p o l i c y
initiatives w h i c h m a y be t a k e n b y D e v e l o p m e n t Agencies t o r e m o v e c o n ­
straints. Comparisons o f performance a n d r e c o m m e n d a t i o n s take account o f
*The research has been supported by a grant from the Economic and Social Research Council, London;
the Department of Economic Development, Northern Ireland; and Shannon Free Airport Development
Company, Republic of Ireland.
e x i s t i n g g r a n t s a n d o t h e r assistance m a d e a v a i l a b l e b y A g e n c i e s t o r e m o v e
constraints
a n d encourage
e m p l o y m e n t g r o w t h i n these l o c a t i o n s . I n t h i s
paper samples o f companies i n t w o parts o f I r e l a n d , the M i d West a n d N o r t h e r n
I r e l a n d are c o n t r a s t e d . T h o s e r e g i o n s share b o t h s i m i l a r g e o g r a p h i c r e m o t e ­
ness a n d g e n e r o u s s m a l l f i r m s d e v e l o p m e n t agencies. T h e a p p r o a c h uses a
sample
design based o n m a t c h i n g pairs o f firms ( D a l y , H i t c h e n s , Wagner,
1 9 8 4 ; O ' F a r r e l l a n d H i t c h e n s , 1 9 8 8 b , Peck, 1 9 8 5 ) i n N o r t h e r n I r e l a n d a n d
t h e M i d West r e g i o n o f I r e l a n d a n d b y c o m p a r i n g m a r k e t s served, m a c h i n e r y
used, labour force characteristics, q u a l i t y and price competitiveness o f p r o ­
d u c t s seeks t o i s o l a t e t h e i r i m p a c t o n c o m p a n y p e r f o r m a n c e m e a s u r e d
by
f i r m g r o w t h rates.
I I C O N C E P T U A L ISSUES
M a s o n a n d H a r r i s o n ( 1 9 8 5 , p p . 4 - 5 1 ) have i d e n t i f i e d t h e " n e e d f o r s o m e
detailed studies o f the . . . role a n d g r o w t h o f n e w a n d small firms i n c o n t r a s t i n g
r e g i o n a l e n v i r o n m e n t s " a n d have c a l l e d f o r " a n e x a m i n a t i o n o f t h e l o c a t i o n a l
and
s m a l l f i r m s " . T h e y have
also
a r g u e d t h a t w h e r e a s t h e r e is n o w s u b s t a n t i a l r e s e a r c h o n t h e n e w f i r m
structural characteristics
o f 'successful'
for­
m a t i o n process, equivalent research o n the relative p e r f o r m a n c e o f small f i r m s
i n d i f f e r e n t r e g i o n s is v i r t u a l l y n o n - e x i s t e n t ( M a s o n a n d H a r r i s o n , 1 9 8 5 , p . 5 ) .
T h e l o c a l m i l i e u m a y be a n i m p o r t a n t i n f l u e n c e u p o n t h e p r o s p e c t s
for
s m a l l f i r m g r o w t h a n d e x p a n s i o n : g r o w t h i m p e d i m e n t s are l i k e l y t o v a r y i n
n a t u r e a n d scale b e t w e e n d i f f e r e n t r e g i o n s . V e n t u r e c a p i t a l a v a i l a b i l i t y is m o r e
l i m i t e d i n p e r i p h e r a l areas d u e t o t h e c e n t r a l i s a t i o n o f t h e l e n d i n g i n s t i t u t i o n s
and
the
d i s t o r t e d p e r c e p t i o n o f r i s k b y b a n k s . L o w e r rates o f e c o n o m i c
g r o w t h a n d l o w e r levels o f i n c o m e i n h i b i t t h e o p p o r t u n i t i e s f o r s m a l l f i r m
expansion
based u p o n local a n d regional m a r k e t s ; a n d small firms i n the
p e r i p h e r y m a y face less severe c o m p e t i t i o n t h a n t h o s e i n c o r e r e g i o n s .
Small firms
i n p e r i p h e r a l regions
also
suffer
technical impediments
to
g r o w t h r e f l e c t e d i n l o w e r rates o f i n n o v a t i o n c o m p a r e d w i t h s i m i l a r sized
firms i n core regions (Oakley, T h w a i t e s and Nash, 1 9 8 2 ) . L a b o u r supply b o t t l e ­
necks — especially shortages o f a p p r e n t i c e - t r a i n e d c r a f t s m e n a n d managerial
staff — vary b e t w e e n
regional and sub-regional economies
a n d m a y be
a
serious c o n s t r a i n t u p o n g r o w t h . D e l M o n t e a n d G i a n n o l a ( 1 9 8 6 , p . 2 8 6 ) have
also a r g u e d t h a t o n e o f t h e m a j o r i m p e d i m e n t s t o t h e e x p a n s i o n o f s m a l l
f i r m s i n p e r i p h e r a l r e g i o n s is t h a t t h e p r o c e s s o f d i v i s i o n o f l a b o u r is c o n ­
strained p r i m a r i l y t h r o u g h a restricted supply o f organisational and managerial
skills.
As a f i r m grows i t w i l l need t o change its organisational s t r u c t u r e f o r w h i c h
i t needs t o e m p l o y t h e r i g h t p e o p l e t o i m p l e m e n t t h e c h a n g e . I f t h e f i r m is
not
able t o o b t a i n t h e a p p r o p r i a t e p e o p l e because t h e s k i l l s are n o t a v a i l a b l e
i n t h e area i t w i l l n o t c h a n g e i t s o r g a n i s a t i o n a l s t r u c t u r e a n d t h e r e f o r e i t s
g r o w t h w i l l b e r e t a r d e d . D e l M o n t e a n d G i a n n o l a ( 1 9 8 6 , p . 2 8 6 ) also suggest
t h a t f i r m s i n less p r o s p e r o u s
areas w i l l be m o r e v e r t i c a l l y i n t e g r a t e d
than
those i n developed regions a n d t h a t this lack o f specialisation reduces t h e
r
competitiveness a n d g r o w t h o f local f i r m s . Hence policies a i m e d at p r o v i d i n g
r e g i o n a l d e v e l o p m e n t g r a n t s a n d s o f t l o a n s w i l l i n t h e m s e l v e s n o t address
i m p e d i m e n t s a r i s i n g f r o m s u p p l y - s i d e shortages o f a p p r o p r i a t e s k i l l e d w o r k e r s
and
management.
F o t h e r g i l l et al., h a v i n g r e v i e w e d t h e e v i d e n c e o n i n d u s t r i a l costs a n d p r o ­
f i t a b i l i t y , c o n c l u d e d t h a t , a l t h o u g h costs o f l a b o u r a n d r a w m a t e r i a l s d o n o t
vary between urban and rural locations, the p r o f i t a b i l i t y o f manufacturing
f i r m s i n c o n u r b a t i o n s ( e x c e p t L o n d o n ) is b e l o w t h e levels o b s e r v e d i n t h e i r
surrounding
hinterlands. They
suggest t h a t
inadequate
premises
i n cities
i m p a i r o p e r a t i n g e f f i c i e n c y a n d are t h e m o s t p r o b a b l e cause o f l o w e r p r o f i t s
in the conurbations.
Small independent
f i r m s are less w e l l e q u i p p e d t h a n m u l t i - p l a n t o r g a n i ­
s a t i o n s t o a n t i c i p a t e a n d a v o i d i m p e d i m e n t s a n d also t o resolve t h e m : n o t
o n l y are t h e i r o w n p r o b l e m - s o l v i n g r e s o u r c e s f e w e r , b u t t h e i r l i m i t e d m a n a g e ­
m e n t c a p a c i t y m a y also c o n s t r a i n t h e i r access t o e x t e r n a l p u b l i c a n d p r i v a t e
r e s o u r c e s ; w h i l e these l a t t e r r e s o u r c e s m a y also b e m o r e scarce a n d o f l o w e r
q u a l i t y i n p e r i p h e r a l areas. S u c h e n v i r o n m e n t a l i m p e d i m e n t s m a y i m p a c t d i f ­
f e r e n t i a l l y u p o n v a r i o u s k i n d s o f business.
A t p r e s e n t a n a d e q u a t e e x p l a n a t o r y f r a m e w o r k w i t h i n w h i c h t o analyse
the g r o w t h o f the small owner-managed
m a n u f a c t u r i n g e n t e r p r i s e has
not
b e e n d e v e l o p e d ( O ' F a r r e l l a n d H i t c h e n s , 1 9 8 8 a ) . W e are s t i l l s e e k i n g a t h e o r y
w h i c h w i l l simultaneously explain the infrequency o f the phenomenon
and
a c c o u n t f o r t h e m a j o r processes u n d e r l y i n g g r o w t h a n d w e argue t h a t t h i s
crucially depends u p o n the c o m p e t i t i v e f r a m e w o r k and the firm's ability t o
foresee a n d a d j u s t t o c o m p e t i t i o n .
F l o r e n c e ( 1 9 5 3 , p p . 6 4 - 6 5 ) w r o t e t h a t " M a n y s m a l l f i r m s s u r v i v e because
t h e y give t h e precise a n d r e l i a b l e service r e q u i r e d b y c u s t o m e r s , p a r t i c u l a r l y
i n j o b b i n g f o r p r o d u c e r c u s t o m e r s . . . T h e y p r o m i s e f i r m d e l i v e r y dates . . .
a n d k e e p t h e i r p r o m i s e : t h e y p r o d u c e t h e e x a c t u n s t a n d a r d q u a l i t y a n d design
(usually unreasonably)
r e q u i r e d . " I t appears t h a t
Florence, among
many
o t h e r s , t e n d e d t o i m p l i c i t l y assume t h a t s m a l l f i r m s are a b l e t o m a n u f a c t u r e
to t h e precise design, q u a l i t y a n d p r i c e r e q u i r e d i n specific m a r k e t segments.
T h e r e s e a r c h e v i d e n c e p r e s e n t e d i n t h i s p a p e r suggests t h a t s u c h a n a s s u m p t i o n
is u n j u s t i f i e d a n d t h a t i n a d e q u a t e d e s i g n , p o o r q u a l i t y a n d l a c k o f p r i c e c o m ­
p e t i t i v e n e s s are m a j o r f a c t o r s c o n s t r a i n i n g t h e g r o w t h a n d t h r e a t e n i n g t h e
survival o f m a n y small firms.
T h e k e y a r g u m e n t o f t h i s p a p e r is t h a t a m a j o r r e a s o n ( p o s s i b l y t h e m o s t
i m p o r t a n t o n e ) w h y m o s t s m a l l f i r m s close o r f a i l t o e x p a n d is t h a t t h e y are
m a n u f a c t u r i n g p r o d u c t s t h a t t h e m a r k e t does n o t w a n t , i . e . , t h e y f r e q u e n t l y
do n o t o p t i m i s e the p r i c e / q u a l i t y r e l a t i o n s h i p f o r the segment(s) o f the m a r k e t
t o w a r d s w h i c h t h e i r p r o d u c t ( s ) are t a r g e t e d .
Ill METHOD A N D SAMPLING FRAME
A n a l y s e s are b a s e d o n a s a m p l e o f 3 6 N o r t h e r n I r i s h f i r m s a n d 2 7 M i d
West c o m p a n i e s o p e r a t i n g i n f o u r m a n u f a c t u r i n g sectors — engineering, fur­
n i t u r e , c l o t h i n g and miscellaneous trades. N o r t h e r n I r e l a n d firms were sampled
f i r s t a n d m a t c h e d a t t h e s e c o n d stage w i t h f i r m s r a n d o m l y s e l e c t e d i n t h e
M i d W e s t . A m i x o f 2 7 d i f f e r e n t i n d u s t r i a l a c t i v i t i e s are i n v o l v e d . I n a n u m b e r
o f cases ( a n d e s p e c i a l l y i n t h e e n g i n e e r i n g s e c t o r ) t h e i n d u s t r i a l a c t i v i t y is
represented b y m o r e t h a n one c o m p a n y i n N o r t h e r n Ireland m a t c h e d w i t h a
single c o u n t e r p a r t i n t h e M i d W e s t ( a n i m b a l a n c e , i n p a r t , r e f l e c t i n g d i f f e r e n c e s
i n t h e size o f t h e i n d u s t r i a l base i n t h e t w o p a r t s o f I r e l a n d ) . M a t c h i n g has
b e e n as close as p o s s i b l e w i t h r e s p e c t t o p r o d u c t d e s c r i p t i o n , e m p l o y m e n t
size c a t e g o r y , a n d b r o a d age g r o u p . T h e c h o i c e o f i n d u s t r i e s i n c o r p o r a t e s a
b r o a d cross s e c t i o n o f m a n u f a c t u r i n g t e c h n i q u e s a n d s k i l l s w h i l e t h e s e l e c t i o n
o f f i r m s m a k i n g e s s e n t i a l l y t r a d a b l e p r o d u c t s ensures t h a t t h e i r g r o w t h is
n o t w h o l l y constrained b y local or regional demand.
T a b l e 1 sets o u t t h o s e t r a d e s i n w h i c h t h e 6 3 c o m p a n i e s h a v e b e e n m a t c h e d ,
a n d u p o n w h i c h t h e f o l l o w i n g analysis a n d d i s c u s s i o n s are b a s e d .
T a b l e 1: Number
of Firms Matched
Northern
Precision Engineering
11
Ireland
by
Trade
Mid
West
6
Castings
3
2
Other Engineering
4
4
A l l Engineering
Clothing
18
12
9
8
3
2
Knitwear
All Clothing
12
10
Furniture
4
3
Miscellaneous
2
2
36
27
IV
Small
The
Firm
ANALYSIS
Growth
central question
addressed b y t h e
r e s e a r c h is h o w
does t h e
firm's
l o c a t i o n i n f l u e n c e its p e r f o r m a n c e . T a b l e 2 c o m p a r e s one aspect o f f i r m per­
formance between the
period
1982
t w o regional samples: the g r o w t h o f firms over
the
t o 1 9 8 6 / 7 . T h e table presents f o u r measures o f g r o w t h : Part A
shows g r o w t h
in e m p l o y m e n t and
i n r e a l sales,
1
while Part B o f the
shows the percentages o f firms r e p o r t i n g g r o w t h
table
i n e m p l o y m e n t and
sales. T h e n u m b e r s o f c o m p a n i e s i n c l u d e d i n t h e s e m e a s u r e s d i f f e r s
real
accord­
i n g t o w h e t h e r s a t i s f a c t o r y e m p l o y e n t a n d / o r sales d a t a w e r e r e p o r t e d . T h e
table shows that measured either b y g r o w t h achieved (Part A ) or the percen­
tage o f f i r m s r e p o r t i n g g r o w t h
(Part B ) , M i d West f i r m s i n all sectors o u t ­
performed their Northern Irish counterparts.
T a b l e 2: Small Firm
2
Growth
Part A : Percentage growth i n sample companies 1 9 8 2 - 1 9 8 6 / 7
Employment
North
Engineering
Clothing
F u r n i t u r e and Miscellaneous
A l l sectors
N u m b e r of firms
Average size o f firm (employees)
Growth
Mid
-8.5
19
-34(26)*
-22(6)*
28
24
West
48
99
48
61
27
18
Real Sales
North
Growth
Mid
40
West
32
34
79
110
140
33
27
Part B : Per cent o f companies sampled reporting growth i n :
Employment
North
Engineering
Clothing
F u r n i t u r e a n d Miscellaneous
A l l sectors
N u m b e r of firms
35
33
38
39
28
Mid
Real
West
67
90
80
78
27
North
Sales
Mid
61
67
44
58
33
• W h e n exceptionally high negative growth rates reported b y two firms are excluded
the sample recalculations
are shown in
parentheses.
West
75
89
100
81
27
from
1. Deflated by official British and Irish producer price indices.
2. Northern Irish firms were interviewed in 1986 and Mid West firms in 1986/7 while growth was
recorded from 1982 (for those firms in existence from that date). I n principle Mid West firms had
longer to grow, however, a glance at the figure shown in Table 2 indicates that the factor is not of
importance.
T h e average size a n d age o f c o m p a n i e s i n t h e N o r t h e r n I r i s h s a m p l e d i f f e r s
from
that
o f the M i d West
firms.
O n average t h e N o r t h e r n I r e l a n d f i r m
e m p l o y e d 2 5 p e r s o n s w h i l e i n t h e M i d W e s t 18 p e r s o n s w e r e e n g a g e d , a n d a l l
but
o n e o f t h e M i d W e s t f i r m s was f o r m e d since 1 9 7 0 c o m p a r e d w i t h t w o
t h i r d s o f t h e N o r t h e r n I r i s h c o m p a n i e s . B o t h t h e s e f a c t o r s , c o m p a n y age a n d
size a f f e c t t h e i n t e r p r e t a t i o n o f t h e g r o w t h rates s h o w n i n T a b l e 2 . A separate
c a l c u l a t i o n a l l o w i n g f o r d i f f e r e n c e s i n age a n d size o f f i r m i n d i c a t e d t h a t
those factors d o n o t influence the i n t e r p r e t a t i o n o f the table.
T h e r e m a i n d e r o f t h e paper examines markets served, p r o d u c t c o m p e t i t i v e ­
ness, a n d t h e q u a l i t i e s o f p l a n t , m a c h i n e r y a n d l a b o u r e n g a g e d at f a c t o r i e s i n
these t w o parts o f I r e l a n d .
Markets
Served
T h e g r o w t h o f f i r m s is p a r t i a l l y d e p e n d e n t u p o n access t o s u i t a b l e m a r k e t s ,
o n e a s p e c t o f w h i c h is g e o g r a p h i c . N e i t h e r N o r t h e r n I r e l a n d n o r t h e M i d W e s t
are a t t h e c e n t r e o f i n d u s t r i a l c o n c e n t r a t i o n s w i t h i n t h e B r i t i s h Isles a n d t h e
q u e s t i o n arises as t o h o w t h a t s e p a r a t i o n a f f e c t s g r o w t h . T a b l e 3
sets o u t
t h e geographic e x t e n t o f t h e m a r k e t s served b y t h e f i r m s i n t h e t w o regions.
I t s h o w s t h a t o n average N o r t h e r n I r i s h f i r m s are m o r e d e p e n d e n t o n t h e
r e g i o n a l m a r k e t w h i l e t h e r e is a s i m i l a r d e p e n d e n c e o n t h e l o c a l m a r k e t . T h e r e
are v a r i a t i o n s b e t w e e n s e c t o r s , i n e n g i n e e r i n g M i d W e s t c o m p a n i e s are m o r e
T a b l e 3: Geographic
Structure of Small Firm Markets: Percentages
Regional and Export
Markets
Regional **
Local*
Engineering
Clothing
Furniture
O t h e r trade 1
2
All
Sample size
of Sales to
Local,
"Exports and
GB***"
NI
MW
NI
MW
NI
MW
39
15
70
0
44
34
34
61
13
48
33
10
38
26
73
37
100
5
95
63
70
20
63
67
33
53
27
63
0
95
5
37
9
38
5
20
67
22
* L o c a l includes sales w i t h i n 2 0 miles of the factory.
• • R e g i o n a l is defined as w i t h i n the M i d West and w i t h i n N I .
* * * N . Irish sales to G B are included w i t h exports i n this c o l u m n .
Note: Figures show the percentages of total sales i n each trade sold at various distances.
Regional Sales include local sales. Percentages shown under "regional" and "exports a n d
G B " s u m to 100 i n the case of N I small firm sales. Companies i n the M i d West also sell to
extra regional R e p u b l i c of Ireland markets, s h o w n in T a b l e 4 , hence for MW firms "regional"
plus "exports a n d G B " plus "extra regional Irish T r a d e " sum to 100.
T a b l e 4: Exports
and Extra
(percentages
Regional
of sales
Trade
Extra
Regional
Irish Trade
NI
Trade
volume)
With
GB
Exports
British
Outside
Isles
MW
NI
MW
21
45
5
4
4
24
14
14
0
Engineering
2
21
Clothing
4
42
NI
0
32
0
5
0
Other 1
37
13
54
20
4
0
2
5
0
0
0
0
67
4
25
27
12
7
9
11
19
12
7
6
7
Furniture
All
N u m b e r of firms
dependent
o n local b u y e r s , w h i l e i n c l o t h i n g a n d f u r n i t u r e trades N o r t h e r n
I r i s h c o m p a n i e s are m o r e d e p e n d e n t o n r e g i o n a l c u s t o m .
T a b l e 4 analyses t h e f i r m s ' e x t r a r e g i o n a l sales i n t h r e e c a t e g o r i e s :
trade
w i t h i n I r e l a n d as a w h o l e , w i t h G B , a n d e x p o r t s o u t s i d e t h e B r i t i s h Isles. I t
s h o w s t h a t o n average t h e M i d W e s t c o m p a n i e s d e p e n d m o r e f o r t h e i r c u s t o m
u p o n I r e l a n d w h i l e N o r t h e r n I r i s h c o m p a n i e s sell m o r e t o G B . E x p o r t sales
a c c o u n t e d f o r a b r o a d l y s i m i l a r p r o p o r t i o n o f t o t a l sales f r o m t h e t w o r e g i o n s
u n d e r t a k e n b y a s i m i l a r p r o p o r t i o n o f c o m p a n i e s ( 2 3 % ) . T h e y i n c l u d e d a large
n u m b e r o f M i d West p r o d u c t s sold t o t h e c o m p a r a t i v e l y soft I r i s h - A m e r i c a n
m a r k e t . T h e g e o g r a p h i c a l s p r e a d also r e f l e c t s t h e s o u r c e o f t h e g r o w t h o f t h e
M i d West f i r m s , w i t h the m a j o r i t y o f companies r e p o r t i n g n o m a t e r i a l change
i n t h e e x t e n t o f t h e i r m a r k e t s o v e r t h e l a s t f i v e y e a r s . O n l y 15 p e r c e n t o f
firms visited attributed g r o w t h to entry into G B , N o r t h e r n Ireland and US
m a r k e t s . I n t h e m a j o r i t y o f cases n o c h a n g e w a s r e c o r d e d w i t h , f o r e x a m p l e ,
engineering companies dependent for g r o w t h o n local multinationals. T h i r t y seven p e r c e n t o f t h e N o r t h e r n I r i s h s a m p l e r e c o r d e d a c h a n g e i n t h e geo­
g r a p h i c e x t e n t o f t h e i r m a r k e t s , i n h a l f t h e cases a d e c l i n e i n overseas o r G B
m a r k e t s was e x p e r i e n c e d a n d t h e r e m a i n d e r a t t r i b u t e d t h e i r g r o w t h t o e n t r y
o r g r e a t e r p e n e t r a t i o n o f p r i n c i p a l l y overseas e x p o r t s o r R O I m a r k e t s . T h e
n e t r e s u l t o f t h o s e changes as p r e s e n t e d i n T a b l e 3 i n d i c a t e s a s i m i l a r d e p e n ­
dence f o r c u s t o m o n h o m e markets.
S u c h a dependence was n o t considered a c o n s t r a i n t o n f u t u r e g r o w t h b y
M i d West f i r m s . T h e y were o p t i m i s t i c a n d o n l y a quarter o f f i r m s sampled
believed there t o be a m a r k e t constraint o n t h e i r f u t u r e g r o w t h
compared
w i t h half their N o r t h e r n Ireland counterparts. The N o r t h e r n Ireland shortfall
o c c u r r e d i n all sectors b u t was greatest i n t h e f u r n i t u r e a n d engineering trades.
T h a t N o r t h e r n I r i s h p e s s i m i s m was e x p r e s s e d d e s p i t e t h e f a c t t h a t 4 0 p e r c e n t
o f firms sampled, c o m p a r e d w i t h 4 4 per cent i n the M i d West, t o o k active
steps t o d e v e l o p t h e i r businesses b y i n t r o d u c i n g n e w p r o d u c t s , n e w
tech-
niques or b y entering new markets. I n general, engineering companies effected
changes i n t e c h n i q u e s w h i l e c l o t h i n g f i r m s c h a n g e d designs a n d t r i e d t o estab­
l i s h n e w m a r k e t s . T h e n e t r e s u l t o f these changes was a n increase i n e m p l o y ­
m e n t o f 72 per cent at t h e M i d West companies a n d one o f j u s t 14 per cent
at t h e N o r t h e r n I r i s h f i r m s .
Transport
Costs
Table 5 examines
t h e i m p o r t a n c e o f t r a n s p o r t costs i n s e l l i n g t o w i d e r
m a r k e t s as a p o s s i b l e e x p l a n a t i o n f o r t h e r e g i o n a l c o n c e n t r a t i o n o f sales f o u n d
i n t h e t w o p a r t s o f I r e l a n d ( a c o n c e n t r a t i o n w h i c h is greater t h a n t h a t t y p i c a l
o f t w o r e g i o n s i n B r i t a i n — S o u t h Wales a n d S c o t l a n d : H i t c h e n s a n d O ' F a r r e l l ,
1 9 8 7 ; O ' F a r r e l l a n d H i t c h e n s , 1 9 8 8 . ) T h e p e r c e n t a g e s s h o w n are costs i n c u r r e d
i n r e a c h i n g m a j o r e x t r a r e g i o n a l m a r k e t s , w h i c h i n t h e m a i n are d i s t a n t I r i s h
markets
from
t h e M i d West a n d G B m a r k e t s f r o m N o r t h e r n I r e l a n d . T h e
f i g u r e s i n d i c a t e t h a t t r a n s p o r t c o s t s e x p r e s s e d as a p e r c e n t a g e o f t h e v a l u e o f
g o o d s s o l d are s i m i l a r a n d s m a l l .
T a b l e 5: Transport Costs to Major Markets Outside the
(percentages of the sales value of goods sold)
Engineering
Clothing
Furniture
Other
Sample size
Region
NI
MW
1.3
2.3
5.0*
3.0
12
1.2
1.8
6.1
2.3
17
Note: Percentages for Northern Ireland refer to costs incurred
i n transport to a mainland market, while MW figures are
q u o t e d for Irish markets outside the MW.
^Transport costs to Dublin.
W h e r e , as i n a f e w cases, c o m p a r i s o n s w e r e p o s s i b l e o f t r a n s p o r t c o s t s t o
m a i n l a n d British destinations those i n c u r r e d b y M i d West (engineering and
clothing)
companies
were
about
double
those q u o t e d b y N o r t h e r n Irish
proprietors.
C o m p a r a t i v e l y f e w l o g i s t i c p r o b l e m s o f s u p p l y i n g c u s t o m e r s at a d i s t a n c e
w e r e m e n t i o n e d b y M i d W e s t p r o p r i e t o r s , p e r h a p s because less w a s b e i n g s o l d
b e y o n d I r e l a n d , t h e m a i n d i f f i c u l t y w h e r e i t was s a i d t o o c c u r i n v o l v e d c o m ­
pleting the required export documentation, and "difficulty o f breaking i n t o "
the British market.
Northern
Irish
engineering proprietors complained o f difficulties
with
c u s t o m e r liaison w i t h regard especially t o queries arising over drawings, i n
t h e o t h e r t r a d e s p r o b l e m s w i t h t h e ease o f d e l i v e r y o f p r o d u c t s ( i n c l u d i n g
t h e f t i n t r a n s i t ) a n d ease o f access t o c u s t o m e r s w e r e c i t e d .
About
o n e - t h i r d o f N o r t h e r n I r i s h companies a n d one-seventh
M i d West c o u n t e r p a r t s
o f their
were involved w i t h N o r t h - S o u t h trade. Three M i d
W e s t f i r m s c l a i m e d t o have e n c o u n t e r e d s o m e r e s i s t a n c e b y b u y e r s i n N o r t h e r n
Ireland to purchasing products manufactured i n the Republic o f Ireland while
N o r t h e r n Irish companies were m o r e concerned w i t h the risks i n v o l v e d i n
giving credit t o companies i n the R e p u b l i c , and a l t h o u g h b a d debts were n o t
a p r o b l e m r e p o r t e d b y p r o p r i e t o r s i n the M i d West, slow (90 day) p a y m e n t
was said n o t t o b e
Raw
uncommon.
Materials
P r o b l e m s a r i s i n g f r o m t h e n e e d t o i m p o r t r a w m a t e r i a l s w a s a m o r e par­
t i c u l a r w o r r y f o r M i d W e s t p r o p r i e t o r s e s p e c i a l l y as regards d e l a y s , l a c k o f
c h o i c e a n d t h e e f f e c t o n cash f l o w o f t h e n e e d t o p a y V A T a t " p o i n t o f
e n t r y " . T h i s p r o b l e m was i n t e n s i f i e d , i t w a s s a i d , b y t h e p o o r q u a l i t y o f
m a t e r i a l s a v a i l a b l e at h o m e . S p e c i f i c m e n t i o n was m a d e o f t h e p o o r y a r n ,
w o o l , packaging, b r o c h u r e s , b o t t l e s , d y e i n g , c h i p b o a r d , etc., o f t e n q u o t e d
a p o l o g e t i c a l l y as g o o d reasons f o r n o t " b u y i n g I r i s h " .
T h e d e l i v e r y charge was o f t e n i n c l u d e d i n t h e c o s t o f i t e m s i m p o r t e d b u t
w h e r e t h e y were q u o t e d separately
b y M i d West f i r m s , were f o u n d t o be
h i g h e r t h a n c o m p a r a b l e d e l i v e r y charges r e p o r t e d i n N o r t h e r n I r e l a n d . H o w ­
ever, i n e n g i n e e r i n g s u c h costs w e r e said t o be " i r r e l e v a n t " i n r e l a t i o n t o t h e
cost o f t h e c o m p o n e n t m a d e .
Most N o r t h e r n Irish firms sourced f r o m outside the Province complained
similarly o f consequent
problems arising f r o m a lack o f choice a n d
diffi­
culties i n o b t a i n i n g " o d d b a l l " materials. A c o m p a r i s o n o f the delivered
prices o f 1 1 i n p u t s t o N o r t h e r n I r i s h firms i n d i c a t e d t h a t t h e y p a i d n o price
p r e m i u m o v e r t h e i r S o u t h East E n g l a n d c o u n t e r p a r t s ( H i t c h e n s a n d O ' F a r r e l l ,
1987).
A c h i e v i n g repairs presented m o r e p r o b l e m s t o M i d West f i r m s . E n g i n e e r i n g
companies
c o m p l a i n e d o f t h e n e e d t o use B r i t i s h service agents t o r e p a i r
c o m p l e x m a c h i n e r y , a n d t h a t t h e i r remoteness i m p l i e d a h i g h repair charge.
T h i s was i n c o n t r a s t t o t h e experience o f N o r t h e r n I r e l a n d companies w h o
used l o c a l firms t o repair t h e i r ( m a i n l y c o m p u t e r n u m e r i c a l l y c o n t r o l l e d ,
CNC) machinery.
Marketing
A c t i v e m a r k e t i n g t e c h n i q u e s i n c l u d i n g t h e use o f a g e n t s , salesmen,
and
a d v e r t i s i n g ( o t h e r t h a n Y e l l o w o r G o l d e n pages) w e r e said t o be a d o p t e d b y
62 per cent o f companies i n t h e M i d West c o m p a r e d w i t h 37 per cent o f t h e i r
•natched N o r t h e r n Irish counterparts, where r e c o m m e n d a t i o n s and w o r d o f
m o u t h w e r e m o r e l i k e l y t o be r e l i e d u p o n . M i d West f i r m s h a d t h e a d d i t i o n a l
advantage
over a n d above t h e i r N o r t h e r n Irish counterparts o f a possibility
of inclusion i n the National Linkages Programme.
Product
Price
and Quality
Comparisons
We e x a m i n e d the quality and price competitiveness o f products p r o d u c e d
b y f i r m s i n t h e M i d West a n d i n N o r t h e r n I r e l a n d . T h e m e t h o d o f testing
i n v o l v e d asking t h e p r o p r i e t o r o f a m a t c h e d c o m p a n y t o evaluate a n d price
t h e p r o d u c t m a d e b y his c o u n t e r p a r t i n a n o t h e r r e g i o n . I n p r a c t i c e t h e research
p r o c e d u r e i n v o l v e s s h o w i n g several samples m a d e b y f i r m s i n d i f f e r e n t r e g i o n s
o f B r i t a i n a n d I r e l a n d t o e a c h b u s i n e s s m a n . T h i s m e t h o d has t h e
advantage
o f p r e s e r v i n g t h e a n o n y m i t y o f t h e r e g i o n i n q u e s t i o n . Several f i r m s i n each
region evaluated and q u o t e d a price o n the p r o d u c t made i n the other region.
I n g e n e r a l , t h e q u a l i t y assessments w e r e h i g h l y c o n s i s t e n t w h i l e p r i c e q u o t a ­
t i o n s w e r e subject t o s o m e w h a t greater v a r i a t i o n .
Price a n d q u a l i t y evaluations o f p r o d u c t s were sought f r o m b o t h m a i n l a n d
British producers and producers i n Ireland. I n this section multiregional c o m ­
p a r i s o n s are m a d e t o a n a l y s e t h e c e n t r a l q u e s t i o n o f p r i c e a n d q u a l i t y c o m ­
p e t i t i v e n e s s w i t h i n a w i d e r B r i t i s h Isles c o n t e x t . R e s u l t s o f c o m p a r i s o n s m a d e
b e t w e e n N o r t h e r n I r e l a n d a n d S o u t h Wales ( H i t c h e n s a n d O ' F a r r e l l , 1 9 8 7 )
a n d t h e M i d W e s t a n d S c o t l a n d ( O ' F a r r e l l a n d H i t c h e n s , 1 9 8 8 c ) are d r a w n
u p o n . P r i c e a n d e s p e c i a l l y q u a l i t y c o m p e t i t i v e n e s s are c r i t i c a l t o s e l l i n g o n
w i d e r B r i t i s h m a r k e t s . T a b l e 6 summarises t h e results; i t shows i n Part A price
T a b l e 6: Evaluation
of Price and Quality of Products Made by Firms in Northern
and the Mid West
Part A
Products
Evaluation
Product
Source
by Mainland
% Poor
Companies
Quality
%
Expensive
Number of
Evaluations
Engineering
NI
MW
82
40
67
65
21
59
Clothing
NI
MW
92
40
40
71
25
35
Part B
Evaluation
by Irish
Ireland
Companies
Engineering
NI
MW
46
30
56
71
16
23
Clothing
NI
MW
50
47
50*
—
19
18
• C o n f i n e d to 6 price quotations on locally sold products.
a n d q u a l i t y evaluations of N o r t h e r n I r i s h a n d M i d West p r o d u c t s m a d e b y
respectively
their W e l s h a n d S c o t t i s h c o u n t e r p a r t s . Part B is c o n f i n e d
to
evaluations b y firms i n the t w o parts o f I r e l a n d .
T h e n o r m a l p r o c e d u r e w h e n evaluating differences in the q u a l i t y a n d p r i c e
p e r f o r m a n c e o f m a t c h e d firms i n t w o regions w o u l d be to e m p l o y a sign test
( O ' F a r r e l l a n d H i t c h e n s , 1988b) w i t h the probabilities associated w i t h observed
c o u n t s d e t e r m i n e d b y reference to the b i n o m i a l d i s t r i b u t i o n . I t is n o t appro­
priate to a p p l y this test to the N o r t h e r n I r e l a n d M i d West c o m p a r i s o n since
the M i d West p r o d u c t s were not j u d g e d b y m a t c h e d firms in N o r t h e r n I r e l a n d
b u t b y larger c o m p e t i t i v e enterprises (see b e l o w ) . H o w e v e r , i n the N o r t h e r n
I r e l a n d / S o u t h Wales c o m p a r i s o n , H i t c h e n s a n d O ' F a r r e l l ( 1 9 8 8 ) s h o w e d that
there were significant differences at the P < 0.01 levels i n the q u a l i t y of b o t h
engineering a n d c l o t h i n g p r o d u c t s m a n u f a c t u r e d .
Price
and Quality
Evaluations
made
by British
Mainland
Producers
Part A o f the table shows that I r i s h suppliers o f engineering p r o d u c t s are
c o m p a r a t i v e l y expensive irrespective o f w h e t h e r they are s o u r c e d in the M i d
West or N o r t h e r n I r e l a n d as j u d g e d b y the q u o t a t i o n s m a d e o n their sample
p r o d u c t s b y m a t c h e d Welsh a n d S c o t t i s h engineering c o m p a n i e s . A b o u t t w o thirds of the prices a c t u a l l y charged b y the I r i s h c o m p a n i e s are above the
q u o t a t i o n s m a d e b y c o u n t e r p a r t M a i n l a n d c o m p a n i e s . A c u r r e n t exchange rate
of IRJE = £ 0 . 9 2 is used as a basis for c o m p a r i s o n although the p r i c e q u o t a t i o n s
are n o t p a r t i c u l a r l y sensitive to alternative rates ( O ' F a r r e l l a n d H i t c h e n s , 1988).
N o r t h e r n I r i s h c l o t h i n g was f o u n d to be c o m p a r a t i v e l y m o r e p r i c e c o m p e t i t i v e
w h e n j u d g e d b y W e l s h m a n u f a c t u r e r s w h i l e c l o t h i n g f r o m the R e p u b l i c is m o r e
expensive as j u d g e d b y m a t c h e d S c o t t i s h firms.
A similar exercise w a s c o n d u c t e d o n p r o d u c t q u a l i t y a n d Part A of the
table s h o w s that i n 4 0 per cent o f evaluations M i d West engineering a n d c l o t h ­
ing p r o d u c t s w e r e n o t w o r k e d o n to the same s t a n d a r d as their S c o t t i s h
c o u n t e r p a r t s a n d the p r o p r i e t o r o f the m a t c h e d m a i n l a n d c o m p a n y w o u l d
note a deficiency in the sample w h i c h w o u l d not be c o n s i d e r e d representative
of w o r k c a r r i e d o u t o n his shopfloor. N o r t h e r n I r i s h p r o d u c t s w e r e c r i t i c i s e d
for the same reason i n 8 2 per cent a n d 9 2 per cent of p r o d u c t evaluations in
the t w o industries ( b y the Welsh m a i n l a n d c o u n t e r p a r t s ) , i.e. double the p r o ­
p o r t i o n o f times o f those of their M i d West c o u n t e r p a r t s .
Price
and Quality
Evaluations
Made
by Firms
in N. Ireland
and the Mid
West
T h e i n d i c a t i o n s o f a l a c k o f p r i c e a n d q u a l i t y competitiveness of p r o d u c t s
m a n u f a c t u r e d b y sample firms in N o r t h e r n I r e l a n d a n d the M i d West as j u d g e d
b y B r i t i s h m a i n l a n d s m a l l firm o w n e r s raises the q u e s t i o n of the value w h i c h
c a n be p l a c e d o n the j u d g e m e n t of p r o p r i e t o r s in the t w o parts o f I r e l a n d ,
especially w i t h regard to q u a l i t y competitiveness (the i m p o r t a n c e o f w h i c h
has b e e n stressed i n e a r l i e r p a p e r s ( H i t c h e n s a n d O ' F a r r e l l , 1 9 8 7 ; O ' F a r r e l l a n d
H i t c h e n s , 1 9 8 8 c ) ) . Clearly the q u a l i t y judgements especially o f the N o r t h e r n
I r i s h c o m p a n i e s s a m p l e d are l i k e l y t o b e e s p e c i a l l y u n r e l i a b l e g i v e n o u r f i n d ­
ings
3
a n d a d e c i s i o n was t a k e n t o have M i d W e s t p r o d u c t s assessed b y larger
fully competitive firms i n N o r t h e r n Ireland producing exclusively for m u l t i r e g i o n a l m a r k e t s . T a b l e 6 b s h o w s t h a t t h e p r i c e a n d q u a l i t y assessments m a d e
b y t h o s e f i r m s are c o n s i s t e n t w i t h t h e e v a l u a t i o n s m a d e b y B r i t i s h m a i n l a n d
companies, n a m e l y that 30 per cent a n d 47 per cent o f engineering a n d c l o t h ­
i n g p r o d u c t s were j u d g e d o f p o o r q u a l i t y and 7 1 per cent o f engineering pro­
ducts were u n c o m p e t i t i v e o n price. Businessmen were reluctant t o quote a
price, i n either p a r t o f I r e l a n d , o n c l o t h i n g p r o d u c t s especially where there
w e r e d i f f e r e n c e s i n f a b r i c , s t y l e o r f i t e v e n t h o u g h t h e p r o d u c t i t s e l f , e.g.,
y o u t h s ' trousers was w e l l m a t c h e d .
M i d West s a m p l e c o m p a n i e s w e r e s h o w n N o r t h e r n I r i s h p r o d u c t s a n d t h e i r
assessments m u s t b e i n t e r p r e t e d i n t h e l i g h t o f t h e j u d g e m e n t s m a d e o f t h e i r
o w n p r o d u c t s s h o w n i n P a r t A o f t h e t a b l e . H e n c e t h e q u a l i t y assessments o f
the N o r t h e r n I r i s h engineering a n d c l o t h i n g p r o d u c t s at 46 per cent a n d 5 0 per
c e n t , c o n s i d e r e d o f p o o r q u a l i t y , is b e l o w t h e p r o p o r t i o n c r i t i c i s e d b y B r i t i s h
m a i n l a n d p r o d u c e r s r e f l e c t i n g the fact t h a t 4 0 per cent o f M i d West p r o d u c t s
w e r e also c r i t i c i s e d b y B r i t i s h m a i n l a n d p r o d u c e r s . T h e p r i c e q u o t a t i o n s m a d e
o n N o r t h e r n Irish engineering p r o d u c t s indicated that 56 per cent were u n ­
c o m p e t i t i v e o n p r i c e w h i c h is c o n s i s t e n t w i t h n e i t h e r r e g i o n b e i n g c o m p e t i t i v e
w i t h i n the wider c o n t e x t o f the British mainland market.
W h a t was t h e n a t u r e o f t h e c r i t i c i s m s o n q u a l i t y ? I n m o s t cases t h e p r o b l e m
i n d i c a t e d w a s o n e o f p o o r w o r k m a n s h i p as a c o n s e q u e n c e o f a l a c k o f s k i l l o r
supervision a n d o f p o o r finish especially w i t h regard t o a t t e n t i o n t o d e t a i l . I n
the m a i n an e x a m i n a t i o n f o r f u n d a m e n t a l p r o b l e m s , f o r e x a m p l e b y measure­
ment
o f engineering pieces, c o u l d n o t be made w i t h o u t reference t o
the
o r i g i n a l d e t a i l e d d r a w i n g s , n o r w e r e c l o t h i n g p r o d u c t s m e a s u r e d f o r size o r
" f i t " , or electronic components tested. Products were visually inspected.
Premises,
Machinery
and Labour
Force
Comparisons
W e e x a m i n e d t h e c o m p a r a t i v e c o s t a n d q u a l i t y o f t h e f i r m ' s m a i n assets:
i t s b u i l d i n g s , m a c h i n e r y a n d l a b o u r . T h e s e are c o n s i d e r e d b e l o w .
Buildings
and
Machinery:
Several f e a t u r e s
o f f a c t o r y premises were c o m ­
p a r e d . C o l u m n 1 o f T a b l e 7 s h o w s t h a t square f e e t o f space a v a i l a b l e t o e a c h
p e r s o n e m p l o y e d i n t h e business w a s g r e a t e r i n N o r t h e r n I r e l a n d t h a n t h e M i d
W e s t , a n d e x c e p t i n t h e case o f t h e f u r n i t u r e s e c t o r large d i f f e r e n c e s w e r e
3. While the table focuses on judgements made by Welsh proprietors about Northern Ireland products
similar comments have been made by matched producers in East Anglia and Scotland.
T a b l e 7: Characteristics
of
NI/MW
Trade
Factory
Ratios
Space per Person Engaged
Engineering
Clothing
Furniture
Other
Premises
of:
Rent and* Rates per Square
1.44
1.80
1.07
1.86
NI
36
S a m p l e size
Foot
0.37
0.30
**
0.37
MW
27
NI
16
MW
20
*IR£=£0.92.
**A11 o w n e d i n M i d West.
r e c o r d e d . S e v e n t y - s i x p e r c e n t o f t h i s s a m p l e o f M i d W e s t f a c t o r i e s was r e n t e d
c o m p a r e d w i t h 55 per cent i n N o r t h e r n I r e l a n d . T w o - f i f t h s o f N o r t h e r n Irish
p r o p r i e t o r s c o m p l a i n e d a b o u t t h e c o n d i t i o n o f t h e i r premises especially w i t h
r e g a r d t o t h e i r age, r e p a i r a n d m a i n t e n a n c e
compared w i t h m a n y fewer —
15 p e r c e n t i n t h e M i d W e s t s a m p l e .
C o l u m n 2 o f t h e table indicates t h a t r e n t a n d rates p a i d i n N o r t h e r n I r e l a n d
are c o n s i d e r a b l y l o w e r p e r s q u a r e f o o t o f space t h a n i n t h e M i d W e s t (a r e s u l t
w h i c h is i n s e n s i t i v e t o a l t e r n a t i v e e x c h a n g e r a t e s ) , a n d w h i l e N o r t h e r n I r i s h
companies w e r e at a cost advantage i n this respect relative t o m a i n l a n d c o m ­
panies M i d West r e n t a n d rates were f o u n d t o be n o greater t h a n those p a i d
in GB.
Machinery
We
and
Equipment
a s k e d p r o p r i e t o r s t o s t a t e t h e age o f t h e i r m a c h i n e r y a n d t o i t e m i s e
t h a t e q u i p m e n t w h i c h was t e c h n o l o g i c a l l y m o s t u p t o d a t e . T a b l e 8 m a k e s a
c o m p a r i s o n o f t h e v i n t a g e s o f m a c h i n e r y a t t h e businesses i n e a c h I r i s h r e g i o n .
It
shows t h a t i n t h e engineering, c l o t h i n g a n d miscellaneous trades the
p r o p o r t i o n o f m a c h i n e s u n d e r 5 y e a r s o l d is s i m i l a r i n t h e t w o r e g i o n s , w h i l e
i n the f u r n i t u r e trade M i d West firms h a d c o m p a r a t i v e l y y o u n g e r machines
(and
w i t h t h e e x c e p t i o n o f t h e c l o t h i n g t r a d e s M i d W e s t c o m p a n i e s also h a v e
m o r e m a c h i n e r y w h i c h is u n d e r 1 0 years o l d ) .
Comparisons
o f technologically up
to date
(computerised)
equipment
s h o w e d m o r e C N C s i n e n g i n e e r i n g i n N o r t h e r n I r e l a n d : o n average o n e s u c h
m a c h i n e was a v a i l a b l e t o 4 . 5 p e r s o n s engaged i n t h e business c o m p a r e d w i t h
o n e f o r e v e r y 13 p e r s o n s at t h e m a t c h e d M i d W e s t e n g i n e e r i n g p l a n t s . I n
c l o t h i n g t o o U l s t e r f i r m s w e r e f o u n d t o have m o r e c o m p u t e r i s e d m a c h i n e r y
t h a n t h e i r M i d West c o u n t e r p a r t s .
THE
ECONOMIC A N D SOCIAL
T a b l e 8: Vintage of
Northern
Under 5
Years
Engineering
Clothing
Furniture
Miscellaneous
N u m b e r of firms w i t h machines
under stated age
Sample size
REVIEW
Machinery
Ireland
(per cent of
Under 10
Years
Mid West
machines)
Under 5
Years
Under 10
Years
36
61
38
70
48
94
55
70
38
56
68
87
66
64
80
100
30
NI: 34
32
MW: 2 6
21
23
A c o m p a r i s o n was m a d e o f t h e a d d i t i o n a l e m p l o y m e n t e n j o y e d b y M i d
West a n d N o r t h e r n I r e l a n d engineering c o m p a n i e s i n v e s t i n g i n n e w techniques
( e s s e n t i a l l y C N C ) ; i t i n d i c a t e d a n e m p l o y m e n t g r o w t h o f 6 6 p e r c e n t at t h e
M i d West f i r m s c o m p a r e d w i t h m i n u s 8 p e r c e n t at c o m p a r a b l e N o r t h e r n I r i s h
engineering companies.
T h e a v a i l a b i l i t y o f g e n e r o u s levels o f g r a n t a i d w a s t h e m a i n e x p l a n a t i o n
for
t h e m o d e r n e q u i p m e n t f o u n d at b o t h t h e M i d W e s t a n d N o r t h e r n I r i s h
companies.
Three-quarters
o f c o m p a n i e s i n the M i d West received c a p i t a l
grants o n n e w i n v e s t m e n t o f b e t w e e n 45 a n d 60 per cent, a n d w h i l e all b u t
12 p e r c e n t o f c o m p a n i e s i n t h e N o r t h e r n I r i s h s a m p l e r e c e i v e d c a p i t a l g r a n t s ,
5 4 p e r c e n t o f t h e m r e c e i v e d t h e m o r e g e n e r o u s S e l e c t i v e F i n a n c i a l Assis­
tance. H a l f t h e M i d West c o m p a n i e s w o u l d n o t have p u r c h a s e d some o f t h a t
m a c h i n e r y i n t h e absence o f grants a n d i n N o r t h e r n I r e l a n d t o o m a n y p u r ­
chases w o u l d n o t have b e e n m a d e , w i t h o u t t h e assistance, b u t i n N o r t h e r n
Ireland
alone
n o a s s o c i a t i o n w a s f o u n d b e t w e e n business g r o w t h a n d
the
acquisition o f modern equipment.
Labour
We c o m p a r e d t h e c o s t o f l a b o u r , p r o d u c t i v i t y a n d a n u m b e r o f q u a l i t a t i v e
characteristics o f the l a b o u r force e m p l o y e d at the companies
i n the t w o
r e g i o n s . T h e r e s u l t s o f t h i s c o m p a r i s o n h e l p i d e n t i f y reasons f o r t h e l a c k o f
competitiveness o f p r o d u c t s and the better g r o w t h performance o f M i d West
companies relative to their N o r t h e r n Ireland counterparts.
Pay,
Skills
and
Training
T a b l e 9 s h o w s t h e r a t i o o f wages p a i d i n e a c h b r o a d s e c t o r b a s e d o n i d e n ­
t i c a l grades o f l a b o u r e m p l o y e d at t h e m a t c h e d p l a n t s : s k i l l e d t o o l m a k e r s ,
machinists, semi-skilled persons, etc. T h e table shows t h a t i n the engineering
COMPARISON OF SMALL MANUFACTURING COMPANIES
T a b l e 9: Comparative
Ratio
Wages Paid by
Sector
MW/NI
1.39
Engineering
Clothing
1.15
Furniture
0.96
Other
1.00-1.20
S a m p l e size
N I : 32
Note:
191
MW:24
A n exchange rate of I R £ 1 = £ 0 . 9 2 is t a k e n . Ulster
wages have been raised b y official indices to align times
of i n t e r v i e w .
a n d c l o t h i n g s e c t o r s wages p a i d are h i g h e r i n t h e M i d W e s t w h i l e i n t h e f u r ­
n i t u r e a n d miscellaneous trades p a y ranged f r o m near e q u a l i t y w i t h N o r t h e r n
I r e l a n d t o 20 per cent above the N o r t h e r n Irish rate.
T h e p r o p o r t i o n o f persons designated skilled differed slightly b e t w e e n the
m a t c h e d pairs. Some
12 p e r c e n t o f t h e l a b o u r f o r c e w e r e t r a i n e e s a t M i d
West factories c o m p a r e d w i t h 10 per cent i n N o r t h e r n I r e l a n d . I n b o t h regions
the
availability
incidentally
o f t r a i n i n g grants
is a n i m p o r t a n t i n c e n t i v e t o t r a i n
and
p r o v i d e a source o f cheaper l a b o u r . Seventy per cent o f M i d
West companies w e r e i n receipt o f t r a i n i n g grants at t h e t i m e o f t h e i n t e r v i e w .
Recruitment,
Turnover
and
Absenteeism
D i f f i c u l t i e s i n r e c r u i t i n g suitable persons w e r e m e n t i o n e d i n b o t h samples,
w i t h "willingness t o w o r k " a p r o b l e m w h i c h particularly affected N o r t h e r n
I r e l a n d companies. Specific m e n t i o n o f a d e f i c i e n c y i n the u n d e r l y i n g educa­
t i o n a n d t r a i n i n g o f recruits was m a d e b y a n u m b e r o f M i d West engineering
companies, especially w i t h regard t o c o m p u t e r t r a i n i n g ( f o r C N C ) . T h e q u a l i t y
o f t e a c h i n g o n A n C O courses w a s q u e s t i o n e d w h i l e i n N o r t h e r n I r e l a n d t o o ,
c r i t i c i s m was l e v e l l e d at t h e q u a l i t y o f i n s t r u c t i o n c a r r i e d o u t a t G o v e r n m e n t
T r a i n i n g Centres.
S k i l l s h o r t a g e s w e r e f o u n d , o n average, t o b e less a c u t e i n t h e M i d W e s t
where 14 per cent o f companies r e p o r t e d a p r o b l e m c o m p a r e d w i t h 24 per
cent o f their N o r t h e r n Irish counterparts. There were sectoral differences i n
the numbers r e p o r t i n g difficulties: i n N o r t h e r n Ireland engineering companies
were p a r t i c u l a r l y affected — reflecting differences i n the numbers o f appren­
tices b e i n g t r a i n e d — w h i l e i n t h e M i d W e s t a m o r e a c u t e s h o r t a g e was f o u n d
at c l o t h i n g f a c t o r i e s , a c o n s e q u e n c e o f t h e i r faster g r o w t h . I n a d d i t i o n , a
n u m b e r o f firms i n b o t h regions r e p o r t e d difficulties i n a t t r a c t i n g suitably
qualified
management.
L a b o u r t u r n o v e r w a s h i g h e r , a v e r a g i n g 16 p e r c e n t a t t h e N o r t h e r n I r i s h
companies
a n d j u s t h a l f t h a t , 8 p e r c e n t , i n t h e M i d W e s t . T w i c e as m a n y
N o r t h e r n I r i s h c o m p a n i e s ( 2 6 p e r c e n t ) q u o t e d l a b o u r t u r n o v e r rates i n excess
o f 20 per cent w h i l e m o r e t h a n two-fifths r e p o r t e d an annual rate exceeding
10 p e r c e n t , c o m p a r e d w i t h 2 7 p e r c e n t o f t h e i r M i d W e s t c o u n t e r p a r t s . H i g h
t u r n o v e r rates were c o n c e n t r a t e d i n t h e c l o t h i n g a n d f u r n i t u r e trades.
A b s e n t e e i s m was a p r o b l e m f a c i n g a t e n t h o f N o r t h e r n I r i s h ( m a i n l y c l o t h ­
i n g ) f a c t o r i e s a n d i n t h o s e cases i t w a s m e a s u r e d t o e x c e e d 1 0 p e r c e n t o f
a v a i l a b l e d a y s l o s t . N o p r o b l e m s o f excessive a b s e n t e e i s m w e r e r e p o r t e d b y
M i d West p r o p r i e t o r s w h e r e 4 4 per cent o f companies c o m p a r e d w i t h 52 per
cent i n N o r t h e r n I r e l a n d c l a i m e d t h a t n u m b e r s o f days lost were either negli­
gible o r " u n m e a s u r a b l e " . N o M i d West p r o p r i e t o r c o m p l a i n e d o f p o o r t i m e ­
keeping c o m p a r e d w i t h three owners i n the N o r t h e r n Irish sample.
Labour
Force
Difficulties
Problems arising f r o m an unsatisfactory level o f skill e m p l o y e d o n the shop
floor were identified b y about a quarter o f N o r t h e r n Ireland proprietors and
w e r e e v i d e n c e d b y h i g h scrap r a t e s , i n a b i l i t y o f e m p l o y e e s t o " d o t h e j o b " a n d
"carelessness". T h o s e p r o b l e m s w e r e e s p e c i a l l y c o n c e n t r a t e d i n t h e engineer­
ing sector. O n l y one p r e c i s i o n engineer i n the M i d West r e p o r t e d l o w standards
o f skilled personnel and a lack o f c o m p u t e r expertise f o r C N C b u t the reports
made o n M i d West p r o d u c t s b y B r i t i s h manufacturers (listed above) i m p l y a
s k i l l , t r a i n i n g o r s u p e r v i s o r y d e f i c i e n c y i n t h e M i d W e s t ( a l b e i t n o t as great as
t h a t suggested b y t h e N o r t h e r n I r e l a n d p r o d u c t s ) . I t was also i m p l i e d b y t h e
w a y M i d West managers were u n c r i t i c a l o f p r o d u c t s s h o w n t h e m w h i c h w e r e
t h o u g h t defective b y their British counterparts.
L a b o u r force d i f f i c u l t i e s arising f r o m a p o o r a t t i t u d e t o t h e j o b was recog­
nised b y a p p r o x i m a t e l y another quarter o f N o r t h e r n Irish companies instanced
b y a " l a c k o f interest i n the w o r k " and o n subsequent disciplinary a c t i o n
"problems w i t h industrial tribunals". Those difficulties were concentrated i n
t h e f u r n i t u r e a n d c l o t h i n g t r a d e s , a n d a m o n g s e m i - s k i l l e d p e r s o n s at ' m i s c e l ­
laneous' engineering companies. Such a t t i t u d i n a l difficulties were reported
b y o n l y 7 per cent o f p r o p r i e t o r s o f firms i n the M i d West sample. Managers
there were a g o o d deal m o r e positive t h a n their N o r t h e r n Irish counterparts
a b o u t the attitudes and abilities o f their labour force. Where there were diffi­
culties they were localised.
Productivity
T h e f e w e r c o m p l a i n t s m a d e b y M i d W e s t p r o p r i e t o r s d i d n o t signal h i g h e r
l a b o u r p r o d u c t i v i t y ( o r a n absence, j u s t a d i m i n u t i o n , o f q u a l i t y p r o b l e m s ) .
W e c o l l e c t e d d a t a o n a n n u a l sales a n d m a t e r i a l costs w h i c h i n p r i n c i p l e e n a b l e
a p r o d u c t i v i t y c o m p a r i s o n t o be made b e t w e e n companies i n the t w o regions.
Using data o f this k i n d , the correct procedure t o m a k e a p r o d u c t i v i t y estimate
is t o s t a n d a r d i s e
the financial measure o f o u t p u t between the t w o regions
T a b l e 10: Ratios
of Mid West:Northern Ireland
by Sector
Comparative
Labour
Productivities
Sample
MW/NI
Size
MW
NI
Engineering
0.95-1.14
18
11
Clothing
0.86-0.99
10
9
using
"average
value r a t i o s " ( S m i t h , H i t c h e n s , Davies, 1 9 8 2 ; S m i t h
H i t c h e n s , 1 9 8 5 ) . S u c h r a t i o s have b e e n d e r i v e d f r o m
and
the price quotations
m a d e o n p r o d u c t s m a n u f a c t u r e d i n t h e t w o r e g i o n s . T a b l e 10 s h o w s t h e r a n g e
o f p r o d u c t i v i t y estimates w h i c h resulted.
The
estimates
indicate unambiguously lower productivity
at M i d W e s t
c l o t h i n g c o m p a n i e s w h i l e t h e r a n g e s h o w n f o r e n g i n e e r i n g suggests a n u n c e r ­
t a i n t y as t o w h e r e t h e p r o d u c t i v i t y s u p e r i o r i t y l i e s . T h e r e is s o m e i n d i r e c t
e v i d e n c e i n s u p p o r t o f t h e g e n e r a l t h r u s t o f these f i n d i n g s . I n c l o t h i n g o n l y
4 2 per cent o f companies visited i n the M i d West e m p l o y e d a piece w o r k incen­
tive scheme c o m p a r e d w i t h
70 per cent o f their counterparts i n N o r t h e r n
I r e l a n d . S u c h schemes are k n o w n t o d r a m a t i c a l l y raise o u t p u t . I n e n g i n e e r i n g
92 per cent o f companies i n the M i d West were f o u n d t o w o r k o v e r t i m e c o m ­
p a r e d w i t h 55 per cent o f t h e i r N o r t h e r n I r i s h c o u n t e r p a r t s . O n e N o r t h e r n
Irish firm
said " p r o d u c t i o n c o n t r o l depends u p o n h o w b u s y w e a r e "
and
a l t h o u g h t h a t is suggestive o f a s o u r c e o f b e t t e r p r o d u c t i v i t y t h e m e a s u r e
s h o u l d be c o r r e c t e d f o r t h e longer h o u r s w o r k e d i n t h e M i d West. O p e r a t i n g
i n t h e o p p o s i t e d i r e c t i o n w e r e a n u m b e r o f adverse p r o d u c t i v i t y
comments
m a d e b y L i m e r i c k engineers regarding t h e need t o " p u s h " apprentices ( o f
w h i c h t h e y h a d m a n y ) a l o n g ; at one f a c t o r y a shortage o f h a n d t o o l s , especially
spanners, " w e o n l y have t w o f o r n i n e m a c h i n e s " , was said t o waste t i m e .
F i n a l l y , 4 4 per cent o f N o r t h e r n I r e l a n d managers emphasised the need t o
manage o u t p u t c o m p a r e d w i t h j u s t u n d e r a t h i r d o f t h e i r M i d West c o u n t e r ­
parts. T h a t difference p a r t l y reflects contrasts
i n labour force
difficulties,
n o t e d a b o v e b u t also t h e m e a s u r e d p r o d u c t i v i t y gaps.
Performance
Contrasts
and Management
Training
and
Nationality
i n w o r k experience and qualifications o f management
m a y go
some w a y t o w a r d s e x p l a i n i n g the r e p o r t e d differences i n p r o d u c t q u a l i t y .
Three-quarters
o f t h e p r o p r i e t o r s o f M i d West engineering companies
were
t r a i n e d e i t h e r b y m u l t i n a t i o n a l s ( a h a l f ) o r i n B r i t a i n o r t h e U S A (a q u a r t e r )
c o m p a r e d w i t h j u s t a t h i r d o f U l s t e r p r o p r i e t o r s . A r g u a b l y an i n t e r n a t i o n a l
o r i n t e r - r e g i o n a l t r a i n i n g e x p e r i e n c e is o f a h i g h e r s t a n d a r d o r w i d e r b r e a d t h .
Significantly
fewer criticisms were made o f products manufactured b y M i d
W e s t f i r m s o w n e d , m a n a g e d o r s u p e r v i s e d b y i n d i v i d u a l s t r a i n e d at a n M N E
or w i t h w o r k experience abroad (O'Farrell and Hitchens, 1988c).
I n t h e c l o t h i n g a n d f u r n i t u r e trades a b o u t three-quarters o f M i d West p r o ­
p r i e t o r s h a d r e c e i v e d d i r e c t t e c h n i c a l t r a i n i n g i n t h e i r i n d u s t r y — as designers,
tailors, cutters, j o i n e r s , etc., c o m p a r e d w i t h j u s t 43 per cent o f t h e i r N o r t h e r n
Irish counterparts. (Others had changed their trade or o c c u p a t i o n f r o m engin­
eering t o f u r n i t u r e m a k i n g , f a r m i n g t o c l o t h i n g , etc.)
F i n a l l y , j u s t over 2 0 per cent o f firms i n the M i d West sample w e r e r u n
successfully b y C o n t i n e n t a l E u r o p e a n owners, c o m p a r e d w i t h fewer — half
t h a t n u m b e r i n t h e N o r t h e r n I r i s h s a m p l e , a n d i t is i n t e r e s t i n g t o n o t e t h a t
those M i d West owners e x p a n d e d t h e i r e m p l o y m e n t ( b e t w e e n 1 9 8 2 a n d 1 9 8 7 )
b y 4 0 p e r c e n t m o r e t h a n t h e average f o r t h e s a m p l e as a w h o l e .
Reactions
to Development
Agencies
Proprietors were asked h o w h e l p f u l t h e y t h o u g h t the local d e v e l o p m e n t
a g e n c y was i n assisting t h e i r business d e v e l o p m e n t . F o r t y - f i v e p e r c e n t o f
f i r m s s a m p l e d i n N o r t h e r n I r e l a n d w e r e s a t i s f i e d i n t h e i r dealings w i t h t h e
L o c a l Enterprise D e v e l o p m e n t U n i t ( L E D U ) c o m p a r e d w i t h 78 per cent w i t h
Shannon D e v e l o p m e n t ( S F A D C o ) i n the M i d West: those p r o p o r t i o n s b r o a d l y
r e f l e c t t h e n u m b e r s s e c u r i n g g r a n t a i d f r o m t h e agencies i n t h e t w o r e g i o n s .
S o m e d i s c o n t e n t was e x p r e s s e d a b o u t " p a p e r w o r k , r e d t a p e a n d b u r e a u ­
c r a c y " associated w i t h o b t a i n i n g those grants. I n N o r t h e r n I r e l a n d , there was
a f e e l i n g o f a r b i t r a r i n e s s i n d e c i d i n g w h o q u a l i f i e d : " y o u have t o be a n E n g l i s h ­
m a n t o t e l l t h e m a p a c k o f l i e s " ; b u t i t w a s o n t h e m a t t e r o f ( d i r e c t ) business
a d v i c e a n d s u p p o r t t h a t a m u c h s h a r p e r c o n t r a s t e m e r g e d : " L E D U is p o o r o n
a d v i c e f o r s m a l l f i r m s " , S h a n n o n D e v e l o p m e n t w e r e v a r i o u s l y d e s c r i b e d as
" e x p e r i e n c e d p e o p l e " ; " n o t h i n g b u t praise f o r S h a n n o n " . H a l f t h e M i d W e s t
sample
had
attended
business courses r u n b y S h a n n o n D e v e l o p m e n t t o o .
W h i l e d i s c o n t e n t w i t h agencies is n o t u n u s u a l i n t h e U n i t e d K i n g d o m , t h e
interviewers were impressed b y the need for i m m e d i a t e advice and s u p p o r t
e x p r e s s e d b y m a n y b u s i n e s s m e n a n d t h e f a v o u r a b l e i m a g e t h a t S F A D C o has
developed i n this regard.
P r o p r i e t o r s w e r e also a s k e d t o r a t e t h e business a d v i c e r e c e i v e d f r o m b a n k
managers a n d accountants.
Three-quarters
o f Northern Irish
businessmen
f o u n d t h e i r b a n k m a n a g e r s h e l p f u l w h i l e o n l y a h a l f o f t h e i r M i d West c o u n t e r ­
p a r t s d i d so. A s i m i l a r p r o p o r t i o n , a b o u t s e v e n - t e n t h s w e r e s a t i s f i e d w i t h t h e
a d v i c e r e c e i v e d f r o m t h e i r a c c o u n t a n t s . T a k i n g t h e t h r e e sources o f a d v i c e
together small companies i n t h e M i d West o f I r e l a n d b e n e f i t e d m o r e t h a n d i d
their N o r t h e r n Ireland counterparts.
V
The main purpose
SUMMARY A N D DISCUSSION
o f t h e p a p e r has b e e n t o c o m p a r e t h e
performance,
competitiveness, a n d characteristics o f a sample o f small m a n u f a c t u r i n g c o m ­
panies l o c a t e d i n N o r t h e r n I r e l a n d a n d t h e M i d West o f I r e l a n d . T h e paper
makes direct comparisons between 27 m a t c h e d industrial activities involving i n
t o t a l 63 small firms m a n u f a c t u r i n g m a i n l y engineering, c l o t h i n g , k n i t w e a r
and f u r n i t u r e p r o d u c t s . T h e sample
size is s m a l l b u t t h e c o n c l u s i o n s are sug­
gestive o f areas f o r f u r t h e r f r u i t f u l i n v e s t i g a t i o n . T h e s t u d y f o r m s p a r t o f a
series o f c o m p a r i s o n s o f t h e p e r f o r m a n c e o f s m a l l f i r m s i n d i f f e r e n t r e g i o n s
o f B r i t a i n a n d I r e l a n d a n d seeks t o i d e n t i f y g r o w t h c o n s t r a i n t s w i t h a v i e w t o
m a k i n g p o l i c y r e c o m m e n d a t i o n s w h i c h c a n be a d o p t e d b y t h e r e l e v a n t d e v e l o p ­
m e n t agencies.
S p e c i a l i n t e r e s t a t t a c h e s t o t h e c o m p a r i s o n s b e t w e e n these t w o r e g i o n s
b e c a u s e , a l t h o u g h p o l i t i c a l l y a n d e c o n o m i c a l l y s e p a r a t e , t h e y have i n c o m m o n
g e n e r o u s schemes t o g r a n t a i d s m a l l c o m p a n i e s . B o t h share a s i m i l a r r e m o t e ­
ness f r o m m a j o r U K m a r k e t s t o o .
I n this s u m m a r y we contrast the findings emerging f r o m this paper w i t h
those o b t a i n e d f r o m t h e earlier comparisons o f t h e t w o parts o f I r e l a n d w i t h
B r i t i s h m a i n l a n d regions (Hitchens and O ' F a r r e l l , 1987; O ' F a r r e l l a n d H i t c h e n s ,
1 9 8 8 c ) . T h e p r i n c i p a l c o n s t r a i n t o n g r o w t h i s o l a t e d is o n e o f a l a c k o f c o m ­
p e t i t i v e n e s s o f b o t h M i d West a n d N o r t h e r n I r i s h p r o d u c t s . M i d W e s t p r o d u c t s
w e r e n o t , o n average, p r i c e c o m p e t i t i v e o n B r i t i s h m a r k e t s a n d m a n y N o r t h e r n
Irish products were uncompetitive t o o . T h e quality o f products manufactured
i n b o t h Irish regions varied m o r e t h a n d i d those o f companies sampled i n
e i t h e r Wales o r S c o t l a n d a n d m o s t f a u l t s w e r e f o u n d w i t h N o r t h e r n I r i s h
products.
L a c k o f p r o d u c t competitiveness d i d n o t affect the g r o w t h
performance
o f M i d West f i r m s ; t h e y were largely dependent u p o n the Irish m a r k e t for
sales a n d g r e w o n t h e c u s t o m o f local
m u l t i n a t i o n a l companies, and o n pro­
d u c t features p a r t i c u l a r t o the I r i s h m a r k e t i n c l u d i n g design, insignia, C M T ,
g o v e r n m e n t c o n t r a c t s , e t c . S o m e g r o w t h w a s a c h i e v e d w i t h sales t o t h e " s o f t "
e t h n i c I r i s h - A m e r i c a n m a r k e t , b u t l i t t l e was e x p o r t e d t o G B . N o r t h e r n I r i s h
companies
contracted
over t h e p e r i o d u n d e r c o n s i d e r a t i o n . T h e N o r t h e r n
Ireland market p r o v i d e d no g r o w t h opportunities and the lack o f quality
competitiveness made difficult the penetration o f British mainland markets
o n w h i c h N o r t h e r n Irish companies were markedly more dependent than their
M i d West c o u n t e r p a r t s . A b e t t e r p e n e t r a t i o n o f e x t r a regional m a r k e t s was
achieved b y m a t c h e d m a i n l a n d British companies t h a n b y either o f their Irish
counterparts.
A less c o m p e t i t i v e m a r k e t w i t h less d i s c r i m i n a t i n g b u y e r s , a n d p a r t i a l l y
p r o t e c t e d f r o m i m p o r t c o m p e t i t i o n , because o f size a n d r e m o t e n e s s ( t h o u g h
n o t transport costs), explains the c o n t i n u i n g survival o f m a n y firms. B o t h
M i d West a n d N o r t h e r n I r i s h companies recognised similar n u m b e r s o f d i r e c t
c o m p e t i t o r s b u t t h e y n u m b e r e d b e t w e e n o n e - t h i r d a n d one h a l f those recog­
nised b y counterpart m a i n l a n d British firms. Firms f r o m b o t h parts o f I r e l a n d
considered t h a t t h e m a i n r e q u i r e m e n t o f t h e m a r k e t place was f o r a q u a l i t y
p r o d u c t b u t j u s t 17 p e r c e n t o f f i r m s i n N o r t h e r n I r e l a n d a n d 2 5 p e r c e n t i n
t h e M i d W e s t c l a i m e d t o have a c o m p e t i t i v e a d v a n t a g e b a s e d o n q u a l i t y c o m ­
p a r e d w i t h three-fifths o f t h e i r Welsh a n d S c o t t i s h c o u n t e r p a r t s . Perhaps this
implies some r e c o g n i t i o n o n the part o f Irish p r o p r i e t o r s o f the lack o f q u a l i t y
performance
o f t h e i r p r o d u c t s , a n d w i t h less c o m p e t i t i o n less p r e s s u r e t o
achieve an i m p r o v e m e n t .
I n c o m p a r i s o n w i t h t h e M i d W e s t c o m p a n i e s i n N o r t h e r n I r e l a n d w e r e at
a c o m p e t i t i v e a d v a n t a g e as regards space a n d cheapness o f p r e m i s e s , w h i l e
c o m p a n i e s i n b o t h p a r t s o f I r e l a n d h a d m o r e space a n d p a i d n o m o r e f o r fac­
tories t h a ^ their counterparts
i n S c o t l a n d a n d Wales. T h e age o f m a c h i n e s
was f o u n d t o b e s i m i l a r i n t h e t w o p a r t s o f I r e l a n d a n d m o r e m o d e r n t h a n
t h a t f o u n d at s i m i l a r W e l s h a n d S c o t t i s h f i r m s . N o r t h e r n I r i s h f i r m s h a d m o r e
c o m p u t e r i s e d m a c h i n e r y t h a n their M i d West counterparts despite their p o o r e r
p e r f o r m a n c e . Large capital grants f r o m S F A D C o a n d L E D U encouraged
the
p u r c h a s e o f t h a t m a c h i n e r y , m u c h o f w h i c h w o u l d n o t have b e e n b o u g h t
w i t h o u t t h e i r assistance, a n d e q u i p m e n t w h i c h , j u d g e d b y t h a t f o u n d ade­
q u a t e at W e l s h a n d S c o t t i s h f a c t o r i e s , w a s n o t a l w a y s s t r i c t l y necessary f o r
the purposes o f t h e business.
P r o d u c t i v i t y i n N o r t h e r n I r e l a n d was superior t o t h a t i n the M i d West i n
the
c l o t h i n g sector, a n d similar or i n f e r i o r i n the engineering sector
measured
(the
d i f f e r e n c e w a s i n c o n c l u s i v e ) . C o m p a r a t i v e l y p o o r p r o d u c t i v i t y at
M i d W e s t a n d N o r t h e r n I r i s h c o m p a n i e s was n o t e d w h e n c o m p a r i s o n s
were
m a d e against m a i n l a n d B r i t i s h f i r m s . Wages p a i d a t c u r r e n t e x c h a n g e rates
i n d i c a t e d t h a t p a y a t M i d W e s t c o m p a n i e s w a s h i g h e r t h a n at N o r t h e r n I r i s h
companies
(and m a i n l a n d factories t o o ) . T h e p o o r p r o d u c t i v i t y c o m b i n e d
w i t h h i g h e r wages a t M i d W e s t c o m p a n i e s m u s t e x p l a i n m u c h o f t h e l a c k o f
price competitiveness o f products o n British markets, and poor p r o d u c t i v i t y
n o t e d a t N o r t h e r n I r e l a n d f i r m s has a s i m i l a r b u t lesser i m p a c t o n t h e c o m ­
petitiveness o f a n u m b e r o f N o r t h e r n Irish products.
M a n u f a c t u r i n g p r o b l e m s a r i s i n g f r o m a n u n s a t i s f a c t o r y level
o f skill and
poor w o r k attitudes identified more frequently by N o r t h e r n Irish proprietors
a n d evidenced b y a higher level o f labour t u r n o v e r and absenteeism f o u n d
there w o u l d go some w a y t o w a r d s e x p l a i n i n g t h e q u a l i t y d e f i c i e n c y o f m a n y
o f t h e p r o d u c t s sampled. T h e t y p e o f c r i t i c i s m made o f M i d West p r o d u c t s ,
t h o u g h f e w e r i n n u m b e r , suggested t h e same cause, a l t h o u g h i n t h a t s a m p l e a
d e f i c i e n c y i n t h e s k i l l s o f p r o p r i e t o r s w a s suggested t o o b y t h e i r i n a b i l i t y i n
a n u m b e r o f cases t o r e c o g n i s e f a u l t s i n d e f e c t i v e p r o d u c t s s h o w n t o t h e m .
Companies whose owners w e r e t r a i n e d at a m u l t i n a t i o n a l c o m p a n y o r a b r o a d
( o r w h o s e s u p e r v i s o r y s t a f f w e r e so t r a i n e d ) p r o d u c e d p r o d u c t s less f r e q u e n t l y
criticised o n p o i n t s o f f i n i s h , a n d there were m o r e such firms i n the M i d West
sample t h a n i n the N o r t h e r n Irish sample. I n a d d i t i o n , those companies w h i c h
were o w n e d b y foreign nationals p e r f o r m e d i n every w a y better t h a n d i d t h e i r
indigenous counterparts
i n b o t h r e g i o n a l samples ( O ' F a r r e l l a n d H i t c h e n s ,
1988c).
T h e s e f i n d i n g s suggest a n u m b e r o f p o l i c y r e c o m m e n d a t i o n s f o r c o n s i d e r a ­
t i o n b y t h e d e v e l o p m e n t agencies. M o s t i m p o r t a n t is t h e n e e d f o r a g r e a t e r
c o n c e n t r a t i o n o n t h e h u m a n assets o f t h e businesses. T h e a s s o c i a t i o n f o u n d
between better product quality and background training o f proprietors and
m a n a g e r s suggests t h a t a p o l i c y t o s e l e c t i v e l y b a c k s m a l l f i r m s s h o u l d p a y
close a t t e n t i o n t o t h e s k i l l s a n d a b i l i t i e s o f g r a n t a p p l i c a n t s . A p o l i c y d e s i g n e d
to selectively grant aid i m m i g r a n t foreign (and British) entrepreneurs
would
be beneficial t o e m p l o y m e n t c r e a t i o n i n b o t h Irish regions, t o o . Agencies
s h o u l d also r e c o m m e n d a n d c l o s e l y m o n i t o r a p p r o p r i a t e t r a i n i n g schemes t o
e n s u r e t h a t t h e r e q u i r e d s t a n d a r d s o f s k i l l are a c h i e v e d . M a n a g e m e n t t r a i n i n g
courses designed
to improve p r o d u c t i o n efficiency w o u l d contribute to a
n a r r o w i n g o f the p r o d u c t i v i t y gap.
A b e t t e r m o n i t o r i n g o f p u r c h a s e s o f g r a n t a i d e d m a c h i n e r y is r e c o m m e n d e d
to
e n s u r e t h a t t h e e q u i p m e n t b o u g h t is a p p r o p r i a t e f o r t h e p u r p o s e s o f t h e
b u s i n e s s . A r a i s i n g o f t h e p r o p r i e t o r ' s awareness o f t h e h i g h e r q u a l i t y s t a n ­
d a r d s r e q u i r e d t o sell o n e x t e r n a l m a r k e t s is suggested, p e r h a p s l i n k e d w h e r e
a p p r o p r i a t e t o t h e i n t r o d u c t i o n o f q u a l i t y c o n t r o l s y s t e m s ( s u c h as B S 5 7 5 0 ) .
A n u m b e r o f factories visited i n the M i d West h a d a d o p t e d or w e r e b e g i n n i n g
to introduce the I S 3 0 0 system.
B u s i n e s s m e n i n N o r t h e r n I r e l a n d f e l t t h a t L E D U w e r e p a r t i c u l a r l y w e a k as
regards advice a n d t h a t t h e agency encouraged t h e m o n l y u p t o t h e p o i n t o f
m a k i n g a g r a n t o f f e r . A n a d v i s o r y service w o u l d h e l p t h o s e b u s i n e s s m e n
better
decisions
a n d b y s h o w i n g a c o n t i n u i n g interest encourage
make
them
to
t a k e t h e r i s k s necessary t o d e v e l o p t h o s e c o m p a n i e s .
REFERENCES
D A L Y , A . , D . M . W . N . H I T C H E N S , and K . W A G N E R , 1984. "Productivity, Machinery and
Skills i n a S a m p l e of B r i t i s h a n d G e r m a n M a t c h e d M a n u f a c t u r i n g Plants", National
Institute
Economic
Review.
D E L M O N T E , A . , a n d A . G I A N N O L A , 1 9 8 6 . " R e l e v a n c e a n d N a t u r e of S m a l l a n d M e d i u m
S i z e d F i r m s i n S o u t h e r n I t a l y " , i n D . K e e b l e a n d E . Wever (eds.), New Firms and
Development
in Europe, L o n d o n : C r o o m H e l m , p p . 2 7 5 - 2 9 8 .
Regional
F O T H E R G I L L , S . , M . K I T S O N , a n d S . M O N K , 1 9 8 2 . " T h e Profitability of M a n u f a c t u r i n g
I n d u s t r y i n the U K C o n u r b a t i o n s " , W o r k i n g Paper N o . 2 , I n d u s t r i a l L o c a t i o n R e s e a r c h
Project, D e p a r t m e n t of L a n d E c o n o m y , U n i v e r s i t y of Cambridge.
F L O R E N C E , P . S . , 1 9 5 3 . The Logic
C a r o l i n a Press.
of British
and American
Industry,
U n i v e r s i t y of N o r t h
H I T C H E N S , D . M . W . N . , a n d P . N . O ' F A R R E L L , 1 9 8 7 . " T h e Comparative Performance of
S m a l l M a n u f a c t u r i n g F i r m s in N o r t h e r n I r e l a n d and S o u t h E a s t E n g l a n d " ,
Studies,
Regional
21(b), pp. 543-553.
H I T C H E N S , D . M . W . N . , a n d P . N . O ' F A R R E L L , 1 9 8 8 . " T h e Comparative Performance of
S m a l l M a n u f a c t u r i n g C o m p a n i e s i n S o u t h Wales and N o r t h e r n I r e l a n d " , Omega 15.5
(forthcoming).
M A S O N , C M . , and R . T . H A R R I S O N ,
1 9 8 5 . " T h e G e o g r a p h y of S m a l l F i r m s i n the U K :
T o w a r d s a R e s e a r c h A g e n d a " , Progress
in Human
Geography,
9, pp. 1-37.
O A K E Y , R . P . , A . T . T H W A I T E S , and P . A . N A S H , 1 9 8 2 . " T e c h n o l o g i c a l Change and
R e g i o n a l D e v e l o p m e n t : S o m e E v i d e n c e on R e g i o n a l V a r i a t i o n s i n P r o d u c t a n d Process
I n n o v a t i o n " , Environment
and Planning A, 14, p p . 1 0 7 3 - 1 0 8 6 .
O ' F A R R E L L , P . N . , and D . M . W . N . H I T C H E N S , 1 9 8 7 . " A P r o d u c t i o n O r i e n t e d E x p l a n a ­
t i o n of S m a l l F i r m G r o w t h : T o w a r d s a C o n c e p t u a l a n d P o l i c y F r a m e w o r k " , Heriot
Watt
University.
O ' F A R R E L L , P.N., and D . M . W . N . H I T C H E N S ,
F i r m G r o w t h : A C r i t i c a l R e v i e w " , Environment
1 9 8 8 a . "Alternative T h e o r i e s of S m a l l
and Planning A (forthcoming).
O ' F A R R E L L , P . N . , a n d D . M . W . N . H I T C H E N S , 1 9 8 8 b . " I n t e r F i r m C o m p a r i s o n s in I n ­
dustrial R e s e a r c h : T h e U t i l i t y of a Matched-Pair Design", Tijdfchrift
Voor
Economiche
En Sociale Georafie
(forthcoming).
O ' F A R R E L L , P . N . , and D . M . W . N . H I T C H E N S , 1 9 8 8 c . " T h e Relative Competitiveness
and Performance of S m a l l Manufacturing F i r m s in S c o t l a n d a n d the M i d West of Ire­
land: A n A n a l y s i s of M a t c h e d P a i r s " , Regional Studies
(forthcoming).
P E C K , F . W . , 1 9 8 5 . " T h e Use of Matched-Pairs R e s e a r c h Design in I n d u s t r i a l S u r v e y " ,
Environment
and Planning A, 17, pp. 9 8 1 - 9 8 9 .
S M I T H , A . D . , D . M . W . N . H I T C H E N S , and S.W. D A V I E S , 1 9 8 2 . International
Productivity,
C a m b r i d g e University Press.
S M I T H , A . D . , a n d D . M . W . N . H I T C H E N S , 1 9 8 5 . Productivity
Cambridge U n i v e r s i t y Press.
in the Distributive
Industrial
Trades,