Select Committee on Northern Ireland Affairs Fifth Report


III. THE INDUSTRIAL DEVELOPMENT BOARD AND ITS INWARD INVESTMENT ROLE

14. As Dr John Bradley pointed out in his evidence, inward investment lies at the very centre of efforts being made to transform, modernise and develop the Northern Ireland economy. Inward investment in principle provides an effective basis for a successful economic growth strategy as it can provide access to new technologies, upgrading of skills in the local labour force and entry to global market skills.[21] IDB's overall vision is to see a larger base of world class companies in the manufacturing and internationally tradeable services sectors. It consequently aims to attract, from within these sectors, new inward investment which will contribute to growth in sustainable employment and offer opportunities for enhanced job quality.[22]

15. IDB has a set of key objectives and targets for the three year period to March 2001.[23] These include:

  • promotion of 18,000 jobs by externally owned companies;
  • 75 per cent of all first time locational visits from inward investors to be Targeting Social Need (TSN) areas; and
  • 75 per cent of all first time inward investment projects to be located in or adjacent to TSN areas.

As at 31 March 1999, 4,162 jobs had been promoted by externally owned companies; 73 per cent of first time visits and 62 per cent of first time projects were to TSN areas.[24]

16. IDB seeks to promote Northern Ireland as a location for inward investment on the basis of a range of attributes principally relating to the calibre of the workforce, good industrial relations, low costs and favourable tax and grant régimes. The message is targeted on both a sectoral and a geographical basis. Sectors currently targeted are software, telecommunications, network services, health technologies, electronics and automotive components. Geographical targeting is currently aimed at Great Britain, parts of Europe, North America and the Asia Pacific region.[25]

17. IDB's inward investment activity is carried out by the Inward Investment Group. This has 105 staff, 40 of whom are deployed overseas while the remainder form a support group within headquarters.[26] This represents nearly 30 per cent of total IDB staff. Total staff and promotional activity costs for 1999-2000 were about £7.6 million.[27]

18. All inward investment projects IDB deals with receive offers of Selective Financial Assistance.[28] IDB told us that the level of financial assistance depends on the nature of the project. When it gave evidence in June 1999, IDB reported that, in the last 12 months, the projects being attracted had tended to require lower levels of capital investment than manufacturing industry. Although the actual contribution towards the project cost may be higher in some cases, the overall level of support per job promised is significantly less than in some previous years.[29] IDB counselled caution over placing too much weight on year-on-year comparisons "because the nature of the projects signed up in the last year by and large is quite different in character from the projects we have been signing up over previous years."[30]

19. Having persuaded a prospective inward investor to visit Northern Ireland, IDB has to seek to persuade the investor to decide to locate there. By definition, most new inward investment is in principle mobile. IDB estimated that, currently, something like one in ten visits is leading to a project.[31] IDB stated that research has shown that, measured in population terms, Northern Ireland has recently gained a disproportionate share of Foreign Direct Investment into the British Isles.[32]


21  Ev. p. 115. Back

22  Ev. p. 1. Back

23  Ev. p. 2. Back

24  IDB Annual Report, 1998-99, p. 37. Back

25  Ev. p. 3. Back

26  Q 8. Back

27  Ev. p. 6. Back

28  Q 11. Back

29  Q 12. Back

30  Q 13. Back

31  Q 14. Back

32  Ev. p. 4. Back


 
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