VIII. THE FUTURE
81. NIEC, despite some specific criticisms of current
policy, commented that "there are good indications that Northern
Ireland can attract investment in the new fast growing sectors
to alleviate the pains of readjustment" [arising from "major
and unavoidable structural upheaval"].[199]
It considers that financial inducements will remain necessary
given the international market for mobile investment and that
the importance of "fundamentals" such as skilled labour
and the local research and development infrastructure as incentives
to potential inward investors are increasing, particularly for
the fast-growing industries.[200]
82. There was general consensus that, in the longer
term, concentration on a higher skills and higher value added
basis was the only viable route for the Northern Ireland economy.
As Mr Mullan, of Investment Belfast, put it:[201]
"We cannot compete on
low wage low skills and I think the decline of our traditional
industries of textiles and shipbuilding is proof of that."
83. CBI was looking for a greater emphasis on sustainability
than has been the case in the past. It queried whether some of
the very large grants provided over the last 30 years have represented
value for money.[202]
In 1997, it set out a series of recommendations on future inward
investment policy and acknowledges that Government policy has,
in broad terms, shifted very much in the direction it recommended.
It also anticipates that there may be a need to change the structure
of financial incentive offered, to reflect the change in character
of inward investment.[203]
84. CBI envisages a change in the overall focus of
public expenditure towards investment in creating an attractive,
world class location based on the fundamental needs of business,
rather than on capital assistance or other forms of grant. It
identifies[204]
two key expectations of investors in an era of increasing globalisation
of markets and the rapid spread of new technology:
- low cost environment
- skilled labour pool and knowledge base.
Derry Investment Initiative saw the priorities as
skills, land and infrastructure, and wished to see more done to
create on integrated environment.[205]
CBI also suggested a review of fiscal and other incentives.[206]
85. Derry Investment Initiative also saw a need to
change IDB policy on land holdings. It believed that the bulk
of IDB's land bank in the north-west was not the sort of sites
sought by information and communications technology companies,
who "are image conscious, want visibility, security and good
access, and most of all, single use business environments."[207]
It wanted to see a restoration of IDB support to developers to
create such business parks. It also wanted to ensure that the
telecommunications infrastructure remained 'state of the art'
in its area.[208]
86. Derry Investment Initiative considered that policy
should place an emphasis on ensuring that local companies can
benefit and grow on the back of inward investment. It cited the
examples of Du Pont, where it claimed more people are now employed
in private sector spin-off companies than in Du Pont itself, and
of United Technologies, where skills left behind when the company
relocated outside the United Kingdom were taken up by another
company manufacturing a similar product.[209]
Both CORE and Into the West also drew attention to the potential
spin-off benefits from inward investors developing links with
indigenous companies.[210]
87. Several witnesses raised the question of whether
IDB should concentrate on industrial development, or on marketing.
Derry Investment Initiative saw the present situation as biased
towards the marketing side.[211]
Mr Doherty, of Into the West, commented[212]
that IDB have:
"... suffered from being
part of what is said essentially to be a British industrial investment
selling machine. I think that IDB needs to proactively strategise
their work as Northern Ireland, for Northern Ireland reasons,
and not carry the image of a wing of the Northern Ireland Civil
Service. I think that the investment agencies down south have
long since shed that image. They may still very well be civil
servants, I do not know, but the point is that they are not perceived
as such and, therefore, have more commercial rapport at the international
marketplace."
88. John Simpson considered that the IDB "has
too narrow a remit and is too oriented to deliver a set of functions."[213]
He sought a greater emphasis on developing skills, which would
then be available to all employers.[214]
He argued[215]
for a more proactive role on the part of the IDB, and for a greater
range of functions to be brought within its purview, in effect
creating a 'one stop shop' for potential inward investors.
89. We have already mentioned[216]
the suggestion that IDB is not geared up to respond to the smaller
potential inward investor. Mr Doherty, of Into the West, commented:[217]
"I can see a gap in
the vertical operation of IDB, when they tend to go for the big
fish and leave some inward investment opportunities that may not
make the headlines in terms of job creation of 25 or 30 or 40,
but they are very valuable in polarised and ostracised communities
in Northern Ireland which are at rock bottom. I would like to
see them focusing more at the bottom end of their market in volume
terms."
90. NIEC took the view that IDB cannot bear the sole
responsibility for attracting new inward investment and that its
role will become increasingly confined to marketing within the
context of an overall economic development strategy which focuses
on upgrading regional capabilities, particularly in the area of
education and training.[218]
This upgrading it considers to be a multi-departmental responsibility,
although NIEC envisages that IDB will have an important contribution
to make both in attracting knowledge intensive industries and
in maximising transfers of knowledge from them to the local economy.[219]
199 Ev. p. 31. Back
200 Ev.
p. 33. Back
201 Q
154. Back
202 Ev.
p. 51. See also Q 349. Back
203 Ev.
p. 51. Back
204 Ev.
p. 52. Back
205 Q
145. Back
206 Ev.
p 52. Back
207 Q
145. Back
208 Q
145. Back
209 Q
158. Back
210 Q
257. Back
211 Q
164. Back
212 Q
259. Back
213 Q
187. Back
214 Q
195. Back
215 Q
186-188. Back
216 See
paragraphs 26 and 29 to 30. Back
217 Q
259. Back
218 Ev.
p. 33. Back
219 Ev.
p. 34. Back
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