Kieran Donoghue, CEO
How can we grow Northern Ireland’s economy in a volatile trade world?
This article was originally published in the Belfast Telegraph.
As the economic development agency in Northern Ireland (NI), Invest NI is proactively working with businesses across NI to support them to scale, innovate, export and become profitable. We are also promoting entrepreneurship and assisting more people to establish new start-up businesses.
The result of our work over many years in partnership with the Department for the Economy (DfE), our universities, local councils, chambers, industry bodies and many more organisations has been hugely positive. NI now has an established international reputation as home to leading companies in sectors such as advanced manufacturing and engineering, life and health sciences, technology, aerospace, defence and security, fintech, agri-food and the green economy.
Invest NI’s client portfolio comprises more than 1,400 companies employing over 130,000 people and generating annual sales of £28 billion and exports of £10 billion. Most of these firms are locally owned businesses, but the portfolio also includes several hundred foreign-owned Multinational Enterprises (MNEs) attracted by Northern Ireland’s skilled workforce, excellent universities, cost competitiveness and access to the UK, EU and global markets.
A volatile and uncertain world
As I write, the US administration has suddenly and unexpectedly introduced a 90 day pause on the application of tariffs that were first introduced on April 2nd. China has been excluded from the pause for retaliating against the original US tariffs. The US climb down has been undoubtedly triggered by evidence of increasing stress in financial markets. However, the pause will not eliminate the risk of recession and for many countries, businesses and the real economy, the psychological impact of the unprecedented change in the US approach to trade will persist and have long-term economic and political consequences. In this volatile, uncertain, complex and ambiguous environment, Invest NI has established a Trade Task Force to assess the impact of the various tariffs and any other modifications to trade arrangements so that we can support our clients to understand and mitigate the impact of any changes. Similarly, to ensure the continuing development of Northern Ireland’s economy in this volatile environment, we must focus on making the long-term investments that will increase the productive capacity and capabilities of the economy and especially in areas such as housing, water infrastructure, energy and skills.
A new strategy for Invest NI
Recently, Invest NI launched a new strategy entitled Our Future in Focus 2024-27. This sets out ambitious business development targets aligned with the Economy Minister’s economic vision and its emphasis on productivity growth, good jobs, regional balance and a low carbon economy. We have translated these policy goals into the following strategic priorities.
Boosting business investment
Investment by business will be key to delivering positive economic and social outcomes for NI. As a result, we have made new investment by existing clients and new inward investment a key priority in our strategy. In addition, the productivity gap between NI and the UK average presents a £7 billion growth opportunity for our economy. Therefore, improving our productivity levels will strengthen our export potential, create more high-quality jobs, and encourage sustainable growth. To close the productivity gap, we must incentivise businesses to invest in the drivers of productivity, such as innovation, skills, leadership, and technology including digitisation, automation and AI.
Accelerating innovation and skills
Northern Ireland has a rich history of innovation, and that spirit continues today in high-growth sectors such as aerospace, cybersecurity, advanced manufacturing, and life sciences. However, we need to invest in skills development to equip our people for the future. The rise of digitalisation and automation means some skills are no longer needed, while others, such as programming and digital literacy, are in high demand. Innovative businesses with skilled employees are more productive, encourage business growth, and can future proof our industries while ensuring we stay competitive in international markets.
Driving global ambition
We want to position Northern Ireland as a leader among the world’s Small Advanced Economies. To do this, we need to find and exploit commercial opportunities around the world, take advantage of our unique dual market access, and simultaneously attract more high-value inward investment.
The prospect of higher tariffs, fragmented markets, reshoring, and a more politicised trade and investment environment will make this ambition more challenging to achieve, but the overall objective is still correct. On a recent visit to the US, both clients and potential new investors indicated that they were thinking long-term, looking beyond the current uncertainty and see NI as a place for new investment.
Developing and achieving sustainability
Forecasts suggest green investment could create over $10 trillion in global GDP by 2050. With a strong foundation in manufacturing, innovation and green technology Northern Ireland has the potential to become a global leader in the green economy.
Businesses here are already making their mark in this relatively new industry by developing cutting-edge technologies for the low-carbon economy. Thanks to our natural resources, Northern Ireland has a significant advantage in renewable fuels and the ability to tap into global markets such as sustainable aviation fuel.
To accelerate Northern Ireland’s decarbonisation journey, we need to embed fully sustainable approaches across all industries and help our businesses seize the opportunities this creates. We need to help more businesses identify opportunities in green markets to increase sustainable investment across NI's businesses and strengthen our reputation as a leading destination for sustainable foreign direct investment.
Maximising the impact of City & Growth Deals
We believe the City & Growth Deal projects such as AMIC have the potential to be vehicles for both sectoral and regional development. The investment from the Deals will make NI more attractive for international investment but also strengthen the capabilities of existing clients both foreign and domestic. They will stimulate a culture of innovation that will allow NI to be seen as a leader in areas such as drug discovery, environmental sustainability, data analytics and other transformational technologies. It is vital we support the successful implementation of the deals and ensure businesses can benefit from the infrastructure and capabilities derived from them.
Promoting places and partnerships
We must ensure that communities right across Northern Ireland share in our economic growth. The Department for the Economy has made £45m of funding available to support Local Economic Partnerships to identify initiatives and investments to support growth in every region. This partnership between stakeholders, including Invest NI, brings a shared focus to delivering regional balance across Northern Ireland.
Invest NI has also introduced a new regional approach with an expanded network of regional teams and a new Land and Property strategy to improve the geographic distribution of investment as well as a commitment to deliver 65% of our investments outside of the Belfast Metropolitan Area. We are already making good progress against this target.
Onwards and upwards
We have just completed the first year of our three-year strategy and the results to date have been very encouraging. The Invest NI team and our clients have responded very positively to the new strategy and the level and quality of investment undertaken by companies has increased significantly. This investment will deliver substantial benefits to the NI economy and represents a foundation for further progress in 2025-2026.
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