Invest NI driving economic growth

Jan 31, 2008

Every day clients of Invest Northern Ireland have, on average, invested over £1.4 million in the local economy and exported almost £11.5 million of goods and services, as investments stimulated by the agency have contributed to increasing employment, new business formation and improved regional competitiveness, figures released today show.

The figures are included in the Invest NI Performance Information Report, which provides detailed information and analysis relevant to an assessment of the performance in the agency and its clients for the five year period since its inception in 2002.

Commenting on the report’s publication, Invest NI’s Chairman, Stephen Kingon, said: “Our support is directed towards the growth of the private sector and recent evidence indicates that this has been increasing in terms of the number of new businesses, employment and regional competitiveness. The performance of our clients, the majority of which are locally owned SME’s, is an important measure of our success. Encouragingly, smaller businesses (those with less than 50 employees) recorded the highest rates of growth over the period, with sales increasing by 50% and exports by 75%.

“Every pound of public money which Invest NI has spent has generated £4 of business related investment, resulting in over £2.6 billion of business investment being committed to the economy.  Almost £340m of support has been offered to local companies and some £290m to externally owned companies,” he continued.

The Report shows that, over the period, 50% of all assistance offered by Invest NI was to clients located within disadvantaged areas, which contain 30% of the population, with 74% of first-time inward-investment projects planning to locate in disadvantaged areas. In future, new foreign direct investment, which will increasingly be of a services nature, is likely to be focused onthe two large conurbations of Belfast and Londonderry, driven by the available population within a travel to work area.

Planned investments in the West of Northern Ireland amounted to £2,019 per head of adult population, compared to £1,872 in the East. Overall inward investment per head was some 43% higher in the West than the East.

In totality, Invest NI offered £439 of assistance per head of adult population in Northern Ireland, which contributed towards projects that planned to invest £1,912 per head, with the highest level of assistance (£513) and investment (£2,328) per head being in the North West.

Detailing how Invest NI interventions are driving economic growth, Leslie Morrison, Chief Executive of Invest NI said: “We have initiated and delivered programmes to support product and process development, to help Northern Ireland businesses explore new external markets and to enhance business start-up activity. Many of these are delivering tangible results with the total sales output of our clients increasing by 13% in real terms over the period to a total of £10.3bn by 2005/06.

“The growth in both sales and employment over the period resulted in overall sales per employee growing to over £123,000 in 2005-06, an increasing proportion of which were exports. By 2005/06, exports had increased by 22% to reach £4.6bn (44% of sales). With almost 700 companies exploring export markets for the first time and a further 1,600 diversifying their export base, this is a clear indication that more of our clients are becoming increasingly internationally competitive.

“Over the five years almost £1.1 billion of inward investment was won, which is expected to generate over £440m per year in salaries. £375m of investment commitments were in the growing financial, software and computer services sectors, which are creating an increasing number of higher-quality jobs. Total employment within our client base has increased slightly as the 25% growth in services employment has more than offset the 5% decline in manufacturing employment.

“During the five years almost £254m of innovation assistance (contributing towards over £655m of planned investment) was offered through a range of programmes supporting the development of new products and processes, and through the exploration of new markets. A significant contribution towards enhancing the innovation infrastructure in Northern Ireland has been the £42 million of support for 19 centres of excellence in our universities and companies.

“Expenditure on R&D by Invest NI clients has increased by 10% from 2002 to reach £137.1m in 2005. While this is welcome and growth has come largely from our SME’s, achieving higher levels remains a priority, as Northern Ireland still ranks 113th out of 203 EU regions based on the Regional Innovation Index.

“Since 2002, the rate of early-stage entrepreneurship in Northern Ireland has increased from 3.3% to 4.9%, resulting in a narrowing of the gap from 61.1% of the UK average in 2002, to 87% in 2007. Significant challenges remain to instil a truly entrepreneurial culture within Northern Ireland.

“Many are beyond the influence of Invest NI, but we have invested substantial resources to increase awareness, including more than £2.5m to enable 230,000 young people in the post primary and higher education (HE) sectors to participate on entrepreneurial programmes. During the 5 year period, Invest NI offered start-up assistance to 15,326 locally-owned businesses and individuals, of which 413 were our direct clients, offering the potential for significant external sales.  The remainder were under the locally focused Start a Business Programme.”

Invest NI also provided £3m of funding to the Prince’s Trust for the PTNI Business Programme, resulting in over 800 new businesses started by disadvantaged youth.

In conclusion, Stephen Kingon said: “The many positive outcomes evident in this report lay the foundations to meet the goal of halving the private-sector productivity gap which exists between Northern Ireland and the UK average (excluding the Greater South East) as laid down in the Executive’s draft Programme for Government. They have also informed the development of Invest NI’s Third Corporate Plan, which will shortly go out for public consultation, after a long pre-consultation process with stakeholders.”

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