“In 2005/06 Invest NI stimulated over £560m of investment commitments in the local economy, generating over £200m per year in additional salaries and supporting the creation of more than nine new businesses every day," Invest NI Chief Executive, Leslie Morrison, said today.
“In exceptionally challenging circumstances, Invest NI made a direct contribution to Northern Ireland’s economic regeneration, supporting investment in innovation, exports and new business starts.”
“Preliminary results for the year ended 31 March 2006, bring the total investment supported by Invest NI to over £2bn in the last four years and show that Invest NI met or exceeded the majority of its targets while reducing staff numbers and costs,” he continued.
Key Operational highlights for year ended 31 March 2006
•Over 1,500 offers of support to businesses totalling £129m, which will result in £560m of investment in the local economy;
•Approx £20m of support offered towards increased investment in Research & Development;
•Over 300 locally-owned clients will invest almost £103m in expansion and development - investments which will generate a further £65m annually in salaries;
•Externally owned companies committed to 31 new projects, promoting or safeguarding almost 6,500 jobs and generating approximately £130m annually in salaries;
•3,475 new businesses supported, which are anticipated to create some 5,000 new jobs.
Innovating for global markets
Invest NI made over 1,300 separate innovation interventions, helping companies to improve their processes, develop new products and/or explore opportunities for export. This included a significant number of companies seeking R&D assistance for the first time, investments which, along with 7 Proof of Concept projects and 33 Knowledge Transfer Partnerships, will boost Northern Ireland’s output of new goods and services.
This will further strengthen Northern Ireland’s broader innovation infrastructure, including the 18 Centres of Excellence which Invest NI has already supported and which focus on creating marketable goods and services. These are now home to over 250 researchers and have reported in excess of £80m new product revenue since the centres were formed.
Invest NI increased its support for companies across a wide range of sectors to sell into global markets. In addition to supporting nearly 140 companies, such as Cookstown-based McQuaid Engineering in their efforts to become first time exporters, a further 270 were helped to broaden their existing export-market base. Skills training in languages, selling and negotiation was provided to over 160 key sales personnel.
The proximity of the ROI market offers Northern Ireland companies an early entry into exports and this was further developed when NI companies participated in an all-island trade mission to India during January.
As part of Invest NI’s trade programme, the DETI Minister led a strong NI mission to China in November and the Secretary of State led a very successful Northern Ireland trade and investment mission to India in early April.
The rapid development of emerging economies, such as India and China, require us to focus on increasing our value-added and cost competitiveness. Significant work has been undertaken with clients on areas such as energy efficiency, waste minimisation, and process improvement.
Northern Ireland is the leading broadband region in Europe, achieving 100% coverage during the year. To help our clients maximise the potential of this critical business tool, 924 companies received practical advice in exploiting broadband and the internet for business advantage.
Supporting Investment and Reinvestment
Our success in securing new inward investment continues to reinforce Northern Ireland’s image as a prime location for nearshore operations in internationally tradable services such as software development, network services and financial services. The recently announced investment by Polaris Software Lab, the first greenfield technology investment in the island of Ireland by an Indian company, adds to our emerging financial-services software sector.
Northern Ireland is establishing an image of social stability with a healthy supply of well-educated, committed, English-speaking people, situated in the best commercial timezone. It is critical that this perception be maintained in a global environment where competition for internationally mobile investment is increasing. As a result of our engagement, a number of our clients are repositioned as Research & Development centres for their multinational parents, making Northern Ireland a prime location for knowledge-intensive projects and contributing to the continued upskilling of the Northern Ireland labour force. We are in a good place to create and safeguard intellectual property, and must continue to focus on skills and innovation as the rationale for investment, as distinct from merely cost.
Sponsors of 14 new inward-investment projects secured will invest nearly £155m in the local economy. They are expected to generate 1,756 new jobs and some £30m in annual direct salaries. We have developed a healthy pipeline of potential projects, which should secure further significant investments in the year ahead.
Investor confidence was also reflected in the £205M of new follow-on commitments made by externally owned companies. Collectively, these projects are expected to create 1,344 new jobs, while safeguarding 2,956 others.
Equally importantly, over 300 local companies which we have supported will initiate projects worth over £100m in investment value, the Engineering and Business Services sub-sectors having exceeded their targets. Significant projects were secured from established multi-nationals such as Seagate, Canyon Europe and Caterpillar/FG Wilson, and from local companies, including Marlborough Engineering and MJM Marine, illustrating that Northern Ireland remains competitive in niche manufacturing, where new-product development and greater added-value provide a platform for export sales.
Stimulating Entrepreneurial Activity
Our efforts to create more positive attitudes towards enterprise included a range of initiatives delivered to over 50,000 individuals, with a particular focus on under-represented groups, including women and young people.
Increasing awareness of the opportunities arising from self-employment have ensured that uptake of the Start a Business Programme remains high, with two Start a Business Shows and the sustained “Go for It” campaign stimulating over 10,000 enquiries. We are consulting with our stakeholders on further refinements to the Programme to sharpen delivery and ensure maximum value for money. We will increasingly focus on raising the quality of new business starts to encourage larger numbers with export and high-growth potential.
Substantial work has been undertaken to develop an enterprise portal (www.nibusinessinfo.co.uk) bringing together critical information sources of interest to all businesses, whether clients or non-clients at no cost to them. The site will go live in June 2006 and will be more comprehensive than any similar site operating in the UK, putting Invest NI ahead of any other business development agency in providing high quality online business support.
Resources and Efficiencies
Increasing global competition, combined with a challenging business environment means that Invest NI must continually improve its performance and prioritise scarce resources in order to achieve best value for money. Demand for our programmes and services is currently outstripping the supply of available resources and this will require Invest NI to target increasingly its activity towards high value-added opportunities.
Invest NI has continued to deliver impressive efficiency achievements and savings, while maintaining the highest standards of corporate governance and achieving many of the requirements outlined in the government’s Modernisation and Reform Agenda. Among the achievements are a 20% reduction in staff (148 Full Time Equivalent staff) and a 30% reduction in running costs, compared to those of the legacy agencies. As a result, Invest NI has a level of running costs per head that is amongst the lowest of any comparable economic development agency in the British Isles.
Invest NI has continued to dispose of surplus assets within its land bank that have no foreseeable prospect of development. Receipts from this source amounted to £10M in 2005/06 and funds were passed back to central government for redistribution to other frontline services.
During the year, Invest NI moved into its new headquarters building in Bedford Street in an investment financed through a PPP. This will generate significant savings through reduced overall facilities and operating costs, and increased efficiency.
Invest NI’s activities are wide-ranging and complex, and the time lag between initiatives, activities and their tangible impact on the economy vary greatly. We shall shortly be publishing our Performance Information Framework, developed to provide a systematic approach to measuring the impact of our activities on the Northern Ireland economy. This forms part of our determination to improve transparency of outputs and outcomes while providing a framework for interpretation of results.
Commenting on the preliminary results, Invest NI Chairman, Stephen Kingon said: “Invest NI is operating in an exceptionally competitive environment, both at home and in international markets. Low-cost economies are actively targeting foreign direct investment and even established businesses in domestic markets are vulnerable.
“Against this challenging environment, Invest NI has had a good year. The value of annual salaries generated by overseas and indigenous investment in the last year alone exceeds Invest NI’s total budget. More than 9 new businesses were started every day and we made an offer of support to a business every 6 hours.
“Nevertheless, we cannot be complacent. We have initiated programmes to increase our client focus, to sharpen our responsiveness and improve communication with stakeholders. Turning the Northern Ireland economy from one that is public-sector dominated to one that is private sector-led demands a partnership amongst the public, voluntary and private sectors, as well as our politicians. Invest NI is a willing partner in this endeavour and looks forward to working closely with all its stakeholders to promote Northern Ireland and grow the economy.