THE PEOPLE of Northern Ireland can look forward to a "future full of hope" according to British prime minister Gordon Brown and, if the attendance at a three-day US/NI Investment Conference is anything to go by, he may be correct.
The conference, which was almost a year in the planning, drew more than 100 senior executives from major US corporations. It is the fifth Northern Ireland investment conference since the signing of the Hillsborough Agreement in 1985 and the omens this time are more encouraging than ever.
The timing of the conference is less than propitious given that the US economy has gone into recession (albeit a mild one) and the developed world's credit crunch is undoubtedly putting some investment decisions on the back-burner. Yet the conference, which closed last night, has succeeded in raising the awareness of Northern Ireland as a business location where costs are low and significant financial incentives are available. Only time will tell whether this awareness sows the seeds of substantial future investment.
It is widely acknowledged that the drive for such investment is a medium to long-term process and that Northern Ireland has some catching up to do. Unemployment is low at 4.2 per cent compared with 5.5 per cent in the Republic. But the public sector accounts for an unwieldy 63 per cent of the economy compared with 43 per cent in the UK as a whole and only 36 per cent in the Republic. The private sector badly needs to grow.
There are some encouraging signs. Bombardier Aerospace has unveiled a £70 million investment in aircraft components and development projects, encouraged by a £10 million grant from Invest NI. In addition, NYSE Euronext is to increase investment in its Belfast IT operation and CyberSource, which handles internet payments, is to establish an R&D centre. The whole docks area of Belfast is being transformed into a Titanic Quarter which will cost over £1 billion and take seven years to complete. Harcourt Developments, owned by Donegal businessman Pat Doherty, is confident of creating up to 5,000 jobs and building 3,000 homes.
Up to now, this State was Northern Ireland's strongest competitor for inward investment. Last year, foreign direct investment into the North reached nearly $1 billion whereas the Republic has managed as much as €27 billion in the past. Taoiseach Brian Cowen made it clear that the days of partitionist competition are, for the most part, over. A joint North/South approach is the order of the day on the basis that North and South, working together, may present a more compelling case for investment than in competition with each other.
That said, the company tax rate of 28 per cent in the North compared with 12.5 per cent in the Republic may continue to distract potential investors. Mr Brown will give no concession on the tax rate because Scotland and Wales would insist on similar treatment. Therefore, at the least, he must commit substantial investment to Northern Ireland so that its infrastructure and educational facilities will be sufficient to attract high added-value and innovative industries.