Should Ireland North and South be marketed as a single entity for inward investment, as suggested this week by a prominent Northern Ireland businessman? Two experts in their fields - former IDA chief Padraic Whiteand academic economist Michael Smyth- broadly agree in their reactions
Padraic White
Dr Alan Gillespie in his Irish Times article of last Wednesday set out an impressive five point charter "on how to deliver the future of the Northern Ireland economy" but it was his recommendation for a single joined up effective agency to promote foreign investment which captured the most headlines and media attention.
I happened to read it that morning on the Enterprise Train to Belfast where I was to spend the day with colleagues on the Enterprise Council of West Belfast & Greater Shankill progressing our ideas for a business led spatial and regeneration concept plan to stimulate badly needed investment in the area - all of which added to the article's relevance.
In addition, I have long been an advocate of much greater North-South collaboration in the promotion of foreign investment dating back to my period as managing director of IDA Ireland.
Among the welter of initiatives for North-South economic co-operation, joint foreign industrial promotion has remained a "no go" area. This appears surprising when you reflect on the remarkable advances made in other areas.
The concept of the "all-island economy" has become embedded in political and official discourse on the island and has provided a rational framework for other remarkable advances unthinkable a few short years ago.
Our National Development Plan earmarks over €500 million for investment in Northern Ireland on projects such as road and rail lines of joint benefit.
Business leaders North and South led by Martin Naughton, chairman of Glen Dimplex, and Sir George Quigley, chairman of Ulster Bank, have combined to argue the case for a 12.5 per cent corporation tax in the North, to Sir David Varley of the British treasury, who is conducting a review of tax policy in Northern Ireland for the chancellor of the exchequer.
There is genuine support and goodwill in the South for a 12.5 per cent corporate tax across the island because we recognise that a thriving prosperous island economy is to the mutual benefit of us all.
I share this strong sentiment and met Sir David and his team and provided a detailed submission on the crucial role of a low tax rate in attracting foreign investment to this island based on some 15 years of appraising investment proposals in IDA Ireland.
So given these impressive advances in shared thinking on an all-island economy, it is time to lift the "no go" status on industrial promotion as a subject for real North-South dialogue.
There has been the rare public hint of the possibilities. Former secretary of state for Northern Ireland Peter Hain has been quoted as suggesting that "Dublin use its muscle to secure investment for the North" and of talking to Minister for Foreign Affairs Dermot Ahern "about the common marketing of the island of Ireland to investors" ( Sunday Times, January 15th, 2006).
What are the political and institutional obstacles to joint co-operation in foreign investment promotion? They are rooted in the intensity of the competition for foreign investment between all European countries and traditionally between both parts of this island where each of us has "lost" significant industries to the other side. Co-operation in tourism and trade has been easier because the tourist can travel easily to both parts of Ireland and the inward buyer can place an order with companies in either jurisdiction. In the case of a foreign direct investment, there is an all or nothing, win or lose aspect to the decision - the factory or business centre has a fixed location in one jurisdiction or the other.
However, in our island economy today, it is time for a different perspective. Both parts of the island want to be part of the "knowledge economy" as they become uncompetitive for traditional industry with central Europe, China and India.
Together they can offer a range of skilled personnel, third level education and research capabilities which is more compelling than what each part of the island can separately offer. International companies are increasingly looking at the island as a single economic entity particularly for skilled labour.
Just over 12 years ago, I was involved with Dr Martin Mansergh , (then policy adviser to Fianna Fáil in opposition) in drafting the party's submission to the White House Conference for Trade in Investment in Ireland convened in Washington DC in May 1995 by president Bill Clinton. This little known submission proposed that "the governments and promotion agencies, North and South, should jointly promote a small number of unemployment black spots selected annually from each jurisdiction. "Agreed levels of incentives would be set for each location. These black spots would be promoted at joint seminars and at investment conferences directed to the entire island." For example, west Belfast and Lifford-Strabane were some of the listed black spots for inclusion in joint promotion. It is striking that despite all the advances in co-operation, there has been no movement to joint investment promotion even on the limited basis proposed in the Fianna Fáil submission to the White House conference of 1995.
In keeping with the sentiments contained in the submission, I support the marketing of the island for foreign investment by a new all-island agency but not a merger of the two existing agencies as envisaged by Dr Gillespie. In his article, he cites Tourism Ireland as an operating example to follow. But in the case of Tourism Ireland, it focuses on marketing the island of Ireland overseas as a holiday destination, while the Northern Ireland Tourist Board and Fáilte Ireland develop and promote the "tourism product" within their individual jurisdictions.
Similarly, if there were a new all-island investment promotion agency, the development of suitable sites and infrastructure, the encouragement of investment in skills, third level research and technology and funding of incentives to investors should remain the responsibility of Invest NI and IDA Ireland respectively.
Padraic White is a former managing director of the Industrial Development Authority of Ireland. He chairs the Enterprise Council of West Belfast and Greater Shankill and the Employment Services Board in that area