Give prosperity a chance, too

The peace process has boosted efforts by the Northern Ireland Growth Challenge to revive the economy. Roger Trapp reports
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The attempt to find a political solution to "the Troubles" is not the only initiative under way in Northern Ireland. The province's business community is also seeking a solution to the economic problems that have long gone hand in hand with the civil unrest.

This business move is especially notable because in a part of the UK used to government assistance, it requires self-help.

The idea for the Northern Ireland Growth Challenge was conceived in late 1993 by the local branch of the Confederation of British Industry. But from that somewhat typical start, it has moved on to tread fresh ground.

Although the membership of the challenge's steering committee is largely made up of "the great and the good" - for example, Roy McNulty, president of Short Brothers, is chairman - there appears to be a recognition that a structural change in the economy is required. And achieving that means enlisting younger managers to work in more practical ways than would be expected of their more exalted leaders.

The committee's interim summary of progress, published in May, paints a bleak picture. Despite a strong industrial heritage, Northern Ireland has had higher unemployment rates and lower average standards of living than other parts of the UK for most of the twentieth century. Per capita income is the second lowest in the UK, after Merseyside, and is 74 per cent of the European Union average.

The report accepts that the civil unrest has not single-handedly constrained the region's competitiveness and growth. Consultations carried out by the challenge suggest that the two key factors behind the current problems are an increasingly insular/conservative culture and a traditional reaction by government to a depressed regional economy.

The report is in large part the work of the US-based management consultancy Monitor, which was called in by Mr McNulty on the strength of work it had done for Shorts. Since Michael Porter, the well-known management thinker and author of The Competitive Advantage of Nations, is a director of the consultancy, it is not surprising that it is dotted with references to "clusters", the concept developed in that book of grouping "inter-relating activities" in an area to improve knowledge sharing and performance.

The overall finding is that Northern Ireland has a few companies that can compete on a world stage but few clusters, or little strength in depth.

Ian Smith, Monitor's European managing director and Brid Rodgers, who has worked closely on the project, thought their analysis was controversial and so were pleasantly surprised at how quickly the steering committee acknowledged that "they were the problem".

The fear of being targeted by terrorists had exacerbated a natural unwillingness on the part of successful business people to raise their profile, Ms Rodgers says. As a result, the traditional desire of middle-class parents to see their children enter the professions or the civil service rather than business was perpetuated.

With the political moves towards peace giving the challenge a boost, there was a greater realisation of the need to communicate. Experience elsewhere demonstrated that companies found it difficult to succeed on a "go-it-alone" basis.

Even with such significant changes in attitudes, the challenge's aims look daunting: Real GDP growth of 5 per cent per annum by 1998, creation of 60,000 net new jobs by 2000, real export growth of 10 per cent a year to 2000, a significant improvement in average living standards in the region, and a shift in the export market mix in favour of markets beyond the UK in order to capitalise on global growth.

The summary of progress published earlier in the summer includes 100 action initiatives designed to develop the cluster concept - both in specific areas and across sectors. Key to these will be the involvement of younger managers, who will typically be seconded from large organisations such as Shorts to small and medium-sized enterprises for a few months at a time.

And, anxious to stress that this is not another management consultancy project that culminates in a report gathering dust on a shelf, Ms Rodgers points out that some initiatives have already started.

For instance, tourism has been targeted as a growth sector now that visitors are less worried about terrorist attacks. But because "it needs a lot of work", a team is at work developing the idea of "welcome posts" in order to help local business people deal with tourists.

Meanwhile, efforts are under way to bring about consolidation of the food-processing and technology industries.

The appointment of a director for the challenge - expected by the beginning of next month - should be an added boost. But Ms Rodgers is adamant that this should not be thought of as the first in a string of positions.

"The work will be project-based, using secondees, so there will be very few permanent employees," she says. Moreover, the Monitor team is putting in place mechanisms for measuring success and to assess standards for recruitment.

All of which perhaps makes it all the more surprising that the initiative has so far not only received the strong support of Northern Ireland Secretary Sir Patrick Mayhew and his ministers but also the backing of local politicians.