Northern Ireland is an integral part of the United Kingdom with its own devolved administration. Whilst it is one of Europe’s smaller regions, its First Minister, Arlene Foster says: “We are big enough to do the business but we’re small enough to care.” The region has a vibrant business scene, growing success in global markets and acknowledged success in attracting inward investment.
Alastair Hamilton is CEO of Invest Northern Ireland the region’s economic development organisation, which is tasked with growing the economy by attracting inward investment, through boosting exports and innovation. The European caught up with Mr Hamilton to discuss the opportunities the region has to offer and to hear about companies already finding success there.
Q: UK Prime Minister David Cameron once said: “Investing in Northern Ireland makes good business sense.” Why?
Alastair Hamilton: The Prime Minister made his remarks to an audience of potential international investors a couple of years ago at a conference in Belfast. It was true then and is even more so now. Investors are always looking for a location that offers a combination of qualities: available talent, competitive costs, and business-friendly environment.
Northern Ireland has proven itself to be a winner on all of these criteria. We have a skilled, talented and educated young workforce (55% of population is under 40) and business costs that allow us to offer investors a bottom line that can save them 50% on London costs. The region’s business-friendly environment offers new investors generous incentives on set up, a favourable tax regime and an administration that’s accessible, ready to listen to and to work with industry.
It’s a winning combination that has allowed us to attract international investors. In EY’s most recent “Attractiveness Survey”, Northern Ireland was the UK region that secured the most jobs from inward investment in 2014. These were across a range of sectors including financial services, technology, cyber security and business services. Included in this is reinvestment by existing external investors. We are proud of our record of reinvestment with around 80% of those who came to Northern Ireland after 2002 having reinvested. This speaks loudly about the value we can bring to a business.
Q: How does investing in Northern Ireland benefit international investors?
AH: We have been attractive to companies wanting to take advantage of our location as part of Europe and the UK for some time. It is particularly attractive to US companies wanting to access European markets for their products and services or to support their customers from a near shore location.
Our proposition has become increasingly appealing to firms in the financial services and legal sectors who are focused on improving bottom line efficiency and flexibility while maintaining service quality and managing risk appropriately. Culturally compatible, Northern Ireland offers reduced operating costs compared to traditional centres, enhanced agility and time-to-market compared to further afield offshore locations.
In the last decade several global financial and legal services firms have opened centres in the region to deliver services to established centres in Europe and beyond. These firms repeatedly cite the region’s high quality and relatively untapped talent pool, our stable competitive cost base, low wage inflation and low staff turnover as the critical success factors enabling them to drive value for their business.
Citi established a technology centre in Belfast in 2005, and has since added middle and back office functions and legal and compliance divisions. Further expansions have been made, and, most recently, an additional 600 jobs were announced which will bring the total staff numbers in Belfast to over 2,000 providing integrated financial services and support to their markets in EMEA and beyond.
Other internationally renowned financial services firms, such as First Derivatives, the Allstate Corp, Liberty Mutual, Mercer and Lloyds Banking Group have significant operations in Northern Ireland with recent arrivals to the sector including Cowen International and Chicago Mercantile Exchange. These companies are delivering specialist software development, legal services, actuarial and risk analytics services to clients globally.
In the legal sector we now have a number of international firms with established and growing operations in the region including Allen & Overy; Herbert Smith Freehills and Baker & McKenzie.
Q: Which are the sectors to invest in?
AH: Northern Ireland’s appeal to international investors in the areas of IT, financial services, business and professional services is well established. Belfast is the world’s top city for financial technology investment and Europe’s top destination city for new software development projects.
Following the recent commitment by the NI Executive to reduce our rate of corporation tax to 12.5% from April 2018, we firmly expect foreign direct investment to grow exponentially over the next few years. This rate will be joint lowest in western Europe and will complement and enhance our already strong proposition even further.
I believe that we will now have added appeal to a range of sectors, which are sensitive to this taxation. I would anticipate growth in some of the sectors where we have obvious skills and strengths including advanced engineering, and life and health sciences. Even with corporation tax at 20% we have a number of well established businesses in these sectors. BE Aerospace produces over 30% of the world’s aircraft seating in a small town in Northern Ireland, whilst one quarter of the world’s hard drives have a component made in Northern Ireland by Seagate.
In the health sector we have inward investors including Terumo BCT, a global leader in blood component and cellular technologies. We also have indigenous firms working on an international stage. These include global contract development and manufacturing organisation, Almac, which provides an extensive range of integrated services globally to companies within the pharmaceutical and biotech sectors and Randox Laboratories a global diagnostics provider that sells its products in more than 145 countries.
All of these sectors benefit from the traditional close working relationship industry and academia enjoy. Northern Ireland has two world-ranked, research-intensive universities: Queen’s University Belfast (QUB) and Ulster University which jointly produce 15,000 graduates per annum.
Q: Do you offer support to companies looking to invest or relocate to Northern Ireland?
AH: As well as offering a great talent pool and competitive costs, we can help companies wanting to locate and set up operations in the region with direct support from Invest Northern Ireland. We offer expert help, advice and signposting prior to set up and various financial incentives. And it’s our aim not only to help successfully launch operations in Northern Ireland, but to ensure they thrive and grow. We pride ourselves on our partnership approach with our investors and we will be there to help through the life of an investment.
Northern Ireland is a welcoming region where inward investors find not only a superb business environment, but a great place to visit and to live. We have an unparalleled quality of life, great schools and easy-going friendly people. Leisure opportunities abound, including world-class golf courses and a host of cultural activities.