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Green Paper highlights key issues and solutions for poor productivity in Northern Ireland

A new Green Paper ‘Northern Ireland’s Productivity Challenge: Exploring the issues’ has been published.

QMS Queen's management school

The paper shows there are several reasons for Northern Ireland’s productivity gap, and highlights to policymakers, the business community, and the wider public, that there are key issues that must be addressed if Northern Ireland’s economic performance is to be improved.

The research was led by academics from Queen’s University Belfast in partnership with the Northern Ireland Productivity Forum.

John Turner, Professor of Finance and Financial History at Queen’s Management School, and Northern Ireland Productivity Forum Lead, explains: “Northern Ireland is the poorest performing UK region for productivity, almost 20 per cent below the UK level. Increasing productivity is key to improving Northern Ireland’s prosperity, with low productivity identified as central to explaining the region’s persistently poor economic performance.

“As we emerge from the Covid-19 pandemic, it is crucial now more than ever that we work to increase productivity which is key to raising people’s living standards.”

The report highlights Northern Ireland’s strengths include its ability to tailor economic policy through devolved powers, and a relatively younger population. Weaknesses include the areas where Northern Ireland possesses deficiencies to the rest of the UK, particularly in skills and investment.

Further points include:

- The productivity gap is not evenly spread within Northern Ireland: most areas perform poorly, with the highest levels of productivity found in Belfast and Mid Ulster.

- Belfast has the smallest productivity gap, only 6 per cent below the UK level, while Derry City and Strabane has the largest gap, at 23 per cent below the UK level.

- Northern Ireland possesses a skills gap to the rest of the UK, relating to both an attainment gap and a ‘brain drain’, which leaves a lower proportion of the population with tertiary education.

The researchers state that there are opportunities for the productivity gap to be closed through interventions by policy and business, including the digitalisation of the economy, growth of the knowledge economy, and the development of green technologies within manufacturing.

Dr David Jordan, Research Fellow in Economics at Queen’s Management School and researcher on the Northern Ireland Productivity Forum, said: “A greater understanding is needed by both policymakers and business of what the drivers of this underperformance are, why this is the case, and the role of policy and political institutions in shaping this.

“Identifying how to improve skills, alongside ways to attract firms and industries which can take advantage of a more highly skilled workforce, are key issues which must be addressed if Northern Ireland’s economic performance is to be improved.”

The research was conducted in partnership with the Productivity Institute (TPI), based at the University of Manchester, and funded by the Economic and Social Research Council (ESRC).

Bart van Ark, Managing Director of The Productivity Institute and Professor of Productivity Studies at The University of Manchester, said: “These insight papers provide an excellent account of the productivity gaps across and within all regions in the UK, which are large by international standards. The papers identify the obstacles faced by people, firms and places in attaining the capabilities required to invest and achieve higher levels of productivity. They will provide policy makers at a local and central level with a clear guide to the levers of productivity for each region and devolved nation in the UK.”

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