Friday May 29, 2020

Northern exposure to the world of tech

It’s a time of opportunity for Northern Ireland, despite the forthcoming election and questions about the status of the Border post- Brexit

29th January, 2017
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International press coverage of economic development in Northern Ireland has tended to cover high-profile but relatively marginal developments, such as the filming of Game of Thrones or the opening of the Titanic Belfast visitor attraction.

But, alongside these initiatives, the region has also been promoting itself as a globally competitive tech hub.

Central to this is the work of Invest Northern Ireland (Invest NI) which seeks to nurture local start-ups, as well as draw in significant foreign direct investment (FDI).

“There is huge competition for talent around the world, particularly in technology,” said Jeremy Fitch, Invest NI’s executive director for business and sector development.

“Northern Ireland is a place where you can have that met.”

Fitch is confident Northern Ireland can meet the skills requirements of multinationals across a range of technology sub-sectors, and points out that the region has experience of this dating back two decades, something which may not be widely known south of the Border.

“It takes time to build up a critical mass,” said Fitch.

“Fintech probably started with Allstate and Liberty IT in the 1990s. Allstate did an initial project of about 250 people and now employs over 2,000. At around that time, you had the telecoms boom with Nortel. Nortel had expanded dramatically and trained up a huge number of people from around 1994 to 2001. Then we had the dot-com bubble bursting and those people got dispersed, some setting up their own companies and others going to work elsewhere. This seeded a new sector for Northern Ireland and provided an early source of talent for new FDI.”

The next major entrant was Citigroup, which arrived in 2003 to provide software development for their global banking operations.

Jeremy Fitch, Invest NI’s executive director for business and sector development

The company has since expanded its operations several times and now carries out a range of functions such as legal services, compliance, risk and human resources.

Fitch said that such reinvestment is a sign of satisfied customers.

“Citi is now on track to hit over 2,000 jobs in Northern Ireland. The reinvestment pattern from investors demonstrates two things: they’re pleased with the quality of the employees they are getting and they’re pleased with their ability to get the supply,” he said. On the back of these investments, Northern Ireland has secured a stream of other FDI investments including Chicago Mercantile Exchange, Visa and Tullett Prebon. For Invest NI, the fundamental issue that has to be addressed in order to compete globally is to ensure Northern Ireland is able to satisfy potential investors that it can provide the supply of skills they need.

“There was already a skills base here, and the universities, the colleges and the workforces, in particular, demonstrated that they could adapt.

"Our desire is to take that critical mass of skills and overlay it with tailored training, according to what the specific needs of individual companies are,” he said.

As Northern Ireland does not have tax-varying powers, it tends not to compete with the Republic directly and instead has carved out a niche for itself centred on a cost-competitive base making operations viable.

“In an FDI profit play, we don’t often win against the Republic in corporation tax terms so, for example, FDI pharma wasn’t going to come here in the same way. However, our competitive advantage against Britain, Dublin and other parts of western Europe is cost.

“Where we have that competitive advantage isn’t necessarily in profit centres, but in cost centres,” he said.

Competition itself can also involve co-operation and Invest NI’s vision for further expansion includes companies working on an all-Ireland basis – something that may prove especially attractive post-Brexit, as it would allow companies enjoy access to both the UK and EU markets.

“As well as fintech we have an emerging legal and compliance sector. So, if Dublin is finding it hard to get staff, can you establish an operation on Belfast? As well as securing a talented workforce, there is the additional benefit of having a UK base. You can have blended costs as well; we’re not looking to take jobs out of Dublin, but to complement them. It’s less than two hours away,” he said.