This document summarizes productivity trends in Ireland and Northern Ireland from the 1920s to present day. It finds that while Ireland saw strong GDP growth, productivity growth was concentrated in foreign-owned firms, hiding weaknesses in domestic firms. Northern Ireland consistently had lower productivity than Ireland and the EU15 average. The document analyzes sectoral and regional output, employment, and productivity. It questions Northern Ireland's focus on corporate tax rates to attract foreign investment, finding skills development and links between foreign and domestic firms are more important drivers of productivity growth. Post-Brexit, the role of the EU in Ireland's growth is a key consideration for Northern Ireland.
Slides from NERI Seminar Belfast: Productivity on the Island of Ireland: A tale of three economies
1. Productivity on the Island of
Ireland:
A tale of three economies
NERI Seminar Series Belfast,
April 11th 2019
Paul Mac Flynn and Paul Goldrick-Kelly
Nevin Economic Research Institute
Paul.MacFlynn@nerinstitute.net
paulgk@nerinstitute.net
www.NERInstitute.net
5. Regional Trends
Region/State % of EU15 Average
Dublin 208.6
South-West 156.8
Belfast 136.8
ROI 128.0
Mid-West 97.9
Mid-East 91.3
West 90.6
South-East 85.0
NI 75.0
East of Northern Ireland 70.0
Midland 63.8
West and South of Northern Ireland 63.4
Outer Belfast 61.1
Border 60.5
North of Northern Ireland 58.2
17. ROI Domestic
0
0.5
1
1.5
2
2.5
3
3.5
Total business economy Manufacturing Wholesale and retail
trade; repair of motor
vehicles and motorcycles
Transportation and
storage
Accommodation and
food service activities
Information and
communication
Real estate activities Professional, scientific
and technical activities
Administrative and
support service activities
2012 2014
19. Three economies?
Sector Domestic ROI ROI Foreign NI
Total 53,527 179,603 45,357
Manufacturing 61,492 330,220 56,331
Wholesale and retail 38,474 76,555 40,193
Transportation and storage 67,887 67,289 56,855
Accommodation and food 21,576 23,856 16,748
Information and communication 69,726 452,418 50,654
Real estate activities 55,137 62,488 54,103
Professional, scientific and technical 63,576 69,880 51,252
Administrative and support service 94,595 48,866 23,213
20. Policy?
•NI Corp tax policy misplaced – range of policy levers available to NI
•FDI – Quality not quantity, other areas more important than corp tax
•FDI can’t be about ‘buying in’ success - absorptive capacity matters
• FDI most successful when domestic firms integrate
•Skills a key issues where NI lacks opportunity to take FDI potential
•FDI hides domestic weaknesses in ROI – distribution of productivity
very broad
•Tax breaks in hospitality, misguided from productivity standpoint.
•Role of EU in ROI growth, key issue for NI post-Brecit.