Regional balance has been a big feature of economic chat this year, particularly so since Minister Murphy announced it as one of his four economic missions, with improving productivity, good jobs, and climate making up the rest.
‘Regional balance’ aims to address inequalities and enhance regional development, an aim that was recently expanded on through the introduction of the Sub-Regional Economic Plan in recent months and through Invest NI’s new business plan which was launched in the past few of weeks.
These plans prioritise locally-driven initiatives that empower communities to identify and pursue their own economic goals, promising a more inclusive approach to development across Northern Ireland.
More specifically, the Invest NI business plan, ‘Our Future in Focus’, which hopefully marks a line in the sand moment after the highly-critical independent review, sets the organisation on a path to accelerate economic growth through promoting sustainability, seeing more of our companies undertake innovation, and ensuring investments are more evenly spread across all of Northern Ireland.
The ambition is that, by 2026/27, two-thirds of Invest NI’s investments will be to businesses located outside of the Belfast Metropolitan Area. Why this shift? In Invest NI’s own words “Northern Ireland has suffered from uneven distribution of economic activity for decades. The old approach hasn’t worked. A new coordinated, co-designed and optimised approach will help maximise public and private resources to get better results.”
I couldn’t agree with this sentiment more - the old approach has not worked. That has been evident for decades.
But hold up. While this focus on regional balance is a welcome development, it has raised concerns that Belfast, the central hub of Northern Ireland’s economy, could be overlooked. In conversations I have had, there are fears that the push for regional growth could inadvertently foster an ‘anywhere but Belfast’ mentality. Such an approach would risk undermining Belfast’s critical contribution to Northern Ireland’s economic success.
I don’t believe for a second that more regional balance has to come at the detriment of Belfast. In truth, we aren’t talking about seismic shifts in focus either - Invest NI’s target for the proportion of investments outside of Belfast is a modest increase of just 10 percentage points from the current level.
The talk of ‘anywhere but Belfast’ reminded me that these concerns are not new. Twenty years ago, I worked on a report titled Belfast City - Regional Driver, which articulated how much the Northern Ireland economy depends on Belfast. That report was partly motivated by a push to decentralise public sector jobs as a means to create more, you guessed it, regional balance.
Fast forward to today and, while I’m certain that more regional balance does not have to mean less Belfast, it is worth reiterating Belfast’s importance to Northern Ireland’s economy. To be clear, I’m writing about the Metropolitan area, the area that takes in a bigger zone, broadly defined as the commuter belt. This region accounts for almost two-thirds of NI’s total jobs and has a high concentration of jobs in the higher value sectors like IT and finance. Not only is Belfast a key employment hub but also a significant business centre. According to the ONS, the Belfast Region generated approximately £33 billion in GVA, accounting for 65% of Northern Ireland’s total.
It could be easy to get carried away by tales of Belfast’s strength and importance, and conclude that is a rationale for regional balance. To do so, however, would ignore that, despite its strengths, Belfast faces notable challenges. Those of us who access the city on a regular basis have all witnessed the traffic chaos of late. Improvements to infrastructure are a must.
There are also significant areas of deprivation and poverty and, while the labour market is strong, economic inactivity remains stubbornly high. This persistent issue has been widely recognised as a key barrier to productivity and economic growth across Northern Ireland. Addressing this challenge is vital for unlocking the region’s full potential.
Additionally, while the Belfast Region is a significant economic generator, it exhibits disparities in productivity levels across its constituent councils. Enhancing productivity and achieving greater regional balance will not only strengthen the region’s economy but also align with Northern Ireland’s broader strategic objectives.
Regional balance is an essential goal, and lots of our new policy documents set us clearly on this path. Nothing in those policies suggests to me that there is an ‘anywhere but Belfast’ agenda.
That is good news - regional balance is not a zero-sum game. Get it right, and the whole economy benefits.
- Andrew Webb is chief economist at Grant Thornton NI
