Our Economic Policy – Can It Make a Difference?

Currently our official economic policy seems to be represented by the “10X Economic Vision”. However, while that describes the components of a thriving economy, it appears to be little more than a wish-list based more a desire for the end result than on any evidence for how it might be achieved. Perhaps it is assumed that turning these wishes into reality would be the job of our economic development agency, Invest NI – but it was described, by the recent Independent Review, as having has lost focus and being out of control, writes Professor Simon Bridge

In any case, even when it has had strategies, Northern Ireland does not have a good record of executing them. Which is why, without indicating a realistic path to follow, the 10X Vision lacks credibility because in the past targets without proper attention to ways of achieving them can be seen to have failed.

For an example of strategy achievement take the case of simulating new and small businesses. For over 35 years as part of our economic policy we have officially sought to increase the business start-up rate here to bring it closer to the UK average. A key part of the rationale for this has been a belief that small businesses are an important source of new jobs but it is also appreciated that they have a number of other economic benefits.

The means employed to raise start-up rates has mainly been to encourage business creation and to provide assistance for those who want to try starting a business. To this end, shortly after it was established, Invest NI declared it wanted ‘to make Northern Ireland an exemplar location for starting and growing a successful business’. This was very similar to the UK’s Small Business Service’s aim of making ‘the UK the best place in the world to start and grow a business’. Indeed in this it could be thought to have succeeded in that the UK usually comes out well in international comparisons of the ease of starting a business and last year an Enterprise Research Centre (ERC) press release reported that a survey had found that ‘more than 70% of Britons believe it is easy to start a business in the UK’.

However, according to the ERC, the same survey also found that, when it comes to start-up, ‘less (sic) than one in ten has any intention of doing so’ and the available statistics show that in Northern Ireland, compared to the rest of the UK, start-up rates have remained comparatively low and shown no improvement which can be linked to our support provision. Therefore 35 years’ worth of policy effort, much of it under Invest NI’s direction, would appear to have been ineffective.

Where did our economic policy go wrong – if, indeed, it ever went right? Why are visions advanced without credible plans for achieving them? Why did the agency which might be expected to do much to achieve the current economic vision lose its way so noticeably? And why have we continued to pursue similar policies for over 35 years despite them never seemingly making a significant difference?

This naturally raises the question of what might work – but, of course, knowing what doesn’t work does not necessarily indicate what does. It does however suggest that, if we really want more start-ups, we need to look for a better approach. We can try to reflect of the reasons why policy has failed but another concern must be why those responsible for continuing the policy appear not to have realised that it has not worked and adjusted their efforts accordingly. What we require, therefore, is a focus on the objective and innovative efforts to solve the problems preventing it: an acceptance of reality and a willingness to seek, develop and test alternative approaches.

However that requires a spirit of innovation and the cultivation of a mind-set which facilitates it. Unfortunately that sort of approach seems to be most noticeable in governments only in wartime (and not always even then) – once it is clear that the accustomed approaches haven’t worked and that the alternative to change is defeat.  So, if the vision of 10X is appropriate, then to get it we need a wartime change of approach, not just in words and aspirations but in the culture which supports and encourages such an approach.

Nevertheless, if we really want a healthier economy and more start-ups, and if we are prepared actually to innovate in government circles – instead of just prescribing it for others, a place to start looking for possible ways might be in people’s intentions and attitudes. It is relatively easy to provide support for people who want to start businesses, and it is what we and others are used to doing – but we need to accept that it doesn’t make more people want to do it. So we need to look at the behaviour we want and at how we might best encourage that. It won’t be easy – but it might be possible if we want the result badly enough to be prepared to change our approach to getting it.