As if we needed any reminding, the recent announcement by FG Wilson that 760 employees were to be made redundant has once again brought home the fragility of the Northern Ireland economy, the private sector's utter dependency on a small number of key industrial and commercial employers and an SME sector that is struggling for survival.

The Northern Ireland Executive has clear and transparent objectives to improve our economy - create 25,000 jobs, £1bn investment in the local economy, £375m from Foreign Direct Investment, £400m from indigenous companies and an increase in tourism revenue by £676m by the end of 2014.  What there is significantly less clarity on is exactly how we are going to achieve these targets and even if we do achieve them, will this deliver a sustainable and balanced economy?

Our latest unemployment rate of 8.2% supports the analysis of an economy in terminal decline, putting the jobless level above the UK average, in a region falsely propped up by an inflated public sector. Alastair Hamilton, Chief Executive of Invest NI, made a very plausible defence of the progress that his organisation was making in terms of job creation on BBC's Nolan Show, in the face of the recent losses at FG Wilson.  I thought he handled the situation well.  However, he also said that whilst he was not surprised at the trend, the numbers of people laid off shocked him.  What concerned me in this was the apparent lack of understanding of FG Wilson's business model and the threats there were for the local workforce, within a company that has received £1m in state funding over the last five years.  And what impact do these significant job losses have on the clearly set out targets for employment?

I don't ascribe to the perception that the Executive does not have a cohesive strategic plan, it has but it is purely top line.  Like any facet of life, the devil is in the detail and that's where hearts and minds and jobs and investments are won and lost. That's not to say there has been no progress made, to say so would be disingenuous.  The Irish Open, the global success of the Titanic Belfast brand and the introduction of organisations such as Axiom into Northern Ireland are notable wins.

I also applaud DETI's trade missions to China and India with exports to those regions increasing by 30%, albeit from a low base.  Relationships are key to any business development and the Executive has looked to capitalise on the opportunities presented by the BRIC countries, even if their growth has been tempered somewhat by exposure to the Eurozone crisis.  

However, with the events, the tourism opportunities, push for exports, drive for foreign direct investment, the indigenous support, development of growth industries (e.g. agri food), we are simply playing catch up and trying to get on a level playing field with our global competitors.  It is a case of having to work much harder to, at best, remain stationary.

What is needed is both short term and long term economic policy.    The policies and tactics within the Progamme for Government as outlined above are fundamentally short term.  The vast majority of global democracies have a relatively short period of time to turn things around and this can lead to a prevalence of short term policies.  Just consider the wave of emotion and change on which Barack Obama swept into office in early 2009.  Yet the race for the White House is expected to be a close run thing, irrespective of Romney's crude dismissal of 47% of working class Americans.  Obama's supporters would argue that the implementation of polices for long term and radical change such as Health Care Reform has counted against him. 

However here in Northern Ireland such is the nature of our politics, that our locally elected representatives aren't likely to lose power on the basis of their economic performance anytime soon.  This will take a generation to change and whilst many will rightly say more's the pity, it does provide an opportunity to develop and implement long term policies that change the mindset and start to build a more business-focused culture with a flexible and adaptable education system that feeds entrepreneurship.

Any culture change takes a generation, look at drink driving.  So to truly shift the emphasis and culture within our economy our elected representatives must start to implement long term change and where else than with the next generation. We need to build a culture of persistence, curiosity, conscientiousness, grit and optimism, collectively known as character all underpinned by an education system that is flexible and adaptable enough to meet the economic challenges of the future.  The big question is can we build such a culture when we cannot agree on an education system?

All this about the local economy and not a word about corporation tax? The two have been somewhat inextricably linked.  Last week Stephen Farry claimed in a report he commissioned that 58,000 more jobs could be created by 2030 if corporation tax was reduced to the levels of the Republic. 

There can be no doubt it is, potentially, the clichéd ‘game changer’.  The issue is that the Treasury has gone cold and there are significant roadblocks, which many see as insurmountable.  Eamonn Donaghy, Tax Consultant and one of the key drivers behind the campaign to devolve corporation tax to Northern Ireland has highlighted how precarious inward investment would be without this policy in place.  EU grants offering foreign companies cash to locate in Northern Ireland, known as selective financial assistance (SFA) are due to be abolished next year -  all the more onus to deliver on corporation tax. 

However, let’s not have any talk of no plan B.  Plan B must run irrespective of the result of devolution of corporation tax and it is that long term mindset change that will help to breed an entrepreneurial culture and support any policy change we might one day achieve.

Claire Aiken

AikenPR