LAST week the Financial Times ran an article entitled “Start-up map shows the most Enterprising Regions”. The article led with the catchy line “Do you want to fund a business that will hit £1 million within three years? Try Belfast”.
Indeed the article goes on to tell the reader that in the west and south of Northern Ireland around 10.8 per cent of companies that started up in 2011 reached the £1 million turnover mark by 2014.
The figure for Belfast was 9.7 per cent and importantly Northern Ireland managed to beat all other UK regions for which data exists. London followed in second place with a relatively good 7.9 per cent, but the UK average for achieving this level of successful business growth was 6 per cent.
The data has been gathered by the Enterprise Research Centre and is derived from 30 Local Enterprise Partnership areas, individual cities in England and local authorities in Scotland, Wales and Northern Ireland
There is now clear evidence to demonstrate that growing or ‘scaling-up’ new businesses is something that Northern Ireland is very good at. Indeed credit should be given where it is due to the organisations that have all played a part - Invest NI, Enterprise NI and the Northern Ireland Science Parks.
I don’t think we fully appreciate the level of local support that is available to new companies. For example, Invest NI provide a suite of practical advice for local businesses through their website nibusinessinfo.co.uk. Areas of expert advice include skills development, marketing, property, finance, product development and trade.
In addition, local companies can tap into expert guidance around aspects of production such as energy and waste management, operating improvements and for service companies there is ICT and e-business support.
Clearly when it comes to successfully growing new start-up companies the local support networks are working very well. However, when it comes to the number of new businesses coming through the pipeline - there is perhaps a bit more work to be done.
The Knowledge Economy Index 2014 produced by the NI Science Park report shows that when Northern Ireland’s level of business start-ups is compared to the rest of the UK, we actually rank last out of all 12 regions. The report notes that in 2012 Northern Ireland had 16.2 business start-ups per 100,000 of the population compared to the UK average of 50.3. This has to change.
Enterprise is a key component of any successful economic region. Not only do entrepreneurs create wealth for themselves but they also create wealth for the country as a whole. They create jobs, they generate revenue, they pay taxes and they drive economic growth. And the level of entrepreneurship within an economy is positively correlated with Gross Domestic Product growth.
Starting up a small company in Northern Ireland has traditionally been a challenge. In the past, political instability did not create a conducive investment environment and very often people with the skills to successfully run their own business either took off elsewhere, or opted for a less risky employment route – probably in the public sector.
But times have changed, the political climate had been radically improved, public sector jobs are no longer the safe haven they once were and new technological advances mean that people in Northern Ireland can access global markets at the touch of a button.
On the first of April this year the 11 new super councils across Northern Ireland were given responsibility for local economic development. This includes the promotion of entrepreneurship and social enterprise. The time is now perfect for Northern Ireland to take enterprise to the next level.
As the new councils set out their strategies and action plans for economic development, targets for new start-ups must be included. The old saying “what gets measured gets done” will be very important in this respect. Changing mind-sets around enterprise and promoting the idea of self-employment requires a bit of culture change in Northern Ireland as barriers to entrepreneurship still exist. Our attitude to business failure needs to change.
n the US, entrepreneurs are given so much credit for attempting to start a business while in Northern Ireland we only focus on success.
The 11 new councils now have the ideal opportunity to create and build a genuine appreciation of enterprise right across Northern Ireland. They will also ensure the provision of practical support to new start-ups in their districts, helping entrepreneurs with premises, growing and developing local enterprise parks, and connecting business parks with industry experts, investors and university researchers.
It will be essential that at the local level there is genuine collaboration with the local council and organisations such as Enterprise NI, Young Enterprise, local schools and FE colleges.
Northern Ireland badly needs our bright young talent to be attracted to enterprise. By opening up the world of entrepreneurship to our university graduates we could significantly reduce our ‘brain-drain’ problem, create jobs and raise local living standards. Enterprise is about allowing talent to be fully utilised, allowing it to flourish – first locally, then nationally and perhaps globally.
If the new councils manage to stimulate our company start-up levels to the UK average of 50.3 per 100,000 people then the NI economy will go from strength to strength. But who knows, perhaps we could aim higher. Given our fantastic history of enterprise, there is no reason why Northern Ireland could not become the most enterprising region in Europe.
- Angela McGowan is chief economist at Danske Bank in Northern Ireland.
