Belfast’s quest for inclusive growth

Belfast’s economy has changed dramatically over the years, supported by a growing dynamism and attractiveness as a place to invest, do business and live in. But the city’s leaders want to make this growth more inclusive – and for Belfast to have the tools to achieve this.

I recently visited Belfast to speak to local and regional leaders about inclusive growth. The city council has identified the agenda as central to the future of the city’s economy. It also links well with the Northern Ireland Executive’s Programme for Government, which seeks to ensure that the strategic direction of government is based on outcomes (rather than output targets or activities) that are important to people in Northern Ireland.

While the country is sometimes associated with the conflict and community tensions that preceded the Good Friday Agreement, it is all too easy to overlook the way the region has transformed. Northern Ireland is the happiest region of the UK, and it has also been proclaimed one of the world’s friendliest countries. Belfast’s economy is diverse, with significant growth sectors in Pharmaceuticals and Healthcare, ICT and Energy, as well as emerging sectors such as Cloud Computing, 3D Printing, Big Data, and Virtual Commerce.

The city is a driver of the Northern Ireland economy, particularly in service and on jobs: indeed, 7.1 percent of jobs in Belfast are knowledge-based, compared to a UK average of 5.6 percent.   

The challenges

And yet, inequality and labour market exclusion are holding back the economic potential of the city. Economic inactivity rates are climbing, and they are significantly above both the UK and Northern Ireland averages.

A large proportion of the economically inactive are not participating in the labour market because of long term sickness (and some communities are still suffering post-traumatic stress linked to the Troubles).

In West Belfast, half of people aged 16+ are claiming benefits, with 16.5 percent of the working age population on Employment and Support Allowance (compared to 8.2 percent in NI and 6.2 percent in Britain).  Belfast has a higher claimant count than the rest of the UK, while almost half of unemployed people are long term unemployed (unemployed for over a year) – far higher than the UK figure. There are plenty of jobs in Belfast, but the majority of them go to high-skilled commuters rather than city residents, almost 20% of whom lack any formal qualifications.

It is difficult not to trace some of this back to history: to the legacy not only of the Troubles, but also the deep structural economic changes brought about by the collapse of manufacturing, particularly the linen and shipbuilding industries. The fortunes of one famous company provide a visceral example of this. Harland and Wolff, the shipbuilding giant that built RMS Titanic, is now an SME.

As with other advanced economies, the shift to knowledge-based industries has meant that good quality jobs are mostly going to skilled people. Many of those that are less qualified have either dropped out of the labour market, or have taken up lower paid service jobs that lack the security, opportunities and, importantly, the status and pride that employment in traditional industry conferred to working people.

But the shifts also reveal how the ‘low road’ economic strategies we have followed in the UK for the past 30 years have created a rupture between industry and social policy. At its peak, Harland and Wolff’s success was in no small part down to the Belfast College of Technology, which provided vocational training to the company’s apprentices, producing high skilled workers as well as progression opportunities. Such partnership and quality vocational education is now lacking in the UK (and something our Commission argues should be addressed through inclusive industrial strategies)

The way ahead: place-based inclusive growth?

There is much to admire about Northern Ireland’s governance. It is based around consensus and partnership; social and economic justice are key priorities, and there is a government commitment to improving outcomes. However, as a number of key local stakeholders I spoke to suggested, it is clear that more could be done to give cities such as Belfast the tools they need to address the social and economic challenges that they face. As we have argued, it is important to move beyond place-blind approaches to economic growth and public services.

Local government in NI has fewer powers than its peers in the rest of the UK: for example, it lacks important physical regeneration powers and has few social policy levers. There is a strong case for Belfast to get its own ‘Growth Deal’, in order to better integrate public spending, deliver place-based regeneration, and to boost productivity and include more people in its benefits. One key reflection from my time in Belfast is that (fortunately) there is a lot of investment that goes into promoting economic inclusion and getting people into work, but that this investment could go much further if it was delivered differently; integrated with other parts of the public sector; and more directly aligned with the strengths and priorities of places.

The energy and enthusiasm for inclusive growth in Belfast and Northern Ireland suggests there should be real potential for the region to move forward with this vision.