An open letter to Minister Arlene Foster from Grumpy Old Will
Dear Minister, The Barnett report and change
Just when I thought that the Barnett report might spur some swift political actions towards stemming our downward economic drift, I am feeling concerned.
Crisis denial
Last week I was confronted with Minister Sammy Wilson's smiling comment, "the impact may not be felt until 2011". This was in response to Alistair Darling's pre-budget announcement that the Westminster financial support for NI remains effectively intact pro tem. And he certainly was not alone in smiling. But ........
While welcome in one sense, this postponement of inevitable cuts means that Sammy, together with all the folks on the hill and our entire populace, can carry on in the torpor of crisis denial. Rather than actually doing something concrete towards dismantling the excess in our monstrous public service and thus over time freeing funds and people for investment in the private sector.
Barnett v G.O. Will
Overall and over time, Professor Barnett suggests sensible structural reorganisation to improve our economic lot, but history shows that any change will be slow in coming.
The Professor's and my views differ significantly on implementation. Two examples.
1. He suggests a reduction in business development training expenditure and increased spend on innovation and research. I propose the exact opposite.
2. Currently, contact centres are a key element in our private sector employment. My views on their importance are diametrically opposed to those of the Barnett report.
Medium-term strategy strand for INI
Let me put forward a possible strand of private sector strategy for Invest NI to be getting on with in the meantime while longer term strategies are being debated.
It focuses on the reality of where we are today and what we can do by developing current opportunities rather than the longer term, where "innovation and research" may pay off.
The background is Invest NI's tremendous success over the last few years in attracting contact centres, together with many companies describing themselves as in "ICT" or "Financial Services", but which are in reality nothing more than contact centres.
Barnett's blindspot
Professor Barnett mistakenly follows traditional economic group-think in disparaging such jobs and by implication the people who perform them. He is so wrong on this; indeed it is alarming that Invest NI themselves, after expending the effort of putting the cluster in place, do not appear to promote the competitiveness of the sector to any great degree.
"many of the new jobs promoted have been in call centres, some of which offer low wages and have contributed little to Invest NI’s mission to boost business productivity".
Minister, this is rubbish. How can such a statement be taken seriously when the numbers of our "economically inactive" continue to rise? All jobs at all levels of expertise and pay are valuable and in many cases contact centres pay very well.
Invest NI has made a real achievement, whether they acknowledge it or not, in putting this key cluster in place. It should be exploited aggressively, not denigrated.
Invest NI actions
These labour-intensive activities are the foundational base on which to build any successful economy and the creation of this cluster of businesses arguably makes NI the "contact centre capital" of Europe.
Action 1. Something we should boast about rather than hide.
Now that we have enough contact centres on board as a base - Action 2. - Invest NI should put a task-force team in place to assist these existing enterprises, both indigenous and FDI, with intensive training and promotion to enhance their international competitiveness and maintain our lead. This is a tremendous opportunity.
Action 3. The concurrent area of focus should be to motivate and support expansion of the next tier of international competitiveness in our existing manufacturing and service businesses. There is much good work already going on here though still enormous scope for future growth.
Contact centre value
Well-run contact centres deliver direct productivity to the economy and are also a hotbed of business skills training for their often young operatives - effectively they are "commercial universities". Many in due course will go on to higher-wage employment in the wider labour force or will become entrepreneurs in their own right. I suspect their alumni produce more start-ups than Queens and UUJ put together.
To substantiate my argument further by specific example, I refer to public domain information on the Irish-owned Belfast contact centre Gem, which is among the cluster of companies to whom the Barnett report gives a negative portrayal.
For the past 10 years Gem has employed hundreds of people and contributed direct wages to the economy of almost £70 million, which by any reasonable multiplier, alone represents a couple of years of Invest NI's total budget!
In addition, the vast bulk of Gem's multi-millions of revenue is generated by international customers bringing valuable foreign exchange into Northern Ireland.
A phenomonal export performance - and a high encouraging note on which to end this letter.
I hope this proposal is of some help.
Yours sincerely,
Will McKee
4 comments:
At last a business commentator who is talking some sense! The Barnett Review was written largely by economists and not business people. (We all know that the primary role that economists have on Planet Earth is to make astrologers look good!)
Thanks Sonic. I appreciate the encouragement and enjoyed the Hedgehog's "spiky" geddit? comment!
Will, I totally agree with your comments, (you know how I feel about academics and civil servants and their lack of understanding of business - e.g. having a MD breathe down your neck telling you to get the sales force on target by the end of the month) less of the rant and and back to the topic; I have had the privilege of working with the GEM and the quality of the employees and attitudes is outstanding - many who have gone on to bigger and better things - the skills of the management team in GEM are exemplary demonstrating a business model which can be emulate to provide employment (especially for graduates as the GEM does) and stimulate the economy.
Cheers Colly. Your comments illustrate why I used Gem as an exemplar.
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