The reinvestment rates for Northern Ireland (NI) is particularly impressive. The fact that 75% of inward investors reinvest, says Steve Harper, Executive Director International Business, Invest NI, “is testament to our talent”. Jo Murray finds out what these foreign companies are investing in and how Northern Ireland has nurtured both its traditional and emerging niche sectors to ensure investors keep a keen eye on this small region.
Northern Ireland has long been associated with heavy engineering. And today aerospace and advanced manufacturing are still hugely important sectors, with 44,000 people employed in 2,000 such companies in this location. However, the region is rapidly becoming more well-known today for its services sector, particularly in the technology and professional services sectors.
Both business services and legal services are becoming strong sectors in Northern Ireland with significant anchor companies delivering the eco-systems’ credentials. For example, the legal services sector has attracted the likes of Citi, Herbert Smith Freehills, Allen & Overy, Axiom Law and Baker McKenzie. Citi’s Legal & Compliance divisions in Northern Ireland employs over 300 professionals providing document negotiation, legal control, trading support services, compliance monitoring and reporting for global transaction services and markets across EMEA. Herbert Smith Freehills established its Belfast operation in 2011 and now has grown into a worldwide alternative legal services and e-discovery capability of nearly 300 members. Allen & Overy employs over 400 staff in its legal and shared services centre in Belfast, Axiom Law employs attorneys, paralegals and a range of professional staff in client-dedicated teams, and Baker McKenzie’s Belfast operation is its second global services centre dedicated to middle and back office support services.
The talent for these services operations is largely home grown. It is a testament to the way in which government, academia and companies work together to both market surplus capacity internationally and plug any skills gaps. In the latter case, Northern Ireland has put in place measures to skill-up in terms of technology, especially fintech and cyber security. It is also worth mentioning that the Northern Irish population is one of the youngest in Europe, with 55% of its 1.8 million citizens under the age of 40 – all of whom have participated in a much-applauded education system. Mr Harper points out that the vast majority of FDI into Northern Ireland is talent-oriented; it is not designed to gain access to the EU market. This is a blessing in the Brexit environment.
Despite the emergence of the technology sector, the traditional engineering sectors still have a key position in the economy. Aerospace is a big deal in Northern Ireland. It is responsible for the largest FDI into the region, points out Mr Harper. Bombardier’s Northern Irish operation is charged with the manufacture of the C Series aircraft’s advanced composite wings. The much-anticipated aircraft was launched almost a year ago with its first customer, Swiss Air, flying a CS100 from Zurich to Paris. True it has not all been plain-sailing and there are challenges still to be met, but the fact remains that Northern Ireland has proved itself on the world stage as a significant producer of aero-structures and a builder of complex aerospace supply chains.
It is not all about aircraft wings. Northern Ireland has also produced two world-class aircraft seat manufacturers which produce 30% of the world’s aircraft seats and whose quality has attracted international attention. At the end of last year, Thompson Aero was snapped up by Chinese consortium AVIC; a reflection of the quality of the products. Just prior to that, Kilkeel-based aircraft seat manufacturer B/E Aerospace of the US was bought by US company Rockwell Collins as part of a $8.3 billion (£6.8bn) deal. Thales and Magellan have also invested heavily in the region. There is a further plethora of world-renowned tier-one OEMs working with the Northern Irish aerospace sector. These include: Airbus, Boeing, Embraer, BAE Systems, Spirit AeroSystems and GKN Aerospace – all of which contribute to a mature and diverse aerospace eco-system.
Perhaps less glamorous than its work with the aerospace industry, Northern Ireland has considerable expertise in materials handling equipment, especially crushing and screening products, says Mr Harper. In fact, 40% of the worlds mobile crushing and screening equipment is made in Northern Ireland for use in construction, quarrying, mining and recycling. International names associated with materials handling with a manufacturing presence in Northern Ireland include: Terex, Caterpillar and Hyster-Yale, Sandvik and TESAB.
Most of the usual tech-enabled future-facing sectors are being nurtured in Northern Ireland, but there are also some very strong individual companies that are trailing a blaze across the globe and are worthy of note. Wrightbus is a case in point. It is the builder of London’s famous Boris Bus and, indeed, 30% of London’s famous red buses have been built by the firm. From its Northern Irish base, this family-owned business has built a global network from Singapore to Hong Kong, India, the UAE and Malaysia.
A re-occurring theme in any conversation about Northern Ireland includes manufacturing, engineering, supply chains and advanced materials. Both Queen’s University Belfast and the Ulster University have strong engineering centres which work with companies on R&D and new product development. Almost 80% of secondary school graduates go on to further or higher education and Mr Harper says a particular attribute of the local talent is that it is keen to be challenged.
In addition to legal and business services, in recent years Northern Ireland has been particularly strong in attracting fintech, software development and cyber security investments. Companies such as Liberty Mutual, the Allstate Corporation and Citi all have considerable operations there. Among the key investors in the cyber security sector are Whitehat, Proofpoint and Black Duck which have been attracted partly by the presence of Queen’s University’s Centre for Secure Information Technologies (CSIT), the UK’s national innovation and knowledge centre for cyber security and home to an impressive hub of security verification and authentication technology businesses.
So where does FDI into Northern Ireland come from? “The US is very strong,” says Mr Harper, adding that there has always been an affiliation between the US, the Republic of Ireland and Northern Ireland. China has been active of late. Not only did AVIC buy aircraft seat maker Thompson Aero but China International Marine Containers (Group) Ltd (CIMC) took over Retlan Manufacturing Limited, a Northern Ireland based semitrailer manufacturer and owner of SDC Trailer and MDF Engineering. CIMC said that the rationale for the deal is that CIMC will now be able to extend its reach into the UK’s market, expand its business into Europe, and retain its position as a semitrailer world leader.
Ultimately, says Mr Harper, it is Invest NI’s job to bring international companies to Northern Ireland and support them locally. “But it is the people who sell themselves.” Sounds like a good partnership approach.