Closing The Productivity Gap In Northern Ireland

The booklet, funded jointly by the Economic and Social Research Council and the Department for Enterprise, Trade and Investment (Northern Ireland) presents the views of two leading experts on productivity, Dr Chiara Criscuolo and Professor Richard Harris.

The growth of Northern Ireland’s economic output has been comparatively strong in recent years. However, using a variety of productivity measures, the country performs poorly when compared with other European countries, the US and Japan.

In terms of productivity, since the 1960s, Northern Ireland has consistently underperformed, compared to the UK average, in terms of Gross Value Added (GVA) per head of population and, despite recent relative improvements, Northern Ireland’s GVA remains some 20 per cent below the UK average. Low labour productivity relative to the rest of the UK is one of the key factors behind Northern Ireland’s poor economic prosperity.

Northern Ireland’s Programme for Government goal is to halve the private sector productivity gap with the UK by 2015. Recent research has identified a number of sectors with specific productivity issues including agriculture, construction, wholesale distribution, financial and business services, transport, and health and social services.

“Of particular concern is lower productivity in certain key service sectors,” argues researcher Professor Richard Harris. “In the support of the transport sector, telecoms, financial intermediation, computer and related business services, and especially other business services, productivity is considerably below the UK average.”