Innovate for success: how can we solve Northern Ireland’s productivity problem?

John McClune, Invest NI's Operational Excellence Manager, writes in the Irish News about how to address Northern Ireland's productivity problem. 

In today’s fiercely competitive global marketplace, productivity is vital for business survival. Businesses with higher productivity levels and lower costs per unit of output are more competitive in both domestic and international markets.

Productivity is also crucial for wider economic prosperity. A country with higher productivity usually has more export potential, job creation, and sustainable growth.

Northern Ireland lags behind the UK and the Republic of Ireland’s productivity levels. According to the Productivity Institute’s ‘NI Productivity 2040’ insights paper, the failure to address NI’s productivity gap has been linked to policies implemented in isolation. Government institutions, businesses, and academia must work together to build a prosperous future for Northern Ireland.

Good leadership is essential for a successful business. Not only does effective management increase profits, encourage growth, and improve staff retention, it also fosters a workplace that values innovation. 

Improving leadership in NI has been identified as a key development area in the Productivity Institute’s research paper by Queen’s University Belfast, and Ulster University’s report on the impact of management in small to medium enterprises. There is a direct correlation between businesses with strong leadership and good productivity levels. 

Investing in leadership skills invests in the future of a company. Strong leaders can encourage teams to collaborate, develop new ideas, and problem solve.

Good leadership enables teams to be more productive in the long-term. But quality managers are not made overnight – businesses need to invest in learning and development to teach their staff how to be good leaders. It is an essential skillset that companies, both large and small, need to thrive.

Skills development underpins all productivity challenges. 

Learning, development, and training are critical to raising business productivity. It is well known that Northern Ireland has a skills deficit, with a lack of supply and increased demand for talent. The Department for Education reported that 35% of vacancies in NI were due to skill shortages in 2022. 

The NI business community should encourage lifelong learning and reskilling to keep up with evolving technologies. The rise of digitalisation and automation means some skills are no longer needed, while others , such as programming and digital literacy, are in high demand.   

Employees who are armed with desirable skills – and also have access to training – create more value in their work, encourage business growth, and are more likely to generate innovative solutions. Investing in learning and development programmes, upskilling, and collaborating with academia can help businesses increase productivity. 

Northern Ireland’s productivity problem is a challenge for both businesses and policymakers. Yet, if we work together across government, business and academia, we can unlock untapped potential.

Investment in the key drivers of productivity, such as innovation, skills, leadership, and technology, can grow our region’s prospects. Invest NI’s Powering Productivity Conference served as a powerful reminder that by combining its innovative spirit with strategic action, Northern Ireland can bridge the productivity gap and secure its place in the global economy.

Productivity is an ongoing journey, not a destination.