Farewell 10x Economy, we barely knew ye

There was little to quibble with in the three key aims, or triple bottom line, as they became known, first to increase the number of companies undertaking innovation; second, to increase growth in an inclusive way through increased incomes, closing gender pay gaps and increased skills levels; and third, to deliver sustainability by increasing the use of renewable energy and reducing Greenhouse gas emissions.

The problem with 10x over the past two years is that there was never any clear sense of what the actions were going to be to get us to an economy that is 10x bigger.

No matter. Our new Economy Minister has wasted little time in setting out his own Economic Mission. The Minister has set out four key objectives. These are:

• To create good jobs: This seems to relate to wage levels but it was also encouraging to see reference to some issues that have been acting as significant barriers to our labour market – childcare and routes into employment for people with disabilities. Childcare is a difficult topic to solve but is worth trying. The current cost of childcare means that a significant proportion of parents, 88% according to the Employers for Childcare’s latest survey, are changing their working arrangements to manage childcare, including some leaving the labour market altogether. On the other side of the equation, over four in ten childcare providers are financially struggling or distressed. Cracking the childcare conundrum could deliver significant economic gain. On disability, with only one in three disabled people in work, Northern Ireland has the lowest disability employment rate of anywhere in the UK. There is a large task ahead in understanding why this is the case and then doing something about it.
• Regional Balance: This is a long-understood and never-solved problem. I am fully supportive of the idea that regional balance is required. I note that a former senior official in the Department for the Economy has written that moving to sub-regional targets is ‘economically naïve and wasteful in resource’. If that reflects the thinking at senior levels in the Department for the Economy over the recent past, I’ve a lot of renewed sympathy for those people west of the Bann who have felt disregarded for so long. I accept one can’t force investors to go to specific locations but you can definitely incentivise it. Ireland’s exceptionally successful inward investment agency is testament to how a ‘congestion charge’ for projects in Dublin can drive activity to other locations such as Cork or Galway.
• Raise Productivity: The old productivity target rides again. For as long as I’ve worked in economics, our productivity problem has plagued us. Back in the old ‘Strategy 2010’ days, we were trying to close the gap with the UK, which was about 20%. With little or no progress, the target changed to one where we were trying to close the gap with the UK excluding the powerhouse of South East England. Again, with little or no progress, the target was quietly dropped – 10x took a position that improving innovation, jobs and wages would deliver improved productivity levels. The Minister’s position is to make productivity gains an explicit objective once again. Perhaps our dual market access and being ‘the most exciting economic zone in the world’, according to Prime Minister Rishi Sunak, means we can make strides on productivity.
• Reduce carbon emissions: It is encouraging to see this objective feature prominently. It was put to me recently when my team and I were working on an economic strategy for a county council in the south that ‘without sorting the climate part out, there is no economy’. An important warning. The economic opportunity from transitioning to a net carbon zero economy by 2050 is massive. It is good to see that recognised in the Minister’s new vision.

In truth, economic strategies are never that different from one year to the next – why should they be? No one wants anything other than good jobs, high wages, opportunity for all and lots of innovative, productive businesses. I’m more interested in how we get to where we want to go. I’ll look forward to seeing what is different on that front.