Incoherent leadership, duplicating programs for a narrow client base and a focus on distant markets that are unlikely to be profitable are among the criticisms leveled at Invest NI by the economic advisory firm.
Mark O’Connell, executive chairman and founder of Belfast-based OCO Global, said the agency should look to Enterprise Ireland as an example of moving forward.
He said Invest NI could learn from its counterpart in the Republic of Ireland, which successfully runs Europe’s largest venture capital fund and works well in tandem with smaller agencies across the country.
Yesterday, an expert panel led by Sir Michael Lyons reported on the performance of Invest NI and the implementation of the Government’s 10X economic strategy.
The commission’s damning report found the agency, which has 647 staff and costs £160m a year, is focused on Belfast and has limited impact on productivity.
The review highlights 17 areas for improvement, including leadership, governance, sub-regional partnerships and the program portfolio.
“It’s a pretty tough report,” Mr O’Connell said. “Invest NI has sort of gone into hiding and become less transparent, accessible and accountable.
“At the root of the problem is leadership and inconsistent or even different agendas between the Department of Economics, the Council, the Chief Executive and staff.”
There is also a difference in the organization and measurement of outcomes between the Department for International Trade and Invest NI.
The reboot is needed to set out a clear agenda linked to 10X and other economic priorities for the UK and the region, Mr O’Connell said.
“Invest NI really deserves credit for its successes. More needs to be fixed in business and trade than in foreign investments,” he said.
“Northern Ireland really punches above its weight when you look at the success it has had in professional services, with large legal and banking back offices and accountancy firms.
“We are the envy of other regions of our size and that is due to the success of Invest NI, they deserve credit for that.”
And factors beyond the agency’s control, such as Brexit, the pandemic and an evolving geopolitical axis, also require a reboot of how things are done, Mr O’Connell said.
The main concern emerging from the review is that Invest NI has become too domestically focused with too many support programmes.
“I doubt HSBC has that much and it’s a multinational bank,” he said. “As far as I know, there are about 1,000 or 1,200 core customers. Why do you need more than 400 programs for so many major customers? The late culling also feels confusing.
“The customer base itself is narrower than perhaps 10X’s ambitions would require, and they seem to be a lot of cozy repeat customers with longstanding relationships.
“I’m not disputing that they are not good companies because they are clearly delivering key performance indicators related to jobs, exports and inward investment, but nevertheless there must be new customers who cannot navigate the right place or are in 10X sectors that are not as well recognized or understood.”
Invest NI also co-ordinates poorly with other bodies, such as city and borough councils and further education colleges, which receive economic development funding through the Upgrading Agenda and City Deals.
In the Republic, Enterprise Ireland oversees the funding and programs of local business organisations, which it relies on to create new customers and new opportunities, he said.
Mr O’Connell said Invest NI was better off focusing on nearby markets such as the Republic, the UK and Europe, rather than Latin America or China.
“There are probably only a handful of companies in Northern Ireland that are mature and experienced enough to go somewhere like Latin America or China.”
After Brexit, funding is a risk and transitional support should be used as a bargaining chip in the protocol negotiations.
“There is such emotion here about the lack of divergence with the rest of the UK, but there is a huge divergence in the way we run our trade investment agency,” he said.
“For example, we look at the UK as an export market and we look at the UK as a foreign investor in Northern Ireland.
“I believe that we are a special case. and we need to part ways. We have unique strengths and weaknesses, and our agency needs to be different and dynamic to reflect and embrace those strengths, but it feels a bit dated and redundant.”