Ulster Business School Masterclass

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Growing our Knowledge Economy
Richard Johnston, Associate Director, NICEP

The Knowledge Economy is an important and growing component of the NI economy.  It is made up of a range of sectors including IT services, software development, creative content & digital media, communications, computing & advanced electronics, the manufacture of medical devices, pharmaceuticals & biotechnology, aerospace and other technical consultancy.  Companies in these sectors invest in research, development, innovation, creativity and sales & marketing to help them develop their products with which they can compete internationally.  These companies export across the globe with the result that a range of highly skilled and well paid employment opportunities are provided in NI.

Last year was good for the Knowledge Economy, in that fourteen of the twenty one areas included within the Index grew.  This is a laudable performance for the sector in the context of an often challenging macroeconomic environment and whilst this performance is to be welcomed, the regional rankings show that on average, NI is still only ranked tenth out of the twelve UK regions. 

Source:  NI Centre for Economic Policy   
Notes: * London Stock Exchanges definition of UK regions includes 10 rather than 12 regions.

The newly developed composite Knowledge Economy Index shows that the sector has grown more rapidly in NI than in the UK, especially since the recession.  The major driving factors in 2010, ‘11 and ‘12 include;
? Knowledge economy business starts;
? Private equity and VC investments;
? Market capitalisation of PLCs; and
? The number of patent applications filed and granted.
All of which have grown by more than thirty per cent between 2009 and 2012, which is impressive.

Figure 1: NI Composite Knowledge Economy Index (UK = 100)

The evidence clearly shows that the Knowledge Economy is moving in the right direction and catching up with the UK.  We should be cogniscent of the fact that all other regions of the UK are also striving to grow their Knowledge Economies and the target at which we are aiming continues to rise. 

The challenge for those within the sector, the research community, policy makers and advisory bodies is to ensure that we all work together to grasp the opportunities for the sector and realise the full potential of the Knowledge Economy and the contribution that it can make to the NI economy. 

For more information on the Knowledge Economy Index research series, please visit http://www.nisp.co.uk/ni-knowledge-economy-outperforms-uk-average/

The content of this article is provided for information purposes only and does not constitute professional or other advice.

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