Northern Ireland

Corporation tax: Northern Ireland needs long-term growth, says think tank

Dale Farm worker
Image caption The Nevin Economic Research Institute said an innovation fund should be used for research and development in areas like agri-food, sustainable energy and life sciences

Northern Ireland needs a new industrial policy for long-term growth rather than "buying-in" economic success, a think tank has recommended.

The Nevin Economic Research Institute (Neri) said that the majority of Invest NI's grants should be refocused into an "innovation fund".

The fund would be used for research and development in areas like sustainable energy, agri-food and life sciences.

Neri said corporation tax would not address long-term economic challenges.

The think tank said current policy is too focused on what it calls "inefficient financial support for large foreign-owned companies".

Spending on research and development in Northern Ireland has increased sharply in recent years and reached a record £645m in 2013.

However Neri said those strong figures "hide the paucity of basic research generated by indigenous firms".

'Productivity'

Neri economist Paul Mac Flynn warned that Northern Ireland faces significant long-term economic challenges and that a focus on corporation tax would not address that.

"The current debate surrounding corporation tax is distracting from the long-term investment and capacity building needed in key growth sectors of the economy," he said

"Northern Ireland has for many years struggled to close the gap in productivity with the rest of the United Kingdom.

"In order to meet this challenge the state must take an active role in boosting innovation in the economy and commit to it financially," he added.

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