Professor Seamus McGuinness:

With regard to our analysis, we strip out the sectors that are heavily influenced by FDI. Our comparator is basically the Irish indigenous part of the economy with almost all of the Northern Ireland economy because we are very aware of the distortions of some of the FDI in the national accounts. The fundamental point that comes out of that analysis is that productivity in the Republic of Ireland responds as one would expect to increases in things such as export intensity, human capital, proportion of people with educational qualifications and levels of investment. When we do the same thing for the Northern Ireland economy – build the data up in the same way and estimate the models in the same way – we do not see any of that. There is no evidence in the Northern Ireland economy that if you increase educational attainment – and we see the gaps there at the moment – there is no guarantee that would increase productivity in Northern Ireland in the same way that it would in the Republic of Ireland, which tells us that there is something fundamentally amiss with the underlying level of competitiveness in the Northern Ireland economy that needs to be addressed also. That may be related to several factors, such as the legacy of the Troubles and also the siloed nature of policymaking in Northern Ireland. Perhaps there needs to be a more integrated approach to policymaking in Northern Ireland to generate that productivity and growth. Again, that may be a question for planning for reunification, for example, whether that provides an opportunity for new approaches to policymaking that can address that underlying structural problem whereby when you are making changes to key levers of productivity like investment, industrial policy and educational skills, you are actually getting a tangible return in respect of productivity side of the equation. At the moment, we do not see that happening.