Professor John Doyle:

In the work of Professor McGuinness and Dr. Bergin, we can see that statistical pattern but it is impossible from the statistical pattern to know if A causes B or if B causes A. That is just the logic of that sort of analysis. It cannot be unpicked. That is why the next step is to ask decision-makers what their view is. Those decision-makers could be right or wrong on the trade-offs. This might provide an explanation as to why in the model, the South is like a textbook. If one increases the number of graduates by 1%, the economy grows by 1%. It is almost a straight line. It is what you teach first-years in an economics course, namely that the economy in the South does what you expect it to do. The Northern Ireland economy does not do so, for whatever reason. I think it is because of reputational issues. It is hard to be certain but I think that is why. The chicken-and-egg situation is hard to disentangle. Graduates will not come home unless there are well-paid jobs for them. There are better opportunities in England, Scotland and Wales close to the universities where they studied, and they settle after a while. My sense is that no company in San Diego carried out an analysis of the Northern Ireland labour market, looked at the graduate levels and thought that it would not go to Belfast because the graduates are not there. They never even got to that point. There is a reputational issue to the effect that Northern Ireland is too unstable, regardless of whether it is in the Single Market or whether there is power-sharing. The proposition never even got to the table as an offering.

The graduate issue is a problem but I am not sure it is the biggest short-term barrier because the companies never got that far. It is the broader notion of having an offering, which in some ways requires investment as well as reputational issues. In the short term, it will require an increase in public expenditure and increased subvention from the UK. The scale of what will be required will not be raised by water charges in Northern Ireland. Whatever about the politics, it just would not raise enough money to make the biggest difference. It is the reputational investment first, getting those graduates home and starting reinvestment in the schooling system and the further education system in particular, which will take a bit longer, to keep going.