Professor Edgar Morgenroth:

I will start, and my colleague, Professor FitzGerald, will deal with the labour mobility issue. With regard to other drivers of productivity, there are obviously important ones. Dr. Farry mentioned infrastructure, and wider transport infrastructure tends to be an issue. In research I did with others a few years ago, we found that broadband infrastructure is more important than any type of transport infrastructure. Not each type of transport infrastructure is equally valuable, and again, that is important. Certainly, we found at the time that with regard to foreign direct investment and new startups, education was the biggest factor, followed by broadband. That is important. The digital agenda is very important.

Regarding inward investment, Dr. Farry is quite right. In a united Ireland setting, one would expect that there would be only one agency dealing with attracting foreign direct investment, and that the arrangements and benefits would be the same. There would be a corporation tax rate that is common across the island and it may attract different types of firms. As I said a moment ago, education is one of the big factors in attracting FDI, and so we keep coming back to the issue of the education system in Northern Ireland, which is one of the big constraints. If one implemented appropriate reforms, there could be significant benefits. Again, firms would look forward. They would not just look at what the position is now but, rather, at how the position will change in the future. Consequently, one could expect additional FDI into Northern Ireland, which would raise productivity and so on.

When it comes to choices of multinationals, there is essentially one pool of multinationals, companies that are based outside Ireland. If they make an investment in Northern Ireland, it is an investment that they will probably not make elsewhere on the island. The net effect for the island of Ireland will not necessarily be a huge increase. There may be some scale effects because we would be a larger market, but that would be a very modest effect. While Northern Ireland can pick up additional FDI and perhaps higher-value FDI, that might come at a cost to other parts of the island.