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High-tech firms hungry for young, dedicated brainpower and
a European presence need look no further than Northern Ireland.

Seeing is believing when it comes to Northern Ireland -- it just depends on how you see it. If you perceive Northern Ireland as the gloomy media images of the mid-1980s, then it would seem the last place in the world you'd want to do business. But if you go there in person, or study the latest business news, you'll see a totally different view of Northern Ireland -- one of a prospering economy that's rapidly expanding in the information technology and software industries.

"The image of Northern Ireland in the 1980s is still, unfortunately for us, around," says Bill Montgomery, senior vice president, North America, with the Industrial Development Board for Northern Ireland (www.invest-northernireland.com). "Those images are still a challenge for us when we're first approaching executives in high-technology companies in North America. But as we get them to visit Northern Ireland, they're beginning to see it in a totally different way."

But despite the war-torn perception, Northern Ireland continues to grow in a number of ways. The GDP, for instance, has grown twice as fast as other regions of the United Kingdom (UK) for manufacturing output, according to Montgomery. In the last five years, Northern Ireland has also garnered US$2.5 billion of investment from North America alone, which for a region of only 1.5 million people is a sizeable amount of investment. Northern Ireland also has seen one of the highest growth rates in terms of employment in the UK, with unemployment rates dropping from 17 percent in the mid-1980s to less than 7 percent today.

The success that Northern Ireland is experiencing can be attributed to several aspects of the economy. "If you look at the underlying economics, it's one of the lowest cost and best infrastructured low-business-cost places to do business in all of Europe," says Richard Greene, a senior manager with Ernst & Young. "And the difficulties between the Northern Irish and the Republic are basically focused in only a few areas around the country; it really hasn't affected businesses. Ports haven't closed; the airports haven't closed; trucks haven't been hijacked. Business goes on very well, and the companies that have gone into Northern Ireland have found a low-cost business space, pretty strong infrastructure, and lots of ways to get to the rest of the UK and other areas in Europe."

Northern Ireland's Low-Cost Appeal

Among the top advantages that companies typically find in Northern Ireland are a cost-competitive location and a very skilled and highly educated work force. Although the incentives for locating in Northern Ireland have changed little over the past few years, the cost of locating in the region is far less than many other European locations.

In fact, a Northern Ireland location can provide a business-cost advantage of anywhere between 10-15 percent over the Republic of Ireland, and around 25-40 percent over the south of England and mainland European countries such as France and Germany. Northern Ireland is 10 percent cheaper than the north of England and Scotland. "Now that's very broad, but we know we are always competitive and always ahead," says Montgomery.

Northern Ireland does not have a 10 percent corporate income tax like its neighboring Irish competitor, but its incentive packages are among some of the highest within the UK, says Greene. "So it would be an economically viable option and a smart option in terms of cost to invest in Northern Ireland," he adds.

For example, a company can receive up to 40 percent of capital expenditure in incentives from Northern Ireland. The only requirements are that the prospective company hire people and make a capital investment. "So depending on how big an investment you're making and how many people you're hiring, you can negotiate a very attractive incentive package, better than the Republic," says Greene. "Say you were going to invest $10 million in Northern Ireland, and you were going to hire 100 people. Then you could negotiate up to about $4 million of incentives from the government, and that could be termed as a per-job cost that would work out to be around $40,000 per job."

Cheap, Available Labor Up for Grabs

Like other business costs in Northern Ireland, labor is cheaper as well, especially compared to mainland Europe. But cost is only part of the work-force advantage. Northern Ireland also has an abundant amount of labor that is young and well educated.

"Almost half our population is under 30 years of age," says Montgomery. "We have the youngest work force in the UK, and they are highly educated. We actually have a surplus of young people with IT qualifications, and that has been a major incentive for the IT companies in North America."

And the number of skilled young workers is increasing rapidly. "People are coming back here because of the improvement in the whole situation in Northern Ireland and the types of companies that are growing and that we have brought in the last decade," says Montgomery. "They're finding a career path that they can now follow, and they have had experiences in Europe and North America where their skill sets are very valuable. So it's not just people coming back, but people with the right skills and experiences."

Low turnover rates also make Northern Ireland attractive to businesses. On average, the turnover rates range between 5 percent and 7 percent, "which I like to put to companies, particularly those in the IT business and customer support," says Montgomery. "We say that at the end of the year, you've got 95 percent of your work force still there, and in return, that will have a big effect in terms of costs and continuity of the business."

Many companies are finding Northern Ireland's work force and low costs a good fit for their needs. Information technology/software companies find the market particularly attractive, and many of their investments have been in the Belfast and Londonderry markets.