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Ireland-Northern Ireland (United Kingdom)

The island of Ireland, which includes both Ireland and Northern Ireland (United Kingdom), is home to 6.4 million people and has a combined economic output of USD 205 billion. Several cross-border institutions were created in response to the 1998 Belfast/Good Friday Agreement to recreate functional economic linkages across the border. InterTradeIreland is a rare example internationally of a cross-border entity to promote trade and innovation that is co-funded by respective governments. These efforts have led to stability in funding such programmes. The differences between the public sector-driven economy in Northern Ireland and the dual economy of Ireland (outward-looking multinationals and the local small and medium-sized enterprise base) are a challenge for cross-border efforts.

This chapter is an excerpt of Nauwelaers, C., K. Maguire and G. Ajmone Marsan (2013), “The case of Ireland-Northern Ireland (United Kingdom) - Regions and Innovation: Collaborating Across Borders”, OECD Regional Development Working Papers, No. 2013/20, OECD Publishing, Paris, http://dx. doi.org/10.1787/10.1787/5k3xv0llxhmr-en.

Introduction

History plays an important role in assessing the potential and barriers for economic cross-border relationships between Ireland and Northern Ireland (United Kingdom). In the 19th century, the island was a poor agricultural region part of the United Kingdom, the epicentre of the industrial revolution. The Great Famine in mid-century led to a 25% drop in the population, including through massive emigration. The northeast part of the island suffered less, as the Belfast area was enjoying the benefits of heavy industrialisation, notably in shipyards and the textile industry. Ireland became independent in 1922, while Northern Ireland remained part of the United Kingdom. Northern Ireland was granted devolved administration status in the United Kingdom in 1998, with its own parliament and devolved government. Since the late 1960s and until the mid-1990s, the people of Northern Ireland endured a period commonly called “The Troubles”, with its associated civil unrest along religious lines (Protestant and Catholic). After ceasefires in 1994, the peace process gathered pace and resulted in the Good Friday/Belfast Agreement in 1998.

The period since the Agreement has opened a new era of possibilities for developing cross-border linkages across the island. Institutions and policies have been enacted jointly by Irish and British authorities, with support from the EU and the international community, to promote peace on the island. These institutions serve to restore trust across the border in addition to economic ties. The willingness to “reap the benefits of peace”, relying on mutually beneficial exchanges, is currently high on the political agenda. Beyond the contribution of economic exchanges, the new question in this report relates to the potential for innovation-oriented co-operation for the delivery of economic growth, employment and competitiveness on the island of Ireland. Cross-border co-operation is one way to reinforce the strengths of both sides of the border by capitalising on proximity linkages to expand innovation possibilities. Promotion of cross-border co-operation goes hand-in-hand with the promotion of openness towards EU and world markets. The two strategies complement, not substitute, each other.

Table 7.1. Socio-economic overview: Ireland-Northern Ireland (United Kingdom)

Variable

Ireland

Northern Ireland

Surface (km2)

70 283

14 148

Population (2011)

4 588 282

1 810910

Population density (inhabitants/kmP)

66

128

Main cities

Dublin - 28% of island population

Belfast - 18% of island population

Unemployment rate (Q2 2012)

14.8%

7.8%

GDP per capita (2009) (USD PPP constant prices 2005)

36 346

24 014

Note: TL3 is the second level down from the national level in administrative terms.

Sources: InterTradelreland (2013), “Background report for OECD study on cross-border regional innovation policies: Ireland/Northern Ireland”, InterTradelreland, January; OECD (2013), OECD Regional Statistics (database), http://dx.doi.org/10.1787/region-data-en.

Figure 7.1. Ireland-Northern Ireland (United Kingdom): The all-island area and its city-regions

Grey line denotes border between Ireland and Northern Ireland (UK)

Note: This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries.

Source: Irish Academy of Engineering & InterTradeIreland (2010), An Infrastructure for an Island Population of 8 Million.

Table 7.2. Strengths, weaknesses, opportunities and threats for cross-border innovation policy: Ireland-Northern Ireland (United Kingdom)

Strengths and assets

Weaknesses and barriers

  • - Strong political commitment to cross-border relationships
  • - Institutionalisation of collaboration through InterTradelreland
  • - Structural bi-national funding sources for cross-border efforts, limiting dependency on external funding sources (i.e. European Territorial Co-operation funding)
  • - Development and use of strategic intelligence produced by InterTradelreland
  • - Cross-border innovation co-operation instruments by InterTradelreland and their positive impacts
  • - Lack of language barriers and limited cultural barriers
  • - History of social conflict limiting trust and social capital
  • - Accessibility/proximity challenges for the peripheral areas of the island
  • - Different economic structures and innovation potential (Ireland multinational corporation [MNC] base, Northern Ireland public sector)
  • - Insufficient linkages of Ireland-based MNCs with island-based SMEs (both sides of border)
  • - Weak open innovation practices by many SMEs
  • - Differences in university regulations and study programmes
  • - Limited visibility of InterTradeIreland
  • - Public sector-dominated cross-border initiatives (need for more privately led initiatives)

Opportunities

Threats

  • - Greater critical mass of public research and technology development through national policy
  • - Use of European Cohesion funding sources (e.g. ERDF and ESF) for cross-border innovation
  • - All-island branding for FDI attraction, particularly in key sectors
  • - Insufficient job creation in the crisis recovery throughout the cross-border
  • - Lack of long-term sustainability of publicly funded efforts
 
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