NewsLetter 12: Final Reflections

This will be the final edition of my newsletter. Before I sign off, I'd like to extend my sincere thanks to each of you who have read, engaged, and shared thoughts over the course of the past three months. 

My original aim was to share some analysis and thoughts on Northern Ireland's AI and economic policy issues. More fundamentally, this was about analysing stuff that I'm interested in and coming up with a fresh angle to parse it and communicate it. I’m passionate about writing and sharing ideas - something I’ve always done in one shape or form throughout my career - so this was both something of a self-indulgence and also something that I think is increasingly necessary. 

I feel there is a gap for frequent, near real-time independent analysis of policy, particularly on tech, and from a source that doesn’t isn’t motivated primarily by commercial interests. There is much good work happening in the universities, think tanks and in policy units, but that type of research takes time to produce. I still feel that while publication like Sync NI does a fantastic job on the promotion and circulation of what companies are doing, there is space for a weekly tech and policy publication which is quickly assessing what it all means and connecting the dots.

The 17 articles I wrote for this newsletter (that's a single individual with no time, resources or advertising) accrued ~5,000 reads. I’d say that’s enough to suggest there is an audience for independently sourced stories & analysis not being catered for by existing outlets.

In writing these newsletters, I found that the data is increasingly out of keeping with what we tell ourselves. Overall, I fear that we as a region have been too focused on creating marketing and messaging, and less interested in detail and decision-making. Too much time is spent generating marketing bon mots, and not enough creating challenging ideas. (I confess that I have contributed to the marketing noise, so these newsletters were designed to balance that out.) 

Northern Ireland is hugely rich in potential, brimming with opportunity, but facing real challenges. In a small way, the recurring theme of this newsletter is that we ought to gently set aside the comforting narratives and adopt a more honest, strategic policy perspective that doesn’t play it safe.

For this final newsletter, I thought it would be helpful to summarise some of the main points covered this past three months. So I've mapped out below what I found particularly interesting - either as blockers to remove or ideas to run with.

Thank you once again for reading. While this newsletter series concludes, writing is in my nature so I have no doubt I'll be back with something else in the near future. Until then…

Very best,

Geoff

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How we might provide essential support for SMEs: 

If you’re an SME into public sector tendering, this CPD site is an absolute gem. It’s free to access but not everyone knows about it. This gets refreshed every month and gives bidders visibility on planned procurements. It’s a must for sales teams: you can pipeline deals, all qualified, and then engage with the public bodies as the commercial opportunity isn’t live. The site should be emblazoned all over on the Software NI site or Sync NI I, with a focus on tech-related tender opps. Currently there are 72 opportunities listed valued at at least ~£500m; I took the lower end, so this figure is actually closer to £1bn.

An additional thought on public sector tendering - NI has an amazing fintech cluster here, offering niche solution in areas like AML, ID verification and fraud. Big national level contracts (the recent £1bn HMRC CRM project) should be addressed in a big picture way by industry here. Organisations like NI Chamber should be brokering dialogue between their members to create consortia to bid for a piece of these. By setting the conditions for consortia to be created, this would provide additional value to members.

How a New Media Platform might support this: 

On this topic of tendering, there is definitely space in the market here (and in Ireland) for a media platform that deals wholly with public sector tendering; what’s pipelined, what’s awarded, interviews with procurers, advice to the market, tech trends, governance, social value etc etc. This is badly needed to encourage SME participation and spread the benefits of government investment. The audience for this would be indigenous business starts as opposed to the multinational consultancies, software houses and SIs.

Government spend should be distributed more liberally around the marketplace, but too often I see large consultancies (machines designed to hoover up government contracts) rewarded by risk averse government procurers (I mean, which BSO ever got fired for awarding Deloitte or PA Consulting a contract?). SMEs receive good support from InterTradeIreland and Invest Northern Ireland etc, but they need more. Consider this too: Enterprise Ireland 's strategic plan points to a possible goldmine for our exporting SMEs. In 2023, EI backed businesses spent €39 billion in the Irish domestic market. Now EI wants to increase this to a €55 billion spend in 2029. The ripple effect of this will surely lap up against the sides of our own economy (particularly for ESG and net zero aligned firms). Again, a media platform could be supporting and signposting SMEs in the north to public tendering opportunities in the south. This happens to some degree but more needs to be done IMHO. And lest we forget, the recent UK-India trade deal will see UK businesses granted new access to approximately 40,000 tenders in the India market with a value of at least £38 billion a year.

I feel that we’ll see the economy here advance (towards higher productivity, good jobs & regional balance) more quickly with more SMEs on board and participating actively in tender opportunities. God knows, the stranglehold Agenda NI has on the NICS needs to be broken as does the exclusionary advertising rates which only larger firms can afford. This monopoly on marketing access to the civil service really ought to be contested; plus the civil service appears to be providing a degree of patronage and support to a commercial interest and in effect are influencing the media marketplace. Competition could challenge the pricing commanded by Agenda NI and their events arm, which in turn would assist SMEs in accessing the civil service. Had I financing, this is the business I would start tomorrow. But I don’t, so I’d be very happy to see a better leveraged individual or local media outlet take a shot at this.

How we’re guilty of making big bets in the absence of evidence: 

There has been alot of talk about the benefits of Dual Market Access (™everyone/everywhere). In the Matrix Report on Space clustering, on Ministerial trade missions to Germany and the US, in press releases and linkedin updates. At the end of last year, at the Committee For the Economy, Invest NI chief Kieran Donoghue was asked: “Have we evidence of that unique dual market access?” He said: “Not to my knowledge at this point in time not yet. So I think there is still a relatively low level of awareness of the opportunity represented by dual market access so in recognition of that and following discussions with our colleagues in the department we've set up a dedicated team within Invest NI focused on the issue of dual market access.”

The Keir Starmer response. That is, when evidence shows something is failing (like Labour in the local election results), one simply interprets this as a mandate from the electorate to go harder, faster. Labour is rejected? Our fault, you haven’t had enough Labour so you definitely need more. Dual Market Access (DMA from now on) operates at the same level. The benefits of DMA have no evidential value? Our fault, we need us sell it to you harder and faster. As I’ve mentioned before, there is a logic to it but economics - like quantum physics - sometimes engages in spooky behaviour that confounds logic. Then the EU AI Act turned up and the idea started to take hold that NI would be subject to its provisions.

So here’s my worry - DMA will mean that two sets of separate, and often conflicting, regulations from the UK and EU have frictionless access to Northern Ireland. Not the “business-friendly environment” Invest NI is selling overseas, so this really needs to be clarified.

And if all this wasn’t spooky and opaque enough, KPMG Ireland ’s lead partner in NI told the Irish News: “If Northern Ireland is to make the most of the competitive benefits offered by dual market access under the Windsor Framework, it needs to cut corporation tax - and quickly.” He then ill-advisedly put his credibility on the block and described corporation tax as the panacea to our economic woes. Unless he’s been tipped off by DfE that this is on the way, I can’t see any logic in resuscitating this dead parrot from the policy world’s equivalent of the choir invisible.

But I’m not surprised these two issues have been linked together. Corporation tax has been going on for more than a decade with absolutely no movement (despite Stormont having powers to move it). DMA looks like it’s of a similar hue. Really, these turkeys turn up when ideas have run dry and you need to say something that has the appearance of thoughtfulness. Corporation tax and DMA have occupied enough grey matter and valuable time which could otherwise be spent in the generation of fresh ideas. The Northern Ireland Scrutiny Committee is currently investigating the Windsor Framework. This might provide an answer. You can follow the evidence gathering sessions via this link.

How do we address a problem like Scaling Up? 

We start companies at a slightly lower rate than most (tech incorporations are down, says RSM UK ), and we scale them at a much slower / poorer rate than everyone (reflected by a CAGR investment decline over 4 years, says techUK ). And when we do we start, we struggle to raise above seed (says the Irish Venture Capital & Private Equity Association ). Yet in Northern Ireland, we are prone to congratulate ourselves about our startup rates and talk up our tech innovation (*insert reference to Harry Ferguson, Kelvin and ejector seats in here), when the data would suggest otherwise. I think we need fewer events with people sitting on bar stools describing their inspiration journeys and more specific training on entrepreneurialism and sales. Money going into places like GoSucceed could be diverted into more useful programmes (in my experience, Go Succeed is a very good way to circulate public money around underqualified private consultants and a very poor way to stimulate business success) 

Once good work has been done, how do we follow this up? 

The other issue I’ve detected is follow up. Matrix, The Northern Ireland Science Industry Panel and Stephanie Maher produced an excellent report on RegTech here. Right now, Belfast has more people employed in RegTech per capita than London, and particularly in FinTech and cybersecurity. Given our strength in this area, and the fact that the market was valued as $10.8bn in 2022 and is projected to grow to $35.2bn by 2028, how are we capitalising and supporting innovators in this field? What comes next? Who is taking on the report's recommendations and what's the status?

How do we ramp up AI policy development? 

I wrote about the AI Advisory Council in Ireland, a model that is very badly needed in Northern Ireland. In February, it recommended investment in an ‘AI Observatory’ that delivers data and insights on a wide range of AI metrics such as labour market dynamics, capital flows, skills development, quality of life enhancement, complementary innovations, public attitudes and much more. All very good stuff, but it also recommended something for consideration on north-south cooperation. That was an 'AI Energy Council' to ensure necessary measures are taken to rapidly develop clean energy capacity, while transitioning from fossil fuels etc. With UK gov accepting bids for AI Growth Zones (one criteria for which being demonstration of a clear pathway toward creating 500MW of energy infrastructure), it would surely be in Northern Ireland's interest to input into the work of this council, if not request participation in it. 

How do we learn lessons from elsewhere?

On AI Growth Zones, I wrote about this in one of my first articles and AIGZs appeared in my last newsletter (the second expressions of interest call has gone live). For policymakers involved in AIGZs / Enterprise & Innovation Zones in Northern Ireland, I would flag this report from The Canary which finds that the equivalent of £20bn has been poured into freeports BUT main benefactors are large investment firms like Blackrock... and not local businesses. Interesting read.  

How do we capitalise on the opportunities for AI in the public sector?

The ‘AI Economy in Ireland 2025: Trends, Impact & Opportunity’ report - authored by Trinity College Dublin academics in collaboration with Microsoft Ireland - found 24% of public sector organisations in NI report using AI in most or all data-driven decision-making, whereas in Ireland, this figure stands at just 14%. “This suggests that Northern Ireland’s public sector is integrating AI more comprehensively into decision-making processes compared to its counterpart in Ireland,” the report says. This is proof positive that we have an excellent SBRI system, and also that there is real appetite in the public sector for AI innovation.

On more than one occasion, I wrote about the House of Commons Communications & Digital Committee. Its reports on the ‘Future of News’ and ‘AI and creative technology scale ups’ are absolutely essential reading and will immediately transform anyone into a bona fide expert if reading closely. The committee is investigating media literacy at the moment; I’ll be staying across this and I would urge anyone with an interest from a skills and education perspective to do the same. On the topic of sine non qua bodies that generate ideas, the Tony Blair Institute for Global Change is becoming my favourite think thank. They are saying things that are popularly unsayable and politically unpalatable - they are inviting us to examine our assumptions and question consensus thinking. I don’t agree with their conclusion on alot of things but I definitely approve of their topic areas and research methods.

Other nuggets: 

• If your technology is aligned to the Defence Sector (and I definitely don’t mean dual use machine tools), you might want to double down on those applications. Defence spending is going up, the spend here is going up and has alot more catching up to do. 
• The Northern Ireland Audit Office are currently reporting on public procurement here. This is due for publication very soon and this too will be essential reading. One area that I’m interested in is the nature of the legal actions that arise out of the procurement processes. Here’s the CGI/DfP one for example, and disputes about EA contracts have been circulating around offices of m’learned friends for some time. How are we capturing lessons learned from these events? How do we avoid costly actions of this type?
• And finally, I still say Ionic Technologies might be the most important companies in Northern Ireland. I have no relationship with them, and wouldn’t know their management team from Adam, but the global issue around rare earth elements (REEs) is of such significance that I imagine they will quickly go stratospheric. 

And that's it.

There's fantastic work occurring at every tier of economy here - local government, ALBs, devolved government and throughout the tech sector. Anything I've raised over the course of the past three months is designed to help support these efforts and make a small contribution to progress generally.

Thanks for reading.