The Productivity Gap Between North and Republic Widening: A Wake-up Call For Ireland

Once upon a time, there was a small town called Tullamore in County Offaly, Republic of Ireland. It was a peaceful place, surrounded by lush green fields and rolling hills. People there were hardworking, friendly, and generally content. However, something was brewing beneath the surface, something that threatened to disrupt the peace and prosperity of the town. This was the widening productivity gap between North and Republic.

According to a recent report by the Northern Ireland Committee of the Irish Congress of Trade Unions, the productivity gap between the North and Republic is widening. The report states that productivity in the North has increased by 23.3% since the mid-1990s, while productivity in the Republic has increased by only 1.9%. This is a worrying trend that could have serious implications for the future of Ireland.

To understand this issue better, let's take a look at some quantifiable examples. In 2019, the North's gross value added (GVA) per head was £24,167, while the Republic's GVA per head was €63,897, almost three times higher. The latest Eurostat figures show that the North's labour productivity was 84% of the UK average, while the Republic's was only 64% of the EU average. In terms of economic growth, the North's economy grew by 1.5% in 2020, while the Republic's economy shrank by 3.5%.

So, why is this happening? There are several factors that contribute to the productivity gap between North and Republic. One of the key factors is the difference in the industrial structure of the two regions. The North has a higher concentration of manufacturing and engineering industries, while the Republic's economy is dominated by services, including finance, professional services, and ICT.

Another factor is the difference in education and skills. The North has a higher percentage of people with higher education qualifications, while the Republic has a higher percentage of people with lower education levels. The quality of education and training may also be a factor, with some employers reporting that graduates lack the practical skills and work experience needed for the job.

The cost of doing business is also higher in the Republic, which can affect productivity. Higher labor costs, rents, and administrative charges, particularly in Dublin, can put pressure on businesses to reduce headcount or cut wages. Meanwhile, the North benefits from lower operating costs and a more competitive tax regime.

What can be done to address the productivity gap between North and Republic? Here are three key points:

1. Increase investment in infrastructure, education, and training: Investment in infrastructure, education, and training can help to close the skills gap and improve productivity. This requires a long-term vision and strategic planning from the government and private sector.

2. Support innovation and entrepreneurship: Innovation and entrepreneurship can be the driving force behind productivity growth. Governments can provide funding and support for startups and small businesses, while universities can provide research and development opportunities.

3. Foster collaboration and networking: Collaboration and networking can help to break down the barriers between North and Republic and promote a shared vision for the future of Ireland. This includes supporting cross-border initiatives and fostering relationships between businesses, universities, and communities.

In conclusion, the productivity gap between North and Republic is a wake-up call for Ireland. It highlights the need for a more concerted effort to address the underlying issues and create a more sustainable, productive, and prosperous future for all. By investing in infrastructure, education, and training, supporting innovation and entrepreneurship, and fostering collaboration and networking, we can work together to bridge the productivity gap and build a better Ireland for future generations.

Reference URLs:

- https://www.irishnews.com/business/businessnews/2021/06/30/news/northern-ireland-outstripping-republic-of-ireland-in-productivity---new-report-2362142/

- https://www.irishtimes.com/business/economy/northern-productivity-23-higher-than-republic-1.4606945

- https://www.eurofound.europa.eu/data/european-labour-force-survey-2018-2019-elsfuscated-9353

- https://www.belfasttelegraph.co.uk/business/northern-ireland-economy-grew-by-1-5-last-year-new-data-shows-40420005.html

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Category: Business and Economics