Business Month December 2014

December 2014 • ISSUE 49 PRICE £2.50 (Where sold)

THE SECRET

SUCCESS You’ll see few pictures of them and even fewer quotes. This portrait is a rare glimpse of one of the scions of the company — and yet the Barnett family is responsible one of Northern Ireland’s biggest business success stories

• INFRASTRUCTURE • JONATHAN FLINT ON ANDOR • DENROY PLASTICS • 2014 ECONOMY WATCH SPECIAL 3•November THE2014 CHAIRMAN BUSINESS MONTH 1

CONTENTS

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Editor’s note Margaret Canning

FEATURES

mcanning@belfasttelegraph.co.uk

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12 Analysis: High performance computing can help fast-track SME growth and innovation 14 Analysis: Northern Ireland’s economy can grow if our predominantly family-owned businesses spread their wings and expand into overseas markets 16 Economy Watch: Wages and profits under the microscope 22 Analysis: Ohio is a great example of economic success, writes Alan Watts 24 Breaking the Mould: His company bought Andor last year - now Jonathan Flint reveals his passion for science

FOCUS

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38 Independent retailers: As our shopping trends change, our shop owners are reporting a boost in sales , taking on the supermarket giants 42 Fit-out firm: The companies which have worked on some of our best restaurants, pubs and shops — and even ventured to Disneyland, Paris

COVER STORY FIELDS OF GOLD What is the secret behind the phenomenal performance of Northern Ireland’s most illustrious business successes, W&R Barnett?

OFFLINE

46 Out to Lunch: Joris Minne sits down with James Nicholson, the archbishop of the wine trade, who shares his love for wine 48 Day in the life: Simon Campbell managing director of Portview Fit-Out 58 The Chairman: Our man about town gives us the inside track on business.

62 Last Word: Willtheriseofthe robotsheraldanewgoldenagein theworldofwork?

Business Month 124-144 Royal Avenue, Belfast, BT1 1EB Editor - Margaret Canning

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26 Sales manager - Jackie Reid Contact: +44 2890 264070 or email: j.reid@belfasttelegraph.co.uk

58 Design and production: RE&D Business Month is an imprint of Independent News and Media (NI)

ELCOME to December’s issue of Business Month, which will find many businesspeople on tenterhooks as the Prime Minister finally delivers a decision on Northern Ireland’s corporation tax debate (we hope).

It’s been a long road for the stalwarts of the campaign but one many of us hope will reach its destination before our Christmas decorations go up.

And while businesspeople in the province are naturally disposed to Christmas good cheer, we also have reason to be nervous about economic prospects to come.

The austerity which has gripped the Republic in an icy embrace is now travelling north - one form of cross-border trade we could well do without.

The year ahead may be one in which we’re finally forced to swallow some pretty unpleasant medicine. Eurozone nerves are also expected to impact on Northern Ireland, making our below-par export performance worse.

But we have already come through a tough period and are leaner, meaner and more resilient as a result.

Indeed, by November we’d notched up 16 months of improved business activity, so there is something to celebrate at this year’s Christmas party.

And if it’s harder to maintain that performance in 2015, it won’t be for want of trying.

Merry Christmas, and see you in 2015.

1 December 2014 BUSINESS MONTH 3

NEWS BITES

£7.7bn

£0.2bn

£64.1bn £3.7bn

£341bn

UK public sector borrowing in Oct

Fall in borrowing on Oct 2013

Amount borrowed by public sector April to Oct

Central government income April to Oct

Increase in borrowing on same time 2013

Source: Office for National Statistics on public sector finance

Financial firm expands with 600 new jobs FINANCIAL services firm Citi says it is creating 600 new jobs as it further expands its Belfast operations.

The company currently employs some 1,500 people at its Titanic Quarter office.

The new positions will boast average salaries of around £35,000. It’s an overall investment worth £54m to the Northern Ireland economy.

Citi has operated in Belfast for nearly 10 years. It increased its workforce from 900 people to around 1,400 after a jobs boost back in 2010.

Invest NI has put forward almost £6m towards the investment.

James Bardrick of Citi praised the talents of Northern Ireland’s workforce. “The success of our current operations in Belfast was an important factor behind this latest decision to create another 600 jobs,” he said.

Luggage courier takes slice of the Big Apple INDEPENDENT luggage courier Sendmybag.com has opened a branch in New York, creating a dozen new jobs shared between the new US base and its Co Down headquarters.

The baggage carrier, started

by Bangor entrepreneur Adam Ewart, has launched 50 new routes from Europe to the US with luggage shipping charges starting at $99 (£63).

The Big Apple office was launched to provide in-country customer service support and a marketing base for SendMyBag in America. Mr Ewart confirmed the move would result in at least 10 new posts over the next six to 12 months.

US port officials eye waterfront design OFFICIALS from a port in Washington state are set to visit the Titanic Quarter as they consider

HOMES DEAL: Housing association Helm Housing has announced a contract worth £25m over seven years with H&J Martin. The firm will provide response maintenance services to 15,000 tenants in more than 5,000 properties. Around 30 H&J Martin staff will be involved in the work and here, H&J Martin managing director Derek Martin, left, joins Michael McDonnell, chief executive of Helm Housing, to announce the deal modelling a proposed redevelopment on Belfast’s waterfront.

Titanic Quarter has provided a calling card for its Donegal-based developer Harcourt which could help it secure a major contract for Port of Bellingham.

The firm, which is headed up

by Pat Doherty, is in the running to clinch a deal to redevelop 20 acres of waterfront in Port of Bellingham.

The project is expected to cost $44m (£28m) with half of the cost covered by the state, and would take around eight years.

Prison software could be a Danish success A COMPANY specialising in technology for prisons has carried out a major export mission to the Nordic region, helped by Invest NI and British Airways.

Core Systems (NI) Ltd in north Belfast was one of the winners of this year’s Export Challenge, supported by Invest NI and British Airways.

4 BUSINESS MONTH 1 December 2014

Their prize was a set of British Airways flights to the export destination of their choice, along with market research advice from Invest NI. The company’s chief executive Patricia O’Hagan said it chose to visit Denmark to seek out customers for its technology.

The firm has been in business for around 20 years, developing systems which help prisoners access information and educate themselves, therefore helping their rehabilitation.

Denmark’s liberal penal regime allows prisoners to leave jail to work in the community as part of their sentence.

The company’s commercial director and business development manager travelled to Denmark in August to carry out market research and make new connections by visiting prison facilities.

A spokeswoman for Core Systems said: “The trip helped to build strong relationships with those in charge of criminal justice within an innovative country.”

Bank’s massive fine over software blunder A FAILED software upgrade — which left 700,000 Ulster Bank customers being unable to use their accounts for three weeks — led to the biggest ever fine handed down by the regulator.

The Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulator Authority (PRA) slapped the Royal Bank of Scotland (RBS), which owns Ulster Bank, with a fine of £56m for the IT meltdown in June and July 2012.

The banking group, which also includes NatWest, has already paid £70.3m in compensation to its customers because of the problem. A further £460,000 has been paid to those who were not customers but were still affected.

In November, Ulster Bank was fined €3.5m (£2.7m) by the Republic’s financial regulators for the effect it had on the bank’s customers south of the border.

NEWS BITES

Invest NI enjoys its best ever results PAUL GOSLING

▲ HOUSE SALES:

The number of house sales in Northern Ireland rose by 21% in the last year, with average prices rising by 7%.

▲ MORTGAGES:

Gross mortgage lending in the UK rose by 8% in the last year, to £17.5bn. This is the largest amount since 2008.

▲ CONSTRUCTION:

UK construction industry output rose by 3.5% in the last year. It has now grown yearon-year for 16 consecutive months.

▲ SELF-EMPLOYMENT:

The number of people in the UK becoming self-employed rose by 6.6% in the last year: 14.7% of the UK workforce is now self-employed.

▼ UNEMPLOYMENT

Unemployment in Northern Ireland fell by 1.3% in the last year, to 6%.

▼ NEETS:

The number of young adults, aged 16 to 24, in the UK who were not in education, employment or training (Neets) fell by 142,000 in the last year, to 954,000.

▼ POUND:

The value of sterling has fallen by nearly 10% against the dollar since July, when a pound bought nearly $1.72, compared to $1.56 in late November.

▼ REPOSSESSIONS:

Mortgage arrears and repossessions in the UK are falling.

The proportion of mortgages in serious arrears – equivalent to 2.5% of mortgage value – fell from 1.33% to 1.12% in the last year. This is the lowest proportion since the beginning of 2008.

INVEST NI has reported its strongest ever half year results.

It reports that 10,800 jobs have been ‘promoted’ — either created or promised — in the first half of 2014, supporting £1.11bn of investment in the Northern Ireland economy.

Some £126m of investment has been offered by Invest NI, of which £35m is going to small to medium-sized enterprises here.

More than half of supported research and development investment is related to the activities of those SMEs. Firms here are also responsible for more than half the jobs that have been promoted, said Invest NI. In response to a request from Business Month for details of locations of jobs promoted in the half year, Invest NI provided a list of firms where agreements have been announced. These are scheduled to provide an additional 7,526 jobs. Of these, 57% were located in Belfast, while 70% were either in Greater Belfast or the nearby areas of Antrim, Ballymena, Carrickfergus, Lisburn and Newtownabbey.

The largest job creation projects were Concentrix, which is creating 1,043 jobs in Belfast; PwC, 807 jobs in Belfast; Moy Park, 628 jobs spread across Ballymena, Craigavon and Dungannon; EY, 486 jobs in Belfast; First Derivatives, 484 jobs in Newry and Capita, 400 jobs in Newtownabbey.

Despite Invest NI’s success in attracting investment and jobs to

Invest NI has ‘promoted’ some 10,800 jobs during the first half of this year Belfast, unemployment remains high in the city. Claimant count unemployment in Belfast was 6.2% in October, compared with the Northern Ireland average of 4.4%. The lowest rate was recorded in Castlereagh, where

it was 2.7%, and the highest was in Londonderry, at 8.2%. Claimant count unemployment has fallen in the last year by 11.9% in Belfast, compared to a fall of 27.4% in Dungannon, but just 5.1% in Derry.

Rates revaluation produceswinnersandlosers BUSINESS rates have been revalued, with the result that commercial property owners will pay rates based on their 2013 valuations rather than the 2001 valuations as was previously the case.

While some businesses will pay more in business rates than before, the exercise does not mean that more business rates in total will necessarily be collected.

The impact of the revaluation of 73,000 non-domestic properties is to redistribute the burden of business rates more fairly, in line with recent market values.

The valuations will be used for the first time for business rate

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demands to be issued in 2015.

Those benefiting from the revaluation include many licensed premises, which have been severely hit by changing consumer behaviour. There has also been a significant change in the assessed market values of retail properties in Belfast. Shops in the Donegall

Place area of the city are likely to have their rates bills halved.

Other city and town centre shops across Northern Ireland will also gain.

Losers include out-of-town shopping centres, large food stores, some pubs in more fashionable parts of Belfast, wind farms and other major infrastructure assets.

Since the 2001 valuation, commercial property prices first rose substantially and then crashed.

The overall valuation assessment is that commercial properties across Northern Ireland are worth 8% more last year than in 2001.

NEWS BITES

Productivity and spending holding us back LOW productivity is holding back Northern Ireland’s economic recovery, which is also being damaged by restricted consumer spending, according to PwC’s latest UK Economic Outlook. Yet growth in 2014 was largely driven by consumer spending, rather than by the more sustainable economic drivers of exports, investment and higher pay.

The consumer spending that has taken place has been financed to a significant extent out of savings, says PwC. This call on savings may now have reached its limit, warns the study, as the savings ratio can only fall so far.

Economic growth for 2015 is now projected by PwC at 1.9%, compared to 2.5% in the UK as a whole. Northern Ireland has the weakest economic prospects of any UK region next year, says PwC. It also warns that Northern Ireland’s average household income per head is less than 83% of the UK average and the lowest of any UK region.

“Consumer spending growth has been relatively strong for the past two years despite weak average earnings growth,” said Dr Esmond Birnie, PwC’s chief economist in Northern Ireland.

“This has been due to strong employment growth, increased income tax personal allowances and low mortgage interest rates, all of which have stimulated consumer spending. We expect the proportion of household spending on essentials like housing costs and utilities to rise steadily.”

He added: “Northern Ireland has enjoyed a significant increase in job creation over the last 18 months, but this has not translated into wealth creation which is essential to close the gap with the rest of the UK.” PwC expects Bank of England base rates to rise. “For businesses, that’s going to put pressures on liquidity and for families, it’s going to push up the cost of mortgages, overdrafts and credit card repayments,” said Dr Birnie.

Executive‘mustacttoimprovepassrates’ PAUL GOSLING NORTHERN Ireland’s business leaders have called on the Executive to take faster action to raise educational outcomes and address the number of children leaving school without basic skills.

The call followed the latest report from the chief inspector of education and training. Noelle Buick praised schools for the rise in the number of school leavers who achieve five good GCSEs. She added: “Northern Ireland’s education and training system has unacceptable variations and persistent shortcomings which need to be addressed urgently if we are to improve our provision and outcomes from average to truly world-class. Whilst educational outcomes are improving to varying degrees across all the education and training phases, the differences in provision and

achievement reflect a system that serves some better than others.”

Education Minister John O’Dowd said: “There is a consistent downward trend in the number of young people leaving school each year without reaching the crucial standard five good GCSEs. I want to see this trend ending, but I recognise there are still too many young people in this position and that there is more work to be done by all of us in education.”

Ensuring that Northern Ireland has the right skills for its economy is “critical”, said Nigel Smyth, director of CBI Northern Ireland. “It’s important that businesses seize the opportunity to work with schools and colleges and ensure that Northern Ireland’s students are equipped with the skills firms want in their employees. Science, technology, engineering and maths skills are particularly valuable, given

Private rents under review

The private rented sector provides 19% of Northern Ireland housing THE Department for Social Development has announced that it is to conduct a review of the private housing rental sector, with the objective of increasing the supply of privately-owned properties available for rent.

The review will examine the effectiveness of regulation and what improvements can be made to help make the private rented sector a more attractive and viable housing option.

The private rented sector now provides 19% of Northern Ireland housing. Private landlords received £410m in 2013/14 from housing benefits.

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Nicola McCrudden, director of the Chartered Institute of Housing Northern Ireland, said: “There are genuine issues of affordability in the private rented sector, particularly for people on benefits. Many tenants are struggling to meet the increasing shortfall between their housing benefit and their rent.

“Since early 2013 there has been a 10% jump in the number of homeless households presenting to the Housing Executive because they have lost their rented accommodation. This is an indication that welfare reform changes are already biting.”

existing shortfalls and the need to meet the opportunities those sectors will provide over the coming years.

“Businesses are looking for young people who are rigorous, rounded and grounded. Getting the basics of literacy and numeracy right are essential — we need increased rigour within the education system to ensure all young people achieve the appropriate standards in these essential skills.”

Gavin Killeen, who chairs the North West Skills Directorate, said: “If we measure the success of our schools on their results then we have schools offering easier subject choices rather than the harder Stem-based subjects: for example, the ICT A-Level V software development.

“NI plc needs kids with higher level of computational skills and this only comes from the Stembased subjects. ”

Pay falls 1.4% in NI, widening gap with rest of UK AVERAGE pay in Northern Ireland fell 1.4% this year, according to the Annual Survey of Hours and Earnings. This compares with a marginal rise of 0.1% in the UK as a whole — the smallest increase since 1997. However, pay in both the UK and NI fell in real terms once the rate of inflation is taken into account.

Full-time average pay in Northern Ireland is now more than £3,000 a year less than in the UK. NI average pay is £23,764, while in the UK it is £26,936. Average pay in NI is now the lowest of any region in the UK and it is one of only two regions in which average pay fell in the last year.

Unusually, average pay for women in NI is higher than that for men. This reflects the higher proportion of women working in the public sector. In Northern Ireland, public sector pay now stands on average at 41% higher than private sector pay. In the UK, public sector pay is 17% higher.

Just 10% of workers in NI earn more than £43,200 per year, while one in 10 earns less than £13,200.

NEWS ANALYSIS

Lucrative public procurement SMEs could be missing out on public sector tendering opportunities, according to Margaret Hearty, acting chief executive of InterTradeIreland THE public procurement market across the island is worth a staggering £9.5bn. Given its lucrative nature and significant potential, it is surprising to find that only 14% of firms have bid for a public sector tender in the last 12 months.

That was a finding in the InterTradeIreland Quarter 2 Business Monitor, which also highlighted that less than a quarter of the businesses that did take part in public procurement bid on projects on a cross-border basis.

However, of those companies that did, encouragingly more than half (52%) were successful.

It is true to say that companies really could be missing a trick with public procurement, both locally and also cross-border, but it is also the case that firms are seeing some challenges.

The impending changes in how public goods and services are tendered is likely to make this a little daunting initially for smaller firms who do not keep themselves informed. However, this does not mean organisations should shy away from tendering as this will also present new opportunities for SMEs. A consequence of these changes is that the number of individual tenders is expected to drop while the value of tenders will almost certainly rise over time.

‘Adapt’ is the first piece of advice that we would offer to SMEs. For organisations which have been successful in the tendering process in the past, do not rest on former successes as the changes will likely affect you going forward.

First and foremost, ensure you are hearing about the contracts.

Only a small number of SMEs across the island are registered on public procurement portals but this can be an essential tool.

If firms are not listed currently, they should do this as soon as possible. If they are already listed on eTenders (for southern opportunities) and eSourcing (for NI contracts), visit the websites, update your information and check the details you have previously entered are still relevant.

Secondly, consider partnering

Cashing in: businesses are failing to bid for work in a market which is worth £9.5bn on an all-island basis with other companies to bid for these larger tenders. Choose these partners wisely — perhaps a competitor could join you in a consortium? Consortia building such as this can marry complementary skills of different firms to better address tender requirements.

This may seem daunting but it can lead to many other future opportunities way beyond the scope of the tender. Working in tandem with a partner can open up a whole new world of possibilities for firms and initial local successes can progress to GB and wider European bids with significantly more public purchasing power.

Our third piece of advice is for firms to thoroughly research the procurement market. Categories will be coming into effect and understanding how the new market works and who the public buyers are within your category will be essential to those who wish

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to advance. Local firms should look to both www.dfpni.gov.uk/ cpd and www.procurement.ie as a useful starting point.

The realignment and centralisation of the tendering processes across the island by Central Procurement Directorate (CPD) in Northern Ireland and Office of Government Procurement (OGP) in Ireland presents new opportunities and smarter tendering techniques will help firms to maximise these. Bidding locally and also on a cross-border basis remains an underexploited business generation tool.

With that in mind, InterTradeIreland has enhanced its services and now provides a more comprehensive suite of specific tendering supports, including a consortia facilitator to assist firms in partnering with others.

We regularly hold events such as ‘meet the buyer’ which thousands of firms have found extremely beneficial and offers

them the unique opportunity to meet public sector buyers face to face from across the island.

Our award winning Go-2-Tender Workshops, where SMEs can hone their tendering skills, are also extremely popular and often over-subscribed.

These two-day workshops give SMEs the confidence, knowledge and practical skills to tender successfully for public-sector contracts, particularly on a cross-border basis.

These workshops have been updated, based on the new public procurement practices north and south. Advanced Go-2-Tender workshops take the learning a step further, helping SMEs bid for more complex contracts.

For further information on the range of tendering support available from InterTradeIreland and details of upcoming Go-2Tender workshops and events, visit www.intertradeireland.com/ public-procurement

NEWS ANALYSIS

Get in the fast lane High performance computing can help fast-track SME growth and innovation, writes Newland McKelvey, account manager at Fujitsu

D

O you conduct large-scale research projects or need to analyse large datasets? Ever wondered what access to a supercomputer could do to turbocharge your projects? Fujitsu’s new high performance computing (HPC) service brings a supercomputing service to Northern Ireland for the first time, something which has the potential to add significant competitive advantage to a wide range of local businesses and researchers.

For the first time many will now be able to access worldclass, secure and easy-to-use high performance computing technology which is critical to solving advanced computational problems, but at high speed and at a fraction of the cost. High performance computing essentially speeds up computationally heavy tasks turning processing time of months to days and days to hours.

The technology is designed to support the development of Northern Ireland’s knowledge economy and has the potential to fast-track product innovation, knowledge capital and commercially focused research application, not to mention the associated job creation. We want to help more Northern Ireland businesses to compete on the world stage — be that in software, healthcare, manufacturing, creative industries or agriculture- and are very excited about the HPC’s prospects to help more increase their competitive edge.

A similar service has been operational in Wales for some time and has already been used across a number of industry sectors including advanced materials, engineering and manufacturing, creative industries, energy and environment, financial and professional services, ICT and life sciences, resulting in many new innovations, company developments and job creation.

With our initial investment plans, we want to collaborate with local SMEs and researchers to support their innovation strategies. Two local companies have already seen first hand the

enabling power it brings.

PathXL, a global pioneer in the use of web-based solutions for digital pathology based at the Northern Ireland Science Park has used it to speed up their analysis of tumours using digital imagery.

Speaking at our recent HPC launch Professor Peter Hamilton, VP research and development at Path XL explained the key benefits of the service.

“Our area of business is looking at very large medical images, being able to analyse those images quickly, cost effectively and being able to detect cancer within those images.

This just cannot be achieved successfully with normal computer technology so high performance computing and the ability to parallelise difficult complex computational tasks is really important. Fujitsu has provided us with the framework and the capability of doing that.

“This allows us to accelerate our research and development program within Northern Ireland, allowing us to deliver new solutions that are going to help with cancer diagnostics in the future.”

One of the challenges that PathXL faced was that the digital tissue images they analyse are enormous, probably the largest images currently generated in medical practice, with many millions of slides being generated annually in cancer diagnostic and research labs across the country.

It became clear that conventional computer processing was not sufficient to analyse these tissue images with the precision, accuracy and importantly, the speed that was needed.

The HPC Service is now providing PathXL with essential architecture to deliver the processing speed that it needs in its ongoing research and development program. Having already moved its software across to the Fujitsu HPC platform PathXL believe that this will really reduce the tissue analysis time significantly, allowing it to develop, test and deliver its cancer detection software more quickly and cost

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Supercomputing is coming to Northern Ireland for the first time effectively than they have been able to do previously. This will allow companies like PathXL to continue to develop world leading solutions in medical image analysis and cancer diagnostics.

The Institute of Electronics, Communications and Information Technology (ECIT), the Queen’s University centre which commercialises research and expertise in cyber security has used the service to test facial recognition software to assist tracking people in real time using CCTV. Stephen Wray, commercial director at ECIT commented on the difference HPC has made to their work: “Cybersecurity as an industry has a fundamental requirement for high performance computing.

“We trialled the service running simulations on huge amounts of CCTV video data which normally takes days to run but we were able to speed that up dramatically.”

ECIT found two main benefits of Fujitsu’s HPC service — one is the performance enhancement and the computer capacity that the service offered, while the other was the support service which was tailored to their specific needs.

ECIT is linked to some of the emerging cluster of cybersecurity companies around Northern Ireland. These companies are developing technologies and solutions in a landscape where there is an increasing amount of data and a need to analyse that data in real-time. Many are start-up or small companies, who cannot afford to build their own high performance computing infrastructure and why would they whenever this service not only offers access to some of the fastest and most powerful computers available but also the expertise and tools needed to perform the computational tasks required.

Working with our partner HPC Wales, we are now offering SMEs in Northern Ireland access to the UK’s largest distributed supercomputing network through a simple web browser. Supercomputing enables research to be completed quicker, products to reach market earlier and production costs to be reduced significantly. In many cases it has made what was once considered impossible, now possible. We are keen to collaborate with anyone who could potentially benefit from this enabling power.

NEWS ANALYSIS

Lean in together Neasa Quigley, partner and joint head of the corporate department at law firm Carson McDowell says working as one can reap benefits Northern Ireland has huge potential but everyone needs to work together to achieve common goals

“ONLY 3% of Northern Ireland’s incorporated businesses are actually exporters, with half of the region’s manufacturing exports currently accounted for by just some 10 companies”.

At first blush that may sound like grim news but I prefer to think more positively about it.

Despite our modest export performance, our economy has managed to grow (albeit at a slower and more patchy rate than the other regions in the UK).

So consider the opportunity that lies ahead for significant and sustainable growth of the Northern Ireland economy, if our predominantly family-owned businesses spread their wings and expand into overseas markets.

Another opportunity to be grasped and exploited is Northern Ireland’s prowess for innovation.

We know from the recently published knowledge economy index, a report commissioned by the Northern Ireland Science Park, that Northern Ireland has one of

the fastest growing knowledge economies in the UK. According to the research it is a sector that has grown by 33% in the past five years. The definition of “knowledge economy” includes research intensive sectors where “new ideas, new products and new processes are key determinants of competitiveness”.

Sound too “techie” for Northern Ireland? Not in the slightest. Northern Ireland has a rich heritage in all these areas and Ballymena-based Wrightbus is a prime example. Employing almost 2,000 people, it is a family-owned business that combines the key ingredients of innovation and engineering excellence together with export sales to impressively successful effect.

Many of the big ticket merger and acquisitions in recent years have happened in this sector of the economy and almost invariably attract international investors to these shores. In 2013 we saw software giant Intel acquire local

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software company Aepona and in the first half of this year, our client, Nasdaq-listed Brunswick Corporation, acquired Whale, the Bangor-based water, waste and heating systems manufacturer.

Earlier in the year, another client, Tyrone-based specialist materials handling manufacturer Telestack, was sold to Nasdaq-listed Aztec Industries for $36m (£23m). This international aspect to M&A activity is, in my view, a trend that is set to continue.

I see this as an opportunity not only for those shareholders achieving an exit but also for the wider Northern Ireland economy as investment is pumped into the newly acquired local businesses.

Aepona’s workforce grew by 21% in the year after acquisition and Whale chief executive Patrick Hurst said its acquisition provided greater security to the business and opened up “direct access to the largest markets in the world”.

As the next Programme for Government is being prepared,

the opportunity to really transform our economy by encouraging our business owners to expand operations into export markets must be a priority.

That means political stability in emotive areas like parades and flags, financial certainty over the impact of welfare reform and financial management of the devolved government budget, all must be achieved.

I think that we have already seen signs of changing priorities in Invest NI evidenced by the strong pipeline of announcements in the legal services, financial services and ICT sectors.

Facebook chief operating officer Sheryl Sandberg advises women to “lean-in” in order to fulfil their potential. Northern Ireland has huge potential but we need all the stakeholders — politicians, funders, universities, business owners, innovators and employees — working towards that same goal, leaning-in to make it happen.

ECONOMY WATCH

Mixed Our economy perked up in 2014, with 16 theless, pay packets are not keeping up. Richwhile Brian Murphy ponders the improve-

O

F late, Northern Ireland has seen rising house prices, growing business output, and a general, overall recovery. One thing that hasn’t been on the up though is the wage packets going into people’s pockets. Northern Ireland’s recent Annual Survey of Hours and Earnings showed that the earnings of a typical full-time employee here fell by 1.4% this year. Within the survey’s data, though, it is a veritable mixed bag, with women faring better than men, and inequality between a range of demographics apparent.

Income inequality has been a big talking point globally this year. Thomas Piketty’s award-winning book Capital in the Twenty-First Century argued that capitalism gives rise to growing income inequality, necessitating state intervention. One of its big findings was that there has been a notably big rise in the income shares of the top 1% in English-speaking countries (above all, the US) since 1980.

Perhaps the most extraordinary statistic is that “the richest 1% appropriated 60% of the increase in US national income between 1977 and 2007.”

Within Northern Ireland’s wage data, inequality takes a variety of forms, including gender, public sector versus private sector, and Northern Ireland’s pay performance relative to the UK and other UK regions.

Data limitations prevent us from identifying the ‘top 1%’ of earners. However, looking at earned income for all employees, it is noted that the wage packets of the top 10% are almost seven times larger than the bottom 10%. Adjusting for full-time employees only, reduces the ratio to 3.3. This represents a slight narrowing relative to 1997 when the top 10% earned 3.6 times those in

SALARIES

Richard Ramsey

Chief economist Ulster Bank the bottom. Meanwhile, the pay packets of the top 25% of full-time employees in Northern Ireland earn twice the amount of the bottom 25%.

The narrowing of the gap between the top and the bottom 10% of earners has been driven by the public sector The narrowing of the gap between the top and bottom 10% of earners has been driven by the public sector, particularly among part-time employees. There are two key areas of growing wage inequality that are a particular cause for concern. These are the recent

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divergence between male earnings in Northern Ireland and the UK, and the widening wage gap based on age.

Last month’s survey reported a slump in Northern Ireland’s male earnings. The median full-time male weekly wage fell by 3.9% over the last year or 6.4% when adjusted for inflation. The corresponding UK figure was broadly flat in cash terms. As a result, Northern Ireland’s full-time median gross weekly wage for men has fallen to less than 83% of the equivalent figure in the UK. This represents the lowest share since the series began in 1997. Back then, Northern Ireland’s median male earnings were 89% of their UK equivalent. Therefore the NI-UK male earnings differential has widened by 50% over the last 17 years. Conversely, Northern Ireland’s women have narrowed the gap in full-time earnings that existed with the UK in 1997 by 60%.

There have been contrasting fortunes for different age groups. The older genera-

tions have witnessed a huge improvement. But the younger generation has borne the brunt of unemployment with one-infive of our 18 to 25-year-olds who are looking for work unable to find employment. When you consider that the younger generation also has a higher concentration of low wage employment, it is increasingly apparent that they have been hit hardest from the cost of living crisis, too. According to some recent research, it is noted that the fall in real wages (adjusted for inflation) for those UK individuals aged 18-25 years has been so severe that they are back at levels last seen in 1988.

Since 2008, the median wage for all employees (fulltime and part-time) has fallen in real terms by almost 14%.

The median wage of employees aged between 18-21 has almost halved between April 2008 and April 2014. Those aged between 22-29 and 30-39 have experienced declines of 21% and 12% respectively.

Employees in their 40s and 50s have seen their pay fall by almost 15% and 12% respectively.

Meanwhile those employees over 60 years of age buck the trend and are the only agegroup not to experience a real terms decrease in earnings over this period (+0.4%).

A big focus in Northern Ireland’s economy tends to be closing the gaps with other parts of the UK. When it comes to Northern Ireland’s median full-time wage, this hasn’t been happening. Indeed, it was closer to the UK’s when the Good Friday Agreement was signed in 1998.

Indeed, while we have been focusing on trying to close the gap with the UK, new wage gaps have actually been emerging – notably between the young and the old. And this has economic as well as social implications.

ECONOMY WATCH

fortunes months of improved business activity. Noneard Ramsey considers wage stagnation, ments in company performance and profits

O

VER the last 12 to 24 months confidence has been slowly seeping back into the local economy and there is no doubt that the private sector is in a better place now than at any stage between 2008 and 2012.

While that is a generally applicable statement, our experience has been that some sectors are moving ahead at a faster pace than others.

Growth in profitability in Northern Ireland firms has largely been driven by the wider recovery throughout the UK, from export markets and from a general increase in consumer confidence and spending at home.

Businesses are tapping into growing market confidence and are using this as a catalyst for growth. This is to be encouraged and it is something we are seeing on a daily basis within our client base.

In Northern Ireland, the agri-food sector has been a real success story in the post recession context. Indeed throughout the downturn, it was one sector which continued to boast growth and profitability.

That was helped significantly by the recent implementation of the Agri Food Strategy Board’s ‘going for growth’ strategy, which was backed by the NI Executive and in particular the Departments of Enterprise, Trade and Investment and Agriculture and Rural Development.

The hospitality and leisure sectors, despite difficult trading conditions during the downturn, are also beginning to show signs of improved performance.

Not only is the level of confidence growing but we are seeing a tangible increase in business activity with a lot more transactions in relation to property involved in this sector.

There have been a number of

PROFITS

Brian Murphy

Business restructuring partner at BDO high profile projects announced

by Invest NI in recent months, all of which have involved jobs which number in the hundreds.

In general, the technology sector is buoyant. We have recently seen companies like Proofpoint creating 94 jobs in Belfast and Seagate in Londonderry and its multi-million investment along with Puppet Labs, another software company investing and providing jobs in the province.

This clustering of technology companies can lead to a demand for skills by both new entrants to the market and indigenous businesses. Northern Ireland is now developing a reputation as a technology hub and that will inevitably help the region attract even more projects and more investment.

The construction sector was the one which above all others was the demonstrable barometer of the downturn. Building firms large and small suffered and many unfortunately did not survive to take advantage of the developing upturn.

While the sector remained

deflated for some time, our clients have been seeing opportunities to reinvest in the marketplace and to rebuild the momentum that this sector once had. Some of the major infrastructure projects in Greater Belfast are testament to the increase in confidence and profitability within the sector.

Property prices in residential and business sectors are also on the increase.

In our experience, the companies that are now achieving growth are those companies that have prepared for it during the lean years of the downturn. During this period, these businesses adapted to the financial pressures and structured themselves in such a way as to insulate themselves from the worst effects. Now as we see growth returning to the marketplace, these streamlined and stronger companies are in a perfect position to avail of the upturn.

Confidence is key to the growth of profitability for businesses in Northern Ireland.

Businesses need to be ‘growth

ready’ and that means having the right personnel in place, with the right skills and the appropriate resources.

They cannot hold back in investing in new products, in training, in marketing and in sales. Some businesses may be reticent about spending money as we emerge from recession, but success in growth opportunities demands that level of commitment and investment.

Traditionally the Northern Ireland economy was dominated by agriculture and manufacturing industries.

However, over the last 30 years, there has been a shift to a more service based economy, with the public sector accounting for in excess of 70% of the economy. Business leaders across Northern Ireland have long been calling for a rebalancing of our economy, with a move away from the public to the private sector in order to boost growth, profitability and enterprise. While such a strategy will no doubt be painful in the short term, it can only be for the long term good.

There are a number of strategies being considered to strengthen the private sector in Northern Ireland.

The local business community patiently awaits the Government’s intentions regarding the devolution of tax powers to the Northern Ireland Executive, most importantly including the power to vary the corporation tax rate. A reduced corporation tax rate will benefit existing businesses within the private sector and will increase the attractiveness of foreign investment.

We are by no means clear of the threat of economic instability or the lingering effects of the recent downturn.

However, the signs are good, and we should be encouraged to continue to work towards a new economic era of growth and prosperity.

1 December 2014 BUSINESS MONTH 17

COVER STORY

SLOW RISE TO TOP Jamie Stinson looks into the formula behind the phenomenal performance of one of our illustrious — and elusive — business successes, agri firm W&R Barnett

S

LOW and steady is the name of the game for W&R Barnett.

We’ve seen tech companies, like Google and Facebook, rise to become global monoliths in a matter of years and rush to embrace PR to boost their profile.

However, W&R Barnett, which has over 100 years experience in the job, is taking a different path, with a slow and steady approach and a policy of staying out of the limelight. All in all, they are the antithesis to the ‘grow or die’ model.

W&R Barnett, established in 1896, is Northern Ireland’s largest international grain trader and the holding company of a group of international

commodity trading and agribusiness firms, including John Thompson & Sons.

The fourth-generation business is still run by the family that bears its name, with Robert Barnett (70), whose great uncle co-founded the company, and his son William (38) behind the wall of the firm.

The company expanded from its origins as a grain merchant, and now has operations of a variety of areas, such as dry bulk commodities, derivatives, molasses, oils, feed mills, laboratory testing, and storage.

W&R Barnett had a turnover just shy of £0.5bnlast year, making it the 10th biggest Northern Ireland company in terms of sales (Moy Park is

18 BUSINESS MONTH 1 December 2014

first with £1bn.). This brought about a profit of over £22m.

The Sunday Times Grant Thornton Top Track 250 league table recently called it Northern Ireland’s biggest mid-market private company following its stellar 2013 performance.

The success of the family run firm has been built on inward investment within the business and acquisition. The purchase of other companies has played an integral role in the business ethos of the family throughout all generations, with two of its most successful acquisitions (John Thompson and Sons and United Molasses) taking place more than 50 years apart.

Economist John Simpson, who compiles the Belfast Tele-

graph’s annual Top 100 companies, puts the success of W&R Barnett down to a number of factors. Mr Simpson said: “The business has built up over most of the last 50 years, partly by expansion, partly by acquisition.” Alongside this ‘their grain trade expertise has grown and grown, and their skilful international buying and financing,” has played a big role in their continued success, Mr Simpson added.

A great understanding and skilful management of the grain market was needed when the UK system of grain imports changed upon the UK entering the European Union, according to the economist.

The firm’s focus on acquisi-

tions has left W&R Barnett as a dominant player of the market as a whole. Mr Simpson puts its sheer size and influence over the Northern Ireland agriculture market as a big factor in its success. It has been so successful as it “has become large enough to be a strong market player on the whole island”.

He added that its influence in the grain market and agriculture in Northern Ireland is “much more critical than simply measured by direct employment, or turnover”.

“Potentially it might have an even larger impact in years ahead,” he said.

But it hasn’t all been plain sailing. One deal which left W&R Barnett taking a big hit was its investment in Scottish insulation company Superglass Holdings. The AIM-listed company has taken a battering over the last five years, and in August shares plunged 17% after another set of poor results. W&R Barnett were the majority shareholders, before a share issue last month, which sought to raise £6.25m for the business, left its share holding around 5%. The glass wool insulation manufacturer’s share price has seen a colossal fall.

It was almost 730p a share in 2007 and is now around 5.13p a share. W&R Barnett made the majority of its investment in 2013, when the share price had already dropped to 50p.

The investment was a step in a different direction for the conservative family business, whose success has been underpinned by the agri-food sector. This may have left it more nervous about straying into areas which it may not have the years of expertise as it does in grain and animal feeds.

One of W&R Barnett’s most successful investments has been with Irish firm Origin Enterprises plc. Together they are joint owners of R&H Hall — a grain and animal feed business, whose history stretches back to 1839.

Together the Barnetts and R&H Hall, alongside flour millers Isaac Andrews, made the purchase of animal feeds company John Thompsons and Sons in March 1964, according

The Barnett Room at the Harbour Office in Belfast is named after William (Billy) Barnett to Gentle Giant, a history of Thompsons written by Mike Faulkner.

Thompsons is a leading manufacturer of animal feeds for the ruminant, pig and poultry markets in the province.

The firm, which dates back to 1871, is one of the most recognisable factories in Belfast, located on the York Road with its dour grey facade overhanging the M2 motorway — and a distinct smell of its products.

On the other side of the M2 lies another area of the city where the Barnetts have played a major role over the last century.

The family has always had a strong influence on Belfast Harbour, with both Robert Barnett and his father William (known as Billy) sitting as chairman and commissioner at a time. The Barnett Room in the Harbour Office is named after Billy, whose chairmanship ran from 1972 to 1980, and both men’s portraits hang in the Belfast Harbour Office. The first Barnett silos were built at the harbour in 1937, and after the Second World War it was the company entered into a joint venture with R&H Hall, one of the most prominent of the port users today, according to Alf McCreary, author of Titanic Port: An illustrated history of Belfast.

The notoriously private family rarely gives interviews (they declined for this piece), but Robert opened up to Mr McCreary on why the Harbour is so instrumental in Northern Ireland’s fortunes.

“The harbour is the key to nearly everything that comes in and out of Northern Ireland.

If you make a mess of the harbour, you make a mess of the province, and over the years everyone connected with the port was aware of this,” he said.

“The Commissioners in each generation did a good job, and there are few ‘not for profit’ organisations that can create enormous chunks of infrastructure like that, and hand them on. It really has been a ‘sacred trust’ but it has to be run in a businesslike way. The harbour is a very visible and completely vital asset, and I believe the public realises that.”

Mr Simpson said a big part of the Barnett’s success is “linked to their role in Belfast Harbour and as Harbour Commissioner”. Robert’s final year as chairman of Belfast Harbour in 1997 was a record one, with turnover £18.8m, profit £6.4m and net assets £74m.

During The Troubles, Robert told Mr McCreary how the management ensured the harbour remained relatively unscathed during the tumultuous and violent period in Northern Ireland’s history. “Early on, there was an attempted armed robbery at a pay-depot at the harbour, but from that time on there was a tacit agreement on all sides that it would be stupid

to import the violence into the estate. It was almost the equivalent of deciding to maintain a regime of peace in a large game reserve, where the lions would not eat the elephants, and the elephants would not charge the lions. This tacit agreement held good throughout all the Troubles, and it was a phenomenal achievement on all sides.”

A love of horses has played a big part in the family’s history, and has filtered down through the generations. Robert Barnett believed his involvement in horses, and horse breeding, has helped the business. He told Mr McCreary: “There are certain similarities between our business and our horse breeding. Both are high-risk ventures, and things don’t always go the way one would like.

“I think it helps people feel that if you are involved in horses, which are so unpredictable, you must be a real human being, and not just a hard-hearted businessman.”

Robert’s great-uncle William, co-founder of the company, left Malone House, and its surrounding land known as Barnett Demesne, to the people of Belfast upon his death in 1946. This William Barnett played a big part in the family’s love of horses and was a hugely successful horse-breeder himself. His horse Trigo, Spanish for grain, won the 1929 derby despite initial odds of 33-1, according to Mr McCreary. When the childless William died, all his money, from the selling of

>> Continued on page 20

1 December 2014 BUSINESS MONTH 19

COVER STORY

>> Continued from page 19 his racehorses and stud farm, was donated to hospitals in Belfast and Downpatrick.

William’s nephew, and Robert’s father ‘Billy’ was also a renowned horse breeder and occasionally leased horses to Sir Winston Churchill, including Red Winter, the winner of the Ulster Derby, and Dark Issue, which won the Irish One Thousand Guineas.

Billy, who died in 1980, studied economics at Cambridge under JM Keynes in 1929, at the time of the Wall Street Crash, and represented Britain in yachting in the 1948 London Olympics.

Despite all its illustrious past, it could be argued the business has never been in a better state, and its best years are still to come. The year to July 2013, W&R Barnett enjoyed record levels of turnover, when revenues grew to almost £500m. “In the last five years the Barnett group of companies saw business more than treble,” Mr Simpson said.

In the group’s latest results, pre-tax profits increased from £0.16m to £22.3m, while employment rose from 256 to 278. The group’s results include trading figures for 26 active

subsidiaries — 14 registered in other countries where they trade in the marketing of molasses — and seven other associated companies.

“The group has expanded its business successfully, with only a relatively modest increase in borrowed funding. In the last three years, the capital programme has been eased by the retention of significant post-tax profits in the business and bank borrowing in July 2013 of just over £400m,” Mr Simpson added.

A major part of the company’s current success is down to the purchase of United Molasses in 2010 from Tate and Lyle for £71m. The acquisition has been a fruitful one, and has made it a global trader and active in the markets of Western Europe, Asia, and Central America. It is now buying, shipping and selling vessels of molasses around the world for use in yeast, rum, lysine, mono-sodium glutamate and steel production.

United Molasses now makes up over 50% of the group’s turnover and pre-tax profits. The firm believes United Molasses has presented it with opportunities to invest and grow over the last three years

20 BUSINESS MONTH 1 December 2014

and believe that it will be able to continue this growth.

Mr Simpson said: “The impact is only now building up after the takeover about four years ago, and takes the group into more trading developments in Great Britain.”

In February 2013, United Molasses Group purchased Advanced Liquid Feeds, which was one of the major factors on why 2013 was such a strong year. Another was the sharp increase in the price of raw materials for feed grains and related agricultural commodities, as well as a small volume increase due to poor weather of spring last year.

Mr Simpson is of the opinion the potential of the acquisition of United Molasses for W&R Barnett has “yet to be fully realised, but could be major.”

While United Molasses, sees W&R Barnett looking beyond Northern Ireland, it is still firmly entrenched in the agrifood sector here, where there has been an increase in animal feeds demand.

Robin Irvine, chief executive of the Northern Ireland Grain Trade Association, said: “The agri-food sector in Northern Ireland, which is principally based on livestock production,

has seen steady increase in demand for feed materials.

“Therefore the increase in volumes imported over a number of years was relatively unaffected by the slump in the economy as underlying demand for food remained strong.

“Demand for animal feed is not expected to grow this year due to concerns about low product price and poor profitability at farm level.”

Low milk prices are hitting farmers in the province hard, Mr Irvine said. “Agriculture in Northern Ireland is facing a big hit, particularly on the milk side. Milk price has been good for 18 months or so, but then America and New Zealand push up their production in response to growing demand and good prices — the market become oversupplied and the price falls again.”

Supply outstripping demand is something that is not only happening in milk prices, but within the grain market, in which W&R Barnett have such a major investment.

Mr Irvine added: “We have a record global grain crop in 2014. Last year (2013) there was a record maize crop, but this year virtually all the

principal commodities (maize, wheat and soya) are producing record crops and growing stocks. There is now a surplus of supply over demand, bringing prices down.�

While there is some volatility in the market W&R Barnett believes the market will continue to perform relatively well into the future. Two current issues which will affect the business are rising freight costs in North America, and the US dollar becoming stronger against the pound. This is creating higher costs, which will be reflected in a rise of the cost of animal feed for its customers.

However, this is contrasted with the strength of the pound over a relatively weak euro at the moment.

A weaker pound against the euro is beneficial for most agri-food companies in Northern Ireland and the UK more generally, as it increases their competitive advantage against European competitors.

The company believes this is important but maybe not as significant as it appears as most costs, apart from labour and property costs, are either euro or dollar based.

William Barnett (left) and Robert Barnett, company chairman (right) The grain market has been on the increase since around 2004/05, with a brief decline due to the financial crisis in 2009. The company feels the market has gone through the cycle and stable or lower prices should return in years.

Going forward W&R Barnett will continue to look for op-

portunities to invest and grow in a sensible and controlled manner.

This is likely to be both by the acquisition of new businesses and additional investment within its existing businesses.

W&R Barnett is firmly fixed on sticking to what it knows

best, and what has worked for the company this far. There is no desire to branch out overseas into markets where there may be good returns but high risk, with the company staying strictly focused on areas where conservative, steady growth is more than important than just making a quick buck.

1 December 2014 BUSINESS MONTH 21

NEWS ANALYSIS

A fine state of affairs Ohio is a great example of economic success, writes Alan Watts

W

HEN you think of investment, your first thought is probably the United States. Probably more specifically California or maybe New York. And in terms of the big numbers, you’d be right.

California, New York and Boston normally account for the lion’s share.

But one state that I’ll bet didn’t spring to mind was Ohio. It rarely gets a mention and indeed, often describes itself as a flyover state. That is, somewhere people fly over in order to get to somewhere else — like California or Boston.

Earlier this year we were lucky enough to have John Huston speaking in Northern Ireland.

John is an amazing guy who started his career landing fighters on aircraft carriers, went on to be a major US banker and then retired early to transform the angel scene in Ohio.

The three leading states have 21% of the US population and yet they take 62% of the venture capital (VC) deals and an amazing 76% of the VC dollars.

Ohio, with 4% of the population, takes only 2% of the deals and 0.5% of the dollars.

So you can probably see the parallels emerging from this unfashionable, in the wrong place, flyover state — and little old Northern Ireland.

If you want more, well Ohio has had five initial public offerings (IPOs) in 14 years. Which is bad, but better than us.

And yet Ohio has the largest angel group in the US whose portfolio of 30 companies employ 420 people with an annual payroll of $37m.

So what lessons can we learn here from this?

Well, the first one is if you’re not California then don’t try to act like another Silicon Valley.

It’s about horses for courses, really.

With so little VC money

22 BUSINESS MONTH 1 December 2014

available, Ohio angels know the limitations of their pockets.

By being well organised and syndicating multiple angel rounds between their various angel groups, they can take a good company a lot further than many other angel organisations.

This means investing up to, say, $3m.

This may sound a lot, but it’s small change to west coast VCs and certainly not enough to let that company grow to sales of over $100m.

Effectively this means that the marriage between angel investors and growing companies should end in a (financially lucrative) divorce before the company needs really big bucks for its major growth.

This translates into selling the company in less than five years and before it outgrows the available local pockets.

This in turn leads to the other big learning point. The investor exit, or at least the strategy for the exit, is agreed

before the first investment is even made.

To continue the marriage analogy, this is like a pre-nuptial agreement to plan a divorce within a few years. Scary stuff, but it works.

And the third lesson is about how the investors behave after investment, especially in guiding the company.

John trains his angels extensively in how to be an effective non-executive director: how to plan and look for the strategic purchasers the company will need.

Look up in the sky on any clear night and you may well see people flying over our little state. But at least we can say that there’s a good chance that the seats or the wings of their planes were made in Northern Ireland.

Alan Watts is the director of Halo, the Northern Ireland Business Angel Network. Halo is based at the Northern Ireland Science Park

23

BREAKING THE MOULD

Pushing boundaries How technology from west Belfast is fuelling scientific progress Name: Jonathan Flint Company: Oxford Instruments plc, parent company of Andor I got into a technology business because ...

My passion for science started as a young child. I found the novels and films about brave scientists and engineers saving our world from some overwhelming external threat fascinating and terrible in equal measure. Today the threats have become real. Of course it is not little green men which pose the threat. Today it is issues like health, safety, energy, our environment, which present real challenges for our society. The simple fact that we have to use the resources we have in more innovative ways, means we have to make nanotechnology work for us.

We need to make things smaller, faster and smarter. Oxford Instrument’s tools enable scientists and engineers to do just that.

I have always done this ...

I have always worked in companies that offer me a perspective on the difficult path between the spark of a new idea and seeing the effects of that idea on society at large.

My time with BAE Systems, for example, gave me a real insight into the technology and thinking behind the aerospace world and in managing very bright technical experts.

The challenges at Oxford Instruments apply to the world of the very small (nanotechnology) rather than aerospace, but in many ways they are similar.

In each case we had to take a new technology and apply it to a difficult technical challenge.

In the end the job is to convert innovation into products which solve real problems.

The best thing about my work is ....

Without question it is the technology that excites me. Science will always push the boundaries of mankind’s knowledge and capabilities, and I am in the privileged position of

Jonathan Flint from Oxford Instruments plc is excited about the progress in technology working with highly skilled, talented people who turn our smart science into commercially successful products. Our recent acquisition of Andor Technology in Belfast has opened up a whole new world of optical imaging for us. Our objective in buying Andor was to extend our business into the life sciences markets and to get access to Andor’s amazing optical technology. We were buying into all the expertise and innovative thinking that exists in Belfast. I am amazed by the images of living cells produced

24 BUSINESS MONTH 1 December 2014

by Andor’s scientific cameras. I feel privileged to live in an era when we are, for the first time, starting to get real answers to the burning questions about how the processes of life work.

The person who inspires me ....

When I was a young engineer I had a boss who managed in a completely different way than I had experienced before.

Although we were working in a technology business, he focused entirely on communication and people. He remembered everybody’s

name and seemed to be able to recall many details about their work, families and hobbies.

Although he was managing thousands of people, all of us felt he particularly cared about us as an individual. I felt that if I ever became a manager, I would like to be able to lead people with a little of his amazing personal touch.

My advice to anyone starting out in technology ....

Never lose the passion to learn and push boundaries. Never say it can’t be done.

AND I’LL TELL YOU ANOTHER THING...

We’re on world stage John Irwin of Denroy Plastics in Bangor on his long experience

Denroy Plastics has been winning contracts all over the world, says general manager John Irwin

Name: John Irwin Company: General manager, Denroy Plastics My first job was....

With SHS Sales & Marketing selling major grocery brands to all the local supermarkets and wholesalers.

It was great experience in relationship building, selling brands, looking after customers, travelling all around Northern Ireland. I learned the value of having a product to sell that I knew ticked all the boxes for my customers. This is vital and Denroy has this strength also.

The person who taught me to succeed was…

My father. His characteristic ability to listen rubbed off on me. He taught me not to be the one who is always talking. In business I have always felt it was crucial to listen, not only to my customers, but also to the people whom I work with.

It is important to provide what customers require rather than what I think they require. I couldn’t do this without a team of people who are encouraged to put forward their ideas on how we can perform better and better all the time. Denroy Plastics Ltd has an excellent existing team from management right through the workforce.

Their track record of success speaks for itself and I am very lucky to have this foundation on which to grow the business.

My business mantra is…

Tenacity. Be flexible and agile, adapt and overcome but be tenacious in relation to your objectives and you will succeed every time.

It’s all changed since I started out…

Having worked in manufacturing for almost 20 years I have seen considerable change.

Northern Ireland has always shown a positive drive and di-

26 BUSINESS MONTH 1 December 2014

rection even through what has been difficult political and economic times. The result is now, without doubt, world-class manufacturing throughout the country. Denroy Plastics is selling product all over the world, competing with manufacturers in low cost economies. The only way to do this is to have an irrefutably high quality product offering backed up with service levels fully aligned to what the market demands.

Underpinning this is a manufacturing ethos that drives out inefficiencies, supports the local workforce and attracts customers to the reassuring label — made in the UK. In 10 years the world will be…

Still full of opportunities. I believe the next 10 years are my opportunity to be part of the tremendous growth potential for Denroy Plastics. We have the team, the contacts and the technical ability to be in the right place at the right time with the right product.

My one business regret is…

Seeing the demise of some great companies and customers over the years. It has been a great pity to witness the casualties of the recession and not be able to do anything about it.

We can only hope that as the economy recovers the skills, expertise and dedication of all those people are incorporated back into the workforce.

My one piece of business advice is…

Never be afraid to change. Just because something was right at one time will not make it right forever. Be prepared to review what you do and change it, but make sure you get feedback from your team.

I couldn’t start the day without…

Driving to work! It gets me there but it also gives me time to think before the day starts..

SME WATCH

Deli-cious

Kieran Sloan tells Amanda Ferguson how gourmet deli Sawers has thrived selling high-end produce aimed at Belfast’s foodies

Sawers’ managing director Kieran Sloan has worked there since the 1980s

28 BUSINESS MONTH 1 December 2014

S

AWERS is known as Belfast’s foodie heaven — for good reason. The gourmet grocery business based in College Street in the city centre stocks some of the finest food products the world has to offer.

Sawers was established in Glasgow in 1873 but following the closure of shops there and in Aberdeen, Birmingham, and Dublin, the Belfast store is the only one that remains of the brand.

It sells a variety of local and international produce including cheese, olives, charcuterie, tapas, seafood, caviar, Greek and Italian desserts and other fresh deli items.

Managing director Kieran Sloan started working for the company in the 1980s as a teenager on a youth training programme, moving his way up the business he now owns.

The 47-year-old self-confessed workaholic from Belfast is passionate about food and loves running Sawers alongside his 14 staff.

Mr Sloan has fond memories of his first days at the firm.

“I was a 16-year-old trainee on a YTP,” he said.

“My first job was in (menswear shop) Burton and I hated it.

“I did my exams and there were no jobs and then an opportunity came up through Youth Ways — a totally new concept.

“It was the first time Protestants and Catholics were going to meet. We all joined in and had 16 weeks of mad fun.

“It was just brilliant. I loved it. I made new friends, went camping, went mountain climbing and you had work placements.

“One week I got into McErlean’s bakery on the Glen Road and then I got into Sawers on the fish counter.

“I loved it and was offered a job after about six weeks, and I’ve been here ever since.”

Sawers moved from Castle Street to College Street in 1982 and two years ago Mr Sloan doubled its floor space to move away from being seen as merely as a fishmongers. He broadened the range to include tea, jams and marmalades.

“We sell top-end foods,” he said.

“It’s gourmet grocery for people who like to eat, who like to cook nice food.

“We stay away from mainstream stuff. We do a lot of fresh produce and also a lot of local produce.

“We support a lot of local suppliers and work with them as well such as (tea and coffee makers) SD Bells on the Newtownards Road and Erin Grove Preserves in Enniskillen.

“Our bestsellers are our own-label sweet chili jam, our chili feta, Mull of Kintyre mature cheddar made with sea salt, potted herrings — so many things fly out the door.”

Mr Sloan told Business Month Sawers customers are “mostly local foodies” but “from all walks of life” and he gets regular visits from Belfast Food Tours groups and tourists from all over the globe.

“We have become a foodie heaven in a sense,” he added.

“We have the deli-to-go and have delved into different things like Italian pastries and a Turkish delight counter.

“We bring food in from all

Sawers has built up a loyal following selling everything from cheese and olives to seafood and caviar over the world — Sicily, mainland Italy, London, as well as companies across Ireland.”

A Sawers Christmas store has opened across the road from the main business premises and ‘Belfast Hampers’ filled with local products are on sale there.

“Everything is 100% North-

ern Ireland and that’s something I would be very adamant about,” Mr Sloan said.

“There is companies out there sticking Irish and Northern Irish on things and they are not made here at all.

Mr Sloan also has ambitious plans for expanding the events side of the business and its

website to offer online ordering. “The people of Belfast are so loyal to us,” he said.

“I would love to run cheese and wine nights, get companies in, get some local musicians in.

People would love it. It would be a brilliant night. I have lots of plans. My head never stops, but there is only one of me.”

1 December 2014 BUSINESS MONTH 29

ASK ASKTHE THEEXPERTS EXPERTS I’M a minority shareholder in a private limited company and am being left in the dark when it comes to pretty fundamental decisions. What should I do?

MOST Northern Irish companies only have a small number of shareholders, usually two or three. It’s often the case that these shareholders are also the people who manage and run it on a day to day basis.

In reality these companies are run more like a partnership than a large corporate entity and are often called quasi-partnerships.

‘Majority rule’ is an established principle of company law whereby the majority of the shareholders hold the decision making power of the company.

Sometimes this dominant position leads to an oppression of the minority shareholders interest – this may be in the form of blocking minority shareholders from the decision making processes.

The Companies Act 2006 offers an olive branch to those minority shareholders who find themselves in such a position.

This piece of legislation affords broad relief to a minority shareholder who can show that they have been treated both unfairly and prejudicially as a shareholder.

The court can award the majority shareholders with a share purchase order, as well as other forms of relief. Quality advice, early, is crucial in these situations to ensure your financial interests are not eroded beyond repair.

TMcM

Toby McMurray Partner at Tughans Solictors

Gordon McElroy Director and coporate solictor at MKB Law

John Minnis Director, John Minnis Estate Agents

Sound advice can be a valuable commodity We put your questions to the experts with the answers

I entered into a loan agreement with an interest rate swap but I don’t think I was treated fairly by the bank. What can I do?

L

AST year it was revealed that banks had acted with negligence in the sale of certain financial products, known as interest rate swaps. The intention of these swap agreements is to protect borrowers with loans against potential interest rate rises by fixing the interest rate for a specified period of time. The potential consequences of having a fixed interest rate, however, were not fully explained in the majority of cases and led to many businesses making a loss as a result.

Some businesses have actually collapsed due to the financial burden of the fixed interest rate. If you have signed up to one of these agreements and feel the details of your arrangement were not fully explained, you could be due compensation.

In January 2013 the FSA admitted that 90% of these complex agreements may have been missold by banks. This admission led the ‘big four’ UK banks to set aside £3bn for potential compensation pay-outs. So far only about one-third of this figure has been reclaimed.

Our practice has taken a proactive approach to the situation and has established a dedicated department, MKB Law Financial,

I AM considering putting my house on the market in the New Year. What considerations should I bear in mind?

JANUARY is one of our busiest times for new property listings for sale.

Many people start the New Year with resolutions they want to accomplish, and moving house is often one of them.

It pays to get in there first. Have your home valued pre-Christmas so you are ready to get on the market the first week in January.

In today’s marketplace, vendors must do all they can to ensure their home is in top condition, both inside and out, to maximise the value. How does your home look from the road? Is the driveway untidy? You need any potential buyers to be sufficiently impressed from the road to take a closer look.

Take time to think about who your home is likely to appeal to. For example, if you feel young professionals are your market, you could consider turning a bedroom into a study. For families, do the reverse.

Clean up — while it seems obvious, some vendors don’t see the importance of keeping the home clean and tidy and odour free for each viewing.

Create an ambiance so that the moment a potential purchaser walks into your home, they should be overcome with that welcoming feeling.

Put the heating on at least an hour before viewings. There’s nothing worse than viewing a cold home. If you have a fire, light it.

You don’t need to spend a fortune on home improvements buyers may or may not want, but repair signs of obvious wear and tear. Neutral colours sell. It’s a fact. Try to convey an image of quality and neutrality.

Remember that nothing will turn off a potential buyer quicker than a cluttered, untidy home. And, dress up your main rooms to their advantage.

Place greater emphasis on any unusual or period features e.g. dress an unused Victorian fireplace with candles.

In summary, house prices can vary significantly even for very similar properties, so anything you can do to boost the perceived value of your home will be well worth the effort in the long run.

JM to assist individuals and businesses who have been mis-sold these complex products. It is very important that you speak to an

All questions should be addressed to: experts@businessmonth.co.uk Questions and advice are publishted in good faith but should not replace the advice of your professional financial advisor.

30 BUSINESS MONTH 1 December 2014

expert in these cases as they will be rejected if not presented in the correct way.

GMcE

INSIDE REPORT

Building blocks FOR SUCCESS Finance Minister Simon Hamilton talks to Paul Gosling about his ambitious plans to use the new Northern Ireland investment fund to help to improve infrastructure here A NEW public transport interchange in the heart of Belfast connected to a modern shopping plaza and high quality office accommodation, could be the first project financed through the new Northern Ireland investment fund, it has emerged.

Finance Minister Simon Hamilton told Business Month during an exclusive interview that he is keen to make much faster progress with the ambitious Europa transport hub upgrade for the Belfast city centre train and bus station.

“For me, it [the Europa interchange] is the perfect example of how we should be using financial transactions capital,” said Mr Hamilton. “There are 10 acres of spare development land in the centre of Belfast. We have pushed and pushed DRD [the Department for Regional Development] and I don’t think they have been moving as quickly as I would like to see them moving.”

Under the system of financial transactions capital (FTC), some of Stormont’s capital budget must be spent in association with the private or third sector. In the 2015/16 financial year, a total departmental capital budget of £1.1bn for Northern Ireland includes some £128m that is allocated as FTC. This means that it must be used as equity or to lend to a private sector project, or as part of a joint venture with the private sector.

This in fact provides an opportunity for Stormont to circumvent spending rules that

have caused problems for several Northern Ireland departments, including DRD. Many millions of capital allocations are at risk of being lost because government departments are unable to spend them within the financial year.

The new Northern Ireland Investment Fund — which is expected to become operational during the 2015/16 financial year — will get around this problem.

The fund is to be managed by the European Investment Bank, the European Union body charged with improving infrastructure across the EU by assisting with the financing of major projects.

A spokesman for the EIB said: “We are happy to do things with

32 BUSINESS MONTH 1 December 2014

Northern Ireland.”

He added that a priority for the EIB in its engagement is to improve the use of European funding for Northern Ireland — including Peace funding, the competitiveness programme, the Social Fund and Interreg.

The spokesman added: “We are looking at ways we can help leverage European and national resources. . . We can both lend into the structure and we also have a team with experience of setting-up funds.”

The EIB has previously expressed a wish to finance projects in Northern Ireland, but has been hamstrung by rules that prevent it being engaged in projects

Simon Hamilton plans to improve infrastructure in Northern Ireland smaller than £150m in size. Few projects above that size exist in Northern Ireland and support for Ulster University’s new Belfast campus was the first example of EIB engagement here.

By creating a large single fund for a range of infrastructure projects that are individually smaller than £150m, the EIB is able to become an active investor in Northern Ireland. It is hoped that a £100m investment by the

Northern Ireland Executive will create a £1bn fund.

The Executive has approved £12.1m that is unallocated from this year’s capital budget to be set aside as the initial base for the Northern Ireland Investment Fund.

The Treasury has agreed that as this money will no longer be in the hands of the Executive, and instead held by the EIB, it will be treated as having been

spent and so will not be lost to Northern Ireland.

As well as the Europa transport hub, other projects likely to be backed are social housing schemes, large urban regeneration projects, renewable energy developments, energy efficiency schemes, telecommunications infrastructure and mixed use education campuses. By processing schemes such as the Europa interchange through the invest-

ment fund, it also means that speedy progress can be made on a project that will stimulate the construction sector and provide new premium office space in Belfast, while not reducing funding for other priority DRD schemes, such as road and rail upgrades.

Only schemes that involve the private or third sector will be able to access the fund. Housing associations will be eligible to put forward proposals, but the North-

ern Ireland Housing Executive would only be able to bid if it is restructured to take it outside the public sector, or if it works with a private sector partner. Similarly, the new district councils can work with private sector developers or higher or further education providers.

“The origins were early this year,” Mr Hamilton said. “Two

>> Continued on page 34

1 December 2014 BUSINESS MONTH 33

INSIDE REPORT >> Continued from page 33 things were filtering in. The first was the reality dawning around [the underspending of ] FTC... This is going to become an increasingly large part of our budget going forward. Whatever we get we have to ensure we spend it.”

The first discussions began in August last year with the EIB about enabling it to finance infrastructure and these intensified earlier this year, when it became clear that government departments were having severe difficulties in managing their capital budgets and spending their capital allocations.

“They have experience in some other European countries with similar issues,” Mr Hamilton said.

“They were very receptive to this.”

However, Northern Ireland — for once — is moving faster than the rest of the UK and the Republic. “We are ahead of the curve, doing this before Scotland, Ireland, or England. FTCs can fund anything we can think of where we have private partners, the Minister said.”

And the intention is for the fund to be around for the long-

Belfast’s Europa Bus Centre and Great Victoria Street Station could receive an overhaul through a new fund term, said Mr Hamilton, who hopes it will be a fixture in the infrastructure investment landscape in Northern Ireland.

European Commission President Jean-Claude Juncker, has pledged investment in infrastructure as central to his presidency and his plan to lift the EU out of

34 BUSINESS MONTH 1 December 2014

its economic crisis. Juncker wants to invest €300bn into European infrastructure, probably through the EIB. Northern Ireland’s active engagement with the EIB will raise hopes that we can benefit from some of this additional infrastructure investment.

With a significant capital sum

already allocated to the fund and the support of the EIB, it looks certain to go ahead.

If the £1bn target can be reached the fund could prove extremely important in helping to address what the CBI has calculated is a £2.5bn infrastructure deficit.

TICKERS

The month’s local indicators at a glance Ulster Bank chief economist Richard Ramsey gives a rundown on the latest key pointers THE latest residential property price index (RPPI) reported its sixth successive quarter of price rises. Residential property prices increased by 1% q/q in Q3 with prices some 7% higher than the corresponding period last year.

Northern Ireland’s residential property prices recorded a peak-to-trough decline of 57% between Q3 2007 and Q1 2013. Prices have subsequently risen by over 11%. As a result, Northern Ireland has recouped less than one-tenth (9%) of the peak-to-trough decline with prices still almost 52% below their pre-downturn peak.

From a wider economic perspective, the continued rise in transactions is a more significant signal that the recovery is strengthening. Residential property transactions in Q3 2014 (5,094) were 21% higher than the same quarter last year and represented the highest

Q3 figure in seven years. On an annual basis, the number of transactions has been rising steadily for three years with almost 19,700 transactions completed over the last 12 months. This is more than twice the number recorded at

the low in the 12 months to Q2 2009 but 52% below the ‘freak peak’ recorded in 2006/07.

A return to this ‘freak peak’ is neither expected nor desired.

Instead a return to more ‘normal’ levels of activity that we would have seen around 2005

(29,000) would be desirable.

This is almost one-third above where transactions currently are.

Further growth in house prices, and more importantly transactions, are expected in the year ahead.

PERSONAL or individual insolvencies in Northern Ireland have more than doubled since 2007. The latest figures for Q3 2014, released last month, posted a 36% rise relative to the corresponding quarter last year. In the latest quarter, 975 individuals were either declared bankrupt (or chose bankruptcy) or entered into either an individual voluntary arrangement (IVA) or a debt relief order (DRO). The latest increase was driven by

a surge in IVAs with a record number (549) in Q3 2014. IVAs increased by 68% year-on-year in Q3 2014 with bankruptcy orders (303) up 20% over the same period. Meanwhile, the number of DROs fell by almost 12% y/y. It is noted that the latest four quarter outturn (to Q3 2014) there were 3,510 individual insolvencies which is 134% above the level that prevailed in the four quarter period (to Q3 2007) that predates the credit crunch.

SINCE 2008, the median wage for all employees (full-time and part-time) in Northern Ireland has fallen in real terms by almost 14%. However, the younger age groups have experienced the steepest declines.

The median wage of employees aged between 18-21 years of age has almost halved between April 2008 and April 2014.

Those aged between 22-29 years of age and 30-39 years of age have experienced declines of 21% and 12% respectively.

Employees in their 40s and 50s have seen their pay fall by almost 15% and 12% respectively.

Meanwhile those employees over 60 years of age buck the trend and are the only agegroup not to experience a real terms decline in earnings over this period (+0.4%). The huge fall in median earnings for those aged 18-21 years is largely explained by the changing composition of jobs (a greater preponderance of part-time work and lower job quality).

36 BUSINESS MONTH 1 December 2014

BUSINESSPEOPLE

The Northern Ireland Businessperson who... ...went from corporate law to coffee Orla Smyth, owner of Kaffe-O in south Belfast, tells Jane Hardy about her past life — including winning the World Transplant Games world record in 400, 800 and 1500m

I

KNOW exactly when I decided I wanted to stop being a corporate lawyer.

It was when I was taking part as a middle distance runner in the World Transplant Games in Sweden in 2009 after my second kidney transplant.

From the age of 11, I had renal problems which were discovered when I collapsed the day after my Confirmation. It didn’t affect my life that much but at 24, I had a pre-emptive transplant. That failed after three months, then I was in dialysis for three and a half years and had my second transplant in 2007.

I’m a sporty person and played Gaelic football for Northern Ireland when I was young. I had no energy after my first transplant, but six months after the second, I started to test myself and have now done two marathons.

Law was always a safe option for me anyhow. I was really there by default. But the experience of meeting so many people with transplants at the games made me realise we only have one chance.

I became good friends with an English guy in his twenties who’d had a heart transplant and he’s now back playing professional rugby, doing what he loves.

A lot of people in his position start their own businesses and I know somebody with a kidney transplant who switched from teaching to being a physio.

It changes you and you start thinking, ‘hy not? What’s the worst that can happen?’

Four months after opening Kaffe-O on the Ormeau Road, I’m content I did the right thing. In a way, although it sounds odd, I’m very grateful - if I hadn’t had renal failure when I did, I would never have

Orla Smyth, who lef t the legal profession to open a coffee shop done this.

It’s been a dream for five years and I just bit the bullet before Christmas last year. I finished my 12-year legal career in April, working finally for Allen & Overy, then opened the cafe, which is self-financed, in June.

I saved for a year and don’t have an extravagant lifestyle - my car is 12 years old. But although this is 100% harder than anything I imagined, it’s my passion. I guess I am a little obsessive and always see things that can be done better.

As a lawyer, you’re not your own boss and you can go home and leave the job behind. Now I find I never switch off but I am using my creativity and do all the PR, marketing and social media. I employ nine people and I’ve consulted experts in everything from shop design to the furniture. That leaves you

free to play to your strengths.

For me, the customers are 110% of the job and are the best part of the business.

Five years ago when I was living in Copenhagen, which is a coffee city, I discovered the Kaffe O concept. I drank the coffee, which is a mix of Guatemalan, Ethiopian and Costa Rican beans, every day.

It’s a strong, dark roast and you know, coffee is good for your health and a performance enhancer. My pricing in line with other Ormeau Road cafes. If we’re a few pence more, well, our coffee has been hand-roasted in Copenhagen and our hot chocolate is made with chocolate that’s 80% cocoa solids not cocoa powder. People imagine the profit margins on a £2 coffee are massive, but they aren’t.

The furniture is Danish and I

worked with the architect John Lavery from BGA and graphic designer Paul McNally who created our brand.

I was brought up round here as my family lived in the Ormeau Road and I remember this building when it was Rea’s electrical shop, which was a bit of an institution.

I am very confident in my product and our coffee is regularly voted the best in the market. We also use local ingredients and the cheese sandwiches aren’t just cheddar but Irish cheddar.

Why did I open a business in the teeth of a recession in a stretch of road with six other cafes? Because if there are more good businesses in an area, more business is attracted.

There’s a lovely French cafe near here and Soul Food Cafe, but people want variety. Belfast was ready for this.

I think we can extend the brand. We sell beanies, t-shirts, mugs and are importing more Danish ceramics for Christmas.

The music’s very important too. People say why not have some Abba, but I don’t think so. We’re listening to Bruce Springsteen’s The River at the moment.

One of the bonuses of changing from law is the joy of wearing a beanie, ripped jeans and yellow hoodie to work. I couldn’t do that as a lawyer.

And as it’s my business, I set my own timetable. The only thing I miss sometimes is the chance to think analytically, and I was well paid.

Some people think I was buck daft to do this. My other half, who’s a PE teacher, is envious. People are usually envious of the dream, not the reality, but I am very happy with where the business is after four months. My brother Pat-

1 December 2014 BUSINESS MONTH 37

FOCUS ON: INDEPENDENT RETAILERS

SMALL SHOPS Kerry McKittrick discovers that as our shopping habits change, independent retailers in

T

HE way we shop is changing — and independent retailers in Northern Ireland are making the most of our changing habits.

Small businesses and independent retailers are a vital part of Northern Ireland’s economy, employing three-fifths of workers here and accounting for £1.7bn in trade each year.

Independent shops are in a good position for growth — because thanks to increased pressures on our time, gone are the shopping patterns of the 1990s and 2000s.

Time is of the essence in our busy modern lifestyles and consuming is now all about convenience.

The big shop — either weekly or fortnightly — with families buying their groceries in bulk in giant supermarkets is on the wane.

Customers are more likely to drop in to smaller shops two or three times a week for their groceries, topping up store cupboards as they go.

Tesco has encroached on the small-shop sector by opening around 16 Tesco Express stores in recent years around Northern Ireland, though Sainsbury’s has no plans to introduce its Sainsbury’s Local format in the Province.

Instead, Northern Ireland has a wealth of successful independent retailers, predominantly in the convenience grocery sector.

Over the last year independent retailers have reported a steady though not an overwhelming growth, with business not yet back to pre-recession levels.

Robin Mercer, owner of the Hillmount Garden Centre in Gilnahirk outside Belfast, reports that although the business has seen more customers coming through the door, they are becoming less frivolous with their spending.

He said: “People aren’t spending foolishly. They still come in to buy birthday and Christmas presents, but they don’t include a little treat for themselves any more.”

Musgrave Retail Partners, which incorporates the SuperValu, Centra and Mace

38 BUSINESS MONTH 1 December 2014

brands, reports that shoppers are preparing earlier for Christmas this year, with seasonal sales beginning in September.

According to Neville Woods, owner of Woods SuperValu in east Belfast, these early Christmas spends are due to smart shopping.

He said: “People are buying earlier, buying many festive items since Halloween.

“I think this is largely because they are looking for better deals and being cautious, rather than leaving it to the last minute and having no choice about cost.”

Nothing highlights the importance of independent trade more than the UK’s Small Business Saturday on December 6.

Now in its second year, the event — which is promoted in the province by the Northern Ireland Independent Retail Association — saw 57% of customers shopping at independently owned businesses last year on the day.

NIIRTA hopes to build on the success of last year, making the occasion bigger and better with online resources for small businesses and their customers available from www.smallbusinesssaturdayuk.com.

It has also run a strong social media campaign to promote the event.

The Mallusk-based Henderson Group, owners of Spar, Eurospar and Vivo, have also reported growth in 2014.

The company said that over the next year, it will be responding to new shopping habits by investing heavily in new stores and their own brands. The group prides itself on ensuring that 75% of their produce is sourced on the island of Ireland.

Henderson sales and marketing director Paddy Doody said: “We know that convenience is making a comeback, but we also want our shoppers and potential shoppers to know that while we excel in convenience and quality, that same convenience and quality is being sourced locally.”

Declan Corry, owner of Corry’s SuperValu in Shantallow, Londonderry, also said: “We hope to develop our business next year by continuing to focus on and increase

>> Continued on page 40

Steven Kennedy (l) of Henderson Group with Jonathan Stinson of Daily Bake. Henderson Group recentl y announced a deal stocking the firm’s pies in SPAR and EUROSPAR

THINKING BIG Northern Ireland are reporting a boost in sales as they battle with the supermarket giants

1 December 2014 BUSINESS MONTH 39

FOCUS ON: INDEPENDENT RETAILERS >> Continued from page 39 our fresh offerings which were successful for us last year,” he added.

To coincide with Small Business Saturday, NIIRTA has set both the Northern Ireland Executive and the new super-councils with the challenge of returning Northern Ireland’s independent retailer numbers to their pre-recession levels.

NIIRTA chief executive Glyn Roberts said: “We have set them the objective of helping to establish or create positions for 3,000 new independent retailers by 2020 — we lost that number in the recession. People want something different.

“They want something better than the same old chain supermarkets — that’s where local grocery stores, butchers, bakers and chemists can all offer something different and distinctive.

“I think consumers are getting that message and increasingly voting with their feet.”

Recent figures from researchers Kantar Worldpanel show that our three biggest su-

Independent retailers are on the rise permarkets — Asda, Tesco and Sainsbury’s — all experienced falling UK sales in the 12 weeks to November.

And the big-format stores so beloved of the major supermarkets will also receive a hit next year when the revaluation of

40 BUSINESS MONTH 1 December 2014

business rates hits home.

Edge-of-town retail parks will see an increase in rateable value of 18%, while the largest food stores will see their rateable value go up by around 40%.

Retailers are cautiously optimistic about 2015, but by

no means are they resting on their laurels.

If independent retailers stay ahead of the game, they may be able to benefit more than ever from the toughening conditions facing their big supermarket rivals.

FOCUS ON: FIT-OUT FIRMS

TASTE FOR A

Simon Rowe talks to the joinery and fit-out firms which have worked on some of our best restaurants, pubs and shops - and even ventured as far afield as a cruise ship in Cyprus and Disneyland, Paris

N

EXT time you’re out having a drink or enjoying some fine dining in one of Belfast’s trendiest venues, take a moment to toast Les McCracken.

Why? Because the chances are his firm has provided the brains and craftsmanship behind the establishment’s luxury décor and quality finish.

Mr McCracken heads up McCue Crafted Fit, one of Northern Ireland’s most successful fit-out firms. His company’s portfolio of projects includes the swanky Albany bar on Lisburn Road, the uber-cool Shiro bar and Chinawhite club in Brunswick Street, as well as El Divino, Box nightclub and the Harp Bar. It has also worked on the fit-out of eateries The Potted Hen and House of Zen in the city’s thriving Cathedral Quarter.

With five-star hospitality sector clients such as London’s Savoy, Claridges and Berkeley hotels, McCue’s has built an international reputation over 60 years, and the firm has just secured a lucrative contract to refurbish 30 branches of a major UK high-street bank.

McCue’s, renowned for its specialist joinery services, has diversified in recent months by tipping its toe in the cruise ship market, securing a £1m deal with Thomson Cruises.

McCue’s was awarded two cruise ship refit contracts to be carried out in Cyprus and Gibraltar. The work includes new restaurants and refits to bars, coffee shops and lounges.

Mr McCracken, who has run the firm for 27 years, said “diversification” and “maintain-

ing a strong cash position” has been key to the firm’s ongoing growth through the recession.

“We reinvented ourselves in that period. We widened our geographical reach as well as the breadth and scope of our work,” he said.

Although McCue’s suffered a 33% drop in turnover during the slump, it has extended its reach into the retail fit-out sector and has seen “more movement in the corporate and banking sector” in recent months, said Mr McCracken.

With a workforce of 120 located on a five-acre manufacturing site in Carrickfergus, McCue’s has grown its turnover to £30m. While the majority of its work comes from abroad — this year alone the firm has worked on contracts in Cyprus, Rome, Paris, Barcelona, Stuttgart and Amsterdam — Mr McCracken says the firm is “keen to stick to our roots” in Northern Ireland.

Another fit-out firm that is in ship-shape is Marcon. The Antrim-based company is riding the crest of a wave after its celebrated work on the £100m Titanic visitor centre.

Marcon was crowned McDonald’s UK Contractor of the Year in 2013 and has just completed a new £2m McDonald’s restaurant on Boucher Road.

Winning the McDonald’s Contractor of the Year award in 2013 was a big deal

42 BUSINESS MONTH 1 December 2014

It employs 40 people at its 11,000 sq ft manufacturing workshop.

Needless to say, the folks at Marcon aren’t just enjoying their lucrative relationship with McDonald’s — they’re lovin’ it! Since 2008 the firm has completed more than 200 fit-out projects for the fast food giant across Ireland, Scotland and the north of England.

“Winning the McDonald’s Contractor of the Year award was a big deal,” said Marcon director Mark O’Connor. “That has given us the opportunity to take on more work in the UK.” “About 60% of our work is now outside of Northern Ireland and a large portion of that is McDonald’s work,” he said.

Marcon is also looking east in its expansion drive as it is currently completing work on Northern Ireland’s first YO! Sushi restaurant which opens this month in Victoria Square.

The Japanese-themed food chain has more than 70 restaurants worldwide and is looking to expand further in Northern Ireland.

Mr O’Connor said: “To see those two global brands investing in Belfast gives you an idea of what they think about the quality of our work and also the future of the economy. At Marcon we demand and expect very high levels of quality and that has stood to us when we are working with these global brands.”

Another Northern Ireland firm that’s gained an international reputation is Portadown-based fit-out specialists Deluxe Group.

>> Continued on page 44

Deluxe Group’s managing director Colm O’Farrell with Brian Dolaghan, Invest NI (r)

FINE FIT-OUT ust volorrum utatiata volenda quia ni alitati ratiumet et vendus dis et voluptas ut ium nihilla quamus

1 December 2014 BUSINESS MONTH 43

FOCUS ON: FIT-OUT FIRMS >> Continued from page 42 The firm won the Fit-Out Project of the Year in the international category at last month’s Fit-Out awards in Dublin — an annual showcase for the sector.

The firm’s work on the Ratatouille adventure park at Disneyland Paris proved a recipe for success.

Deluxe, which was also shortlisted at the recent UK Restaurant and Bar Design Awards for its work on the new Whisky Lounge in London’s Metropole Hotel, has been making an impression in the hospitality, leisure, commercial and luxury residential sectors for more than 40 years.

From its origins as a family-run painting and decorating firm in 1969, Deluxe now supplies the services of sculptors and designers specialising in custom features and finishes to some of the biggest construction projects in the world. As well as Disneyland Paris, it has worked on One Tower Bridge in London, and

Paul McMahon, manager of CastleCourt Shopping Centre (l) , with Alan Stewart of Marcon Fit-Out at the new Toys “R” Us fitted out by Marcon an energy science centre in Saudi Arabia.

Such is the demand for its services that the firm needs to expand production facilities and recruit an additional 22 employees.

44 BUSINESS MONTH 1 December 2014

Managing director Colm O’Farrell jr said: “We have identified opportunities for growth in the high-end residential, hospitality, education and theme park markets.

“We plan to target these

over the next two years.

“Our objective is to significantly grow sales outside Northern Ireland and we need to have the right level of skill and the production capacity to achieve that.”

OFF LINE SECTION MOTORING

SPORTING

LIFE

Audi TT still shows its a winner

DAY INTHE LIFE

MANABOUTTOWN

SIMON

THE

CAMPBELL

Managing director of Portview Fit-Out

CHAIRMAN

Inside track on Northern Ireland business

MAKING A SPLASH

BANGLADESH WATER LEAVES BIG IMPRESSION

1 December 2014 BUSINESS MONTH 45

offline

OUT TO LUNCH

Ever-youthful exuberance key to finest vintage

Excellent palate: James Nicholson is the much-respected proprietor of JNWine.com

Joris Minne visits Love Fish on Howard Street, Belfast with so-called archbishop of the wine trade James Nicholson, who discusses his love for wine and his passion for horse racing

W

HAT is it about people in the drinks business and staying fit and youthful? Think Mark Beirne of Chinawhite, Bill Wolsey of 40 or 50 pubs or David Russell of GDK Drinks. All of them look at least 10 years younger than they are.

The same goes for the archbishop of the wine trade, James Nicholson. By right, Nicholson should be bulbous of nose and corpulent.

He should move with care so as not to inflame his gout and he should definitely not be travelling too far from home.

Yet here he is at the age of 60, fit as a beachguard and covering thousands of miles as a frequent flyer with an infectious passion for horse racing as well as good wine. Not only does he run the widely respected James Nicholson Wines and JNWine.com operations but he is also chairman of Down Royal Race Course and a board member of the charity Youth Action.

If you were to choose to grow old prematurely, horses, youth unemployment and wine would do the job. But not James Nicholson.

For a man who had to grow up early following the untimely death of his mother when he was 13 and started pulling pints in the Villager in Crossgar shortly after his A-Levels at Methody, the wine business and horse racing became something much more akin to art dealing than just vulgar buying and selling.

46 BUSINESS MONTH 1 December 2014

He says he began to take an interest in wine following the creation of a good restaurant in the Villager. “Wine was a whole new world and I wanted to know more and soon the wine business took precedence.”

He makes it look easy. His base is a handsome Crossgar warehouse, one of the most attractive buildings in the village. The experience of buying wine has now been transported from the atmospheric woody interior to a successful online retail operation, JNWIne.com.

“We are not the biggest in Ireland but we have a presence throughout the island,” he says. JNWine.com does however sell more than a million bottles of wine a year. “Tesco could do that on a Saturday coming up to Christmas,” he sighs.

The firm has a 50/50 mix of sales north and south. Three quarters of those sales are from trade, with the remaining going through retail (of which 15% is through mail order from his whizz-bang website).

We are having a white burgundy from Macon with lunch. It is fresh, invigorating and in harmony with his crab on toast and my prawns. He talks about Robert Parker, the world standard setter on wine. What Parker says makes and breaks wine labels.

He’s marked this Macon at 92%. James Nicholson knows these things because this is what he does. His knowledge of the horse-racing sector in Northern Ireland is similarly

forensic. With 4,000 jobs reliant on the sector in the north alone, he says much more should be done to help it get stronger and start attracting more international players. “Mike Todd at Down Royal has brought the racing sector up to par with the rest of Ireland but we can do more.”

Similarly, his devotion to the charity Youth Action and helping get young people into employment is as fully charged and he says some flattering things about the Minister for Employment and Learning.

We head out into the rain, yet with his bright, shin-length, cream-coloured raincoat, he seems somehow radiant, reflecting a little sunshine wherever he goes.

Love Fish Tom yum soup Scallops Prawn curry Crab on toast Bottle sparkling Half pint Yardsman Glass wine x 2 Espresso Macchiato Service

5.00 8.00 13.00 6.50 4.50 2.65 18.00 2.65 2.70 6.30

Total

69.30

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STREETVIEW

Streetview No. 51: Country Choice Ron McBride

T

WENTY years ago in Dromore on the banks of the Bann, there stood a derelict, roofless building which today has an award of merit from The Historic Buildings Council.

The sympathetically-restored building is now occupied by two complementary businesses, the Country Choice gift shop and Riverside Tea Room. The gift shop is owned

by Gareth and Sophie Ingram whose parents carried out the restoration. The Ingrams expanded the shop and have since leased out the tea room, their symbiotic relationship reflected in the common signage.

The shop has a pleasant frontage with a typically full window display. Outside there is a painted milk churn, a reminder of its earlier emphasis on a particular style of furniture and giftware. On entry there is a narrow hallway with

stairs going up to the tea room and another flight down from street level to the basement which has windows fronting the Bann. The main part of the gift shop is through a door to the left in the hall. The shop with its three rooms and flight of stairs is ‘busy’ with all wall space used to maximum effect.

Dromore has a good range of shops with competition keeping business owners alert in

terms of service and value.

The Ingrams face competition in a business where discretionary spending is vulnerable in times of recession.

Despite the pressures, business this year has been good. Word of mouth bring customers to Country Choice from as far as Bangor and Portadown.

In September a high-order dress shop opened in a former bank premises and has already

brought people into town: some of these customers call into the tea room and, inevitably, the gift shop.

This busy shop requires considerable effort behind the scenes. Trends are important and the main buying is at the NEC, Birmingham. Stock has to be refreshed frequently and displays changed around.

Stock must be refreshed to the extent that unsold items are ‘moved on’. Gifts for the young such as the Gor Juss range are kept and customers can discuss the subtle difference between soya-based and petroleum wax candles.

A wide range of cards and candles, lamps and occasional furniture, pictures and photo frames as well as jewellery and scarves is available. Country Choice is very social by nature and is good for pottering without feeling under obligation.

Country Choice, 12 Bridge Street, Dromore BT25 1HN 028 9269 9211

1 December 2014 BUSINESS MONTH 47

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DAY IN THE LIFE

‘A major part for us is not simply ticking all the right boxes but showing what makes us different’ Simon Campbell

An accountant by profession, he is now managing director of Portview Fit-Out

5.30am

Today it’s an early start as I’m off to London for a pitch to a new client who is due to open a restaurant in the city. I drive to the City Airport for the flight to Gatwick. While in London I will also visit one of our sites and have a conference call.

7am

On the flight I catch another hour’s sleep before a busy day of meetings with our clients.

8am

On the Gatwick Express I catch up on emails and phone the office in Belfast.

9am

I head to the Institute of Directors’ business centre in Pall Mall to take a conference call with a client in Belgium.

9.45am

Settled into the room I have booked for the call. This facility is really useful as it provides a quiet space where you can make calls, and it enables you to have a conversation in private. The call is productive and I have been able to negotiate a

significant deal for Portview Fit-Out, following a recommendation from a previous client.

make sure we are well prepared for what the client may throw at us.

11.15am

Presentation goes well and the elements have come together well to convey the experience and knowledge that the team has to bring to bear for the client. A major part is not simply ticking the right boxes but showing what it is that differentiates us as a company in our approach to working with clients that allows us to enjoy high levels of repeat business and a growing reputation in this tough market place. A lot of it comes down to our “roll our sleeves up” approach.

Hopefully the client has seen that today and we will wait to hear their response in due course. [Subsequently asked to tender for the project — now it’s down to price!]

I take the Tube to a site in Westminster which is near to completion. It is for a Japanese client and as well as being their flagship store in the UK, they are a new client for Portview.

It is six weeks since I last saw the site, so it has transformed tremendously from a stripped out shell to a retail space with fittings, bespoke furnishings and special lighting now in place. Our site manager John McMahon gives me a tour of the building to see how it has progressed, and I get an opportunity to speak to the architect we are working with who is pleased with the way his vision has been brought to fruition.

12.15pm

I take the Tube to our potential client’s offices in Great Portland Street and meet up with the rest of the team involved in the pitch for a quick sandwich and coffee and run over our roles in the presentation to

48 BUSINESS MONTH 1 December 2014

1.30pm

2.30pm

Another coffee to debrief after the presentation to get a feel for what the client’s reaction was — what they seemed to warm to and where we can focus on more the next time. It’s

always about learning — what each client is like and focuses on to take into the project if successful, and what works best in how we convey the messages we want to get across.

3pm

Say goodbye to the guys and tube it back to the Heathrow Express along with Mel our estimator who was also at today’s pitch.

4.00pm

At Heathrow I go through Terminal 2 for the first time and get a chance to see a couple of other projects we have recently completed there — Sunglass Hut and Dixons. I meet up with one of our other contract managers who has also been over today and catch up with progress and issues and a general update. Flight back to Belfast is spent catching up on some work related reading.

6.30pm

After landing, I head home to get changed into Dad taxi to run kids to football and horse riding before heading out to a movie with my wife.

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Citroen commercial economy drive

EFFECTIVE from November’s production, Citroën has further improved the fuel efficiency and reduced the CO2 emissions of the Berlingo — the brand’s best-selling LCV model. The versions benefiting from these improvements are the Berlingo X, LX and Enterprise vans with the HDi 75 diesel engine and the Berlingo LX e-HDi 90 manual micro-hybrid van.

The November changes see the HDi 75 powered Berlingo vans’ combined cycle fuel consumption figure improve to 56.5mpg (previously 55.4mpg) and CO2 emissions reduced to 131g/km from 133g/km. Similarly, the Berlingo LX e-HDi 90 manual micro-hybrid sees its CO2 emissions reduced to 120g/km from 125g/km and its combined cycle fuel consumption figure improve to 61.4mpg (previously 58.9mpg).

Barclaycard give backing to Fleet World Fleet Show

BARCLAYCARD has been confirmed as the headline sponsor of next year’s Fleet World Fleet Show at Silverstone on May 12.

The sponsorship follows the successful launch of Barclaycard Fuel+, in association with The Miles Consultancy (Fuel+) at the Fleet World Fleet Show earlier this year.

Fuel+ is a new fuel and mileage expenses solution designed to help companies cut their business fuel costs by, on average, 25%.

Fuel+ allows drivers to refuel at almost all petrol forecourts in the UK. The 2015 show will again feature an indoor exhibition in halls 1-3 of the Silverstone Wing, with a wide array of exhibitors.

Mondeo Man set to return in the coming months

ALMOST 20 years after Tony Blair famously coined the phrase, ‘Mondeo Man’ is set to return to our roads. According to research by Sewells Intelligence, over half of company car drivers are considering the highly-anticipated fifth generation model for their next company car when it arrives here over the coming months.

In the largest study of its kind, half of those asked and who

usually consider lower, upper and executive cars in the User Chooser Barometer (UCB) survey said they would definitely or be likely to consider the Ford Mondeo as their first choice for their next company car.

The fifth generation Mondeo is available from this month with Ford’s range of ultra-economical EcoBoost engines and, for the first time in the UK, a hybrid petrol-electric option.

Politicians urged to support new road safety manifesto

THE IAM (Institute of Advanced Motorists) has published its road safety manifesto for the upcoming general election, calling for urgent support from all political parties to promote driver and rider improvement on UK roads.

One of the more radical ideas in the IAM manifesto, which is designed to cut the unacceptable number of road deaths and injuries every year, is a call for high speed rural roads to be part of the driving test as well as for road safety to be

MOTORING NEWS

part of the national curriculum.

Volkswagen sales continue to climb

THE Volkswagen Group handed over 8.24 million vehicles to customers from January to October, thus reporting a new record and delivering more than eight million vehicles for the first time in this tenmonth period. The brands also reported a rise in deliveries in October, handing over 842,700 during that month.

Within the group, Audi delivered 1.44 million vehicles worldwide in the period to October.

New world champion set for motorsport show

NEW FIA World Rallycross Champion and former World Rally Champion, Petter Solberg will showcase his skills at Europe’s biggest motorsport show, Autosport International.

Solberg will perform stunts in the UK’s largest indoor racetrack, the 5,000-seat Live Action Arena, during the event at Birmingham’s NEC from January 8 to Janury 11.

1 December 2014 BUSINESS MONTH 49

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MOTORING

TT still a winner

Audi is to roll out the third generation of its cult sports roadster, writes Jim McCauley

F

OR many there is only one TT, the original coupĂŠ launched in 1999 that not only did so much to establish the reputation of Audi, but also hallmarked a generation of innovative car design. However, the marketing end of the company knew that they were on to a winner and the badge continued to adorn the more matronly shape of its successor, adding 60,000 UK sales to the 50,000 units of

50 BUSINESS MONTH 1 December 2014

the original.

Today the UK remains the largest market for the car, ahead of Germany and the US, as the third generation filters into the showrooms.

The new car is shorter and narrower than the outgoing model and its less angular bodywork establishes a closer heritage to the original.

But it also acknowledges the latest Audi design elements and shares its frontal aspect with the R8, featuring the chamfered grille and bon-

net-mounted badge. Like the previous model, the third generation is also offered with a diesel power unit and while the ultimate attraction is the 4-wheel drive Quattro model with twin clutch automatic gearbox, I found the 2-wheel drive manual version to be more engaging.

Power-wise there are no shortcomings with the front wheel drive model, with its 2.0 litre turbocharged engine developing the same 230PS as the all-wheel drive

variants. In this instance the in-line four drives through a six-speed manual gearbox, and with maximum torque available from a lowly 1,600rpm, response across the rev band is immediate and satisfying.

Despite a penalty of 0.7 seconds in the 0-62mph time compared to the Quattro version, it still manages to record a very respectable 6.0 seconds. But this disguises the car’s true ability, and weighing over 100Kg less

AUDI TT COUPÉ Engine: 2.0 litre, 4-cylinder TFSI turbo-petrol; 230 PS @ 4500-6200rpm; 370 Nm torque @ 1600-4300rpm Drive: 6-Speed manual gearbox to front wheels Performance: 0-62mph (100km/h) in 6.0 seconds; max, 155mph ( 248km/h) Fuel on combined cycle: 47.9mpg ( 5.89 l/100km) CO2: 137gms/km; VED Band E for annual car tax of £130 Trim: ‘S line’ Price: £32,410 Insurance: TBC Warranty: 3 years, 60,000 miles Benefit-in-kind: 20% Euro NCAP: TBC Available Extras: 19-inch alloy wheels £450, Auto lights, wipers and dimming rear view mirror £110, Heated seats £325, Leather package £420, Rear parking sensors £430.

than the all-wheel drive car, it has greater agility and overall poise with the manual ‘box fully engaging the driver. The test car further benefited by being in ‘S line’ trim with a 10mm lower suspension adding to its driver focused response.

There is also the additional function of the Audi Drive Select adaptive driving system, which allows the driver to control the operating parameters of the engine in a call-up menu that offers comfort, dynamic, efficiency, individual and auto modes to fine tune the responses of the car to individual preferences.

The electronic stabilisation control system can also be set to a preferred handling mode.

Advancing their technology applications to the interior, the new TT features

virtual cockpit instruments in a 12.3-inch panel, in which the main displays of speedometer and rev counter can be reduced in size to provide a larger central area for the satellite navigation or other called-up information.

Like the original, the cabin offers an enveloping driving position with excellent front room for both driver and passenger.

Rear seat room is restricted in both leg and head room, leading Audi to describe the car as a 2+2 rather than a full 4-seater. Luggage space is increased over the previous model to a generous 305 litres with the rear seats in situ, extendable to 712 litres when folded.

In ‘S line’ trim, the car receives a number of upgrades, including the lowered suspension and LED headlights

which provide superb spread and range at night with exceptionally crisp cut-off lines.

In addition to the equipment level of the standard model, a range of driver assistance options are on offer, including side assist technology to help drivers change lanes more safely, and camera-based traffic sign recognition that can alert a driver to speed limits even if they are only temporary.

Other optional features include park assist to help guide the driver into suitable parking spaces, and active lane assist, which can correct steering if there is a danger of the driver unintentionally drifting out of lane.

Overall, Audi has progressed the TT in a car that pays homage to the lines of the original but reinvents

it with engines that are more powerful than those of the second generation car, but less polluting and more economical. The twowheel drive model tested has a given combined fuel consumption of 47.9 mpg and CO2 emissions of 137 gms/km, putting it in band E for annual car tax of £130.

The standard car comes in at just under £30,000, while a £2,550 premium on the ‘S line’ upgrade brings the list price to £32,410.

For those who like to see a healthy return on their purchase after three years’ ownership, the new TT 2.0 litre in ‘S line’ trim has a CAP Monitor prediction of 46%, comfortably beating the 38% and 39% of its BMW Z4 and Mercedes-Benz SLK competitors. The car can be ordered now for New Year delivery.

1 December 2014 BUSINESS MONTH 51

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TECHNOLOGY Arcam Miniblink £90@ www.arcam.co.uk

Toshiba Encore Mini £99@ www.pcworld.com

Bargain hunters will be attracted to Toshiba’s latest product, the Encore Mini, as it comes in at under £100. The 17.8cm (7”) tablet offers Windows 8.1 with Bing and Microsoft Office 365 Personal, in an ergonomically designed, affordable, mobile package. Its conveniently compact form means users can take it anywhere, enabling them to store and sync work, or watch the latest films while on the move. This combination of features and form makes the Encore Mini the perfect partner for any primary Windows-based PC. It was designed for one-handed usage for viewing content, or to fit into a small bag, for comfortable use on the move.

Optimised for portrait mode, it would make a perfect first tablet for occasional Radley De Beauvoir Body Bag £149@ www.radley.co.uk rather than daily use.

If you feel like treating yourself and your laptop this Christmas, then this luxurious crossover bag is the gift for you. The Radley Camberwell medium ziptop cross body bag has padded pockets suitable to house a small laptop or tablet device. Made from meadle leather, it has foil branding and a contrast grosgrain lining and detachable shoulder strap to complete the look. With zip fastening for safety and a back pocket and adjustable strap, this bag will make a welcome addition to your collection.

It comes in a range of colours including grey, navy or pink.

The miniBlink is a simple, pocket sized Bluetooth receiver designed to allow absolutely any hi-fi system to receive music from a smartphone, tablet, PC or Mac computer. The miniBlink uses aptX™ transmission system meaning a crystal clear sound with quick and simple pairing of devices. A mini-USB power socket, 3.5mm audio output jack and pairing button are all that is needed to get the miniBlink streaming music to any audio system with a ‘line level’ input. The miniBlink’s audio circuitry is engineered by Arcam to ensure real audiophile sound quality. It even comes with a PSU and all required cables. Plug it into your hi-fi and the music streamed from your phone will sound better than the crackle of bacon cooking on Christmas morning.

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Power Bank Charge £10 @ www.50fifty. com If a fading battery on your smart phone puts a stop to your day to day activities, simply power up, then power on with this handy Power Bank. This convenient device works to recharge all phones and cable to USB attachments, as well as many other devices, giving you up to 100% power, all from only a pocket sized charger. Quick to charge, easy to use and super reliable, this Power Bank gives you the reassurance you need when making longer journeys or spending lengthier times away from an orthodox power point.

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Gift wrap

By Grainne McGarvey

I

F you’re lucky enough to get some down time this festive season, it’s important to dress for all eventualities in case the temperature drops. The best way is to use layers and keep your head, hands, and feet toasty — as these areas are

FASHION

Cashmere Striped Tunic £125 @ Lands’ End John Rocha gloves £28 @ Debenhams

most likely to feel the cold. By adding details like buttons, faux fur or a pop of colour to your winter staples, you will look great whatever the weather — and if you drop enough hints, you might get the musthave gifts you really want for Christmas.

Celtic wool scarf £25 @ www.clatteringford. com

Black Fair Isle crew jumper £55 @ House of Fraser

Grey tartan scarf £39 @ Barbour Lambeth mittens £29 @ Radley

Faux fur parka £115 @ River Island

1 December 2014 BUSINESS MONTH 53

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TRAVEL

RICH REWARDS Water is a recurring theme for Nick Redmayne as he travels from Dhaka, the capital of Bangladesh, to the wild bay of Bengal, via paddle steamers, ferries and tenders

B

ANGLADESH is all too often reported in cataclysmic terms: cyclones, floods, famine, ferry and factory disasters .... And yet there’s plenty to celebrate.

This Bengali lowland of almost 160m inhabitants isn’t rich, but an annual economic growth of 6%, fuelled by a youthful population has propelled it into Goldman Sachs’s “Next 11” list of future high fliers.

For travellers, perhaps the biggest surprise is an unexpected sigh of relief.

Crossing from India into Bangladesh, the intensity of the subcontinent’s human maelstrom remains; corrupt odours... get used to them, personal space... what’s that?

However, the perpetual hard sell starts to ebb as curiosity extends beyond the contents of your wallet.

Water is certainly a recurring theme.

The nation is dominated by the Ganges delta; the rivers are vital arteries of transport and commerce, while regular inundations are part of the seasonal cycle. My trip begins at the heart of the delta in the capital, Dhaka. From this seething metropolis, venerable ‘Rocket’ paddle steamers have, since 1928, provided serene passage on the Buriganga river through what was once

54 BUSINESS MONTH 1 December 2014

India (this land was violently partitioned into the largely Islamic East Pakistan in 1947 before becoming Bangladesh 24 years later).

“Yes, yes. Rocket is here,” a resting stevedore reassures me. Tuhin, my guide, lost amid the throng of Dhaka’s hectic Sadarghat ferry terminal, indicates the end of the dock. Over thousands of milling heads and beyond rusty white multi-decked launches, the yellow-orange steam punk fantasy of PS Mahsud is unmistakable.

Moorings made fast, boarding planks clatter on to the dock and are roped down.

A surge of passengers — among them hirsute youths holding hands and a trio of one-legged, destitute men — is held in check by a stern-looking man wielding a stick. A young woman without a ticket is given a loud dressing down and stands alone and forlorn. “No money and wanting to travel,” says Tuhin. “This is the tragedy.”

In the end, the woman is nodded silently aboard.

On the upper deck, our cabin is accessed via one of eight doors leading off the firstclass saloon, itself bisected by a long table laid with a white cloth. Everywhere layers

of paint have long since rounded any sharp edges adding to an ambience of genteel decline. Bags stuffed under our beds, I open the door on to a wooden-railed deck.

Below, a tumult of two-way traffic negotiates the gangplank — porters carrying jute-wrapped parcels, fruit vendors and newspaper sellers hoping for a last-minute sale.

At 6.30pm, lines are cast off. It’s the start of an 220-mile overnight voyage south to Morrelganj, lost among the ever-narrowing capillaries of the Ganges-Brahmaputra river delta. On the banks of the Buriganga, tall chimneys of brick kilns belch black smoke against the sky’s last light; small ferries, standing room only, navigate unsteadily through launch wakes, riverbank fires consume rubbish.

It’s a different scene in the saloon where a white-coated steward pours from a porcelain teapot into cups on saucers. Dinner is served: fish, chicken, vegetable curry, rice, dal. I’m given a knife and fork; Bangladeshis deftly employ their right hands.

From stem to stern, PS Mahsud is a village afloat. Beyond first and second-class cabins, deck passengers populate every other space. Extended families occupy do-

mains demarked by blankets, children in erratic orbit; wizened old men sleep curled on random ledges; kitchen staff rush from cabins where vats of hot water bubble on gas rings. Furthest aft, under dim lighting, the black treacle of the Buriganga melds with the night, slipping past a few feet below a deck devoid of barriers. A searchlight sweeps ahead, picking out nocturnal fishermen and their boats.

The thrash of paddles and rumble of engines is constant.

Daylight reveals the Buriganga has relaxed into the wide expanse of the Meghna, the far bank lost from view beyond rafts of water hyacinth. Other river traffic motors by. On the foredeck, Captain Abdul Salaam is taking his ease. “British built,” he says, tapping the side of his head.

“This boat is speedy, we make 11 knots, eight-and-a-half against the current.”

Silted channels and falling water levels mean that Rockets no longer ply the route to Khulna. Instead passengers disembark at Hularhat, 25 miles before the terminus at Morrelganj, to complete the journey by bus.

Doubts regarding the superiority of river transport are dispelled on the road to Khulna. Lurching through cratered asphalt, my head whacks the car’s roof more than once, and I’m careful not to bite my tongue.

“The MP here lives in very nice house,” says the driver, “but road never improves.” As darkness falls a game of vehicular chicken unfolds, cycle-rickshaws adding an extra dimension. Lights are for softies.

The following morning, outside Bangladesh’s third city, Khulna, hidden within a labyrinth of rutted farm lanes, Tuhin shows me an ancient Hindu temple of carved bricks. “The Islamic saint, Khan Jahan Ali came here from Baghdad in the 15th century. Most Hindus converted,” he explains, “Or left for West Bengal or southern India. More went after Partition in 1947.” Nearby, at the saint’s tomb, a lake is home to marsh mugger crocodiles.

Feeding these indolent reptiles promises fulfilment of your heart’s desire, I’m told as I watch pilgrims purchase an unfortunate chicken. The vendor shouts for the crocodile by name, “Khala Phahar, Khala Phahar!” and lobs the bird into the water. The chicken surfaces, to a small crowd’s expectant gaze. Then, shaking its feathers, it stalks back on to land. “We’ll try later,” says the vendor, “If there’s no crocodile, we’ll make it our dinner.” The pilgrims are satisfied. Later, taking rickshaws around the backstreets of Khulna, we stop for sweet, milky cha and hot, freshly-made rice cakes.

At the Bhoirab river, we hire Toyab Ali’s small ferryboat. “I’m 80 years old,”

he tells me. “The youngest of my brothers is already dead. I’ve committed most sins and I’m still here!” Expertly swirling the single oar, Toyab is in rude health. “I saw the British leave. Jinnah said he’d do many things. Nothing changed, only the rulers.” Toyab strokes his beard, “During the independence war I saw Pakistani planes drop bombs on empty ships. The river was the frontline. I carried the Pakistan army, sometimes freedom fighters, in my boat. I don’t ask questions.”

Back at the ferry ghat, Tuhin points out the white decks of the MV Katka Express, the boat I’ll take next day to the Sundarbans National Park, almost 75 miles due south where the delta feeds into the Bay of Bengal. Two thirds of the Sundarbans’ littoral mangrove forests, the world’s largest, lie within Bangladesh, the remainder in neighbouring India.

They comprise 540sq miles of near impenetrable wilderness with no permanent human habitation; a redoubt for endangered wildlife, protecting an estimated 450 royal Bengal tigers.

After cruising late into the night from Khulna, early morning reveals a tranquil anchorage in the forest. The tender is made ready to explore narrow channels among the mangroves. My fellow passengers are foreigners and middle-class Bangladeshis, all curious to discover the secrets of the Sundarbans.

Two uniformed forest guards shouldering bolt-action rifles join us. Abdul, the more senior, sporting a henna-hued orange beard and coiffeur, describes his last journey. “I fired two rounds into the air. We were patrolling alone. I found fresh tracks and thought the tiger was about to attack.”

Abdul was quite possibly correct. Tigers are superlative primary predators and in the Sundarbans they have an unusually aggressive reputation, which some blame on drinking salty water. Every year 50 to 60 people — fishermen, golpata palm cutters and honey collectors — are killed in attacks.

The morning mist has yet to dissipate, and a trickle of birdsong broken by the oar’s gentle splosh are the only sounds.

There can be few more serene waterways.

A white-chested kingfisher flits across the bow, a pair of magpie robins cock their heads from lofty perches. Through the trees spotted deer graze, ever watchful.

In response to whispered instructions the boatman steers cautiously towards a muddy margin on the shore. Fresh tracks indicate a tiger having swum the channel has regained the land, slipping once more into the forest, perhaps lying low, watching us now.

In the afternoon we walk through open woodland, picking our way in between mangrove roots, observing more herds of skittish deer. Emerging from the forest, we’re suddenly on the beach. Languid rollers from the Bay of Bengal collapse on the shore. Abdul examines tracks in the sand — a tigress and a cub passed this way, perhaps yesterday. It’s deemed safe to swim, so I do.

Returning to Dhaka, the sleeper train from Khulna trundles through the night.

Stewards serve cups of cha and spicy vegetable cutlets. Later, they make up beds with white sheets and pillows. Sleep comes in small measures between melodious Bangla station announcements. Arriving in Dhaka, there’s consternation among passengers; the train is on time.

Bangladesh isn’t easy but it is fascinating. Enduring preconceptions will deter those for whom Bangladesh is not ready.

However, for travellers who do visit, the assault of heady sensations comes with a genuine friendliness that will amply reward their efforts.

Getting there Nick Redmayne flew from Edinburgh to Dhaka via Istanbul with Turkish Airlines (0844 800 6666; turkishairlines.com). Flights also operate from Birmingham, Gatwick, Heathrow and Manchester. Return fares start at £475. Biman flies non-stop from Heathrow.

The writer travelled with Undiscovered Destinations (0191 296 2674; undiscovered-destinations. com) which offers both tailor-made and small group tours from Dhaka. The 13-day Bangladesh Discovery tour costs £1,599pp including hotel accommodation, most meals and transfers.

It visits Sundarbans National Park, Sylhet, Srimongal, and Jafflong. Extensions to the Chittagong Hill Tracts are available on request. Flights extra.

More information British passport holders require a visa to visit Bangladesh, available on arrival at Dhaka airport for US$50/£33 (020 7584 0081; bhclondon.org.uk).

Bradt guide to Bangladesh (2012; bradtguides.com) visitbangladesh.gov.bd bangladeshtraveller.com

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TRAVEL

Country retreat: Relax in our lakelands Fermanagh cottage is the perfect escape

BY MARGARET CANNING WHEN your first thought upon hearing birdsong is ‘has my other half changed his text alert again?’, you know you’ve been cooped up in the city for too long. A restorative weekend in Co Fermanagh was therefore more than called for.

We’d heard of a new website promoting cottages and other rural accommodation around Northern Ireland (gorgeouscottagesireland. com) and selected the charming Lakeview Cottage close to Lisnaskea in Co Fermanagh.

For two and a half days we basked in rustic surroundings of beautiful trees, all in their autumn foliage — and Lake Killyfole, right on our doorstep. There is also a hot tub and sauna, so you don’t have to sacrifice mod cons at this location.

We had to battle through dark and stormy conditions in a circuitous, scenic and hilly route recommended by a misguided sat nav system.

But we finally got there to a warm, enthusiastic welcome from Caroline, the owner of the property. She’d baked some sultana, chocolate and plain soda bread in our honour — a gift that was still powering me through the working day on the following Monday.

We awoke on Saturday to sunlight streaming into the cottage, filtered through the autumnal leaves — and putting this hardened business hack in mind of Gerard

The sauna at the Lakeview Cottage

56 BUSINESS MONTH 13December November2014 2014

Manley Hopkins’ ‘goldengrove unleaving’ in his poem, Spring and Fall.

The apartment/cottage is cosy, with a well-equipped, spacious kitchen and a living room with plasma TV, sofas and a beamed ceiling. There are two bedrooms sleeping two people each, and a lovely bathroom.

Overall, it’s stocked with everything a family could require for a weekend away, from board games to DVDs available to borrow from Caroline, and plenty of leaflets on what you can do in the area.

A games room on the ground floor of the property also has a table tennis table and table football.

We enjoy a lovely walk around Lake Killyfole on Saturday — it’s just one minute’s walk from the apartment — and are greeted warmly by its legion of dog walkers.

We’re reluctant to stray too far away but we do check out the cafe offerings in Lisnaskea, and Caroline’s recommendation of the Kissin’ Crust for lunch lives up to its billing.

And while you can take the journalist out of the news room, you can’t take the news room out of the journalist — so we find ourselves on a tour of Sean Quinn country from Derrylin in Fermanagh to Ballyconnell just over the border in Co Cavan, and the one-time jewel in the Quinn crown, the Slieve Russell Hotel.

The following day we also explore Crom Estate, where the BBC series Blandings was recently filmed.

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Appointments

OUT AND ABOUT

withThe

CHAIRMAN The Chairman is relieved to report from a string of interesting social events as the glitterati lure him from his BT9 mansion Leeann Nuttall-Lowe has been appointed digital marketing manager at the Web Bureau Ltd. With 16 years in the web industry, she has extensive experience in all aspects of digital media.. She has particular expertise in developing digital marketin g programmes.

Gemma Hinds has been appointed digital marketing executive at the Web Bureau Ltd. She has 16 months experience as marketing executive for a telecommunications firm and is now responsible for helping deliver clients’ digital marketing strategies.

Laura-Anne Hann has been appointed digital marketing executive at the Web Bureau Ltd. She has several years experience working in marketing and event management and she is now responsible for planning and delivering clients’ digital marketing strategies.

T

he Chairman normally prefers to unwind in the confines of a fine-dining room, complete with crisp linen tablecloths and cutlery as dense as paperweights.

But as soirees go, the Belfast-based precursor to the Dublin Web Summit itself in Dublin was something more akin to a scene from Mad Max — a film he glimpsed out of the corner of his eye after a rare trip to X-travision (remember those?) back in the 1980s.

A couple of hundred global entrepreneurs, investors and people who appear to have something to do with mobile phones and computers were packed into the cavernous metal expanse of the T13 building — home to a ‘skatepark’, among other things.

That, and rope and fire dancers.

Smoky, bright and garish — The Chairman had been told this is the way of the world these days.

While the vivid lights of Dublin boasted sunglasses-wearing warbler Bono, along with ‘desperate housewife’ Eva Longoria, Belfast’s Titanic Quarter had to make do with our own celebrity technology contingent.

CEO of Brewbot, Chris McClelland, was one of those taking to the stage during the two-day Belfast launch — with a few of the firm’s own beers floating around the venue.

The Chairman normally prefers a 1982 Chateau Margaux.

For those who prefer to fiddle with their laptops, rather than get out there and do some actual work, Marcus Segal, the former chief operating officer of Zynga, maker of the compulsive FarmVille game, or so I’m told — addressed the crowd.

Of course, there were repre-

58 BUSINESS MONTH 1 December 2014

Peter Harbinson of Invest NI (centre), Rachael McGuickin, Visit Belfast and Paul Brown of DisplayNote welcomed 150 high potential tech start-ups, investors and media to Belfast’s Web Summit, ahead of Dublin’s main event

Ardmore Advertising picked up the award for marketing agency of the year at the CIM Ireland Marketing Excellence Awards. From left, Mark Irwin, Miriam Pierce and Larry McGarry from the firm, picked up the gong sentatives from the Northern Ireland Science Park, along with Elaine Thompson from Invest NI — who helped bring a little

business-minded decorum to proceedings.

Still, not a single bottle of Margaux anywhere to be seen.

Appointments

Aidan Harbinson has been appointed project manager at the Web Bureau Ltd. He has over five years experience in delivering projects under the Agile and Waterfall software development models and is now responsible for specifying and managing larger e-commerce and custom projects.

Northern Ireland Chamber of Commerce president Kevin Kingston hosted the President’s banquet at Titanic Belfast. He was joined by Enterprise Minister Arlene Foster, chamber chief executive Ann McGregor and guest speaker Jeremy Paxman After the exertions of the Web Summit, the Chairman was relieved to repair to the heavily-upholstered oasis of the Ulster Reform Club.

And no, the committee hasn’t finally relented and welcomed the Chairman to its ranks, forgiving him for his overly-vivacious mood on that fateful evening way back in 1981.

Instead, it was under the auspices of former PA editor Deric Henderson — now an ace PR man — that the Chairman sneaked in to 4 Royal Avenue.

Deric was ably co-hosting a convivial lunch with dynamic father and son duo Eamon and Cathal O’Hare of O’Hare & McGovern construction firm in Newry.

Eamon O’Hare of O’Hare & McGovern builders hosted a media lunch at the Ulster Reform Club The Chairman revelled in Mr O’Hare snr’s ancedotes about how the company began around 40 years ago, and marvelled at

its recent successes, including a contract to build a new school in Edinburgh.

An already chummy atmosphere was enhanced, as ever, by the presence of two further dynamic duos — Naomi McMullan and Jamie Delargy of UTV, as well as John Campbell and Julian O’Neill of BBC NI. The News Letter unchained business correspondent Richard Sherriff from his desk for long enough to enable him to secure a morsel of lunch.

And the Belfast Telegraph’s Margaret Canning also relented from her swift pursuit of The Chairman for his pearls of wisdom (deadline? moi?) for long enough to share in the lovely event.

David Cairns has joined the Web Bureau Ltd as junior web designer. He has several years experience working within the IT industry, including in the south of France. He will assist in all web development activities at the Web Bureau Ltd.

John Mullan has joined the Web Bureau Ltd as a web developer. With a mathematics background, he has joined the web team after spending a number of years working as a programmer in the insurance and e-commerce industries both locally and Australia.

1 December 2014 BUSINESS MONTH 59

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THE CHAIRMAN Appointments

Elaine Birchall has been appointed chief executive of SHS Group. She has more than two decades of international business experience, including senior roles at multi-nationals including Colgate Palmolive and PZ Cussons plc.

Finance Minister Simon Hamilton (l) and Pubs of Ulster chairman Mark Stewart (r) congratulated Pub of the Year overall winner Andrew Gedge of Bangor’s The Goat’s Toe

Richard Ennis has been appointed director of corporate and business banking at First Trust Bank to drive its growth plans in the business sector.

Mr Ennis previously held senior roles in Ulster Bank including director and head of corporate, Northern Ireland.

Rebecca Kincade has joined MCE PR as a client manager.

Working as part of the firm’s corporate team, she manages the public relations accounts for clients including Danske Bank, WhiteRock Capital Partners and Lambert Smith Hampton.

THE biggest night in the Northern Ireland pub industry calendar didn’t fail to impress.

It was penguin suits all round for the annual Pub of the Year Awards, and a night for the region’s own celebrity fraternity to show their faces – The Chairman included – with Cool FM’s Pete Snodden playing host for the lavish evening at the La Mon Hotel.

And of course, Corrie’s Big Jim McDonald (actor Charlie Lawson) made an appearance, so he did. Finance Minister Simon Hamilton was also soaking up the jovial atmosphere, with mind-bending mentalist David Meade and BBC weatherman Barra Best adding to the night’s NI celebrity credentials.

Pubs of Ulster’s own Mark Stewart — making his last appearance as chairman this year — paid tribute to the high standard of entries.

News royalty came in the form of broadcasting giant Ivan Little, with the Sunday Life team headed up by a rather dapper Martin Breen.

While the Goat’s Toe picked up the top gong, a host of oth-

60 BUSINESS MONTH 1 December 2014

ers also walked away with their own silverware.

A spectacular Game of Thrones tasting menu gave Ryan’s Bar a win, while swanky nightspots Shiro and the Albany also took home awards.

There was also scope for a late-night flutter in the lobby – transformed into a casino for the evening. The Chairman was a dab hand at the blackjack. The same can’t be said for Irish News business editor Gary McDonald, whose chip stack soon went the way of the dodo.

THINGS took a remarkably different turn at the launch of accountancy genius Ross Boyd’s new Belfast office.

Mr Boyd, who originally started the practice from his home in Comber, Co Down, has previously worked for international accountancy firms in London, Dublin and Belfast.

Mr Boyd told the Chairman that the eponymous Ross Boyd Ltd works with a wide client base across pensions advisory services and business advisory services, such as tax plan-

ning, assisting with corporate transactions and strategic and financial planning for startups.

Mentalist David Meade wowed, shocked and surprised the audience, as well as leaving a few participants terrified, at the event in Established Coffee in the city’s Cathedral Quarter.

PR maestro David McCavery was on hand to keep the perpetually disruptive hack pack in check.

Before the show, the Chairman was lamenting the apparent lack of businesspeople in Northern Ireland who want to enter politics.

Once Mr Meade took to the stage, things took a much more lighthearted turn.

There is nothing more terrifying than an entertainer calling you up on the stage, with some middle aged men darting to the back of the room to escape the mentalist’s gaze.

Those in attendance will know it’s a lot harder to get a £1,000 cheque from Mr Meade than he’d let you believe.

So good luck to the mentalist as he embarks on his new show.

THE LAST WORD

with John

Sherrocks Will the rise of the robots herald a new golden age in the world of work or will it leave most of us behind as artificial intelligence takes over in even more fields of expertise?

N

EWS that robots will have taken over a third of Britain’s jobs by 2035 will no doubt have been welcomed by some employers — those envisaging a world in which sick leave, overtime pay and petty office politics were a thing of the past. After all, not even in the imaginations of the most gifted of science-fiction writers have robots ever demanded the right to join a trade union. For these bosses the digital revolution heralds a return to the ‘heydays’ of Margaret Thatcher’s rule — just without striking workers.

Low-paid, repetitive posts are at greatest risk with people earning less than £30,000 a year five times more likely to see their jobs taken over by technology than those paid £100,000, according to a joint report from Deloitte and the University of Oxford.

But what if we end up with the Terminator rather than R2-D2? I kid you not. Elon Musk, the billionaire founder of SpaceX and Tesla motors, fears a world in which artificial intelligence (AI) reigns supreme.

And he’s not alone. Theoretical physicist Stephen Hawking is also warning that there are “no fundamental limits” to what machines may be able to accomplish in the future. “One can imagine such technology outsmarting financial markets, out-inventing human researchers, out-manipulating human leaders, and developing weapons we cannot even understand,” wrote Hawking in The Independent.

There is, of course, the possibility that all this speculation will come to nought. I can remember back in the 1980s when we were awash with high hopes of a three-day working week thanks to the advent of computers in the workplace. The only ‘problem’ humans would face, we were told, was working our how best to fill all the spare time we’d have on our hands. And it wasn’t just gullible journos like me who were taken in — canny property developers started planning the massive leisure parks that would be an essential component of our transformed lives. As it turned out, technology did herald a new dawn but instead of having to spend a lot less time working, we’ve all ended up putting in many more hours.

Based on the disruptive effect technology is already having in the workplace, I’ve little doubt that in two to three decades time things will be radically different.

The only question I have is: will things be

62 BUSINESS MONTH 1 December 2014

better or worse for mankind?

Machines have been displacing humans ever since the Industrial Revolution.

Self-service tills in supermarkets are now making cashiers redundant, just as ATMs did within banking. And it’s not just relatively unskilled jobs that are in the firing line — computers are increasingly replacing highly trained workers in fields such as architecture, medicine, teaching, science, transportation, journalism and the law. After all, why would anyone want to pay lawyers to review documents when software can do the work faster and at a lower cost? Some believe that not even directors are safe now that Hong Kong-based Deep Knowledge Venture has possibly set the ball rolling with the appointment of a decision-making algorithm to its board.

Supporters of the onward march of AI argue that while some jobs will disappear brand new ones will emerge. Furthermore, increased productivity will grow the overall pie, reducing the need for people to even have to work for a living. The only pie I can see in this reasoning is in the sky.

Instead, I agree with American economist Paul Krugman who is warning that “we could be looking at a society that grows ever richer, but in which all the gains in wealth accrue to whoever owns the robots.”

For while the Industrial Revolution did prove to be a catalyst for the creation of new jobs, there can be no certainty that the digital revolution will have the same end result. When social network giant Facebook acquired Instagram for $1bn in 2012 the photo-sharing service had just 13 employees. At its peak photographic company Kodak had a global staff of 130,000.

Erik Brynjolfsson, a professor at the MIT Sloan School of Management, contends that the advances in computer technology are largely behind the world’s sluggish employment growth of the past 10 to 15 years.

There is a widely held view that today’s technology provides us as individuals with the information and the means to forge our own opportunities — to unleash within each of us the creativity and possibility that has given birth to digital-sharing economy successes such as Airbnb and Uber. World Wide Web founder Sir Tim Berners-Lee believes the internet provides a massive creative space where people “have the ability to start a new industry if you can dream it up”.

For what it’s worth, I concur with this

train of thought, but as the father of three school-going children I also have grave concerns that our current eduction system is not equipping the next generation with the skills and the wherewithal needed to fully exploit these opportunities. There needs to be a greater focus on stimulating the cognitive strengths of flexibility and creativity within youngsters. It’s only with less rote-learning and more critical thinking that tomorrow’s workers will be able to successfully compete with robots.

As Gary Marcus, a professor of psychology and neuroscience at New York University, notes: “Curricula that foster creativity — by developing children’s intrinsic motivation for originality, encouraging their intellectual risk-taking and cultivating their metacognitive ability to self-reflect — might be a good place to start.”

We could be looking at a society that grows ever richer, but in which all the gains in wealth accrue to whoever owns the robots