Business First Economic Outlook 2015

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NORTHERN IRELAND ECONOMIC OUTLOOK2015 SPONSORED BY

Ministerial Foreword

The translation of science to commercialisation

Arlene Foster, DETI Minister

by Sue Dunkerton, director at the Knowledge Transfer Network.

Economic Overview 2015

Northern Ireland retail grocery market will experience significant change in 2015

John Simpson, Economist

The importance of wealth creation in the digital sector in Northern Ireland Jeremy Biggerstaff, Flint Studio

Damian McCarney, acting managing director of Musgrave Retail Partners Northern Ireland

What does 2015 promise on the political front Chris Brown, director, MCE Public Relations

Change and opportunity on the horizon for Planning in 2015

New year safety call for the waste and recycling industry

Richard Bowman, Strategic Planning

Jim King, HSENI

Make 2015 the year you developed an effective social media strategy

There are clear skies ahead Brian Ambrose, chief executive, George Best Belfast City Airport

Bill McCartney, Social Media Consultant and Trainer

Autoline celebrates 2014 and looks forward to 2015 Harness the power of ideas in your business in 2015

Michael Blaney, managing director, Autoline Insurance

Cherrie Stewart, ANSONS

The commercial real estate sector 2015 We can take steps now to strengthen our tourism industry in 2015

Brian Lavery, managing director, CBRE Belfast

Sinead McLaughlin, Londonderry Chamber of Commerce

IT’s all systems go in 2015!

Lee Surgeoner, Partner with Endeavour Information Solutions

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NORTHERN IRELAND ECONOMIC OUTLOOK 2015

On target to make Northern Ireland one of the most innovative regions of the UK

by Arlene Foster, DETI Minister 014 was the year when we began to see the local economic recovery really take hold. Economic activity is rising, we now have 21,020 more jobs than in 2012 and there has been a sustained decrease in the number of people claiming unemployment benefits.

This recovery has been driven by our local businesses, and we need to do everything we can to support the private sector to grow in 2015 and beyond.

This is particularly important given the difficult public expenditure situation facing the Northern Ireland Executive from 2015/16 onwards due to the reductions in the block grant from Westminster.

Our Economic Strategy ambition is to rebalance the economy and, faced with difficult spending decisions in the public sector, we now need to ensure we focus our efforts on measures which grow the private sector.

But we have not been idly waiting for these powers – in 2014 we continued to work hard to drive our economy forward. It has been more than a year since the launch of Building a Prosperous and United Community and I am proud of the progress we have made.

In 2014, I welcomed the completion of the Review of Business Red Tape, the extension of the Start-up loans scheme, the approval of our 100 per cent assisted areas status until at least 2017 and positive progress of the Joint Ministerial Taskforce. I was also pleased to

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While 2015 will undoubtedly bring challenges, the work we are undertaking will allow us to build on our successes from 2014 and make real progress in helping to build a larger and more competitive private sector.

Arlene Foster 18 www.businessfirstonline.co.uk

launch the Northern Ireland Executive’s Innovation Strategy setting out the key actions to transform Northern Ireland into one of the most innovative regions of the UK by 2025.

Following on from a successful 2013-14, Invest NI has continued to raise the bar. In the first half of 2014-15 alone, Invest NI has supported 23 FDI projects promoting more than 4,700 jobs and 29 local projects promoting more than 1,500 jobs.

We have ensured the Northern Ireland brand has been visible, with 37 market visits in 2014 to over 30 countries and 59 market visits planned to over 30 countries including Chile, South Africa and Singapore next year.

Our significant investment in developing a world class tourism product is bearing fruit.

In 2014 we successfully hosted the prestigious Giro d’Italia, putting Northern Ireland firmly in the spotlight as the world watched on.

Existing attractions have also proven popular, with both the Giant’s Causeway Visitor Centre and Titanic Belfast continuing to exceed expectations.

Looking ahead to 2015, independent economic forecasters are predicting growth of around two per cent. But the Northern Ireland Executive knows it must ensure

resources are in the right place to nurture this economic growth.

The Northern Ireland Executive’s Economic Strategy was designed as a living document and will be refreshed to meet changing economic conditions with a new Action Plan for the 2016-2020 developed shortly.

We are also developing an Exports Action Plan to coordinate activity across government and the private sector to enable Northern Ireland businesses to grow and compete globally. The Northern Ireland Executive will also consider the recommendations of the Red Tape Review and provide a response in 2015 for a programme of reform to support the local economy.

I will continue to work with the Minister of Employment and Learning to develop a strategy to tackle economic activity through skills, training, incentives and job creation.

The agri-food sector is also of upmost importance with the Northern Ireland Executive committed to the achievement of the challenging industry targets set by the Agri-Food Strategy Board.

While 2015 will undoubtedly bring challenges, the work we are undertaking will allow us to build on our successes from 2014 and make real progress in helping to build a larger and more competitive private sector.

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NORTHERN IRELAND ECONOMIC OUTLOOK 2015

Measures to lift the economy remain a policy priority need byJohn Simpson, economist and visiting professor at the University of Ulster arely can a year have ended with such a range of uncertainties about the likely development of the economy in the next twelve months. The Northern Ireland economy has enjoyed steady, if slow, recovery in 2014.

Gaining the authority to set a Northern Ireland rate of corporation tax would give a powerful stimulus. The actual changes may not be effective for up to two years but the advance commitment would give a marketing boost.

Critical to the passing of legislation to allow corporation tax to be devolved there is the unfinished business, as we write, of underpinning the Executive budget for 201516. The draft awaits finalisation. In addition, proposals on the implementation of welfare reform need to be agreed.

The private sector directly generates some 70 per cent of economic activity. The main pillars of the private sector have been strengthening, but with restrained momentum.

In 2014, overall GDP has increased by about 2.4 per cent: fast enough to give a modest boost to employment. Employment has increased to exceed 818,000 people, an increase of just over 2.6 per cent. The slightly faster rate of increase in employment than GDP is a pointer to the small fall in average earnings.

Private sector average earnings for full-time employees in 2013-14 fell by 0.9 per cent in contrast to an increase in GB of 0.7 per cent.

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When allowance is made for price rises, real household incomes have fallen - and fallen rather more than in GB. This comparison is a key component of the explanation for the slower recovery in the economy in Northern Ireland.

John Simpson 20 www.businessfirstonline.co.uk

The increase in the number of employees is a welcome trend although there is a concern that much of the increase has been in lower paid occupations.

When allowance is made for price rises, real household incomes have fallen - and fallen rather more than in GB. This comparison is a key component of the explanation for the slower recovery in the economy in Northern Ireland.

FDI Success An encouraging feature of the past year has been the large number of investment decisions by external businesses, promising nearly 14,000 jobs after negotiations with Invest NI. The impact of these announcements in recent months will convert into the recruitment of more employees in the next two to three years.

The forecasts offer an average growth rate of 1.9 per cent. That creates some doubt about whether employment will increase at all, or, if it does, to the risk of pointing to poor productivity results. John Simpson Slow recovery

Restrained optimism

The composite index of local economic activity peaked in mid-2007. For five years to mid-2012, output in the private sector fell steadily by over 17%. More recently it has recovered by about 3%. This performance contrasts sharply with the UK economy where the recession was much less severe. In the UK the lost output has already been more than offset.

The slow recovery in Northern Ireland is partly a consequence of only modest increases in demand from external markets and a slow recovery in investment expenditure.

Increases in home based consumer spending remain modest. Overall average real personal incomes have fallen by more than enough to offset the extra income generated by increased employment.

In the last three years, activity in Northern Ireland has been sustained by the public sector which, in contrast to GB, has contracted only slowly. That relationship between the public and private sectors is set to change as Ministers not only take steps to rebalance the private sector by encouraging expansion, but also to live within the constrained devolved public sector budget.

Putting together the trend and impact of the several main components of demand, including particularly the spending squeeze in the public sector, gives reason to doubt how well the modest expansion of 2014 will continue in 2015.

Four professional forecasts for the regional economy in 2015 have been published.

Whilst the statistical results vary, they have in common concluded that GDP will increase but increase more slowly in 2015 than in 2014.

The forecasts offer an average growth rate of 1.9 per cent. That creates some doubt about whether employment will increase at all, or, if it does, to the risk of pointing to poor productivity results.

Much of the economic recovery in 2014 in Northern Ireland can be attributed to the stabilisation and improvement of three interrelated features. First, the near cumulative decline in property values was stemmed.

Second, the scale of losses acknowledged by the banks, in terms of provisions in their accounts, has fallen and allowed some of the banks to present positive pre-tax profits.

Third, prices in the private sector housing market have been recovering.

Critically, for 2015, some businesses and

households continue to be aware of an inheritance of negative equity which will be a continuing, but reducing, constraint on spending.

The divergence in overall trends when comparing GB with Northern Ireland may be largely explained by the events linking property development and the impact that this had on the banks.

The serious fall in construction activity on its own would have put the economy under serious strain. In Northern Ireland, after rising to an all-time high in the several years leading up to 2007, construction activity in the last seven years has halved.

The expectation is that the construction industry will begin to see a modest upturn in workload in 2015. There will be business opportunities for an increase in private sector house building and some public sector infrastructure contracts.

The potential for improved recovery rates and the expansion of output is not in doubt.

For this potential to be realised there is a requirement that the clouds of political uncertainty affecting the functioning of the Northern Ireland Executive should give way to co-operation and consensus linking the private and public sectors!

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NORTHERN IRELAND ECONOMIC OUTLOOK 2015

The Importance of Wealth Creation in the Digital Sector in Northern Ireland Jeremy Biggerstaff is involved in number of business ventures including his main role as managing director at Belfast-based web agency Flint Studios. With over 20 years of industry experience, Jeremy has an unrivalled understanding of all things commercial with an extensive background in digital and tech. Here are Jeremy's thoughts on wealth creation in Northern Ireland’s digital sector in 2015. s every company leader knows, the main focus is on the long term success of a business to deliver sustained growth. In order for Northern Ireland PLC to succeed, especially in the digital sector added value products and services will need to be at the centre of the long term planning.

In overall terms Northern Ireland remains in deficit by around £9 billion per annum, representing a shortfall of about one third of its overall performance.

The digital sector can and must play a significant role in reducing the deficit through the supply of services and products that are seen as high potential and value to the local economy.

In 2006, DETI launched a new program for supporting a broadband content initiative. A first of its kind, the program helped stimulate ideas and innovation in the content sector as opposed to supporting traditional capital intensive schemes. The sector has moved on substantially since then thanks to a focus on external sales and job creation and has established a number of great examples of companies that have been successful start-ups.

Over the last few quarters, the Northern Ireland market has been experiencing a brighter outlook, including the recent potential positive impact from the changes in Corporation Tax. Invest NI has set out a growth strategy for the digital media sector for 2013 to 2015 which includes a vision for 2020*. Despite their well published success and performance with Tier 1* and Tier 2* growth, they have a focus on increasing the number of new, Tier 3*, digital media business start-ups by 180 (60 per annum).

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The Challenge So how does the Northern Ireland market create 60 new start-ups per annum and address the need to create wealth in the economy? At a fundamental level it requires investment in ideas and talent and this is being delivered via a number of initiatives that are in place from Invest NI and other Government bodies.

The clear challenge is to get talented individuals to consider starting up their own businesses, but what are the challenges they will face if they choose to do so?

Funding and Support There is already a number of potential options for support including Propel and the Collaborative Network Programme to help get

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you started.

There is Proof of Concept funding offered by Techstart NI, who provide £10k Concept Grants, followed by £40k Pathfinder Grants.

Research and development funding can follow and help you to deliver innovation and it can be supported with various levels of job funding through Invest NI. One area that is growing is in relation to collaboration projects with Queens and University of Ulster, both of which provide innovation vouchers to help access to their extensive talent pool.

Exporting It is important that you consider the potential to export right from the beginning.

The talent and knowledge driven by the competitive nature of the Northern Ireland economy and its success globally, will make you more current and relevant than you may think. Trade missions and potential partnerships should all form part of the plan as Northern Ireland led companies have a proven track record of success, once they invest in export markets.

Corporation Tax The immediate reaction to the Corporation Tax change is that it will be positive by stimulating the sector but it will nearly exclusively impact the Tier 1 and Tier 2 companies for additional investment and growth.

This will have a direct impact on wage costs, a shortage of skills (especially in ICT and Finance) and more importantly the availability of young talent with new ideas and an appetite for disruption. Support and development of graduates and entrepreneurship will remain the biggest challenge to create wealth from new start-ups in Northern Ireland.

Mergers, Acquisitions and Partnerships At this early stage, you are less likely to have thought about an exit plan, a merger or a partnership. In the digital sector ‘exits’ are common place and unless you have a clear plan of where you think your start up business could end up, you might never be able to execute your plans and make the business a success. It is worth investing some time and resource in understanding the wider markets, especially in external markets to provide clarity on your thinking.

At a recent Chamber of Commerce event in relation to exporting, Mark Regan, CEO of Ding.com said “If there is something that you are passionate about and interested in, you should invest in it”. He also stressed about the importance of mentors to entrepreneurs and you will be surprised how much support and help you will find out there, especially through stakeholders like Invest NI, Universities, Northern Ireland Science Park and the different funders.

Northern Ireland has a lot to offer in terms of the start-up scene and with follow on funding options, through Halo, Co-Fund and private investment, it has the making of a region for generating wealth for all of the stakeholders in 2015 and beyond.

Do you have a great idea with commercial potential? Talk to Jeremy about your Proof of Concept by calling 028 9045 5554 or emailing jeremy@flintstudios.co.uk. For more info visit www.flintstudios.co.uk/poc *Taking Digital Further...The Growth Strategy for the Digital Media Sector in Northern Ireland 2013 ­ 2015 by Invest NI

In the land of the GIANTS T he Stena Line Belfast Giants, currently in their 15th season, have taken Northern Ireland by storm since their opening night back in December 2000 and at the helm is Steve Thornton, Head of Hockey Operations, after relocating his family to Belfast last Summer when friend and former Giants General Manager Todd Kelman got in touch back in April.

Thornton had a successful period as a player with the Belfast Giants, winning the Playoff title during the 2002/03 season and then he became the only Giants coach to win two trophies in one season during his second spell in Belfast, lifting the Knockout Cup and Challenge Cup as well as the Playoff championship the following season. However Thornton then moved on to take up a career working in the property market back home in Canada.

"It was a really tough decision to leave at that time,” Thornton explained. “We really liked it here, and I would probably have stayed if I could have kept playing, but the role became a little different because they were looking for a player-coach, although as it turned out they appointed a new coach that didn't play.”

"There were different owners at the time

too and it was really a year-to-year thing with Jim Gillespie, who did a great job in keeping the team going out of the goodness of his heart, simply because he wanted the Giants to keep going because he believed in what the team stood for.”

The decision for Thornton to accept the Giants job offer in April 2014 from Kelman was simple, especially with the added attraction of being appointed as Head of Hockey Operations, rather than just being the coach.

"Todd explained to me how the business was going to be run, how it was a different opportunity this time, I would be more than just a coach and I wanted to be here. I was sold because of how much we enjoyed Belfast before and how well we were treated. I've been to a lot of places in my career, but never to anywhere like Belfast.”

The only trophy that has evaded Thornton during his spells in Belfast has been the Elite League title. The 2010 Playoff win was some consolation for not winning the league that season, but the heartbreak of losing out to Coventry Blaze by a single point has never left.

"I want to win everything, but the league is top of the list. To be the best team over the course of the season is important to everyone

and it's the one that I haven't got. I still think back to the games that we lost when just one point would have made all the difference.”

Although a league title win in 2015 will not see Thornton uproot again and move on as Belfast is now his home for the long-term.

"I'll be here permanently if I can. Even if there comes a day I am not working for the Belfast Giants I would stay here regardless. I am totally immersed in my job and am still learning the structure of the Odyssey Trust and I am enjoying being part of a huge company and dealing with different people.”

The Giants are in the middle of their season and are challenging for a second league title in-a-row and a third title in four seasons. Visit www.belfastgiants.com for the Giants match schedule at the Odyssey Arena and all the info on one of Belfast’s and Northern Ireland’s best nights out!

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NORTHERN IRELAND ECONOMIC OUTLOOK 2015

Change and opportunity on the horizon for Planning in 2015

by Richard Bowman, Strategic Planning he past year has been a busy one for the planning sector in Northern Ireland.

While we have yet to return to the heady days of 2007, the reality for the past year has been slow but steady growth across all sectors, with a strong indication that developers who have been in hibernation are making a tentative and cautious return to the development game.

The move of planning powers to 11 new Super-Councils will take place on April 1st 2015, when Councillors will become the decision makers on all but a handful of regionally significant applications.

Applicants will, on most occasions, wish to ensure that planning applications are decided, or at least well advanced, by April for fear that applications could get bogged down in rounds of deliberations by new local Councillors finding their planning feet.

New planning legislation will introduce a new way of processing planning applications as well as new requirements such as Design and Access Statements and Pre-application Community Consultation for the more major applications. The changes should not be feared by the development sector however, provided they take the right advice in preparing applications.

The final version of the Strategic Planning Policy Statement is to be published in early 2015 which could see some changes to policy, such as retail which is due to be marginally more restrictive with the introduction of a few extra hoops to jump through for out of town proposals.

The new shadow Councils are already working on the early stages of development plan production which will ramp up in April for what DoE Planning promise will be a three and a half year plan making programme for all 11 Councils. We have been guiding Lisburn City Council on its plan for West Lisburn, which should see a published plan for the area in February 2015.

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Belfast Metropolitan Area Plan The adoption of the Belfast Metropolitan Area Plan (BMAP) took everyone by surprise in September 2014. DUP is now seeking leave to challenge this decision which, if successful, could well see the quashing of the new plan even before it has had time to take effect.

Student housing and offices are the invogue land uses at the moment in central Belfast. The on-going development of the university at York St has resulted in a land grab for student accommodation. There is

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talk of a potential over-supply, however, anything that brings life back into the city centre can only be a good thing and will inevitably attract further private sector investment.

The commercial office developers are also vying for city centre space to provide the much needed grade ‘A’ offices. We have come across a number of investors, some from outside the UK looking to snap up key sites and buildings for development of offices.

Many of the big residential players are back in the game and actively seeking sites along with housing associations who are still as keen as ever to acquire sites. DSD/DoE published draft policy on Developer Contributions in June 2014 which caused a bit of a stir during the summer with the main house-builders. The good news for the industry is that further research and debate will continue throughout 2015 and as a result it could be later in the year before we see any such policy.

Energy Renewables continue to be a strong sector, but has experienced a bit of a slowdown during 2014. ROCs tariffs seem fairly settled now until 2017 and as such this sector should continue to develop steadily during 2015/16.

Grid connection continues to be the key issue for NIE and many major generators will be hoping that 2015 will the year that the SONI/Eirgrid North South Interconnector project makes planning progress, along with their plans for other major grid connections in the west.

Debate continues as to the need for the new £240 million EfW plant at Hightown when Bombardier’s approved EfW gasification plant within the Belfast Harbour Estate could itself cater for the waste requirements of the ARC21 area. A decision on the ARC21 project is expected in 2015.

Fracking seems as far away as ever due to the recent decisions by DoE and the DETI regarding Tamboran’s plans in Fermanagh. Meanwhile on the oil front Rathlin Energy’s application for an exploration well could come to fruition by the middle of 2015 and Providence will continue to find a way of tapping into the oil resource in their licence area.

Minerals development generally gets a bad press and none more so than the gold mine in Omagh for which we are hoping to secure approval for expansion of the underground mine in early 2015.

Other projects for 2015 2015 will also see advancements being made on the planning of a number of other major projects, such as the Lisanelly Schools Project, for which we secured outline approval in 2013, the Belfast Transport Hub, and despite recent reports to the contrary, the Desertcreat project on which a scaled back project may yield some development.

Meanwhile, at the time of writing, we are about to submit an application for the new Colin Town Centre on the Stewartstown Road.

In retail, discount operators will continue to dominate for the foreseeable future with Home Bargains, B&M and Lidl continuing their expansion plans. The major retailers appear to have halted all development of large stores, with Tesco opting for development of small scale town centre stores such as the one planned for Dromore.

Finally, the purchase of property portfolios such as NAMA’s by various investment firms, is certainly creating plenty of transactions which are keeping the lawyers and property consultants busy. No doubt the further offloading of property loan books will see continued activity and development projects in 2015.

Our property market may be recovering slower than in ROI, but that’s OK provided our recovery is stable and gives investor confidence through sustainable long-term returns.

Make 2015 the year you developed an effective social media strategy

By Bill McCartney, Social Media Consultant and Trainer “All men can see the tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved” Sun Tzu. un Tzu's Art of War is believed to be the oldest military thesis in the world. This quote highlights how everybody can superficially see how a battle is won; what they cannot see is the long series of plans and considerations that precede the battle.

In essence this is true of business and particularly those successful businesses that take the time and effort to plan their business strategies. Strategic planning is key to a successful business and for many they now see the value of having a strategy, which includes social media.

In 2015 there will be numerous changes and if you are on Facebook, LinkedIn, Twitter, Instagram, YouTube and any of the other social media platforms you need to ensure you keep up to date with what is happening.

There are now 1.73 billion people, one quarter of the world’s population using social media. They are posting, tweeting, vining, instagraming and pinning. Every 60 seconds 20,000 pictures are uploaded on Tumblr, and 2.46 million posts are sent on Facebook.

So in addition to more people using these social media platforms there is a greater diversity of social platforms. Some will say too many platforms so having a strategy is an absolute necessity.

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Think mobile Think mobile and mobile social apps, Instagram and WhatsApp. Both have significant number of users and very high engagement. Instagram has 1.6 billion daily likes! WhatsApp users spend on average 195 minutes per week on WhatsApp. Of note the BBC in the Indian elections earlier this year used WhatsApp. Also think YouTube the second largest search engine in the world. Over one billion unique viewers per month and over six billion hours of video are watched each month on YouTube – that’s almost an hour for every person on earth.

This multitude of platforms is not about engaging with the masses it is about engaging with your target audiences. Big brands are creating coherent strategies that have good content, compelling visuals and authentic stories and the individual is happy to engage creating both positive and negative buzz.

Politics and social media in 2015 Businesses are not the only ones engaging with their target audience but politicians are too. Look at last September when the local Democratic Unionist Party (DUP) announced for the first time on Twitter the reshuffle of ministers and committee chairs – it was a first for Northern Ireland. It achieved direct engagement with their target user – the media and subsequently their direct followers.

Politicians from all of the parties have recently adopted Twitter and Facebook but most have not begun to think of the awesome power of social media mobile applications.

Social media is now mobile centric. When people leave the house in the morning in addition to their keys and purse/wallet, the mobile phone has become an essential object to be carried about daily.

Now social media in politics is not a new tool the founding father for this is possible the American President Barack Obama who four years earlier had strategically used social media and won his 2010 election campaign.

In 2015 as elections take place social media will once again play an integral part how politicians engage, how we engage with the politicians, how they are viewed, and possibly how we, the Northern Ireland public will vote.

Develop a strategy Using social media for politicians is really no different to how businesses should use it –

have a strategy that includes the modern and effective use of social media tactics.

Have a clear objective - social media is going to be a key method for engaging with the electorate – your target audience. It is a means of engaging with the wider community and getting people to understand what you will do when in power.

Sit down and clearly and succinctly (if that’s possible – 140 characters in Twitter can be a #challenge) write your messages – what do you want to tell your electorate – what is your manifesto – what are your key points on health, education, infrastructure et al.

The future of social media is image-based, and for good reason. Posts that include photo albums receive 180 percent more engagement than the average post. Note that hash tags are now competing with emoticon faces on mobile apps.

If Barack Obama’s social media team has taught us anything, it’s that images speak louder than words, with his most popular tweet (and the most retweeted tweet on the entire social network in 2012) consisting of a photo of him and Michelle Obama.

Social media is an excellent opportunity to tap into unknown quantity and change people’s views or at least have reasonable debate but make sure you have a clear defined strategy or if in doubt: “Better to remain silent and be thought a fool than to speak out and remove all doubt.”

Abraham Lincoln.

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NORTHERN IRELAND ECONOMIC OUTLOOK 2015

Harness the power of ideas in your business in 2015

by Cherrie Stewart, ANSONS “It is the strength of UK businesses’ ideas, and the way those ideas are commercialised, that will lead to sustainable growth….A developed economy will only prosper if it can harness the power of ideas to increase growth and create new jobs.” Intellectual Property Office rom going to the cinema, where you are warned not to breach copyright by using video equipment, or sending a rocket to the moon to simply turning on an electric light or deciding which of the many brands of cola drink to buy, Intellectual Property (IP), i.e. trade marks, patents, design, copyright, etc., has a part to play. It touches every sphere of life; it protects the results of creativity and ideas.

While ideas themselves are not protectable per se, the outworking of those ideas may be protected through Intellectual Property Rights (IPRs).

IPRs are present in every business, without exception. Every company or product has a name, most have a website or promotional literature in which copyright subsists; and companies involved in manufacture may develop new, inventive products which are patentable.

Just as action is taken to secure and protect tangible property of value, such as buildings, fixtures, fittings, stock etc., steps also need to be taken to secure and protect intangible property such as IP. Some IPR’s, such as copyright and design right, exist automatically but others require the owners to take action in order to secure them, e.g. trade marks, registered designs and patents.

Riccardo Zacconi, the Managing Director of the company behind games such as Candy CrushTM, understanding the importance of IP, wrote in an open letter:“Like any responsible company, we take appropriate steps to protect our IP….Our goals are simple: to ensure that our employees’ hard work is not simply copied elsewhere, that we avoid player confusion and that the integrity of our brands remains.”

Steve Jobbs, founder of AppleTM, started with the seed of an idea which materialised into the products so many know and love today. With over 416 patents in the iPhoneTM alone he too understood the importance of protecting the fruits of his, and his employees’, ideas.

The economic benefits derived from IPRs may be most obviously seen when consumers purchase branded products rather than a cheaper unbranded.

Consumers identify that goods sold under a

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certain trade mark are, due to past experience, of a nature and quality they require and have faith that goods sold under that trade mark will be the same again. Yet, despite the obvious benefits, the value of these intangible assets are often overlooked.

By protecting the palpable results of their ideas, businesses will build up a portfolio of IP which can generate income and growth.

IPRs can among other things be sold, licensed or used as security.

Securing IPRs can result in often vital investment. Indeed, the World Intellectual Property Office (WIPO) have stated that “…branding is one of the most important mechanisms for firms to secure returns to investments in research and development (R&D).”

Cross-licensing of IPRs will also bring economic rewards; early in 2014 Google and Samsung signed a global patent crosslicensing agreement which was aimed at not only reducing the risk of facing each other in IP litigation but also enhancing innovation and thereby economic growth.

Use of IPR’s to develop and grow their business is not the purview of large international firms alone. The Intellectual Property Office comments in its Corporate Strategy that “…small firms that use intellectual property rights tend to have significantly better chances of survival and growth. The use

of patents and trade marks is associated with better creation, transfer and use of knowledge, and higher firm productivity .

Recognising the important role that IPRs plays in economic recovery and growth, the UK Government have been working alongside other countries within the Organization for Economic Cooperation and Development (OECD) to introduce tax incentives and funding for research and development to encourage businesses to innovate.

They also commissioned an independent review, the Hargreaves Review, to assess the UK IP systems. This review made recommendations to “…ensure that the UK has a framework best suited to supporting innovation and promoting economics in the digital age.”

One of the results of this review is the UK Intellectual Property Act which came into force on 1st October 2014. It aims to clarify the IP legal framework, to simplify and improve design and patent protection and to ensure that the international IP system supports UK businesses effectively.

Companies wishing to grow cannot afford to neglect the safeguarding of the embodiment of their ideas, creativity and hard work through securing IPRs and, once secured, exploiting those rights and the benefits derived therefrom.

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NORTHERN IRELAND ECONOMIC OUTLOOK 2015

We can take steps now to strengthen our tourism industry in 2015

by Sinead McLoughlin, chief executive, Londonderry Chamber of Commerce This is damaging to our hotels price competitiveness.

So we can see the serious damage caused by cross-border competition. Yet we have the opportunity to at least strengthen crossborder co-operation. So it is disappointing that one obvious application has been overlooked.

Enterprise minister Arlene Foster has stressed her disappointment that the South’s very effective Wild Atlantic Way initiative has stopped at the Donegal border, instead of going on to the city of Derry/Londonderry and beyond the wonderful Derry and Antrim coasts. If ever there was a need for an integrated tourism programme from Tourism Ireland, this was it.

Tourism needs more effort

he tourism and hospitality sector knows only too well that it is not just with Corporation Tax that the Irish Republic holds a strong competitive advantage over the North. We also lag when it comes to our costly Air Passenger Duty.

This was sadly not abolished for Northern Ireland by the Chancellor of the Exchequer in the Autumn Statement, despite the precedent of the Scottish highlands and islands being exempted because of their similar reliance on air travel to connect with the rest of the UK. Ireland’s equivalent Air Travel Tax was abolished last year – causing even more people to use airports in the South in preference to those in the North. This is especially harmful to the City of Derry Airport, which is an important piece of infrastructure for the North West. Our airport would play an even more positive role if APD were abolished.

And then we suffer from the differential VAT rates. While hotels a few miles away in Donegal charge just nine per cent VAT, in Derry our hotels must charge 20 per cent.

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The latest figures underline the fact that tourism is a commercial sector where we need to do more. Even during Derry’s year as City of Culture, we were unable to match the performance of the best known Northern Ireland tourism destinations of Belfast, the Causeway Coast, the Mourne Mountains and the Fermanagh Lakelands. Derry needs to proclaim loudly that we offer rival attractions that justify short and long stay vacations.

City of Culture was, though, responsible for a 50 per cent rise in overnight stays during 2013. That was a real achievement and one that we must build on for future years to forge a larger and more sustainable tourism sector.

The same is true for Northern Ireland as a whole. We punch below our weight and we under-perform considering the quality of our natural attractions and our urban centres.

Some 13.3 per cent of Wales’ GDP comes from tourism, as does 10.4 per cent of Scotland’s.

The figure is just 4.9 per cent in Northern Ireland. And those figures understate the scale of the problem we have, given how low our GDP is anyway! Our tourism sector generates £1.5bn a year, against £9.7bn in the Irish Republic, £11.1bn in Scotland and £96.7bn in England.

Given the crisis in Northern Ireland’s Budget finances, this is a very difficult time to ask for more money from government. But to make our tourism sector competitive with the South, would require money. It would need VAT charges in the North to be comparable with those of the South. And it would require the abolition of Air Passenger Duty.

But to avoid going backwards, at the very

least we need the support of the Executive to continue to strongly market Northern Ireland, including Derry and the North West, as an international tourism destination.

It is important to remember, though, that the Irish government cut taxes in the tourism sector to raise revenues – lower costs can lead to higher demand and ultimately higher levels of tax revenues.

The Cut Tourism VAT Campaign The Cut Tourism VAT Campaign in Northern Ireland has calculated that cutting VAT in the hospitality trade to just five per cent would generate an additional £4bn a year to the UK economy as a whole and an extra £2.6bn in tax revenues for the UK Exchequer. After cutting VAT rates for the hospitality sector, the South benefited from a rise in demand of 13.1 per cent - twice the level of rise recorded in the same period in Northern Ireland.

Other initiatives in Northern Ireland would also be very helpful. To reduce waste and improve performance, the structure of tourism support should be streamlined. We have too many public bodies trying to do the same thing in promoting the sector.

We also need continued support - including from the further education and higher education sectors that face severe cuts – for industry training. Derry gained enormously from the WorldHost customer service training – an astonishing 3,000 people in the hospitality sector in our city benefited from WorldHost training.

So it is clear that there are initiatives that the hospitality sector can do for itself that will strengthen the industry. But even in tough times, it also needs help from governments at both London and Stormont.

We punch below our weight and we underperform considering the quality of our natural attractions and our urban centres.

Sinead McLoughlin

BAFE – helping you to meet your fire protection obligations urrent fire protection legislation including the Fire and Rescue Services (Northern Ireland) Order 2006 requires property managers of all non-residential premises to have adequate fire protection. It is their responsibility to ensure that there is an adequate, updated fire risk assessment and that all aspects of the requirements are carried out competently.

To demonstrate that the responsible person has met their obligations, many public authorities and commercial organisations now insist that their fire protection services are carried out by a company that has been third party certificated.

BAFE is the independent third party certification, registration body for the fire protection industry. We develop schemes for UKAS accredited certification bodies to assess and approve companies to recognised standards. There are now more than 1170 BAFE registered companies across the UK. Our aim is to support property managers to ensure that they get quality fire protection for their premises, staff and service users.

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BAFE has recently launched a UKAS accredited scheme for Companies who carry out Fire Risk Assessments (SP205) which is a vital part of meeting your obligations under fire legislation.

The scheme considers the competence of the individual assessors as well as the quality requirements for the organisation. A competent fire risk assessment is now a requirement for all care homes in Northern Ireland. There are a growing number of companies registering to the scheme, throughout the UK. If you are looking for the supply and maintenance of portable extinguishers, look for one of the 330 Companies accredited to BAFE Schemes SP101/ST104. Companies are certificated to ISO9001 and all of their technicians are assessed by BAFE for initial and ongoing competence. There are currently more than 1200 BAFE registered technicians, working for our registered companies.

For fire alarm systems Companies should hold BAFE modular SP203-1 scheme approval. This scheme includes design,

installation, commissioning and maintenance of fire detection systems and also requires that all equipment used is third party certificated. The scheme now has over 750 registered companies. Registration to this BAFE scheme is often a key requirement in tenders for the provision of fire alarms.

Our Emergency Lighting scheme (SP203-4) sets out the standards and staff competence criteria to be met. It is modular as with the fire alarm scheme and is achieving growing recognition from end users.

There are a range of other BAFE schemes covering particular sectors of the fire protection industry and details can be found on the BAFE website, along with a complete search facility to find registered companies in your area.

So if you want to be sure you are getting your fire protection from companies who are properly and regularly assessed look for more information at: Website: www.bafe.org.uk Email: info@bafe.org.uk

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NORTHERN IRELAND ECONOMIC OUTLOOK 2015

IT’s all systems go in 2015!

Lee Surgeoner, Partner with Endeavour Information Solutions shares some concerns for the local ICT industry going forward along with his thoughts on technology development and what businesses of any kind need to focus on in the next 12 months.

We’ll start with a mild tale of caution.

The IT sector within Northern Ireland is fairly unique to say the least. On the one hand we have various companies from the US and further afield running their global IT operations from Northern Ireland and bringing with it much needed investment then on the other side there are a considerable number of local longestablished IT companies that in my opinion have over the years really innovated and provided some of the best ICT solutions and services anywhere in Europe (although I might be slightly biased in that view) and these are the companies that I am concerned for and how they will be able to contribute to that same level over the next few years.

Our local universities produce some of the brightest and best students for this sector but I am concerned that we could start to lose that talent to these global giants who tempt them with offers of generous salaries and benefits and as a direct result our local IT companies just won’t be able to meet the expectations of the future IT professional.

I speak with some experience of this over the last year which has meant that we have had to take action.

If left unchecked, this situation could get worse over the next few years and impact the ability of local IT companies to deliver such innovation and service in the future.

This needs to be considered today; from personal experience this has meant increasing our staff numbers, providing additional training and professional certification opportunities and offering more than just a job but more an opportunity for personal growth and development to ensure that we keep our brightest and best growing within our business.

So please bear this in mind, because if proposed changes to our corporation tax system do come into play during 2015, it’s fairly safe to say that additional foreign investment will increase, which although will

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be great news to our economy as a whole, it might come with a sting in the tail for those in the local IT sector who ignore the best asset they have - their people.

On the road to date!

In terms of business for 2014 this has been a surprisingly good year for growth across the UK with higher than expected growth in various sectors such as Professional Services, Manufacturing and Retail, all of which feed into the additional development and sale of IT products and services.

This is something I can confirm as one of those IT providers which has experienced this growth. However, as recent media coverage has shown it is unclear going forward into the New Year what the position will be in the next 12 months with economic experts saying things will continue as they are now while government is saying we need to be prepared for stormy weather ahead.

At the end of the day I am not an expert on the economy; all I can say is that new business has been at a constant level of growth and appears to continue with customers keen to take the complexity out of their IT systems and to take control of their ongoing costs.

And so what’s hot in 2015?

The hottest ticket in town is cloud computing which vendors of such services continue to push the boundaries of what is possible to be delivered as a service. New functionality comes out nearly on a weekly basis at times and certainly keeps IT companies like ourselves that embrace it, far from being bored.

When such solutions were talked about five years ago there was concern from a number of IT companies that it would spell the end of the traditional IT service provider – and in some cases they would be right; the companies that don’t embrace the opportunity and don’t adapt their way of working to meet the new world of cloud-based subscription computing will find themselves losing out to the companies that do.

You will be amazed at what can be achieved under a cost-effective subscription that is secure, dependable and expandable to meet very specific business need and that is a business that will continue to grow over the next 12 months. That is what innovative IT companies are focusing on for their customers and those are the IT suppliers that businesses will want to work with in the future.

If market analysis is to be believed, 2015 is the year where mobile device sales will outperform traditional PC sales not only in the consumer market but in the business market as well. So if you are an app developer the opportunities in this market should be considerable.

And so what should the new business start-up of 2015 focus on?

Northern Ireland has a wealth of great businesses from all sectors that innovate and export their products and services to all corners of the globe.

A big part of that is the individuals driving these businesses forward with new ideas and raw determination, usually combined with the advice and support organisations such as Invest NI provide to help ensure their business ideas succeed.

So what I would recommend to any start-up is to focus on what you do best; that sounds really obvious, but what I mean is don’t let complexity rule your business.

Technology can get complicated so if there is one thing I would advise it would be to get as much of your technology needs from a vendor that provides the service online.

That will mean you can control your costs without a high start-up outlay and will be able to work from anywhere, which can be important when you are just starting out trying to grow your business.

For advice on how you can simplify your business IT operations you can contact Lee on 028 9031 1010 or via email at lee@endeavour-is.com

NORTHERN IRELAND ECONOMIC OUTLOOK 2015

The translation of science to commercialisation

by Sue Dunkerton, director at the Knowledge Transfer Network (KTN).

he UK has traditionally been very strong in Life Sciences research. Translation of this research into economic wealth creation and provision of a sustainable, cost effective health and care service for the future has been a priority for successive governments.

Future healthcare challenges with respect to the aging population, increasing obesity and subsequent co-morbidities mean that continued funding for the NHS must go alongside significant redesign of the service and exploitation of innovation in new technologies, products and services.

Investments are being made in areas with the potential to understand disease processes at the molecular level. These investments should provide earlier diagnosis and tailored treatments, prevention and independent living, regenerative medicines and emerging medical technologies.

The UK life sciences sector is still vibrant and characterised by a large number of small companies (>4000) alongside the smaller number of large OEMs. As these companies increasingly need to innovate to survive, they also need to understand how their new technologies will enter the market. Evidence is king, and to ease entry to the market it is much better to show cost reduction as well as improved clinical efficacy. This is sometimes difficult where spend and savings accumulate in different domains, but new products and services are much more likely to be adopted if evidence is clear of improvements both clinically and economically, and purchasing/reimbursement will increasingly move to an outcomes model from cost of service or product. Different parts of the healthcare spectrum from large scale clinical trials to rapid deployment and change of digital solutions need to address this same paradigm even if timescales are vastly different Industry trends are likely to have a greater emphasis on innovation in manufacturing in the pharmaceutical sector. The sector has understandably had a history of research in drug discovery and financial returns based on supply of patented drugs. That world has

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changed and the pharmaceutical sector is now coming together to address how it can adapt its business models. A new group spanning small molecules and biologics, the Medicines Manufacturing Industry Partnership (MMIP), has been established to identify and prioritise where new actions are needed to sustain UK capability in the broad pharmaceuticals business.

Precision medicine (also stratified or personalised) is a relatively new term, but is addressing the need to target the right treatment to the right person at the right time (and if medicine, at the right dose). This requires better and earlier diagnosis, targeted to biomarkers, which indicates onset or potential onset of disease. 2015 will see the development of the Precision Medicine (PM) Catapult, the location for which will be decided during the year. This Catapult is one of several Catapults set up by Innovate UK to help the translation of UK science to commercialisation and value to the UK economy. Catapults operate to address a market need in an area which includes the provision of access to capital intensive technologies or generation of clinical evidence and routes to adoption of new technologies. Precision medicine will require companies to consider novel business models.

It may no longer be possible to sell just a test or just a drug, the market will be seeking a solution which brings the diagnostic test and appropriate therapeutic or device together.

Demonstrating value across this piece will also require better understanding and use of health economics to build a strong business case. Northern Ireland is an example of a region with strong capability in diagnostics, with potential to capitalise in this area through strong partnerships and collaboration with other life science businesses.

The ongoing demographic trend towards an increasingly older population, often requiring ongoing management of various conditions, is driving the need for a truly integrated health and care service. Connected Health has been a strong theme for Northern Ireland alongside other parts of the UK and the world, and businesses continue to develop products and services for telecare, telehealth, remote monitoring etc. However, the ubiquitous nature of mobile technology is both a challenge and an opportunity for disease diagnosis and health management. The hardware is all around us, and businesses need to be developing new services and ‘hidden’ capability to provide value added services both to professionals and to the

consumer market. Again, new business models are needed to understand how to bring to market, how to integrate to professional services, how to protect their offering against rapid change in service and maybe easier competition. Finding and maintaining that competitive edge will be an interesting challenge to address, and will need collaboration between those understanding the health and care service alongside new players such as the creative and digital designers/businesses.

It is clear that healthcare of the future will not be just about treating and managing disease. Increased emphasis on public health and opportunities in both consumer and statutory markets will enable new approaches to the prevention of disease and decline. We will also strive to cure disease and regenerative medicine and delivery of new cell therapies offer that potential. This is still a small market for the UK, with around 250 active companies, but it can revolutionise the way we deliver healthcare in the future and is a major area of research across the world. The UK is supporting this market through the Cell Therapies Catapult Centre which is focusing UK effort on developing the route to market, with capability in clinical efficacy, regulation and manufacturing alongside technology development.

And let us not forget new developments in medical technologies. This sector is very strong in the UK, with a real dominance of small businesses. MedTech takes advantage of breakthroughs from our science base, in areas such as photonics, materials and sensors to name but a few. MedTech now employs more people than large pharma in the UK, and has a richness in its diversity. It delivers solutions across the prevention, diagnosis, therapy and rehabilitation areas, and will always be needed with again the drive to greater clinical efficacy at the ‘right’ cost.

For a business briefing, it is not possible to conclude without mentioning data – all the conventional life sciences businesses have a data element in their products and services, and how we best capitalize on that data for patient benefit and competitor advantage will be a trend that will continue through 2015 and beyond.

The KTN is the UK’s innovation network. It exists to connect businesses, value chains, entrepreneurs, innovators and investors – helping businesses to identify and develop the ideas, expertise and technologies, wherever they reside, which have the potential to be world­beating products, processes and services.

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NORTHERN IRELAND ECONOMIC OUTLOOK 2015

Northern Ireland retail grocery market will experience significant change in 2015

by Damian McCarney, acting managing director of Musgrave Retail Partners Northern Ireland n looking forward and considering the outlook for the retail sector in Northern Ireland in 2015, it is vital that we reflect on what has happened in 2014 in the first instance.

In retail, we often talk about the evolution of brands and businesses but 2014 has been revolutionary rather than evolutionary. The majority of our traditional multiple retailers were in the headlines for all the wrong reasons and businesses who traditionally enjoyed steady sales and profit growth were rocked by market share decline and financial scandal. In addition, we witnessed a significant change in how consumers are choosing to shop.

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So what is happening in the world of retail in Northern Ireland?

The average shopper in Northern Ireland has become more ‘savvy’. They are now much more prudent with their disposal income.

They are shopping around for better value and are actively seeking out promotions and special offers more than ever before. In addition, there is an ever –growing trend towards using technology to seek out that value and to shop online.

This behaviour obviously means that where and how the average Northern Ireland shopper is choosing to shop is changing. The days of one big shop per week are numbered, and they are being replaced by one big shop per month, often online instead of in-store, with this one big shop being supplemented by more visits to convenience stores, local specialists and the discounters.

This new environment presents real challenges for some retailers but offers significant opportunities for others. Let’s take a look at how the various market players may choose to react to this trend in 2015.

The majority of the UK grocery multiples have had a very challenging 2014. They have large stores which have seen both footfall and spend reductions and they will need to boost their sales and profit levels again. How will they choose to react in 2015?

Firstly, some form of a price war is one potential reaction to the current challenge in order to win back some of their lost market share.

Secondly, they may look to downsize the traditional grocery part of their large stores

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and use the space to introduce complementary services such as coffee shops, hairdressers etc. which in turn would also attract greater footfall to the site.

Finally, they may look at the ‘shopping little and often’ trend and decide to move more into the convenience sector and ramp up their programs of expansion in this area. A strategy featuring all three of the above is also very possible. One thing that is sure is that they won’t rest on their laurels in 2015!

The current situation we find ourselves in is a real opportunity for growth for small supermarkets, convenience stores and local specialists. Our independent retailers are largely focused in this particular area and we already have some excellent retailers and shops taking advantage of this growing trend.

As is always the case, there is still opportunity to improve in this area but how?

More of these stores need to adapt and become more flexible opposite the changing needs of the consumer by developing a greater focus on fresh food and easy meal solutions and stocking an ambient grocery range which is relevant to today’s shopping needs.

These stores need to work harder on differentiating themselves from the

opposition to become a destination rather than just the local convenience store. They need to do the retailing basics really well and they need to excel in customer service. They need to offer real value and finally they need to work harder to appeal to the digital generation.

At Musgrave, with our three brands SuperValu, Centra and Mace, we have been working hard to rise to these challenges and take full advantage of this great opportunity which the market has presented to us.

Finally, moving on to the discounters. When we talk about the discounters most people think about Lidl in a Northern Ireland context. With very effective marketing and a strong value message, Lidl has had a significant impact on how consumers shop in Northern Ireland.

When they first entered the market, there was a novelty factor attached to shopping in Lidl and their stores were seen as somewhere that a shopper went after they had completed their main shop somewhere else. Evidence would suggest that shopper behaviour has changed and many shoppers are now going to Lidl first and then topping up their shop in other stores.

Given how the market is changing, there is little evidence to suggest that this trend won’t continue in 2015. The other development to note is the ever growing presence of other discounters in our market such as Poundland, Poundstretcher, B&M etcetera.

These stores are appearing in high street locations once the preserve of designer label stores. With their ever-growing ambient grocery ranges and their movement into fresh and chilled foods, they are becoming more of a feature in the typical Northern Ireland shopper mission. In 2015, there is no reason to believe that this trend won’t continue.

In summary, the Northern Ireland retail grocery market is going through a period of significant change. In 2015, there are real opportunities for those retailers who can cope with the pace of this change and give shoppers what they are looking for. It truly is a very exciting time to be in retailing!

What does 2015 promise on the POLITICAL FRONT with Chris Brown, director, MCE Public Relations

t’s January, so you don’t need some long winded opinion or observation from me.

Let’s get straight to the point and have a quick look at some of the legislative changes, strategies, reviews and recommendations that are expected to take place during 2015.

The Work and Families Bill is currently awaiting Royal Assent. It will make provision for shared parental rights to leave from work and statutory pay in connection with caring for children, as well as time off work to attend ante-natal appointments and the right to request flexible working.

OFMdFM is currently developing an Active Ageing Strategy which will use the Delivering Social Change Framework to manage signature projects across departments, aimed at enabling older people to contribute to a society where they feel valued and financially secure. The Strategy was due to be launched in the autumn of 2014 following Ministerial and Executive approval, however, it is still being finalised and is now expected to be launched in early 2015.

In relation to the Disability Employment and Skills Strategy, Employment and Learning minister, Dr Stephen Farry, has stated that his department will carry out a public consultation on the proposals contained within the strategy document in the early part of 2015, with a target date for the strategy launch thereafter.

The associated Action Plan to take forward the recommendations will be developed following the public consultation, and will be incorporated into the new Strategy which aims to provide a clear transition pathway from education through to economic employment for young people with disabilities.

Justice minister David Ford and Health minister Jim Wells aim to publish their joint Stopping Domestic and Sexual Violence

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and Abuse Strategy by March 2015. Wells has also stated that he intends to announce his final decision on the future of the Independent Living Fund in early 2015.

The Mental Capacity Bill is set to be introduced to the Assembly in early 2015 after its consultation period closed on 2 September 2014. The new Bill is designed to protect individuals who are unable to make a specific decision about their health, welfare or finances, fusing mental capacity law and mental health law in a single Bill framework.

It will create a new ‘Office of the Public Guardian’ and make changes to the Mental Health Review Tribunal.

The minister for Social Development, Mervyn Storey, has confirmed he will introduce a Gambling Bill to the Assembly before the 2015 summer recess. Pending Executive approval it is also likely that the Liquor Licensing Review Bill is likely to be introduced to the Assembly in the first quarter of 2015.

Much has been made about the lack of suitable Grade A office space in Belfast last year. The availability of suitable office accommodation is an important part of Northern Ireland’s investment proposition.

An Invest NI commissioned review of the commercial property market has recently finished and the organisation is currently considering its findings and recommendations.

Central to this is a need to ascertain the nature and extent of any market failure and whether government intervention would result in any market advantage. Once Invest NI has completed its deliberations it will decide on the most appropriate course of action.

The previously proposed Energy Bill will not be introduced in the current mandate.

According to the Enterprise, Trade and Investment minister, a report assessing the impacts of the Financial Capability Strategy implementation will be produced by March 2015. This strategy was first produced in early 2013 to address the specific financial capability issues and challenges facing Northern Ireland consumers.

At the time of writing, the draft Budget is still out for consultation. During this time the Finance and Personnel minister Simon Hamilton will be having a series of departmental bi-laterals with other Executive Ministers. It is anticipated that the Executive will agree a final Budget for 2015-16 in early January which will be presented to the Assembly for debate and vote.

Not to forget Corporation Tax, the legislation needs to start its passage quickly at Westminster if it is to become law by May 2015.

Other notable dates Sinn Féin will hold its annual party conference at Derry’s Millennium Forum on 7-8 March 2015.

The Alliance Party Conference will take place at La Mon Hotel on 14 March 2015.

In March 2015, George Osborne will deliver his final Budget ahead of the General Election on 7 May. Parliament will be officially dissolved on 30 March.

Connect with Chris Twitter: @CB_PRandPA Email: chrisbrown@mcepublicrelations.com The participation of third parties at any subsequent hearing is a matter to be determined by the Court and not the proposed Respondents.

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NORTHERN IRELAND ECONOMIC OUTLOOK 2015

New year safety call for the waste and recycling industry T he Health and Safety Executive for Northern Ireland (HSENI) is calling on local waste and recycling operators to play their part to ensure a safe and healthy 2015.

The call comes amid growing concerns about the poor health and safety practices still found in some parts of the local waste and recycling industry.

In 2014, poor health and safety measures resulted in one person being killed, several people seriously injured, including loss of limbs, and one person suffering severe burns.

These accidents are shocking enough, but considering there is little doubt that the numbers of incidents are under-reported, it is an alarming situation for the industry.

In 2014, HSENI established its dedicated ‘Waste Team’ as a single point of contact for safety and health issues in the industry. The new team is already having an impact with robust inspections of sites during 2014 resulting in an increase in enforcement notices issued by HSENI and in the number of cases being prepared for prosecution.

Jim King, who heads up HSENI’s Waste Sector Group, is appalled by recent findings in some parts of the waste industry. He said: “Despite the ongoing work of the Waste Industry Safety and Health Forum (WISHNI) and HSENI, it appears that some employers

simply don’t care about either their employees or about their organisation’s reputation.

“Sadly, recent evidence gathered by HSENI inspectors suggests that it is only a matter of time before there is yet another fatality on a private waste and recycling operator’s site, unless the management of safety on a number of these sites improves dramatically.”

Addressing those employers, Mr King added: “If one of your employees is killed at work then HSENI will investigate - as will the PSNI. The starting point of any such investigation will be around whether there is a case for corporate or gross negligence manslaughter.

“Your business will be stopped until the investigation is sure that the risk to employees has been dealt with. In addition, other charges may also be brought under health and safety law.”

HSENI has identified the main areas of work which cause serious accidents on waste sites - they are: • workplace transport • all-round visibility from vehicles • machinery guarding and isolation • falls from heights • lack of training The risk from fire on many sites remains extremely high, which not only puts the lives of employees on-site in danger, but also those of the fire-fighters who respond to the incident. Common causes of fire are hot plant and bearings, and self heating of the waste.

Employers should address the main areas of risk by taking the following measures: • carry out a workplace transport risk assessment and take action on the findings • separate vehicle movements from pedestrians and people working in the area • fit reversing cameras or fish eye mirrors to the rear of vehicles • make sure all mirrors and cameras are properly adjusted and working • have a daily check sheet for guards and ensure staff do not run machines without the guards • make sure no-one enters machinery without isolating all energy supplies to

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the machine • train staff in safe systems of work which have been prepared by knowledgeable members of the company • provide training in safety and environmental issues for supervisors and key managers • ensure that all fire-fighting equipment is operational and accessible and that all means of escape are kept open and free from impediments • ensure that repetitive tasks or tasks involving lifting and turning have proportionate recorded risk assessments • attend the safety and health awareness day planned for 26 February – see accompanying flyer During 2015 HSENI would also like to see more operators following the best practice advice of the Waste Industry Safety and Health Forum (WISHNI).

WISHNI is a joint initiative by a number of employers working with the HSENI to provide advice and materials to help prevent injuries and fatalities to employees in the waste sector.

WISHNI also runs an annual ‘Ambassadors Awards’ programme to recognise health and safety excellence, and best practice.

Applications are now open for 2015.

HSENI would encourage employers to take the necessary steps to improve safety by making use of the wide range of help currently available, as follows: • for more information about WISHNI and for best practice guides or tool box talks for employees, visit the HSENI website and type ‘WISHNI’ into the search box.

• for help and advice on preparing risk assessments call Health and Safety Works NI (HSWNI) who provide free safety advice to businesses with less than 50 employees on: 0300 020 0030.

• to report unsafe working conditions, phone HSENI on: 0800 0320 121 and ask for the ‘Waste Team’.

NORTHERN IRELAND ECONOMIC OUTLOOK 2015

There are clear skies ahead A says Brian Ambrose, chief executive, George Best Belfast City Airport irports tend to be good indicators of regional economic performance. With double digit growth being forecast for Belfast City Airport in 2015, hopefully this augers well for the economy in Northern Ireland.

The Airport has a clear strategy to ensure we, as a region, have excellent air connectivity. All three strands of this strategy will perform well next year, these are: - Expansion of existing routes has been achieved in 2014 with the average load factor (percentage of seats sold per flight) increasing by nine per cent across the route network - Filling the gaps in our domestic network has taken a significant step forward with the commencement of the London City service in the autumn of 2014 and the new Liverpool service due to commence in February 2015 - Expansion of the European network has again seen notable achievements with the arrival of Vueling to Belfast City and the commencement of their Barcelona service in May 2015

Capped potential Within aviation, there is the looming issue of Air Passenger Duty (APD), a stealth tax that even the ‘big four’ accountancy firms regard as detrimental to economic growth.

Accounting for up to 50 per cent of the price of a flight to the UK, it can have a negative impact on the sector for a region such as Northern Ireland that relies heavily on aviation for connectivity.

Whilst the Autumn Statement revealed that APD would be removed for under 12s from May, and for under 16s from March 2016, we will continue to work closely with the Government for its complete removal.

Another removal that would be widely welcomed is that of the Seats for Sale limit imposed on the City Airport. An issue that, after more than 10 years, looks set to be addressed with a Public Inquiry set for May. The restriction, which permits us to sell only 2 million seats per year from the airport, was established when the terminal was housed in a Portacabin. We know that a flight cap is a more appropriate measure and therefore also operate under a 48,000 flights per annum restriction which would remain should the Seats for Sale limit be lifted.

We have received huge support from the business community and the general public who recognise the negative impact this

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outdated Seats for Sale cap has on the future growth of the airport’s domestic and European route network, and indeed its potential effect on the growth of our local economy.

The rise of low cost carriers On a more general note, with oil prices expected to fall in 2015, competition will continue to grow amongst low cost carriers (LCCs), which are already experiencing above-average growth rates, on short haul routes.

One major player contributing to this will be Vueling, the Spanish low cost yet full service airline, which forms part of Willie Walsh’s International Airlines Group (IAG).

The airline is expected to be the third biggest low cost carrier in Europe by the end of 2014 and will take an even bigger portion of its ever growing share of the short-haul market in 2015 when it commences a number of new routes to European destinations.

One of these routes of course is the previously mentioned Belfast City Airport – Barcelona El Prat Airport service commencing in May. With business travellers accounting for 40% of total passenger numbers, the arrival of the airline to Northern Ireland is extremely exciting. Also of interest to the local market is the potential expansion of services from Belfast City given the airline’s vast route network to over 100 European destinations, including Brussels, Rome, Madrid, Russia and Scandinavia.

There is certainly a gap in the local aviation market with regards to key European connections and that will remain a priority for us.

London is extremely well served from Belfast City Airport with Aer Lingus and British Airways operating a total of nine flights daily to London Heathrow. Aer Lingus also have three flights per day to London Gatwick. Towards the end of 2014, Flybe commenced its thrice daily service to London City which is already proving extremely popular, particularly with business travellers keen to land in the heart of London.

This brings our total number of daily flights to the capital to 15. The popularity of these services will without a doubt continue into, and beyond, 2015.

Due to our location, connectivity with the mainland is crucial for business and leisure travellers alike, for whom hopping on a train or a boat, in most cases, is just not an option.

Through our partner airlines, we have a fantastic, and extremely popular domestic route network – from Inverness to Southampton!

In recent months, we have seen Flybe add a Liverpool service and increase their frequency on the Glasgow flight. Demand for domestic destinations is increasingly popular, particularly for weekend city breaks as people have more of disposable income. As the market continues to stabilise and maintain growth, this will also be the case in 2015 and we may see more increased frequencies on domestic routes.

The Digitalisation of Travel The digital revolution has had a huge impact on all sectors of the travel industry.

Travel ‘down time’ is a thing of a past, as leisure and business travellers can now stay fully connected via tablets and smartphones throughout every leg of their journey.

This has become a necessity rather than a luxury, so much so that last year we installed free, unlimited WiFi, in partnership with Ulster Bank, in all areas of the terminal for our passengers. Needless to say, it was a very popular decision and we’re only too keen to continuously upgrade our facilities to ensure the passenger experience through our airport remains the best in class.

2014 has been another great year for Belfast City Airport and the team of some 1,600 individuals who ensure our customers have a positive experience when they choose to use our Airport. We are fully committed to build on this success and look forward to what we trust will be another record year for the Airport.

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NORTHERN IRELAND ECONOMIC OUTLOOK 2015

Autoline celebrates 2014 and looks forward to 2015 Autoline Insurance Group is celebrating a fantastic year in business with further advances in telematics technology, recruitment and commercial insurance. Business First caught up with managing director Michael Blaney to find out more. e are proud to say that Autoline is one of Northern Ireland’s leading independent brokers providing a range of insurance and financial services to both personal and business clients across Northern Ireland. Through acquisition and business growth we now have five branches across Northern Ireland employing close to 200 people.

A number of well-known names are now no longer operating in the broker market. This reduces choice for customers which is why we believe it is very important to have a strong independent sector.

“We are keen to be one of the leading figures in that sector. While it may be important for personal lines clients it is essential for commercial clients to know that as an independent broker we can access the services they require from any number of suppliers at the most competitive price.

“From a commercial perspective we have just come through the worst economic downturn of our time so after a number of challenging years where we have been building/diversifying our offer, we have just had a very strong 12 months on the commercial side of the business. This shows a growing confidence in the market which we are well placed to build on going forward.

We believe that particularly in the SME sector our commercial customers want a tailored, personalised service. This is why we believe it is important to have a presence in towns and cities across Northern Ireland with staff who can go out to visit customers and ensure that not only are they getting the best deal but that it is completely suited to their needs.

Businesses cannot afford to be underinsured or to not take personalised advice so as a local broker we are able to offer those assurances.

Telematics technology has also been influential this year in putting us at the forefront of innovation in the insurance industry. We were the first broker in Europe to launch an app offering discounting directly linked to driving behaviour. We were seeing more and more young drivers priced out of the market, some of whom were children of our existing clients and we wanted to find a solution to help them.

The telematics industry is continuing to evolve, with lots of different uses for the data generated. We believe that it is the future for this industry. We are working in house and

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From a commercial perspective we have just come through the worst economic downturn of our time so after a number of challenging years where we have been building/ diversifying our offer, we have just had a very strong 12 months on the commercial side of the business. This shows a growing confidence in the market which we are well placed to build on going forward.

Michael Blayney

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with our partners to look at where we can go with this. For example driving behaviour can be linked quite closely to personality traits which goes beyond even the insurance industry’s requirement for the technology.

“The telematics platform enables us to analyse the data collected through our app.

This will give us a valuable commodity that will be of interest to other insurers and brokers and which will help us to substantially increase our exposure, particularly in Great Britain and the Republic of Ireland.

“Invest NI’s recent support for our new jobs is ensuring that we can build our capacity quickly to take advantage of this opportunity.”

Enterprise, Trade and Investment minister Arlene Foster recently paid tribute to Autoline as ‘an example of the many small and medium sized businesses in Northern Ireland which, with the support of Invest NI, are making an important contribution to our economy.’

The minister also acknowledged that ‘Autoline’s success has been built on innovation’.

“It was the first broker in Europe to launch an app that offered insurance premium discounting directly linked to driving behaviour. As a result, it has significantly grown its customer base of young drivers.

“It is now planning to develop its own telematics and data analysis platform, which will help it to more than double its gross written premium by 2018 with almost 60 per cent of sales coming from outside Northern Ireland.”

The jobs will support a further move into the wider UK and Republic of Ireland markets and form part of the company’s multi-million pound investment plans over the next four years.

Michael Blaney continued, “We are also delighted that this new technology will soon extend to commercial vehicles.”

Autoline’s commitment to the road safety element does not end with the app and we believe as a company we have a responsibility to make the road a safer place for all users.

“People with low scores are offered support through RoSPA and we have engaged with BRAKE the Road Safety Charity to deliver a road safety training programme in secondary schools across Northern Ireland with more than 40 workshops delivered this year already and at least another 10 in the pipeline.”

ECONOMIC OUTLOOK 2015

The commercial real estate sector 2015

by Brian Lavery, managing director, CBRE Belfast

014 was a very busy year in the Northern Ireland Commercial property sector. News that the National Asset Management Agency (NAMA) had appointed Lazard on the sale of its entire Northern Ireland property portfolio, following an approach by a potential investor was announced early in 2014, taking many by surprise.

Several assets that were being prepared for sale early in the year were then put on hold to see what effect the NAMA loan sale would have. Indeed, much of the almost £500 million of investment activity recorded in the region during the 12 month period was concluded in the second half of the year following the disposal of Project Eagle to Cerberus, which concluded in June.

The year ended on a similar note with Cerberus agreeing the purchase of Project Aran from RBS making them potentially the largest controller of property loans in Northern Ireland.

Some of the more notable investment transactions to complete during the year include the sale of Foyleside Shopping Centre in Derry and Forestside Shopping Centre in Belfast for £145 million and the sale of the Abbey Centre in Newtownabbey for over £64 million as part of a disposal known as Project Swallowtail; the sale of Shane Retail Park (one of the best bulky good retail parks in Belfast) to US investor Marathon for £30 million, reflecting a yield of 7.36 per cent; the refinancing of Connswater Shopping Centre and retail park in Belfast; the sale to Marathon of Cityside Retail Park (part of a mixed-use scheme in North Belfast anchored

by Tesco) for £24 million, reflecting a yield of 7.87 per cent; the sale of a Tesco Superstore in East Belfast for £24.74 million and the sale of the Obel development in Belfast again to Marathon for a price believed to be in excess of £22 million. As in other years, the majority of large investment transactions completed in Northern Ireland during 2014 comprised retail properties.

Demand for prime investment opportunities continued to emanate from UK

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institutions during 2014 although there was also a notable increase in interest from new investors from other jurisdictions such as the US over the course of the year.

The biggest frustration amongst investors was the scarcity of prime investment grade assets being released for sale to match the volume of demand in the market.

Activity in the occupier markets was more muted than in the investment sector during 2014. Office take-up in the region was somewhat disappointing in the first half of 2014. However, there was a notable take-up activity recorded in the second half of the year, bringing total office leasing transactional activity in Belfast during the year to over 350,000 square feet. There were a number of significant job announcements in Belfast and Derry over the course of the year which will in time boost office activity in both locations.

Office rents in the city increased to approximately £161 per square metre (£15 per sq. ft.), during the year.

Demand for owner-occupier units in the industrial sector remained strong throughout 2014 with vacancy continuing to be eroded in some of the better industrial estates across the region. However, take-up was somewhat disappointing due for the most part to a scarcity of bank funding to enable industrial occupiers to purchase properties. Although there was an increase in activity in the retail occupier market experienced during 2014 with a number of new store openings, this uplift was predominantly experienced in Belfast city centre.

And for 2015 As we look to 2015, it regrettably remains in the balance if Northern Ireland will be given autonomy to set its own rate of corporation tax to match or compete with the 12.5 per cent prevailing in the Republic of Ireland. If this materialises, subject to other budget agreements in Stormont, it could prove a very significant boost for FDI and job creation across the region.

The overriding issue in the office occupier market in Belfast in 2015 will continue to be the scarcity of Grade A accommodation to satisfy occupier requirements. This will put further upward pressure on office rents in the city over the course of the next 12 months and we anticipate prime rents reaching £16 per square foot by year-end.

This is getting very close to the level which makes office development an economic reality and more forward looking developers

may therefore go on site during 2015.

Many retailers are likely to experience some reduction in their rates bills following the revaluation effective in April 2015, which will make stores more affordable for occupiers.

However, there will be some exceptions on high streets such as Arthur Street in Belfast and in some retail park schemes where rates bills are expected to increase.

We have not witnessed any growth in retail rents over the last 12 months and it is likely that any growth during 2015 will be very location specific.

Although economic conditions have been strengthening recently, there is still concern around prospects for growth in the region over the coming years, particularly if proposed austerity measures are implemented, which have the potential to impact negatively on consumer sentiment and retail spending patterns.

A similar volume of activity could be achieved again in the investment sector in 2015 considering the volume of deleveraging that has yet to occur across the region.

In addition, a considerable volume of secondary trading is anticipated with assets purchased through loan sales over the last number of years being offered for sale. There are several large assets due to be offered for sale during 2015, the majority being retail properties although we anticipate some landmark offices will also come to the market.

The relative value of commercial real estate will become increasingly topical in 2015.

While there is currently a notable arbitrage between interest rates, bonds and real estate, which is encouraging investors, it is important to remember that this arbitrage will be eroded once interest rates and bond rates ultimately start to increase.

It is anticipated that UK interest rates may start to rise in 2015. However, rises are not anticipated to be very dramatic and the relative yield arbitrage offered by real estate investment will remain, even if prime yields as anticipated contract slightly over the course of the year in Northern Ireland.

Brian G Lavery Email: brian.lavery@cbre.com Tel: 028 9043 8555

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COVER STORY

GRANT THORNTON following an instinct for growth Gavin Walker meets with the three newly appointed Partners who will spearhead Grant Thornton's significant expansion plans in Northern Ireland over the coming years: Richard Gillan (Advisory Partner) Louise Kelly (Audit Partner) and Peter Legge (Tax Partner).

Richard Gillan (Advisory Partner), Louise Kelly (Audit Partner) and Peter Legge (Tax Partner)

rant Thornton, Ireland’s fastest growing large accountancy firm, has appointed three new partners to drive expansion plans over the coming years and there is a palpable sense of purpose within the team who have recently moved into their new offices in Belfast city centre.

“We grew the Grant Thornton office in Dublin from 60 to 600 employees by providing an unrivalled level of service to our clients and we are now focused on taking the Northern Ireland office to similar heights,” Louise Kelly, Audit Partner explained. “SMEs are our sweet-spot and we know our clients here are more positive about the future than they have been for some years. They are actively looking for new opportunities to

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grow their businesses and we want to play an integral part in their success.

“Our very strong relationship with both our Republic of Ireland and GB offices allows us to easily access expertise from those offices and connect our Northern Ireland-based clients with knowledge and opportunities that will help them penetrate new markets successfully.”

“Our clients tell us that our genuine interest in their business makes us stand-out” Peter Legge, Tax Partner, explained.

“Understanding our clients’ strategic ambitions is fundamental to the services we provide. We want to be a strategic sounding board, testing and challenging assumptions and facilitating debate within the board. By

focusing on the client’s agenda and issues, we have insightful conversations which form the lifeblood of our business. By developing a trusted relationship with our clients we can work with them to reach their fullest potential.”

“Additionally, we ensure that the views of Northern Ireland businesses are represented at the correct level of government by feeding into Grant Thornton UK LLP’s responses to government consultations. This has been of particular interest to our clients recently in seeking to articulate and represent their views in support of the devolution of corporation tax rate varying powers to the Northern Ireland Assembly.”

“Our very strong relationship with both our Republic of Ireland and GB offices allows us to easily access expertise from those offices and connect our Northern Ireland-based clients with knowledge and opportunities that will help them penetrate new markets successfully.” Louise Kelly Entrepreneurial spirit Richard Gillan, Advisory Partner, and the most recent of the three to join the firm, emphasised the entrepreneurial approach Grant Thornton takes to business. “After experiencing the challenges and rewards of running my own manufacturing and services businesses, I had not planned to return to practice. But the entrepreneurial culture and approach displayed by the Grant Thornton leadership convinced me to come back and put to work the experience and knowledge I have gained on our clients behalf.

“The reluctance of Banks to lend over the past number of years has resulted in latent demand from companies to review their funding options. For the first time since 2008, banks really are open for business; I have sat down with all of Northern Ireland’s key lenders in recent weeks and can confirm that they have a genuine appetite for business. Our recent successful refinancing of TBF Thompson is a good case in point.

“Add to that the reality that many local businesses have been accumulating cash over the past five years, together with the arrival of new players in the venture capital markets, and the opportunities for Northern Ireland business to really get moving are outstanding.

Plus as Peter explained, local companies know that having an effective and efficient operating environment is a pre-requisite for success and business development. “We seek to work closely with our clients to streamline processes and behaviours to ensure that they get more out of less.

Also, many business structures have evolved over time and may no longer be fit for purpose due to the changed economic landscape and tax environment. We are therefore supporting many clients to take advantage of the opportunities which exist to restructure the business in a tax efficient manner so that they are best placed to realise their growth ambitions.

“Our commercial approach to client relationships means we don’t adopt a ‘silo mentality’ to our interactions. Instead we see ourselves as a partner in their growth and want to bring our expertise to bear on every aspect of their tax affairs from corporate to

personal. By having an overall understanding of the business and an insight into the objectives and aspirations of key stakeholders, we can help develop a tax strategy to maximise and protect value for individuals and corporates.”

Keeping it local Unusually for the Northern Ireland office of a global network, Louise, Peter and Richard who are all from Northern Ireland, will be focused exclusively on Northern Ireland-based clients.

“We are focused entirely on building our business by working with local companies,” Richard explained. “Being from Northern Ireland we understand how other local businesses think and work. We’re not simply using Northern Ireland as a base to service businesses in other jurisdictions – we’re doing business right here.

“But as a member of a powerful international network with 600 offices in 100 countries, we can easily plug our Northern Ireland clients into an unrivalled knowledgebase without them losing the close personal relationship of the Northern Ireland office.”

Corporation Tax At the time of going to press we are still awaiting the outcome of the talks at Stormont and the determination of whether or not Corporation Tax will be devolved locally.

However, the partners were united in their expression of support for its successful transfer.

“Regardless of the outcome of the talks at Stormont we will drive Grant Thornton’s plans for expansion in Northern Ireland,” Peter confirmed, “However, there is no question that putting the legislation in place and taking the opportunity to set Corporation Tax in or around the same as the Republic of Ireland will be a game-changer for the rebalancing of the Northern Ireland economy.”

Meet the Partners Louise Kelly will lead the Audit team in Northern Ireland. Having joined Grant Thornton in 2000, she has experience working with public and privately owned companies, particularly within the construction, education, motor, retail and manufacturing sectors. Louise is the author of Advanced Auditing and Assurance, the text book used by Chartered Accountants Ireland.

Tax partner Peter Legge has 20 years’ experience in providing tax advice to individuals and businesses. He joined Grant Thornton in 2005 and specialises in advising owner managed businesses on tax matters ranging across the various stages of their growth model – from business structuring, to protecting and expanding business activities, to tax efficient realisation of value from the business. Peter’s focus is on ensuring his clients receive innovative, robust and commercially aligned tax advice. His clients include those from the food and beverage, property and construction, technology and media and retail sectors.

Richard Gillan joins the firm from the private sector to lead the Advisory team.

Having trained as a Chartered Accountant he has spent the last decade acquiring a number of businesses, restructuring and expanding them in advance of successful exits. He is uniquely placed in the Northern Irish market to advise on acquisitions, disposals, corporate strategy and financing.

Welcoming the new partners, Paul McCann, managing partner of Grant Thornton, Ireland, told Business First: “These appointments not only represent a new dawn for Grant Thornton in Northern Ireland but also recognise the vast experience and knowledge that all three partners possess.

“I’m delighted that all three are Northern Irish natives and know the nuances and challenges for companies and individuals when operating in both a local and global marketplace.

“While Louise and Peter have been with Grant Thornton for many years and each is vastly experienced and respected, Richard joins the firm from the private sector. He has purchased and successfully exited a number of businesses and his skills will be unrivalled as he leads the Advisory team.”