Please rotate your device to landscape mode to view the charts.

Place-based industrial strategies in the context of the Northern Ireland Protocol

Journal: Regional Studies

Date: 2024

Author: Graham Brownlow, Leslie Budd

Abstract:
As a lagging regional economy that underperforms the rest of the UK, Northern Ireland represents a number of continuing challenges that have a long history. In recent years, technologies and processes associated with Industry 4.0 have had little impact with a few exceptions. Yet these activities have become central to industrial policy and strategies in the last two decades, in spite of the path-dependent nature of the economy. The underperformance is exacerbated by Brexit and increased hybridity of the economy due to the Northern Ireland Protocol that appears to be a form of industrial policy to be analysed.

Link: Google Scholar

Background and Context

Regional Challenge

Northern Ireland is a lagging regional economy that persistently underperforms the rest of the UK despite numerous industrial strategies.

Policy Approaches

The article examines two contrasting approaches to economic development: space-neutral (market-driven) and place-based (context-specific) models.

Brexit Impact

The Northern Ireland Protocol has created economic hybridity, simultaneously in UK customs territory while following EU market rules.

Contrasting Regional Development Approaches: Space-Neutral vs. Place-Based

Space-Neutral Market flexibility Price signals guide resources Single convergence path Place-Based Regional context matters History & institutions shape Multiple development paths
  • Space-neutral approaches emphasize market flexibility and price signals to guide regional economic development.
  • Place-based approaches recognize how history, institutions, and regional context shape development potential.
  • The article argues that place-based approaches are more appropriate for addressing Northern Ireland's economic challenges.

Path Dependency: Northern Ireland's Historical Economic Challenges

1920s-30s Supporting declining industries 1970s Troubles & deindustrialization 1998-2000s Peace but slow growth Brexit & NIP Economic hybridity
  • Northern Ireland's economic challenges can be traced back to the 1920s-30s support for politically connected industries.
  • Political instability in the 1970s compounded deindustrialization effects experienced throughout the UK.
  • Despite peace, economic growth remained sluggish with persistent productivity problems continuing post-1998.

Northern Ireland's Exceptionally Low Productivity Growth Compared to Neighboring Regions

  • Data from 2000-2018 shows Northern Ireland's productivity growth (0.2) was far below all neighboring regions.
  • While labor participation increased, the productivity gap prevented overall economic convergence with other UK regions.
  • This productivity weakness persisted despite the political stability following the 1998 peace agreement.

Northern Ireland Protocol Creates a Hybrid Economic Arrangement with Asymmetric Trade Barriers

Great Britain Northern Ireland Hybrid Status EU / ROI Checks Free Free Free
  • The Northern Ireland Protocol creates a unique hybrid economic position with asymmetric trade barriers.
  • Goods moving from Great Britain to Northern Ireland face regulatory checks and potential tariffs.
  • Northern Ireland maintains unfettered access to both the EU Single Market and UK market.

Disconnect Between Northern Ireland's Industrial Strategies and Industry 4.0 Integration

Northern Ireland Industrial Strategy Sectors ICT Life Sciences Advanced Manufacturing Agrifood Implementation Gap Industry 4.0 missing from strategies
  • Northern Ireland's industrial strategies reference key sectors but lack explicit Industry 4.0 implementation plans.
  • While identifying Smart Specialization priorities, strategies fail to integrate transformative Industry 4.0 technologies.
  • Unlike the Republic of Ireland, Northern Ireland lacks a specific Industry 4.0 strategy.

Contribution and Implications

  • Place-based approaches better address Northern Ireland's economic challenges than space-neutral, market-driven policies.
  • The Northern Ireland Protocol functions as a de facto industrial policy with both opportunities and constraints.
  • Future industrial strategies should address the path-dependent nature of the economy rather than seeking "silver bullet" solutions.
  • Northern Ireland needs better Industry 4.0 integration in its industrial strategies to transform lagging sectors.
  • Policy should prevent rent-seeking behavior that has historically hindered effective industrial development in the region.

Data Sources

  • The GDP per head growth components chart (Visualization 3) is based on Table 1 from the article.
  • The path dependency visualization is informed by the historical analysis presented throughout section 3 of the paper.
  • The Northern Ireland Protocol trade arrangement visualization is based on the analysis in section 4.
  • The industrial strategy and Industry 4.0 visualization is based on information from section 5 and Figure 3.
  • The space-neutral vs. place-based approaches visualization is derived from the theoretical framework in section 2.