From the beginning, Northern Ireland has been at the heart of Brexit’s thorniest problem: how to maintain an open land border with European Union (EU) member Ireland for friction-free trade while maintaining unfettered access between Great Britain and Northern Ireland?
Now, however, as various agreements are hammered out, the tiny outpost may be uniquely placed within the United Kingdom to take advantage of Brexit, according to Kevin Holland, CEO of Invest Northern Ireland.
“There are some areas where [the EU and UK] want something similar (which is more trade, more engagement) and there are some areas where both sides have got some quite serious differences to resolve and that’s often seemingly semantic things around jurisdiction but actually it’s very important to national pride and what Brexit is about,” Holland told Global Finance editors last week.
Because both sides—the European Union and the British government led by Prime Minister Boris Johnson—agree a hard border should not be re-imposed between Northern Ireland and the Republic of Ireland, goods will continue to flow freely between them. At the same time, Northern Ireland will be part of the UK customs union. This means goods produced within Northern Ireland would be uniquely positioned to ship to both the UK and EU markets.
This arrangement may prove attractive to companies looking to “Brexit-proof” their businesses or for supply chain opportunities. For example, Northern Ireland would be the only place in the world where a pharmaceutical manufacturer can export their final products directly into British and EU markets at the same time—assuming the two sides can reach a permanent agreement governing the flow of European goods between Northern Ireland and the rest of the UK. One remaining sticking point is how to protect the distinction between products made in Northern Ireland, which would be EU-compliant, and products made in the UK but shipped through Northern Ireland, which would not be. Already, reports that the UK team has been tasked with finding a way to “get around” initial agreements have incurred warnings from the EU that such maneuvers put the entire UK-EU trade relationship at risk.
Although the broader British economy may have suffered due to uncertainty surrounding Brexit, Holland says that foreign direct investment in Northern Ireland has not decreased since the 2015 referendum. Northern Ireland’s primary attractions as a business locale—a highly skilled English-speaking population at relatively low cost (an employee can be 40% cheaper Belfast than in Dublin, according to TK) and a low cost of living, including low personal tax rates—have not been impacted by the political vicissitudes of Brexit.
“Northern Ireland’s burgeoning fintech sector, together with a dynamic and highly educated workforce, makes Belfast an obvious choice for us,” said Riskonnect CEO Jim Wetekamp during his announcement that the 500-person Atlanta, Georgia-based company would open a 100-employee fintech center in Belfast.
fDI Markets ranked Belfast as a top global fintech investment location—second only to London and Singapore—and Belfast is the top destination for U.S. cybersecurity companies investing abroad, according to Holland.
“Seventy percent of the investors that come into Northern Ireland come for one reason, but then do a follow-on investment afterwards,” Holland noted. “That’s very much driven by talent and technology.” In addition to fintech and financial services, Northern Ireland’s strong economic sectors are in agribusiness, life sciences and health care, advanced manufacturing, and legal services.
