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Global best practice in productivity improvement – lessons for Northern Ireland

Global best practice in productivity improvement – lessons for Northern Ireland. May 2009. Contents. 1. What we have done. 2. Discussion of case studies Singapore (in depth) Republic of Ireland Costa Rica Finland Sweden Portland, Oregon Others. 3. Implications for Northern Ireland.

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Global best practice in productivity improvement – lessons for Northern Ireland

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  1. Global best practice in productivity improvement – lessons for Northern Ireland May 2009

  2. Contents 1 • What we have done 2 • Discussion of case studies • Singapore (in depth) • Republic of Ireland • Costa Rica • Finland • Sweden • Portland, Oregon • Others 3 • Implications for Northern Ireland

  3. Contents 1 • What we have done 2 • Discussion of case studies • Singapore • Republic of Ireland • Costa Rica • Finland • Sweden • Portland, Oregon • Others 3 • Implications for Northern Ireland

  4. To develop a long-list of examples to examine we used a simple ‘funnel’ NUTS 2 regions in Germany, France, Italy, US, Korea and Canada Countries of the world • Regions with GDP per capita <85% of • Northern Ireland • Countries with GDP per capita <85% of Northern • Ireland or total GDP greater than Spain Germany: Sachsen Germany: Sachsen-Anhalt Germany: Thueringen Germany: Brandenburg Germany: M-burg-Vorp. Italy: Molise Italy: Basilicata Italy: Puglia Italy: Calabria Italy: Sicilia Italy: Capania Korea: Gyeonbuk Korea: Capital region Korea: Jeolla Korea: Gangwon Korea: Jeju United States China India Japan Germany UK France Russia Brazil Italy Indonesia South Korea Mexico Canada Venezuela Malaysia Poland Barbados Hungary Russia Croatia Saudi Arabia Bulgaria Thailand +67 others • Relevance • Performance • Regions that have not recently achieved >2% CAGR GDP per worker improvement in a 5 year period1 • Countries that have not recently achieved >2% CAGR GDP per worker improvement in a 5 year period1 All French regions All other German regions Italy: Lombardia Italy: Toscana Italy: Abruzzo Italy: Veneto Italy: Emilia-Romagna Italy: Sardegna Italy: Valle D’Aosta Italy: Marche Italy: Liguria Italy: Piemonte Italy: Friuli-Venezia G. Italy: Umbria Italy: PA di Trento Italy: PA do B-Bozen Korea: Gyeongnam All other US states All other Canadian provinces Kuwait New Zealand Norway Argentina Netherlands Austria Malta Australia Luxembourg Denmark Cyprus Chile Switzerland Belgium Portugal Spain Uruguay Sweden Finland Taiwan South Korea Israel Greece United Arab Emirates Qatar Italy: Lazio Korea: Chungcheong US: South Dakota US: Oregon US: Colorado US: Arizona US: Massachusetts US: New York US: California US: District of Columbia US: North Carolina US: Vermont US: Louisiana US: Virginia US: New Hampshire US: Washington US: Idaho Canada: Newfoundland Canada: Alberta Canada: Nova Scotia Canada: Saskatchewan Iceland Estonia Slovenia Latvia Slovak Republic Czech Republic Belarus Azerbaijan Armenia Lithuania Kazakhstan Hong Kong Singapore Ireland 1 Based on the area’s best results from either 2003-2008 or 1998-2003 for countries and either 1996-2001 or 2001-2006 for regions SOURCE: ConferenceBoard, OECD, US Department of Commerce

  5. These are the six cases that have been examined in detail Singapore • Success founded in establishing pro-business environment and aggressively pursuing FDI through a high performance agency Republic of Ireland • Built on low tax rate with flexible approach to attract FDI, bring in anchor investors and move up the value chain Costa Rica* • Targeted approach to capturing FDI through independent marketing agency Finland • Built R&D capability around Nokia as an anchor and successfully developed Sweden • Deregulation and creation of pro-business environment to drive competition and productivity Oregon • Built on anchor firms and proximity to West Coast to create hot spot for entrepreneurial spinoffs * Originally filtered out on income SOURCE: Literature review; press search; expert interviews

  6. Disadvantage/ • worst performer Which have different sources of advantage and disadvantage (1/2) • Best in class/ Advantage Corporation tax rate, % 18 12.5 10-30 26 28 US: 35 28 Use of Zonal tax exemptions YES YES YES NO NO NO NO Ease of doing business rank 1 7 117 14 17 3 6 R&D expenditure, % GDP 2.3** 1.3** <1.0** 3.5** 3.7** 2.6** 1.8** Students graduating p.a., %* N/A** 1.40** N/A** 0.77** 0.67** 0.9** 1.06** 0.13** 0.17** Engineers graduating p.a., %* N/A** 0.16** 0.13** 0.06** 0.09** Note: Data for Oregon (US) data is for United States as a whole. Oregon offers tax exemptions and other fiscal incentives lowering the effective tax rate * % of total population ** 2006 SOURCE: WMM; IMF Global Insight; OECD; World Economic Outlook database

  7. Which have different sources of advantage and disadvantage (2/2) • Disadvantage/ • worst performer • Best in class/ Advantage Size of public sector (% GDP) 13.70 35.44 n/a 47.24 52.57 35.36** 43.13** Average wage (manufacturing, GBP per hour) 4.64** 14.07** 2.27** 16.21** 17.25** 12.93** 14.68** Average wage (engineer, GBP annual) 36,447 62,308 25,000*** 60,385 59,717 54,048 61,054 English-speaking (% population) 71* 98* n/a 63* 89* 96* 98* 0.05 0.07 Electricity costs (GBP per KWH) 0.06 0.04 n/a 0.03 0.06 42** 19** 3** 31** 32** 26** 28** Broadband penetration, % * No consistent datasource for languages ** 2006 *** Annual Wage 2009 for Chief Computer Analyst SOURCE: IMD; WDI, CINDE, Costarica.com, Language data: Eurobarometer 2005, US Census Data, EU Commission, Singapore 2000 census data

  8. For each example we have built a case study around four questions • What was the context for this region’s productivity improvement? • What institutions, programmes and policies were used to drive it? • What were the key success factors for these institutions, policies and programmes? • Strategically? • Organisationally? • Operationally? • What are the lessons for Northern Ireland from this region? SOURCE: Literature review; press search; expert interviews

  9. Country specific information • Investor perspective • MGI • Economic strategy • literature • Country experts • Agency employees • Functional experts • Northern Ireland To address these questions we carried out primary and secondary research Over 30 interviews conducted Literature and Research reviews • Government and agency reports for 6 case study countries from 2000-2009) • National press searches • Business school case studies on country competitiveness (Ireland, Costa Rica, Estonia) • Academic literature • Conducted 8 interviews with experts for Singapore, Finland, Sweden, Ireland, US, Israel • 7 interviews with current or former employees of government agencies (FDI/Export promotion) in Costa Rica, Singapore, Finland, Ireland • OECD, World Bank, IMF reports and academic research on • FDI policies • Country competitiveness • R&D and Cluster strategy • Industrial policy • Government efficiency • 2 Offshoring specialists • 3 Productivity experts • Industrial policy expert • 6 Investor perspectives on Ireland, Singapore, Eastern Europe and Northern Ireland • McKinsey Global Institute knowledge incl. 15 country productivity reviews • Conducted interviews with Invest NI, Bombardier, Citigroup, Almac, All State SOURCE: Literature review; press search; expert interviews

  10. Contents 1 • What we have done 2 • Discussion of case studies • Singapore • Republic of Ireland • Costa Rica • Finland • Sweden • Portland, Oregon • Others 3 • Implications for Northern Ireland

  11. Background Key achievements Introduction to Singapore • Small city-state situated on 63 islands and connected to the Malaysian peninsula • Population 4.8m (~70% of Chinese origin) • Land area 710.2 km2 (~5% of NI) • Official languages: English, Malay, Mandarin, Tamil • 5th wealthiest country in the world in terms of purchasing power adjusted GDP per capita • Self-governed since 1959, independent from Malaysia since 1965 • Parliamentary Republic • Single Party (People’s Action Party PAP) dominates political process • Limited natural resources (no freshwater) • Real GDP growth has averaged 8.1 percent since independence in 1965 • Productivity grew by a 4.0% between 1980 and 2008, over three times faster than the OECD • Attracted major > 7,000 international investors from broad range of industries, including for example Infineon, Exxon, GSK, Merck • Succeeded in building sectors “from scratch” such as Health Care • Rated #1 in Ease of Doing Business by World Bank in 2008 SOURCE: Literature review; press search; expert interviews

  12. Why are we interested in Singapore? • Relevance • Applicability ü • Small island economy • 2007 GDP 250% of NI • Aspects NI could learn from • Integrated economic strategy of Singapore where “packages” to attract FDI aims at creating lasting benefits • Customer-focus of the EDB through tailoring to individual investor needs and efficient end-to end process • Focus of government agencies in serving all customer needs conveniently (online) and through “one-stop-shops” • Openness to investment and trade • 2007 Exports 246% of GDP ü • Developed • 2007 GDP per capita 90% of NI ü • Aspects NI is unlikely to learn from • Semi-authoritarian government in Singapore facilitated alignment and “top down” implementation • Creation of state-owned enterprises • Strong use of trade policy and financial incentives • Early import substitution phase to industrialise • Customised financial incentive package to attract FDI • Successful • Achieved 3.0% productivity growth from 1995-2008 compared to UK average of 1.7% ü SOURCE: Economist Intelligence Unit; UNESCO Statistics; World Bank “Ease of doing business” reports; IMF International financial statistics; WMM/Global Insight; World Economic Outlook database; IMD World Competitiveness online

  13. Singapore developed through ambitious planning and outward-orientation • 1980s - Singapore’s high-wage policy to force move to knowledge economy fails in context of world economic crisis. Economic review by MTI recommends PCs and disk drives as “sunrise sectors” • 1959 - Self-government of Singapore, led by the People’s Action Party (PAP) Became independent from Malaysia is in 1965. Lee Kuan Yew is first Prime Minister. Government declares itself “pragmatic” (~capitalist and semi-authoritarian) • 1997 - Asian Crisis hits Singapore, but country recovers already starting in 1999. Re-orientation of economic policy with more focus on knowledge economy • 2000s Continuing emphasis R&D and knowledge economy. Focus on attraction of foreign talent to Singapore and positioning of Singapore as destination for R&D research facilities and regional headquarters of multinationals • 1960s • 1970s • 1980s • 1990s • 2000 • 2009 • 1961 - Creation of the Economic Development Board (EDB). Created the Jurong Industrial Estate, Singapore’s first industrial estate. EDB open offices in NY and Hong Kong. Attract Shell, National Iron and Steel Mills • 2001- Creation of A*STAR- The agency of Science Technology and Research focusing on Biomedical Sciences and Engineering/Science, promoting research and public-private collaboration • 1991 - Creation of EDBI - the independent equity investment arms of the EDB which invests in companies in new strategic industries Has invested in 240 companies since its creation • 1983 - Creation of the Trade Development Board (TDB) to promote Singapore’s exports. Rebranded IE Singapore in the early new millennium • 1970s - Start of the electronics industry in Singapore – Texas Instruments investment of 6m USD is secured within 6 months and operations start 90 days after investment decision SOURCE: Literature review; press search; expert interviews

  14. Singapore’s productivity growth was associated with FDI, export and R&D growth • FDI • Exports • Total stock inward FDI, % GDP • % GDP, excluding tariffs • Singapore • Singapore • UK • UK • R&D • Productivity growth • % GDP, all R&D • Change in real GDP per employed worker, % p.a.* • Singapore • UK • Singapore • UK * 10-year rolling average SOURCE: WMM / Global Insight (GDP, exports, productivity); OECD (R&D expenditure); IMF

  15. Singapore’s success is built on strategic planning and the creation of a business-friendly environment that enabled FDI-driven growth • Long-term analysis and planning for direction of economic policy carried out by MTI, economic reviews led to re-orientation (e.g. focus on PC and disk drives in 80s post oil crisis) • Dedicated planning unit in the EDB with ~10 employees in Strategic Planning and Knowledge and 60 in Planning and Policies • EDB Annual reviews help to bring together market intelligence and trends, identify focus sectors and areas and re-allocate resources accordingly Rigorous policy planning Prioritisation of FDI • Strategic clarity that FDI matters for growth as Singapore’s lack of natural resources and small insular position constrained endogenous wealth creation • EDB “makes things happen” to attract FDI, e.g. set-up of university courses, infrastructure investment • Strong support by leadership to attract investors - Lee Kuan Yew used to gather CEOs of potential investors to reassure about doubts and assert commitment • Singapore comes top in the World Bank’s Ease of doing business rankings 2007 and 2008 • Eliminating unnecessary red tape is constant government concern. For example, businesses can submit suggestions online to Pro Enterprise Panel to cut red tape (e.g. outdated regulations) • Effort to create a pro-businesses environment: EnterpriseOne Portal which centralises all relevant information, e-services, walk-in centers of government agencies Creation of a business-friendly environment inc. low taxation Government agencies as efficient one stop shops • Public services mainly provided through government agencies (e.g. EDB ~500 employees, IE ~370 employees vs. 200 employees in the MTI) which are operated similarly to private entities • Government agencies (EDB, Spring, IE) set up as “one-stop-shops” where all customer needs can be addressed (capital, capability-building, advisory services, market intelligence) • Customer services centre for initial point of contact Culture of excellence • Talent recruitment – high performing students and graduated are attracted to public sector • Talent retention – incentives through performance-based pay (15-50% performance-dependent bonus) and fast promotions • Talent development – emphasis on functional and managerial training. Early on-job responsibilities including client relationships SOURCE: Literature review; press search; expert interviews

  16. Four major agencies drive Singapore’s development, lead roles are taken by the EDB and IE Singapore ROLE STATUS FUNDING • Government agency • One-stop-shop for foreign investors • 500 employees of which ~ 100 in one of 19 international offices • Government • 2008 Expenditure: USD 400m • Key government agency in charge of attracting FDI and creation of favourable business environment • EDBI is Investment arm investing in new industries • Promotion of exports of Singapore-based enterprises • Financing options and capability building focus (skill-building) • Government agency • One-stop-shop for firms seeking to export • ~500 employees of which ~50 in 30 offices abroad • Government • 2008 Expenditure: USD 117m • Payment by companies for selected customised services • Agency supporting SMEs and start-ups with overall mission to “Enable Enterprises” and create a competitive SME sector through financing • Skill building • Government agency • ~370 employees • Government • 2008 Expenditure: USD 96m • Payment by companies for selected customised services • Agency for Science, Technology and Research in charge of promotion of research and innovation • Focus on life science and engineering/IT • Government agency • ~ 150 employees • Government • 2008 Expenditure: USD 710m • Payment by companies for selected customised services • Online information portal serving the business community by centralising all relevant information to start, sustain and grow a business • SPRING (Government agency) in collaboration with 44 partner agencies involved in the Enterprise One project • Government SOURCE: EDB, MTI, Spring, A*Star

  17. The EDB is a high-performing, customer-focussed government agency delivering significant benefits to Singapore’s economy SCOPE AND APPROACH • 500 employees, budget of 410m USD (0.3% of GDP) of which $330m is spent on grants • Provides input to other government agencies on how to make Singapore an attractive business location - has led Singapore’s to be first in ease of doing business worldwide (World Bank) • ~15% of staff located in 19 international offices which develop mainly contacts with new potential investors • Headquarter staff manages relationships with foreign and domestic companies within a “cluster” • Annual strategic reviews of targeted sectors and companies serve to re-focus efforts and identify opportunities based on existing strengths. PROGRAMMES AND POLICIES • Customised assistance and incentives schemes are provided throughout the investment process • Working in Singapore and registering business: easy access to visas, step-by-step guides • Business location: List of science parks provided, EDB staff will look for suitable land • Setting up the business - Financial incentives and assistance schemes* range from assistance in manpower development, technological/equipment upgrading, to R&D, intellectual property and industry development. • Recruitment and Staff – EDB funds on the job training and overseas training of Singaporeans in MNCs • Attractive taxation policy: 17% corporate income tax, capital gains not taxed, GST 7% • Conditional grants: payments against milestones, if conditions not met re-negotiation or claw-back ORGANISATION AND CULTURE • EDB recruitment targeted at high potentials – scholarships are offered to high performing high school students to study abroad and then return to work for the EDB • Incentives for EDB employees are significant: financial incentives (15-50% of salary) and fast promotions • The organisation is focused around seven vales: Care, Integrity, Team, Imagination, Courage, Excellence and Nation - losing a deal to another country is seen as shameful • Junior staff get responsibilities for managing day-to-day client relationships early on and account directors own client relationships and are empowered to create flexible deals to meet investor needs and to start deals moving while formal processes and approvals get completed • Focus on training programmes. EDB employees learn financial and other functional skills as well as managerial skills in workshops on creativity, teamwork and risk-taking * Detail on different schemes available in Back-Up SOURCE: EDB, expert interviews

  18. EDB Board • International Operations • Cluster Development • Enterprise Eco-system and Planning • Corporate Services • International Advisory Council • EDBI The organisation of the Economic Development Board is aligned with its key tasks and emphasizes importance of planning • Independent investment arm created in 1991 • Invests in companies in new strategic industries (over 250 to date) • Senior executives from MNCs advising EDB (e.g. COO of P&G, CEO of 3M) • 4 Executive Directors lead division with area responsibility • 19 international offices with ~ 100 EDB employees • Development of sector clusters of local firms and foreign investors in Singapore • Enterprise Ecosystem • Incubation Unit • Intellectual Property • International Policies • Planning • Resource Development • Business Knowledge Group • Client Services • Finance & Administration • Human Resources • Information Systems • Legal • Marketing Communications • Organisation Excellence Clear dedicated support functions (Admin, HR, CIO) account for ~40 employees but additional support staff is probably within divisions SOURCE: EDB, expert interviews

  19. Structure of the EDB Board brings together international private sector expertise and public sector leadership • Name • Job/Background • Board members and roles • Lim Siong Guan • EDB Chairman (full time), former Permanent Secretary to the Primer Minister • Chairmen • Leo Yip Seng Cheong • EDB Deputy Chair (full time) • Mixed group of private and public sector professionals • Executives from foreign companies • Singaporians and non-Singaporians • Role is to give strategic guidance, external perspective, industry expertise • Ashwin Muthiah • Chairman Proteus Petrochemicals Pte Ltd. • Beh Swan Gin • Managing Director, EDB • Deborah Henretta • Group President Asia, Procter&Gamble • Erik Peyrer • VP, Business Development APME • Francois Guibert • Corporate CP, CEO Asia/Pac ST Microelectronics • Members • Gautam Banerjee • Exec. Chairman, PWC • George Goh • Executive Chairman, MeibanGroup • Goh Chye Boon • Deputy Secretary Ministry of Trade • Iain John Lo • VP New BD Ventures, Shell • Jonathan Asherson • Regional Director SE Asia, Rolls Royce • Jon Niermann • President Asia, Electronic Arts • Lui Pao Chuen • Advisor National Research Foundation • Shunsuke Ohtsu • Chief Executive Asia and Chair, Hitachi Asia • SOURCE: EDB, Expert interviews

  20. Singapore’s financial assistance and other incentive schemes Examples Purpose of the schemes Benefits • Equipment and Technology • Approved Foreign Loan Incentive (AFL) • Investment Allowance (IA) • AFL provides full/partial exemption on interest payments to non-residents • IA provides capital allowance for new equipment on the condition that it introduces new technology or contributes to industry efficiency • Investors pay lower taxes in Singapore; reduces tax liability • Business Development • Development Expansion Incentive (DEI) • Script to Screen (S2S) • DEI provides preferential corporate tax rates • S2S provides grants to support the development of creative and technical talents in content production • Reduces tax liability/Assist companies to move towards higher value-added business activities • Innovation, R&D and Intellectual Property • Approved Royalties Incentive • Further Deduction for R&D Expenses (S14E) • Innovation Development Scheme • Research Incentive Scheme for Companies • Technology for Enterprise Capability Upgrading • Writing Down Allowance for Cost Sharing Agreement • Tax incentives and grants are given to promote R&D capability (technical + manpower) • Technology transfer must take place • R&D should be conducted in Singapore (S14E) • In many cases, schemes are open to companies with at least 30% local equity or ones registered in Singapore • Non-resident recipients of payments pay lower taxes • Meets the cost of R&D; assists companies in technology and knowhow transfers • Helps local enterprises build in-house R&D capabilities • Headquarters Management • Regional/International Headquarters Award (RHQ/IHQ) • Encourage companies to use Singapore as a base • Customised package of tax incentives or grants are provided • Customised support for qualifying projects • Industry Development • Development Expansion Incentive • Initiatives in New Technology • Local Industry Upgrading Programme • Locally-based Enterprise Advancement Programme • Pioneer Incentive • Venture Capital Fund Incentive • Activities must lead to the development or introduction of new capabilities for companies or industry • Projects must generate significant economic benefits for Singapore • Reduces tax liability • Helps meet costs of technology transfer, introduction of new capabilities, manpower and operating costs etc • Foster closer ties with industry contacts • Local Govern-ment Incentives • Programmes cater to the needs of startup, local enterprises, global companies with large-scale needs such as the set up of regional headquarters in Singapore • Help businesses improve efficiency, strengthen capabilities and explore new opportunities in their business • Loans, grants, tax incentives, equity financing and non-financial assistance etc SOURCE: EDB Website

  21. International Enterprise offers a one-stop-shop serviceto promote exports • ~ 370 employees of which ~50 in the 30 offices worldwide (IE employee sometimes in embassy) • Objective to provide a “one-stop-shop” services to all Singapore-based companies seeking to export • IE Advisory Centre as a point of contact for businesses serves and as shop where firms get generic information (general enquiries, access to databases) and customised services • Important information and range of services can be accessed online via Enterprise One Portal • Customised services are available to all companies (no minimum size or export potential) SCOPE AND APPROACH • 35,000 companies benefited from IE Singapore services in 2007 across all activities (+60% vs. the previous year) • Activities of IE are within three areas: CONNECTIONS, CAPABILITIES and CAPITAL • CONNECTIONS: • Organisation of Singapore’s participation in major trade fairs in key sectors including 50-70% subsidy to Trade Associations’ costs (all companies eligible, subject to approval by involved trade association) • Facilitation of search for export partners base through online platform BuySingapore which automatically matches exporters and buyers across over 100,000 business members, basic membership is free but enhanced membership has annual subscription fee (250 SD) • COMPETENCY: • Development of managerial capabilities of business to operate abroad (e.g. Scholarships for international management courses abroad for Singaporean executives) • Identification of selected areas where companies need help (Manpower, appropriate branding and design for international expansion, intellectual property) • CAPITAL: • Provides top up trade insurance and subsidies for firms purchasing commercial trade insurancee • Subsidised credit for purchases of overseas facilities • Subsidised loan insurance • Most services are provided for free to companies (IE Concierge service, use of databases and portals (BuySingapore), seminars but payment for customised services PROGRAMMES AND POLICIES ORGANISATION AND CULTURE • Competitive pay levels for employees • 5-year career plan and attractive incentive schemes • Design of training roadmaps • Participation in Singapore-wide competitions for service-level quality of agencies/public institutions SOURCE: IE Singapore

  22. Enterprise One is the online portal for Singapore’s business community CONCEPT • Online-Portal launched in 2006 which centralises information required by businesses • Aims to help local enterprises find the answers they need to start, sustain and grow their businesses • Points towards available e-services and relevant government agencies • 44 participating partners (government agencies and Ministries) CONTENT Key features of the online portal • Industry Guides: Topics are grouped by industries and organised in sections so that information relevant to business sector is easy to find. • Quick Find (Online Interactive Tools) for • Funding options customised for one’s business • Government assistance based on needs • Market statistics released by Government agencies • Business-related Government e-Services • Licences and permits based on relevant business needs • Frequently Asked Questions (FAQs) • How-To Guides: More than 150 How-To Guides, Checklists and Flowcharts to make it easier to apply for government assistance schemes, licences, permits, approvals and other registrations. • Case Stories • RSS Feed OPERATION AND MANAGEMENT • Managed by the government agency SPRING in close conjunction with 44 partners (including EDB, A*STAR, SPRING, MTI) • Available 24/7 • Phone hotline offers additional support • Constantly updated FAQ database SOURCE: SPRING SINGAPORE, Enterprise One Portal

  23. Enterprise One is the online portal for Singapore’s business community • Single web presence across all agencies and government departments • Sophisticated online help system and single helpdesk contact point • Complete listing of policies and incentives (over 70 schemes) • Questionnaire to identify government schemes applicable to your business SOURCE: Enterprise One

  24. Potential lessons from Singapore for Northern Ireland • Foresight in economic policy making and long term approach of EDB in measuring FDI benefits • Relentless focus on creation of a business-friendly environment through “One-stop-shop” government agencies (EDB, International Enterprise, Spring), e-services and online portal for businesses • Performance-oriented agency attracting FDI with incentive schemes for talent recruitment, development and retention based on financial and non-financial incentives SOURCE: Literature review; press search; expert interviews

  25. These are the six cases that have been examined in detail Singapore • Success founded in establishing pro-business environment and aggressively pursuing FDI through a high performance agency Republic of Ireland • Built on low tax rate with flexible approach to attract FDI, bring in anchor investors and move up the value chain Costa Rica* • Targeted approach to capturing FDI through independent marketing agency Finland • Built R&D capability around Nokia as an anchor and successfully developed Sweden • Deregulation and creation of pro-business environment to drive competition and productivity Oregon • Built on anchor firms and proximity to West Coast to create hot spot for entrepreneurial spinoffs * Originally filtered out on income SOURCE: Literature review; press search; expert interviews

  26. Contents 1 • What we have done 2 • Discussion of case studies • Singapore • Republic of Ireland • Costa Rica • Finland • Sweden • Portland, Oregon • Others 3 • Implications for Northern Ireland

  27. Introduction to the Republic of Ireland Background Key achievements • Small country on edge of Europe • Population 4 million • Total land area 82,000km2 • Member of the EEC/EU since 1973 • Member of single currency zone (using the Euro) since 1999 • Youngest population in Europe • GDP per capita trebled between 1985 and 2008 • Strong productivity growth of 3.2% between 1990 and 2007, as opposed to 1.3% in OECD • Rapid FDI growth, of 10x EU 15 average, resulting in 4x UK FDI level as % of GDP by 2003 • Attracted major global multi-nationals in pharmaceuticals and IT, including Intel, Microsoft, Google, Pfizer and Wyeth SOURCE: Literature review; press search; expert interviews

  28. Why are we interested in Ireland? • Relevance? • Applicability? ü • Small? • 2007 GDP 380% of NI • Aspects NI could learn from • Long term focus on targeting anchor investors • FDI-driven growth performance • Entrepreneurial as opposed to compliance oriented agency • Open? • 2007 Exports 80% of GDP ü • Developed? • 2007 GDP per capita 140% of NI ü • Aspects NI is unlikely to learn from • Ability to use corporate tax rate to encourage inward investment and establishment of profit centres • Successful? • Achieved 3.2% productivity growth from 1990-2007 compared to UK average of 2.0% ü SOURCE: Economist Intelligence Unit; UNESCO Statistics; World Bank “Ease of doing business” reports; IMF International financial statistics; WMM/Global Insight; World Economic Outlook database; IMD World Competitiveness online

  29. Early on, the Republic of Ireland succeeded in attracting anchor companies • 1985: Microsoft founds first European base in Ireland 1989: Intel establishes first operations in Ireland – both after many years’ cultivation as IDA’s policies became more focussed on key targets • 1992: Culliton report published encouraging increased focus on areas increasing productivity, reduced reliance on grants and a bringing together of multiple factors/institutions across the economy (e.g. role of education, infrastructure) • 1999: Euro established including RoI • 2003: 12.5% corporate tax rate established on universal basis • 1970: • Pfizer sets up its first manufacturing plant in Cork harbour • 2003: Google invest in RoI • 1985 • 1995 • 2000 • 2005 • 1970 • 1998-1991 • Creation of “Programmes for Advanced Technology” to support key areas of R&D through partnership between government, business and universities • 1987: Ratification of the Single European Act to join the Single Market • 2000: Technology Foresight fund and Science Foundation Ireland created giving €646m over five years to R&D • 1973: Ireland joings the European Economic Community • 1994: Enterprise Ireland spun off from IDA to increase focus on developing indigenous firms SOURCE: Literature review; press search; expert interviews

  30. , The Republic of Ireland’s productivity growth has been driven by FDI • FDI • Exports • Total stock inward FDI, % GDP • % GDP, excluding tariffs • Productivity • RoI • RoI • UK • UK • R&D • Productivity growth • % GDP, all R&D • Change in real GDP per employed worker, % p.a.* • UK • RoI • RoI • UK * 10-year rolling average SOURCE: WMM / Global Insight (GDP, exports, productivity); OECD (R&D expenditure); IMF

  31. The Republic of Ireland was successful in attracting FDI combining a customer-oriented agency with attractive financial incentives Moved early on FDI and focussed on attracting key anchors • Ireland focussed early on FDI and maintained this focus despite growing calls to provide more support to indigenous firms, which meant it was able to attract key anchor investors early on (Intel, Microsoft) and establish itself in the FDI market • Key anchor investors were pursued over very long periods (10 years plus) and the IDA dedicated high levels of resource to attracting them (e.g. interviewing 300 Irish semiconductor engineers working abroad within 5 weeks for Intel) Overall economic system aligned to attract the right investment • Long term success of the Republic as a destination for FDI has required an increasing focus on R&D support and building collaborative research projects (for example with government support of up to 80% for R&D expenditure carried out in partnership) • Skills have also been aligned to investor needs, with colleges creating new courses specifically to meet local investors’ skills gaps Low corporation tax combined with EU membership • The Republic of Ireland was able to build on its strength as an EU member with low corporation tax rate to encourage MNCs to establish their European base in the Republic and to book profits there Dedicated, dynamic investment agency • The IDA, despite being a government agency, has developed its own, customer-focussed culture based on pride in attracting companies to Ireland and respect from across the political system • Culture is focussed on “seizing opportunities” and “creating jobs” which has helped gain political alignment • The IDA’s customer-focussed culture and risk-taking of employees has been enforced by staff being measured based on outcomes of work rather than targets • Technologists have been recruited to enhance capability to attract R&D intensive firms SOURCE: Literature review; press search; expert interviews

  32. Attracting and embedding FDI in the Republic of Ireland • Government agency with considerable autonomy • 16 international offices situated across 4 continents • 10 offices across the Republic • 2007 turnover of €180m, • Of this, €80m was given to firms in grant funding • National advisory body for Enterprise and Science • Policy advisory body in the Department of Enterprise, Trade and Employment • Sits at heart of national-level planning of enterprise and science strategy • - • Promoting the indigenous business sector, with a particular focus on exporting firms • Government agency with • 31 international offices in 24 countries, with support services provided in another 39 countries • 2007 turnover of around €270m, of which €150m was spent on financial support to industry • Attracting and supporting world class scientific researchers in the Republic of Ireland • Public organisation responsible for distributing research grants to recruit and retain research groups • Awarded €157m in grants in 2007 Institutions in the Republic of Ireland GOAL STATUS FUNDING SOURCE: Literature review; press search; expert interviews

  33. The IDA helps attract investors to the Republic of Ireland SCOPE AND APPROACH • Created in 1949, state-sponsored agency that is funded through a government grant under the National Development Plan • Focused entirely on attracting and embedding FDI to the Republic of Ireland (incl. marketing the Shannon Free Zone abroad) • 2007 turnover of €180m, of which around €80m was given to firms in grant funding • 16 international offices situated across the US, Europe, Asia and Australia, 10 offices across the Republic – 48% of projects in 2007 came from US companies • Initially the IDA initially was responsible for both the attraction of foreign inward investment and the development of indigenous firms; the spin-off of Enterprise Ireland from the IDA in 1994 was aimed at separating the development of indigenous firms (through Enterprise Ireland) from FDI activities. The separation was driven by a need for greater transparency of the different performance of the two sides and a perceived need for greater focus on indigenous firms • In 2007 26% of projects were with new clients • Identifies and builds long-term relationships with firms it wishes to attract to the Republic, and maintains an ongoing dialogue with companies. Opportunity-driven in its targeting • Builds on incentives including: • 12.5% corporation tax rate • 25% R&D tax credit applicable to R&D and buildings where at least 35% of activity is R&D • Grants to R&D (52%), capital (15%), employment (28%) and training (1%) that are capped overall on an amount per job and amount per unit capital basis • Is responsive to the needs of target firms. To “seal the deal” with Intel for example, the IDA interviewed 300 Irish engineers within 5 weeks who were living abroad and presented Intel a list of 85 qualified candidates • Follows a rigorous evaluation process for investment, taking into account cash flows to the state as well as broader economic benefits of the project. Algorithm updated constantly (e.g. in times of full employment, job creation of project is less important). • Purchases and develops Business & Technology Parks with (e.g.) broadband telecommunications network, on site childcare facility, new office & production buildings • Lobbies other government organisations on policies to support its mission, such as the maintenance of a low rate of corporation tax PROGRAMMES AND POLICIES ORGANISATION AND CULTURE • Highly entrepreneurial culture, with a pragmatic focus on “getting things done” within the overall grants cap rather than adhering to strict processes and rule • Staff are incentivised through strong mission and sense of purpose and through recognition of past success of IDA • Staff performance is measured on results rather than fix targets giving them more autonomy (no bonuses paid, public sector pay) SOURCE: Literature review; press search; expert interviews

  34. Structure of the IDA CEO • Total ~300 staff Business Development Marketing ~50 heads Marketing, Personnel and Org Dev Influencing agenda, planning and regions ~90 heads Corp Services • Structured by division, “hub of operations”, responsible for new and existing investors • Each division also paired with a region to ensure close connection • Staff lead identification of priority sectors/firms, negotiations with investors • Structured by region of the world • Staff make presentations, attend conferences, liaise with other Irish agencies overseas, monitor competitors • Works in partnership with skills development and R&D organisations to meet investor needs • Structured by region of Ireland • Staff refine regional messages, work with infrastructure providers, represent IDA on regional bodies • Includes property department that buys and sells property • Also contains Planning & Ecosystem division that develops IDA strategy • Handles communications, legal, IT, accounts etc As of 2006 SOURCE: IDA

  35. Enterprise Ireland is responsible for supportingindigenous firms • Enterprise Ireland is the government agency responsible for the development and promotion of the indigenous business sector • 31 international offices in 24 countries, with support services provided in a further 39 countries • 10 offices across Ireland • 2007 turnover of around €270m, of which €150m was spent on financial support to industry SCOPE AND APPROACH PROGRAMMES AND POLICIES • Increasing sales from exports (key priority) • Provides firms with customised support, • Helping new exporters validate market opportunities and secure first sale reference customers (EI initiated 7,724 client-buyer meetings in 2007, 405 large sales contracts signed with EI support) • Supporting clients in establishing an in-market presence and providing advice on acquisition and partnering strategies (83 international mentors appointed to provide expertise and advice to clients) • Support is primarily practical (export credit guarantees are provided privately by Irish Exporters Association) with the exception of the Going Global Fund launched in 2008– grants up to €50,000 to fund 50% of expansion costs given out competitively • Investing in research and innovation through multiple grants programmes including: • R&D fund supplies grants of up to €450,000 to fund up to 45% (depending on firm size) of R&D expenditure, with an additional 5% funding available for collaborative projects • Innovation Partnership initiative, funding 80% of costs for collaborative research projects led by HE institutions • Pilot funding for small R&D projects from firms who have not previously undertaken R&D • Competing through productivity • Training grants to support (e.g.) supply chain management training • Encouraging foreign firms to use indigenous firms as suppliers (use of local suppliers is never condition for FDI investment deals, e.g. through grant conditionalities) SOURCE: Literature review; press search; expert interviews

  36. Potential implications for Northern Ireland • Illustrates the potential benefits of a long term focus on FDI and attracting major anchor investors • Provides a possible institutional model in the IDA – closely linked to central government but with a sales-oriented culture and flexible mindset • Demonstrates some success in government R&D expenditure driving R&D excellence in the economy SOURCE: Literature review; press search; expert interviews

  37. Contents 1 • What we have done 2 • Discussion of case studies • Singapore • Republic of Ireland • Costa Rica • Finland • Sweden • Portland, Oregon • Others 3 • Implications for Northern Ireland

  38. Introduction to Costa Rica Background Key achievements • Central American country with borders to Panama and Nicaragua, coastlines with Pacific and Carribean sea • Capital: San Jose • Population 4.1m • Land area 51,100 km2 • Official language: Spanish • Constitutional democracy since 1953 • 4th country in Latin America based on the Human Development Index but 16% of population living below poverty line • Natural resources: coffee, bananas and other tropical plants • First country in the world to abolish its army • President: Oscar Arias 1986-1990 and 2006-present (Nobel Peace Prize winner) • Productivity grew by 2.5% between 1990 and 2000, as opposed to 1.8% OECD average • Growing higher value-add sector (high-tech, electronics) through attraction of FDI. 51 foreign companies operate in electronics sector in 2006 • Increasing enrolment of students in engineering and science degrees • Attracted major investors including Intel, GlaxoSmithKline, Procter & Gamble and Amazon to Costa Rica • Development of local supplier base and clusters around foreign companies through government programs SOURCE: Literature review; press search; expert interviews

  39. Why are we interested in Costa Rica? • Relevance? • Applicability? ü • Small? • 2007 GDP 110% of NI • Aspects NI could learn from • Focus of a small agency on selected sectors and priority companies where Costa Rica is competitive to attract FDI • Positive externalities on domestic economy by limited number of FDI investments • Open? • 2007 Exports 48% of GDP ü • Developed? • 2007 GDP per capita 46% of NI ~ • Aspects NI is unlikely to learn from • Use of special export processing zones as financial incentives to attract FDI • Workforce at very low cost • Relatively unproductive labour force in sectors with no/low FDI • Successful? • Achieved 2.0% productivity growth from 2000-2008 compared to UK average of 1.7% ü SOURCE: Economist Intelligence Unit; UNESCO Statistics; World Bank “Ease of doing business” reports; IMF International financial statistics; WMM/Global Insight; World Economic Outlook database; IMD World Competitiveness online

  40. Costa Rica’s strategy to attract higher value FDI was supported by strong leadership • Early 1980s – Costa Rica creates several Export Processing Zones (Zonas Francas) where importers can import inputs free of duties and are exempted of tax for 8-12 years • 1994 –Election of President Figueres gives new momentum to Costa Rica’s economic policy. Priority is shifted towards higher value add economic sector while deprioritising investments seeking low-cost manufacturing. • 1996 –FIAS report on competitiveness of Costa Rican electronics sector recommends pursuing FDI in sub-sectors requiring relatively high inputs of skilled labour: power technologies, PC cards and surface mount technologies, system integration technologies and call centres (to the electronics industry). • Today - Assessment of HC capabilities and existing private and public research in Costa Rica on which R&D intensive FDI can be built. Led by CINDE with other institutions. • . • 1990s • 1980s • 2000s • Early 1990s – CINDE loses part of US-Aid funding and has to focus efforts (higher value add) • 1995 – Active pursuit of Intel investment and involvement or President. Creation of “Intel task force”. • 1997 – 300m Intel Investment is secured • 1982 –Creation of CINDE as a non-profit, non-governmental agency by businessmen in collaboration with US-Aid to attract foreign investment to Costa Rica. 1984 – government acknowledges CINDE to be of public interest. Initial focus on a broad range of sectors • 2000 Creation ofPROVEE program aimed at developing local supplier base for foreign companies and creating linkages in the economy. • 2000 - Creation of R&D matching grants system Fondo de Recursos Concursables to develop Costa Rica’s focus on knowledge economy • 1996 – Creation of Procomer as government agency aimed at promoting exports SOURCE: Literature review; press search; expert interviews

  41. Costa Rica’s performance was driven by rapid growth in FDI and exports • FDI • Exports • Total stock inward FDI, % GDP • % GDP, excluding tariffs • UK • Costa Rica • Costa Rica • UK • R&D*** • Productivity growth • % GDP, all R&D • Change in real GDP per employed worker, % p.a.* • UK • Costa Rica • UK • Costa Rica * 10-year rolling average ** Recent fall in productivity may be due to falling agricultural productivity and dependence on performance of US economy *** Gaps in Costa Rican R&D Data sourced from WDI SOURCE: WMM / Global Insight (GDP, exports, productivity); OECD (R&D expenditure); IMF, WDI

  42. What were the key success factors for Costa Rica? Identifying opportunities based on existing strengths • When losing competitiveness as a low cost manufacturer in the early 1990s Costa Rica made the conscious effort to understand its existing strengths and identify development opportunities • The FIAS study was commissioned to assess competitiveness and opportunities in the electronics sector, CINDE carried out significant market intelligence and identified market trends • Focus on building on existing strengths • Anchor companies: Use of Motorola, Intel for high tech sector, Baxter for medical devices for “reference selling”: CINDE refers to large companies on its website and provides details on “investment story”, gives possibility to talk to large investors in country • Existing human capital: Use of relatively skilled labour to build electronics/high tech sector; CINDE assesses available current and future capital and skill levels • Leverage quality of life: Marketing of political stability, democracy quality of life and proximity to the US Agency focus on a small set of sectors • CINDE adapted its 1997 strategy on recommendations of the FIAS study and its internal market intelligence and focussed on selectedsub-sectors • Services (Shared services, Advertising & Marketing, Software, Design) • Advanced Manufacturing (Telecommunications, Electric Assemblies, Electronic Components, Semiconductors, Engineering and Software, Consumer Electronics, Engineering and PCB Repair) • Medical devices • Strong focus: 29 out of 30 companies that invested in Costa Rica with CINDE support were in these sectors, 99% of employment created with CINDE in these sectors Strong leadership • President Figueres shifts focus to higher value add sector priority of economic policy • Intel investment: When CINDE’s focus allows Costa Rica to be on Intel’s long list, attracting Intel to Costa Rica becomes a government priority • Creation of an Intel task force includes Minister of Foreign Trade • President meets Intel team in person for 3 hours to discuss the project • Today: CINDE has Minister of Trade or President attend important meetings 3-5 times per year. Requests for “VIP” are informal and Minister and President are highly responsive SOURCE: Literature review; press search; expert interviews

  43. , Costa Rica has a set of institutions to support development ROLE STATUS FUNDING • Attracting investment to Costa Rica • Policy advocacy to create a business friendly environment for investors • Independent non profit, non-government agency • 30 employees, one international office in New York • Private. Originally from USAID, now partly from CRUSA foundation • Budget 2.2m USD • Services provided for free • Trade promotion and supporting exporting firms • Non governmental public agency, linked to the Foreign Trade Ministry (COMEX) • 5 offices in regions, 5 offices at major customs posts, 8 offices abroad • Government • Supporting SMEs and encouraging entrepreneurship • Part of Ministry of Economy, Industry and Trade • Government • Supporting technology start-ups and firms with high innovative content • ? Part of Ministry of Economy, Industry and Trade • Government • Financing R&D • Part of Ministry of Science and Technology • Government CONCIT SOURCE: CINDE, Procomer, Literature review

  44. CINDE is an independent, non-profit organisation SCOPE AND APPROACH • Independent non profit, non-government agency 30 employees International office in New York • Budget: 2.2m USD • Focus on promotion of sub-sectors where strong growth is expected: advanced manufacturing, medical devices, services • Constantly develops and refines sector focus. In 2008 orthopaedics and cardiology added as sub-sectors in medical devices. Aim to reach a mix of stable and volatile industries to improve stability of investments • Focus: Targeting of companies based on a list of potential investors (metrics are used to prioritise, based on match with strategy and investment potential). 50% of presentations are result of cold calls. In 2008 29 out of 30 new investments that had CINDE support and 99% of employment created through these investments were within target sectors. • Trade fairs and investor targeting is limited to identified subsectors • Policy advocacy work in collaboration with Presidency to create favourable domestic environment to retain FDI. • After-care: Assistance in establishment process and “after-care” to boos re-investment that is higher up in value chain. • Relationship are cultivated “forever” with potential investors PROGRAMMES AND POLICIES • Two key service areas for potential investors • Information on Costa Rica (free of charge and highly customised) • Preparation of detailed and customised investment agendas • Meetings with service providers, Government organisations, universities, real estate brokers, attorneys, accountants, industrial parks, and office parks. For large companies President of Minister of trade attend whenever possible • Support to foreign companies post-establishment in the country • Policy Advocacy to improve business climate in Costa Rica (CINDE-supported initiatives are training programs for bilingual workforce, technical training, ease of doing business: improvement in administrative processes) • After-care for businesses: help through establishment process, connect with institutions (universities to secure human capital in the long run), encourage re-investment (e.g. Procter&Gamble upgraded from a shared service centre to its Business Transformation Centre) • Performance culture created through incentives. Financial incentive package (private sector pay levels) for employees depends on: • Internal evaluation: performance against agreed annual targets • External evaluation: performance assessment by companies served in investment process (detailed survey) • Credibility of institution: Independence, stability and success in attracting FDI isolates CINDE from political pressures but creates strong links to Presidency and Ministry of Trade • Ability to gain leadership support: Minister of Trade and President highly responsive to CINDE’s request to attend investor meetings “We ask them and they come unless they have a major crisis to solve.” ORGANISATION AND CULTURE SOURCE: CINDE, Expert Interviews

  45. CINDE Board • Investment promotion department • Investment Intelligence • “After-Care” department • International relations CINDE – Organisation Status : Private. Independent, recognised of public interest to Costa Rica. Funded by endowment fund. Head of CINDE is former Minister of Trade • Investment promotion activities (targeting, presenting) • Identification of new sectors and niche markets • Analytics and statistics • Response to customised request for potential investors • Policy Advocacy – cooperation with Presidency to improve business climate • Establishment process • Inter-institutional coordination • After-care process to promote re-investment • Contacts with potential investors abroad • Media relations • Public relations to public and private sector (e.g. consultants, research institutes) • Identification of conferences CINDE should attend SOURCE: CINDE, Expert interview

  46. PROCOMER provides practical support to exporters • Run as non-governmental public agency linked to the Foreign Trade Ministry COMEX • International offices in New York, Miami, Houston, Los Angeles, Mexico, Guatemala, Panama, Puerto Rico, Dominican Republic, China, Germany, Chile • Operates the Free Trade Zones (zones of temporary tax exemption for large investments by exporting companies requiring $150m in fixed asset investment if physically inside the zone or $2m if physically outside the zone) SCOPE AND APPROACH • Training support to exporting firms • Runs programmes on trade logistics and to improve trade capacity • Set-up of meetings with potential importers (e.g. provides addresses, phone numbers, schedules meetings) in market of interest • Trade promotion for Costa Rica • Organises participation in trade fairs etc; combining this with training and support for firms, e.g. exporters are offered lectures and fora on specific topics (negotiation, getting to know the market, access standards) one week prior to an event where they will be meeting a group of buyers • Organises market visits for groups of exporters, with market studies are offered to provide participants with data about the region they will visit in order to plan their negotiation strategies prior to travelling and their subsequent sales follow-up. • Market and trade research • Market research on sectors and products in specific markets (accessible online) for exporters • Logistical support with exporting and investment • An online-portal (SIVUCE) for exporters to provide a “one-stop shop” for export administration and documentation • Manages the 12 Free Trade Zones in Costa Rica in collaboration with COMEX • Close collaboration with CINDE on FDI investments in Free Trade Zones PROGRAMMES AND POLICIES SOURCE: PROCOMER, expert interview

  47. PROCOMER has recently expanded to include support to suppliers of MNCs through PROVEE • PROVEE (Supplier Development Project for High-Technology Multinational Companies) • Mission is to facilitate business deals between export companies and those with export potential and domestic suppliers, thus contributing to enhance value added from Costa Rican industries, as well as the country's global competitiveness. • 186 MNCs and >250 suppliers work through PROVEE • Focuses on three sectors: • Communications & Information Technology / Electrical - Electronics / Metal Mechanics Sector • Medical / Chemical / Pharmaceutical Sector • Agribusiness / Textiles / Other Sector SCOPE AND APPROACH • Business-making • Potential suppliers can register online • PROCOMER checks suitability and quality of suppliers and connects them with MNCs • Introduction of suppliers identified and analysed by Costa Rica Provee. TNCs are given the suppliers' diagnoses carried out by the Management Office. • After-care • Issue resolution • Training • Manufacturing and supply chain training for suppliers • Close collaboration with government institutions and CINDE in the PROVEE program, e.g. CINDE provides a potential investor with a list of qualified local suppliers PROGRAMMES AND POLICIES SOURCE: Procomer

  48. , Multiple organisations work to support R&D and enterprise • DIGEPYME Costa Rica (Support to SMEs) is an entity of the Ministry offering different types of support programs to SMEs, in cooperation with other ministries and with national banks • BN PYMEX program to for exporting SMEs (in cooperation with national development bank). 140 offices in Costa Rica as “one stop shops” • Technical assistance and market research, Logistical support, International payment support, International finance, Loans • DIGEPYME Costa Rica (Support to SMEs) (cont.) • CAAP-IMPROSA in cooperation with Banco Improsa offers financial services to SMEs. Legal, accounting, tax services, help with financial transaction, HR and financial advisory services. • FODEMIPYME Development fund for SMEs • Provides guarantees for SMEs who seek loans • Provides credit to SMEs who want to invest in R&D, technical development, research and training • CIE-TEC Enterprise Incubator of the Technology Institute of Costa Rica (in collaboration with the Ministry of Science and Technology). Focus on technology start-ups and firms with high innovative content • Provides management, communication and other training • Access to financing from international sources and national projects (World Bank, Proyecto Mermas, connected ministries) CONICIT • PROPYME (administered by CONICIT) • Financing of research to develop new products, technology, processes and patents • 80% of R&D costs covered, non reimbursable • Financing from government budget on demand • FORINVES (funded and administered by CONICIT • Venture fund, non-profit for investment in research and innovation. • Clear eligibility criteria for grants (academic qualification, past achievements, project, link to research institutions) SOURCE: Government websites

  49. What were the key success factors for Costa Rica that Northern Ireland could learn from? • Success of small agency with limited resources in attracting FDI through clear focus and support from senior leadership • Beneficial use of small number of foreign investors (Motorola, Intel) to create benefits in the economy and use of “reference-selling” to attract further investments • Policy focus on embedding FDI through close collaboration of institutions and agencies in creation of a local supplier networks SOURCE: Literature review; press search; expert interviews

  50. Contents 1 • What we have done 2 • Discussion of case studies • Singapore • Republic of Ireland • Costa Rica • Finland • Sweden • Portland, Oregon • Others 3 • Implications for Northern Ireland

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