Ireland’s productivity levels have grown to 40% above Northern Ireland’s in the last 20 years, a report has found.
It also revealed that export intensity is an important factor in driving economic productivity.
The Economic and Social Research Institute think-tank, which produced and published the report in partnership with the Taoiseach’s Shared Island Unit, examined trends in productivity across both regions.
Productivity is measured as the gross value added per worker.
Among the report’s main findings were that productivity levels in the two regions were similar in 2000 but in the past two decades they have diverged, with the Republic’s increasing and Northern Ireland’s “trending downwards”.
As of 2020, Ireland’s productivity levels were 40% higher compared to Northern Ireland.
In 17 sectors for which there is comparable data, productivity levels here “noticeably exceed” Northern Ireland’s in 14 sectors, with large gaps in administrative and support services, finance and insurance, legal and accounting, and scientific research.
Northern Ireland has an advantage in electricity and gas supply, as well as construction.
The ESRI’s model shows Irish productivity increases with the employment share of educated workers and levels of investment.
For example, if there is a 1% increase in the share of graduates employed, it generates a 1% increase in sectoral productivity.
But the ESRI said there was “no evidence” of a similar link between a range of factors and Northern Ireland’s productivity.
One of the report’s authors, Professor Adele Bergin, said: “While some existing studies have compared Northern Ireland’s productivity to that of regions in Great Britain, we believe that this is the first comprehensive study to compare productivity in Ireland and Northern Ireland. The research shows a widening productivity gap between Ireland and Northern Ireland.”
The second author of the report, Professor Seamus McGuinness, spoke at a recent Belfast event organised by pro-Irish unity group Ireland’s Future.
At the event, he said that gaps in education are among the factors that are driving Northern Ireland’s “lower relative productivity”.
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