Worrying trend in the North West’s assisted jobs performance

The Annual Employment Survey for 2014  (PDF 0.25Mb) (formerly the Forfás Annual Employment Survey) was published a few weeks ago by the Department of Jobs, Enterprise and Innovation. This data counts agency assisted employment (jobs in companies which have received assistance from Enterprise Ireland, IDA or Udarás na Gaeltachta) and covers the 10 year period 2005-2014. We’ve examined the 2013 report at regional and county level in earlier posts.

In 2014 there were a total of 319,597 agency assisted permanent full-time jobs in the country, up 5.1% from the previous year. These were divided almost evenly between Irish (158,829) and foreign (160,768) owned companies, both of which experienced similar growth since 2013 (5.2% and 4.9% respectively). There were an additional 42,818 agency assisted temporary or part-time jobs.

Every region experienced growth in assisted jobs in 2014. The report contains a section on regional employment trends, which reviews trends for the Border, Midlands and West (BMW), South and East (S&E) and Dublin regions, but the smaller scale regional data contained in the Appendix (PDF 0.3Mb) tells a more interesting story. Particularly as it separates the North West and North East that are usually combined in the diverse Border region.

North West has largest fall in assisted jobs 2005-2014

Over the 10 years 2005-2014 the North West experienced the largest decline in agency assisted jobs of any region in Ireland. Total assisted jobs (both permanent and temporary) fell by -18.2% in the North West (Fig. 1). This was considerably greater than in the second highest, the Mid West, where they fell by -11.9%. The percentage decline in the North West was almost identical to the percentage increase experienced by Dublin over the same period (+18.0%).

The North West’s poor performance is due to the severity of its decline during the recession coupled with slower recovery.  Between 2007 and 2010 the North West had a -17.1% decline in total assisted jobs compared with the -12.2% national average. Then in the most recent year (2013-2014) it had the smallest increase in total assisted jobs of only 2.3%; compared with a national average of 4.5% and over 6% growth in some regions. In the previous year’s report, the North West had similar low growth of just 2.2% between 2012 and 2013, although at that time the South East and Mid West were lower. Both of these regions experienced a strengthening recovery in 2014.

Fig. 1: Percentage change in total assisted employment by region, 2013-2014 and 2005-2014. Source: DJEI (2015), Annual Employment Survey 2014, WDC analysis

Fig. 1: Percentage change in total assisted employment by region, 2013-2014 and 2005-2014. Source: DJEI (2015), Annual Employment Survey 2014, WDC analysis

North West’s Irish owned sector performing extremely poorly

The main driver behind the North West’s poor performance is the Irish owned sector. Irish owned assisted jobs in the North West fell by -20.7% between 2005 and 2014 (Fig. 2). This was substantially higher than the next largest decline of -6.7% which occurred in the West. In fact the only other regions with fewer Irish owned assisted jobs in 2014 than in 2005 were the South East (-6.3%) and the North East (-2.7%). Irish owned assisted jobs in the North West only grew by 1.9% between 2013 and 2014, compared with the 5.2% national average.

The North West has not performed well in the foreign owned sector either. The North West’s -14.9% decline in foreign owned assisted jobs over the 10 years was considerably worse than the national performance (5.1% growth). However several other regions had even greater declines (Mid West, Mid East and Midlands), showing the North West’s relatively better record in the foreign owned sector.  The North West’s Irish owned sector, and its very slow current recovery, seems to be at the heart of the region’s weak performance.

Fig. 1: Percentage change in total assisted employment by ownership and region, 2005-2014. Source: DJEI (2015), Annual Employment Survey 2014, WDC analysis

Fig. 1: Percentage change in total assisted employment by ownership and region, 2005-2014. Source: DJEI (2015), Annual Employment Survey 2014, WDC analysis

West’s Irish owned sector also struggling

Turning to the West region, it has performed well in recent years, with the third highest increase in foreign owned assisted jobs between 2005 and 2014. However, similar to the North West, the Irish owned sector is not experiencing much recovery with just 1.6% growth between 2013 and 2014 (the lowest of any region) leading to the West experiencing the second poorest overall jobs growth of just 2.4% in 2014.

There seems to be a fundamental issue with the North West and West’s Irish owned assisted sector not benefitting from the current upturn in the economy. The divergent performance of the Irish and foreign owned assisted sector in the Western Region, and the fact that the region’s jobs recovery is relying far more on the foreign owned sector than elsewhere, was highlighted in the WDC’s 2015 report Trends in Agency Assisted Employment in the Western Region  which analysed 2013 data. The 2014 figures indicate that this trend has intensified even further.

The new Action Plan for Jobs for the West and Border regions, due to be published shortly, will need to contain very specific actions and targets to stimulate growth in indigenous exporting companies if this trend is to be reversed.

Pauline White

Next Generation Broadband Deployment – Lessons from Australia

As the Department for Communications, Marine and Natural Resources in Ireland prepares the National Broadband Plan Intervention Strategy, it is useful to consider some lessons which can be learned from elsewhere. The experience of Australia is instructive, in part illustrating some of the pitfalls.

  1. Ambitious targets with ambitious deadlines

In 2009 the Australian Government announced an ambitious programme to deliver fibre to the premises (FTTP) to 93% of Australian premises (residential and commercial). This was a very ambitious target given the country’s very low population density (3% compared to Ireland’s 67%). The remaining 7% of the population, in the very remote parts of Australia, were to be served by satellite and wireless technologies.

The original deadline for completion was within six years (2015). By the end of 2013 just 3% of premises were connected.

Following an extensive review in late 2013, a change in direction and new targets were announced[1].

  • Instead of 93% FTTP, it is more likely to be 22% FTTP, the exact technology (and therefore the actual %) will be determined on area basis.
  • Fibre to the node (FTTN) to 71% approximately of premises, with the remaining 4% and 3% fixed wireless and satellite respectively.
  • Lower speeds (50Mbps rather than 100+ Mbps download) resulting from the higher rate of FTTN connection rather than FTTP.
  1. Increasing costs – to the exchequer

The original plan in 2009, was forecast to cost AUD $44 billion (Australian dollars). In 2013, the estimated cost increased to AUD $73 billion – 65% greater than the original forecast.

  1. Higher costs – to the consumer

There is concern that the retail costs will be much higher than the cost of services currently available, estimated at an extra AUD $43 per month[2]. This will influence the take-up of next generation services. Broadband is now accepted as a basic utility and access to it is considered necessary for participation in society and the economy. However as the recent water protests in Ireland demonstrate, basic utilities should not be expensive. The concept of ‘Willingness to Pay’ is a key element of the pricing structure.

From an Irish perspective, it will be interesting to see from the trials of next generation broadband (in Cavan and Mayo for example), to what extent consumers will revert to a basic service at a cheaper price rather than paying extra for a premium product. It is also likely that the consumers in the pilot areas will be more receptive to paying for a premium service which they currently access, compared to those yet to experience the benefits of the premium next generation service.

  1. What are consumers looking for?

There is a declining value to additional broadband speeds. Part of the Australian review included an assessment of the growth in demand for faster broadband speeds. A key finding is that while the Willingness to Pay for speed may grow rapidly at low speeds (less than  40 Mbps download), for most people the Willingness to Pay is not expected to grow at all for high speeds (greater than 50 Mbps)[3].

A related finding is that consumers would prefer an increase to their current speeds quickly, rather than to wait longer to gain a higher level of speed. The Australian Government are now looking at prioritising delivery to those areas which are poorly served and this is consistent with the findings of the Independent Review. http://www.nbnco.com.au/content/dam/nbnco2/documents/soe-shareholder-minister-letter.pdf.

In an Irish context an increase in speed for example from 5Mbps to 10 Mbps is worth more to consumers than an increase from 20Mbps to 25Mbps. The Australian experience also suggests it would be preferable to rollout delivery to those areas with poor and inadequate broadband first.

  1. Don’t play politics with important infrastructure

In Australia, the different ruling parties have taken different policy positions on the rollout of next generation broadband. A change of Government can (and has in Australia) led to a change in policy on delivery and this can create huge uncertainly for investors as well as consumers. Given the scale of investment, the deployment of next generation broadband will generally take many years and beyond the lifetime of one Government. It is therefore important that Government policy is well considered and implemented consistently and not compromised by the electoral cycle.

Deirdre Frost

[1] https://www.communications.gov.au/sites/g/files/net301/f/Cost-Benefit_Analysis_-_FINAL_-_For_Publication.pdf, http://spectrum.ieee.org/telecom/internet/the-rise-and-fall-of-australias-44-billion-broadband-project/

[2] https://www.communications.gov.au/sites/g/files/net301/f/Final_Ministerial_Statement.pdf

[3]  p. 16 https://www.communications.gov.au/sites/g/files/net301/f/Cost-Benefit_Analysis_-_FINAL_-_For_Publication.pdf

Women, men and the jobs recovery

In previous posts we’ve looked at the Western Region’s Labour Market and its Sectoral Profile, but how do these patterns differ by gender? Is the current jobs recovery impacting on men and women differently?

While jobs growth is underway in the country as a whole, as well as in the Western Region (though at a lower level), this has mainly been driven by growth in male jobs. Between 2012 and 2014 male employment in the rest of the state (all counties other than the seven counties of the Western Region) increased by 5.9% compared with 1.6% growth in female employment. In the Western Region over the same period, 2.9% growth in male jobs was in contrast to a -0.4% decline in the number of women at work. Women in general do not appear to be benefiting as much as men from the upturn in the labour market, and even more so in the Western Region. Why is this?

Jobs growth in sectors important for male employment, but decline in many female dominated sectors

Much of it stems from the sectoral jobs pattern and the relative performance of male and female dominated sectors. Fig. 1 shows the percentage of male and female jobs in each sector in the Western Region. Public and local services are the main areas of employment for women. The biggest gender difference is in Health and Social Work which accounts for 22% of women’s jobs compared with 4.3% of men’s. A total of 41.1% of working women in the region work in the predominantly public sectors (Health, Education & Public Administration). For men the figure is just 12.9%. Any reduction or lack of growth in public sector jobs has a far greater impact on women’s employment.

Accommodation and Food Service, ‘Other NACE Activities’, Financial, Insurance and Real Estate, and Administrative and Support Services also account for a greater share of women’s than men’s jobs. These are all predominantly local services which have been impacted by limited domestic demand.

Industry, Agriculture, Construction, and Transport and Storage are the most male dominated sectors. Industry accounts for twice as large a share of all male jobs as female. For the others, their share of all female jobs is very low. It is notable that the knowledge services sector of Information and Communication, often seen as a key future growth area, accounts for a far higher share of male than female jobs.

Fig. 1: Percentage of employment by sector and gender in the Western Region, Q1 2014 (Source:  CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Fig. 1: Percentage of employment by sector and gender in the Western Region, Q1 2014 (Source: CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Between 2012 and 2014 half of sectors (7 of 14) experienced an increase in employment in the Western Region (Fig. 2). Industry, Agriculture, Wholesale and Retail, and Accommodation and Food Service, the four largest male employment sectors, all experienced jobs growth. This contributed to the overall 2.9% growth in male jobs between 2012 and 2014.

However jobs in Health and Education declined in the region, while they rose in the rest of the state. Combined with declines in Finance, Other Services and Public Administration (all of which are more important female employers) these sectoral declines contributed to the -0.4% decline in women’s jobs in the region. The contraction of employment in Health and Education in particular has significant implications for women’s jobs, particularly in more rural areas of the region which have higher dependence on these sectors, partly due to limited alternative professional or clerical career opportunities.

Fig. 2: Percentage change in employment by sector in the Western Region and rest of the state, Q1 2012 to Q1 2014 (Source:  CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Fig. 2: Percentage change in employment by sector in the Western Region and rest of the state, Q1 2012 to Q1 2014 (Source: CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Lower female participation

A distinct gender pattern obvious from Fig. 3  and Fig. 4 is the higher proportion of men who are active in the labour force. The region’s male labour force participation rate is 65.2% compared with a female rate of 50.4%. The gender gap in participation rates narrowed during the recession as participation among men, particularly young men, fell very dramatically while female rates remained steady. However 2014 saw some widening of the gender gap again as the female rate declined and the male rate rose. The weaker recent female jobs performance may be contributing to declining female participation in the labour market.

Fig. 3: Economic status of Western Region’s male population aged 15 years and over, Q1 2014 (Source: CSO, Quarterly National Household Survey, Q1 2014, Table 1. Special run)

Fig. 3: Economic status of Western Region’s male population aged 15 years and over, Q1 2014 (Source: CSO, Quarterly National Household Survey, Q1 2014, Table 1. Special run)

Higher male unemployment but gap narrowing

Despite the stronger recent growth in male jobs, there is still a far greater number of unemployed men in the region than women – 26,200 compared with 14,400 (Fig. 3 and Fig. 4). The massive increase in unemployment from 2008 was initially concentrated among men, given the job losses in building and related sectors, before spreading more widely across the domestic economy leading to rising female job losses (though at a lower level).

The fall in unemployment since 2012 has been stronger among men than women; meaning that while the unemployment rates for both sexes have declined, the rate of decline has been stronger among men, narrowing the gender gap. In 2012 there was a 5.5 percentage point gap, which narrowed to 4.0 percentage points by 2014 when the region’s male unemployment rate was 13.3% and the female 9.3%. Unemployment continues to be higher among men but the difference is declining.

Fig. 4: Economic status of Western Region’s female population aged 15 years and over, Q1 2014 (Source: CSO, Quarterly National Household Survey, Q1 2014, Table 1. Special run)

Fig. 4: Economic status of Western Region’s female population aged 15 years and over, Q1 2014 (Source: CSO, Quarterly National Household Survey, Q1 2014, Table 1. Special run)

Note: The percentages refer to the share of the adult population in each category. Therefore the percentage unemployed is not the same as the unemployment rate which refers to the number unemployed as a percentage of those in the labour force and not of the entire adult population.

Greater part-time working among women

The other key feature of Fig. 3  and Fig. 4 is the far greater share and level of part-time working among women. In 2014 almost twice as many women (52,600) as men (27,500) in the region were working part-time. As a proportion of total employment this was 37.4% of all working women compared with 16.1% of working men. A key aspect is the extent to which part-time working is by choice or involuntary. If a person would prefer to be working full-time (if a full-time job were available) they are considered to be part-time underemployment. For men who are working part-time, 40% are underemployed but for women it is 27%. The extent to which women choose part-time work is very often related to greater caring responsibilities and the availability (or lack) of appropriate and affordable care provision.

For both men and women the share working part-time is higher in the Western Region than the rest of the state. In the case of women, part-time working in the region has increased since 2012 (rising from 35.3% to 37.4%) while it has remained unchanged for women in the rest of the state and declined slightly among men in the region. Not only has total female employment in the region declined since 2012, but a greater proportion of those who are working are working part-time.

This analysis raises serious questions in relation to not only the spatial pattern of the current jobs recovery but also the gender pattern. Women in the Western Region appear to be experiencing the poorest jobs recovery; compared with men and also with women living elsewhere. The concentration of female jobs in public services and the recent employment declines in these sectors in the region seems to be one of the main reasons, a trend that requires further investigation.

Pauline White

Next Generation Rural Broadband – When and How Much?

On the 11th May, WDC attended the official launch, by An Taoiseach Enda Kenny T.D. and Ministers for Communications and Rural Affairs, of eircom’s Fibre To The Home (FTTH) rural broadband trial in Belcarra, County Mayo. This trial offers broadband speeds of up to 1Gb/s (1,000Mb/s) to rural residents and businesses and demonstrates the value of a fibre to the premises solution.

This is a far cry from the very basic broadband service which was made available under the State supported National Broadband Scheme (NBS) which in theory delivered up to 10Mb/s, but for most users, much less than this.

For most rural residents still trying to survive with basic, intermittent and inadequate broadband speeds, the announcement of a service delivering 1,000Mb/s in a rural area, must seem both frustrating and promising at the same time.

The Government have committed to a basic minimum of 30 Mb/s to all citizens under the National Broadband Plan. However rollout under this state funded scheme has yet to start, with the competition to award the tender to the successful applicant(s) yet to take place. Rollout will not commence until 2016, and all citizens are to be served by 2020.

A few days later, an Taoiseach and Minister for Communications unveiled another fibre to the building project, this time through the joint venture between ESB and Vodafone, called Siro. Siro aims to be Ireland’s first 100% fibre-to-the-building broadband network. This will focus on delivering fibre to the home to fifty regional towns across Ireland.

While both eircom and ESB/Vodafone are making commercial investments in fibre based solutions to urban centres, they are both positioning themselves as the preferred bidder to deliver on the planned Government funded National Broadband Plan to rural areas which will deliver the minimum speed of 30 Mb/s.

These announcements raise interesting questions for the Government funded scheme. While 30 Mb/s is the minimum target for all users, the pilot demonstrates that technically 1,000 MB/s can be delivered to very rural communities. The fibre to the home rural pilot raises the bar as to what speeds might be possible in rural areas. However these will not be commercially funded services and will require state support. The cost of such a fibre based solution and how much will be borne by the state is not clear.

The WDC welcome the developments delivering fibre based solutions to regional and rural locations. However key questions for users have yet to be answered such as when exactly will it be delivered? What speeds are likely to be available in rural areas (it is recognised that 30Mb/s is the minimum) and how much will it cost to fund?

Until the new services are delivered, businesses and citizens will continue to work with inadequate broadband, frustrated in their capacity to communicate with clients and suppliers alike and hampered in their ability to access online services. The priority now is to start rollout under the state funded scheme as soon as possible.

Deirdre Frost

How’s life in our region?

How is life in the Border, Midland and West Region? How does it compare with that in other similar regions in Europe and elsewhere? A new tool can help answer these questions.

The OECD has been working on a tool for measuring regional well-being using indicators that take account of more than economics and material conditions and include indicators of quality of life. The OECD Regional Well-being web tool shows the factors contributing to well-being in different regions and allows us to compare our region – the Border, Midland and West [1]  with 361 other OECD regions based on nine topics central to the quality of our lives.

Other tools measuring quality of life (such as the CSO Regional Quality of life in Ireland and the Gateways Development Index) , are already available and are useful for comparing the situation within Ireland, but the OECD index is particularly useful for transnational comparisons.

What’s measured?

The tool uses nine different measures dimensions of well-being (Income, Jobs, Housing, Education, Health, Environment, Safety, Civic Engagement, and Accessibility of Services). This provides a new way to compare a range of factors across OECD regions[2]. The dimensions chosen are all important to quality of life in the OECD regions but because of the need to use comparable data some of the indicators are very limited. This can be seen in Figure 1 below.

The tool and set of indicators provide a common reference for regions to develop their own metrics of well-being and to consider the most appropriate areas of comparison for their own areas. While the indicators used are limited they can help to benchmark the relative position of a place and see how life in the region compares to that elsewhere, where a region has advantages and what aspects of material well-being and quality of life should be targeted for improvement. It also allows for comparison over time.

Figure 1: Topic Indicator Overview

OECD tool indicators

Source: www.oecd.org/regional/regional-policy/website-topics-indicators-overview.pdf

The regional well-being tool provides both a score for each topic and the percentile position of each region on that topic. Often what appears to be a high score may not translate into a high percentile rating because of the wide variation among regions. Similarly, as for Income (discussed below) a low score can still be associated with a good percentile rating.

The limitations of the indicators are, however, clear. For example, Housing is a broad concept but the indicator used is only based on the number of rooms available to occupants, while Access to Services is only measured by access to broadband, and safety relates only to violent death. Nonetheless, it is useful to see how we are doing and how we compare with other similar regions, and it is to be hoped that in the future more information will be added providing a broader base for comparison.

 

How is life in our region?

The tool does not provide an overall score for each region but it illustrates the different strengths and weaknesses of each region (See Figure 2)[3].

Material conditions

  • The BMW region scores highly (7.1) on Housing (which is measured by number of rooms per person) which puts it in the top 26% of OECD regions. Rural regions are more likely to score highly in this indicator, given the lower cost of space compared to city and suburban areas.
  • In contrast the region scores poorly on Jobs (3.0) and is in the bottom 12% of OECD regions for this indicator. The Jobs indicator is based on the employment rates (58.2%) in 2013 and the unemployment rate (15.5%) in 2013.
  • The Income score for the BMW region is also relatively low (4.3) but the region is in the top 51% of OECD regions with an income of $16,219[4] in 2011. This is because of considerable variation in Income levels among OECD regions[5] and so even though the BMW is in the top half of regions for income, the score is relatively low because of the significantly higher incomes in some regions.

Figure 2: Border, Midland and West Region Well Being Index

bmw hows life crop2

Source: http://www.oecdregionalwellbeing.org/region.html#IE01

 

Quality of life:

  • The BMW performs very well on Environment (based on an air pollution indicator) with a score of 9.0 and puts the region in the top 12% of OECD regions.
  • One of the region’s highest scores is for Safety (8.7) where the BMW is in the top 49% of regions. Safety is based on the homicide rate per 100,000 people (1.4 for the region).
  • The BMW scores 7.4 for both Education and Health, and this score puts the region in the top 39% for Health (based on mortality (8.0 deaths per 1,000) and life expectancy (81.1 years)) and the bottom 44% for Education (based on the share of the labour force with at least secondary education (77.2%)).
  • The region is in the top 43% of OECD regions for Civic Engagement (based on voter turnout, 70.6%) with a score of 6.1.
  • Finally, for access to services, which is based only on households with Broadband access (58.7%) the region is in the bottom 27% of OECD regions.

How do we compare?

The main benefit of the tool is ease of comparison with other OECD regions. The tool itself provides an automatic comparison with regions suggested as having similar well-being. The regions suggested by the tool as scoring similar to the BMW are: North East England; Cantabria in Spain; Lisbon in Portugal; the North Island of New Zealand. These can be seen on the BMW page of the tool linked to above.

However it is more useful to compare our region well-being with that in other similar regions rather than based on well-being scores, so four European regions and four OECD regions are included for comparison here. The regions were selected as having similarities with our own BMW region, being maritime and agricultural regions, relatively remote from the main cities or centres of power, and located in temperate climates.

These characteristics mean the regions are often similar in terms of their high scores for Environment, Safety and Housing, given that they are rural regions with less pollution, less violent crime and larger houses. These similarities are interesting, but the differences in other factors (for example jobs and incomes, or access to services (broadband) or health vary significantly and are the result, at least in part, of policy decisions in and for that region. It would be useful, in future, to try to understand the policy decisions and regional characteristics which give rise to the differences in the scores and see what we can learn from them.

It is important to remember that the types and size of the regions selected can influence the areas they score highly, as can rurality or the inclusion of major urban centres.

Comparison with European Regions

Four European regions (NUTS 2) are shown below for comparison (North Jutland, Denmark; Brittany, France; Galicia, Spain; Northern Ireland, UK. See Figure 3). All score well on safety, and on environment, with more variability on the other topic areas. Access to services, which means access to broadband, is interesting given the rural nature of these regions. Both North Jutland and Northern Ireland score 10.0 with 86.7% access in North Jutland and 87% access in Northern Ireland. In contrast, only 59.3% had access to broadband in Galicia. This compares with 58.7% in the BMW.

Brittany and Northern Ireland score relatively well on both jobs and income, and Northern Jutland performs well on jobs but is weaker on income. The BMW was weaker on jobs than either Brittany or Northern Ireland but performed better than Northern Jutland and Galicia on income

Figure 3: Comparison of scores in four selected European regions

North Jutland hows life crop Brittany hows life crop
North Jutland, Denmark Brittany, France
galacia hows life crop NI hows life crop
Galicia, Spain Northern Ireland, UK
Source: http://www.oecdregionalwellbeing.org/

Comparison with selected OECD Regions

Looking further afield, four other OECD regions (New Brunswick, Canada; Tasmania, Australia; Hokkaido, Japan; South Island, New Zealand) with similar characteristics to the BMW are shown below (Figure 4). Again there are high scores for Safety and Environment (except for Hokkaido) and broadband is more variable here, though none of these regions are as good as the better European ones. Hokkaido has the same level of broadband (58.5% of households with access) as the BMW scoring 5.8. All of these regions perform better than the BMW on jobs, with Tasmania doing best, while South Island and Hokkaido both had high job scores with Hokkaido in the top 16 % of OECD regions and South Island in the top 7%. The regions performed similarly or better than the BMW on incomes (Hokkaido and South Island are slightly lower than the BMW). All regions except Hokkaido also achieve high housing scores.

Figure 4: Comparison of scores in four selected OECD regions

 new brunswick hows life crop  tasmania hows life crop
New Brunswick, Canada Tasmania, Australia
 Hokkaido hows life crop  south island hows life crop
Hokkaido, Japan South Island, New Zealand
Source: http://www.oecdregionalwellbeing.org/

 

While there is variation in the scores of all of these regions, and they all have characteristics which will make them perform differently, it would be useful to consider how regions with similar characteristics vary and whether there are policies or actions that have improved their scores, and whether there are policy learnings from such regions, or different uses of natural resources that could be adopted in the BMW.

 

 

Helen McHenry

 

[1] Border, Midland and West is a NUTS 2 region and while larger than the seven county Western Region covered by the WDC it is the relevant region at this level as it contains all but one of the WDC’s counties.

[2] The most recent available data is used and this varies by year for different categories. The Tool is updated as new data becomes available. See www.oecdregionalwellbeing.org and click Download the data for full details.

[3] The same information is also available for the Southern and Eastern region (http://www.oecdregionalwellbeing.org/region.html#IE02 ), but because of the simplicity of the data used the tool is best employed making international comparisons.

[4] Disposable household income per head, US$, current prices, current PPP

[5] It varies from $51,677 (Australian Capital Territory) to $6,478 (Tarapaça, Chile)

Map from Atlas of the Island of Ireland

Balanced regional development – What does it mean?

It is clear that some regions in Ireland are growing much more than others (see Regions and Recovery post), with some even showing ‘growth strains’ (Dublin Economic Monitor, Issue 1, Spring 2015, p.4 ). It is also evident that while national economic growth is the main policy objective, policy on where this growth should occur is less clear. This lack of direction is compounded by the hiatus waiting for the development of a successor to the National Spatial Strategy (NSS) (2002), which is not likely to emerge until late 2016 at the earliest.

In the meantime, work to promote ‘balanced regional development’ continues with policy initiatives and actions being developed to spread growth and development more widely across the country, including the recently announced IDA Strategy 2015-2019  to boost regional FDI employment, along with the formulation of Regional

Action Plans for Jobs, and the implementation of recommendations from the Commission for the Economic Development of Rural Areas (CEDRA).  These initiatives seem to have largely emerged because of growing unease at the uneven spatial pattern of economic recovery.

However the term ‘balanced regional development’ is open to many interpretations and recent commentary provides evidence of that. Though the term is widely used, confusion or obfuscation over what is actually intended has not helped the debate on policy implications and direction, let alone any efforts at implementation. Indeed some might argue that the term is used because it is so vague.

In developing a successor to the NSS, it is important to learn from the experience since 2002 and while poor implementation is often cited as the main reason for the NSS’s limited success, lack of clarity on what ‘balanced regional development’ really meant was also a contributing factor.

A range of meanings

Balanced regional development was expressed as a key Government policy objective in the NSS 2002- 2020 published in 2002 and was a key objective of the National Development Plan 2007-2013 (2006). Though balanced regional development became an important government policy, it was not clearly or consistently defined and a range of interpretations and meanings were evident.

In 2002 the NSS stated that

‘In order to achieve more balanced regional development, a greater share of economic activity must take place outside the GDA’ (p. 3). This suggests increasing the rate of growth and the share of growth in regions other than the GDA and/or curtailing the rate of growth in the GDA, reducing its share of national economic activity.

Elsewhere the NSS argued that all areas should experience growth… by increasing economic activity in all areas’ (p. 4).

The other concept which is very prevalent throughout the NSS is that of realising potential and many would argue that this, rather than reducing disparities, became the main definition. ‘In essence, balanced regional development means [d]eveloping the full potential of each area to contribute to the optimal performance of the State as a whole – economically, socially and environmentally’. (p.11)

The development of the urban structure and a more balanced distribution of population were also considered important. ‘Balanced regional development also depends on building up a strong urban structure to give areas the economic strength to support a more balanced distribution of population growth across the country’. (p.26)

In Chapter two, the lack of clarity on what is meant by balanced regional development was evident in the following

‘The question that arises, however, is whether the objective of balanced regional development would be better served if more growth in population could be encouraged in other regions, while still nurturing and sustaining the successful dynamic achieved in Dublin’. (p.29)

It is evident that within the NSS there was a range of meanings implied in the concept of balanced regional development, which result in different policy objectives for example:

  • Growing regions outside the GDA (p.3) suggested reducing the imbalance between regions, implying slower growth rates in stronger regions and faster growth in weaker regions leading to more regional convergence.
  • Increasing economic activity in all areas (p. 4), could mean equivalent growth rates across all regions or could mean very different growth rates resulting in either convergence or divergence.
  • While the concept of regional potential is used, what exactly was intended and how it could be measured was even less clear.

Balanced regional development, and how it has been expressed and defined, reflects a spectrum of meanings and objectives in government policy.

The Current Context

Population changes (migration in particular), reflect, among other things, economic development, growth rates and potential in terms of economic opportunities. The current pattern of population growth is not dissimilar to that which occurred at the start of the 2000s when the NSS was being formulated. The share of national population in the GDA rose from 37.7% in 1971 to 39.2% in 2002. (p.29)

This continues, with population increasingly concentrated in the GDA and forecast to continue in this way. WDC analysis of the latest CSO Regional Population Projections 2016-2031 shows that the GDA is projected to increase its share of national population to 42.3% in 2031 while all other regions are projected to have a reduced share (though still experiencing population growth).

The population of working age will become more concentrated, with the West and Border being the only regions with a projected decline in their working age population and consequent increases in older and younger age dependency ratios (see previous post).

Growing concentration can also be seen in economic activity. In 2002 the GDA accounted for 46.2% of the State’s total Gross Value Added (GVA), in 2012 its share was 49.6% (CSO, County Incomes and Regional GDP 2012).

Lessons to be learned

In considering the formulation of a new spatial plan or National Planning Framework to frame economic development throughout Ireland, it will be important to draw on valuable lessons learned from the NSS 2002.

Poor implementation is often cited as the main reason for the limited success of the NSS. While this is no doubt a factor, a key aspect of policy formulation must also be clearly defined policy objectives.

How we define balanced regional development (or any similar concept) is important.  Clear definition of regional balance, the need for regional equity or the development of regional potential will ultimately influence the policies used to achieve them.  Though such definitions are politically and practically difficult, failure to make clear what is meant by regional balance, with clear goals and targets will, as we have seen with the NSS, lead to policy failure and to further regional imbalance.

When considering a new national planning framework which aims to deliver balanced regional development, deciding and agreeing what we actually mean by balanced regional development and how we measure it would be a useful starting point which might ultimately ensure a greater chance of success.

Deirdre Frost

 

The Western Region’s Sectoral Profile

We’ve just published WDC Insights-The Western Region’s Sectoral Profile-April 2015 (PDF 0.2MB) which presents the key findings from The Western Region’s Labour Market 2004-2014-WDC Report March 2015 (PDF 2.5MB) on the region’s sectoral pattern of employment.

Understanding the sectoral pattern of jobs in the region, and recent patterns of sectoral growth and decline, is particularly important to the development of job creation, skills and enterprise policy for the region.

Sector of employment

The two largest employment sectors in the Western Region are Wholesale and Retail, and Industry with around 30% of jobs (Fig. 1).  Of the region’s top seven sectors, all (except Health) account for a greater share of jobs in the region than the rest of the state.  Agriculture and Industry (manufacturing) are considerably more important in the region.  Among the region’s smaller sectors the share working in them in the region is considerably below that in the rest of the state.

In general the Western Region’s jobs profile relies more heavily than the rest of the state on the traditional sectors (Industry, Agriculture and Construction) and local services (Wholesale and Retail, and Accommodation and Food Service) which depend on domestic spending and tourism.  The region’s sectoral jobs pattern is influenced by its largely rural nature.

Fig. 1: Percentage of employment by sector in the Western Region and rest of the state, Q1 2014 (Source:  CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Fig. 1: Percentage of employment by sector in the Western Region and rest of the state, Q1 2014 (Source: CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Western Region’s share of jobs by sector

This jobs pattern can also be seen in the region’s share of national total jobs in each sector.  In total 16.5% of all jobs in the state are located in the Western Region (Fig. 2).  Agriculture, Industry and Construction are the sectors where the region makes its largest contribution to national jobs.

The region’s share of all Industry jobs nationally has increased very strongly in recent years from 16% in 2007 to its current 19.5%, due to its relatively more stable jobs performance in the region.  The region’s manufacturing strength is a key national asset and a previous blog post on ‘Trends in Agency Assisted Employment in the Western Region’ highlighted the industrial sub-sectors which have driven the region’s manufacturing strength.

The three knowledge intensive services sectors are where the region accounts for its lowest shares of national jobs.  Less than 10% of all Information and Communication, and Financial, Insurance and Real Estate jobs are based in the region and its share of both has declined since 2012.  Not only does the region have low shares in these sectors but it is losing ground.

Fig. 2: Percentage of total employment in the state based in the Western Region by sector, Q1 2014 (Source:  CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Fig. 2: Percentage of total employment in the state based in the Western Region by sector, Q1 2014 (Source: CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Recent changes in employment by sector

Between 2012 and 2014 half of sectors (7 of 14) experienced jobs growth in the Western Region (Fig. 3).  Agriculture grew most strongly followed by Professional, Scientific and Technical activities next.  Growth in these sectors contributed to the region’s increasing share of self-employment.  Wholesale and Retail and Accommodation and Food Service also grew as this period coincided with an increase in overseas visitor numbers as well as consumer spending.

The Western Region experienced a far greater jobs decline than the rest of the state across many sectors, including knowledge intensive services and public services.  In the case of Information and Communication, employment fell by nearly 16% in the region but it had the fourth largest growth in the rest of the country (5.2%).  The reasons for the Western’s Region poor, and weakening, jobs performance in this high growth potential sector need to be investigated.

Fig. 3: Percentage change in employment by sector in the Western Region and rest of the state, Q1 2012 to Q1 2014 (Source:  CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

Fig. 3: Percentage change in employment by sector in the Western Region and rest of the state, Q1 2012 to Q1 2014 (Source: CSO, Quarterly National Household Survey, Q1 2014, Table 2. Special run)

These key aspects of the Western Region’s labour market should inform the development of the upcoming Action Plan for Jobs for the West, Border and Mid-West regions.  The region’s labour market characteristics should influence which policies are prioritised for the region and the sectors of focus for job creation strategies.

Download WDC Insights The Western Region’s Sectoral Profile and full report ‘The Western Region’s Labour Market 2004-2014’ here

Pauline White

 

Note: The CSO has noted concerns over the impact of the new sampling structure on the employment figures for Agriculture. 

Source: CSO, Quarterly National Household Survey, Quarter 1 2004-2014, special run

 

WDC presents on Creative Economy to JOC

The WDC was invited to present to the Joint Oireachtas Committee on Jobs, Enterprise & Innovation on its work in developing the Creative Economy. On Tuesday 21 April, the WDC as well as NUI Galway, Teagasc, the Design & Crafts Council of Ireland and TG4 presented on the potential for job creation, innovation and balanced economic development in the creative sector.

The WDC has worked with this sector since 2008. At that time, after the collapse of the building sector and its knock-on impacts across the domestic economy, there was a clear need to identify and support new sources of regional economic growth and job creation. The creative industries sector was in many ways an obvious choice for the region as it is mainly made up of self-employed or micro-enterprises with people quite embedded in their local area. The sector was showing strong growth internationally and could create jobs and contribute to tourism, including in rural areas.

As there was little research in Ireland at the time, the WDC commissioned Creative Sector Baseline Report 2008 (PDF 2.5MB) to investigate the size and nature of the region’s creative sector and to identify its key issues. The Creative West 2009 (PDF 1.9MB) report found that there were 4,800 businesses in the creative sector in the Western Region, employing 11,000 people and generating €534m in annual turnover, directly contributing €270m to the Gross Value Added of the regional economy.   There was limited export activity however with two-thirds not engaged in any exporting. The majority of those in the sector were self-employed with 40% working alone and almost 90% being micro-enterprises.

Quality of life and inspiration from the region’s landscape and culture were among the strongest motivators for creative people to live and work in the Western Region. They faced a number of constraints however that can be addressed by policy and enterprise supports. Chief among these are high bandwidth broadband for creative enterprises operating in rural areas, difficulties in finding and recruiting specific skills, and quite limited networking with others in the sector and wider business community.   Creative businesses often do not fit easily into the eligibility criteria for enterprise funding and may find it difficult to access finance.

The report set out a series of recommendations for developing the sector in the region which have formed the basis of the WDC’s activities to support the sector. Under Creative Edge  (a €1.2m transnational EU-funded project, 2011-2013) the WDC developed the MyCreativeEdge.eu website to provide an online showcase for creative enterprises, with over 550 now profiled on the site. The new 3-year, €2m Creative Momentum project will further develop new routes to export markets for creative enterprises, as well as providing international networking opportunities with creative enterprises from Northern Ireland, Iceland, Sweden and Finland. The WDC Micro-Loan Fund: Creative Industries  provides loans of €5,000-€25,000 to creative enterprises and to date has funded 12 creative enterprises across the Western Region.

Nationally the Action Plan for Jobs identified the creative sector as one of the key sectoral opportunities for economic growth and job creation in Ireland. As the new Action Plan for Jobs – Regional process develops, it is important that the potential of the creative industries to contribute to sustainable job creation and enterprise growth at a regional level be recognised and the sector supported. Under the Creative Edge project the Whitaker Institute at NUI Galway developed the Creative Edge Policy Toolkit which set out a number of recommendations on policy actions that could be taken to support the sector’s growth. This could provide a useful input.

The Commission for the Economic Development of Rural Areas (CEDRA)  has also identified creative industries as a key growth sector for rural economic diversification and recommended the development of a coordinated strategy for the sector that places specific focus on its potential to contribute to the rural economy. Such a coordinated strategy however needs to be worked out through sector-specific policies and actions in the areas of enterprise support, job creation, culture, skills development and regional economic development to make a meaningful contribution.

A full transcript of the discussion at the JOC can be found here

Pauline White

Farmers in the West are getting older

The age profile of farmers in the Western Region is changing. Farmers are getting older and by 2010 for each farmer under 35 there were more than 10 farmers over 55 years of age. This changing age profile has implications for the type and amount of output from farms in the West.

The most recent Census of Agriculture[1] (2010) shows that more than half (56%) of the farmers in the Western Region (31,467) were over the age of 55, with 30% of these over 65 years of age (see Fig. 1). There is a higher proportion of farms in the older age categories now than in the last two decades. In 1991 50% of Western Region farmers were over 55, but by 2000 this had fallen to 44% before increasing again in 2010. While the number of Western Region farmers past retirement age is significant (16,838) the age profile of farmers in the region is similar to that in the EU where 30% of farmers are over 65 and only 10% under 35.

Figure 1: Farmers in the Western Region by Age Category, 2010

pie age fers2 15.04.15

 

There were only 2,999 (5%) farmers aged under 35 in the Western Region in 2010 and fewer younger farmers now than in either 2000, or 1991 (the previous agricultural censuses) when farmers under 35 made up 11% of farmers in the region (Fig. 2).

 

Figure 2: Age Categories of Farmers in Western Region 1991 to 2010

 combi bar age fers15.04.15

Farmers in the Western Region have tended to be older than those in the rest of Ireland (in 1991 43% of farmers in the rest of Ireland were over 55 compared to 50% in the Western Region) but the pattern of change is very similar with fewer farmers in the Rest of Ireland in older age categories in 2000 (37% in Rest of Ireland, 44% in Western Region) and in 2010 when 48% in the Rest of Ireland were aged 55 years and older and 56% in the Western Region.

As mentioned in a previous post, much of the structural change in agriculture occurred between 1991 and 2000, and this was associated with older farmers leaving agriculture and increased opportunity for younger famers to take over farm holdings. There has been less change in farm numbers and size since then and numbers in the older age categories have again increased.

Improved efficiency and productivity on farm tends to be associated with younger farmers with older farmers less likely to invest in their farms. With almost of a third of Western Region famers over the retirement age there are significant implications for the development of agriculture in the region.

 

Helen McHenry

[1] CSO, 2010 Census of Agriculture 2010

The Western Region’s Labour Market

The WDC has just published a new analysis of the Western Region’s Labour Market. This is based on a special run of data from the CSO’s QNHS for the period 2004-2014 for the seven-county Western Region. Understanding the region’s labour market is important for effective job creation, enterprise and skills policy.

In 2014 the Western Region’s adult population was just over 600,000 with 350,000 active in the labour force. Its labour force has contracted since 2012, largely because of outward migration, and is characterised by higher part-time, under- and self-employment, for both men and women. These are distinct differences in the nature of the region’s labour market that may point to certain weaknesses which need to be addressed by tailored job creation actions for the region.

Western Regions adult populatin diagram

 

Some of the key findings of the analysis are:

  1. Lower labour force participation in the Western Region: A smaller share of the Western Region’s adult population is engaged in the labour market and therefore economically active. The region’s participation rate in 2014 is 57.7% compared with 60.1% in the rest of the state. As human capital is among the most critical factors for regional economic development, this has negative implications for the region’s economic growth and viability. The higher level of economic dependency, resulting from the larger proportion of the population outside of the labour force, also has important social impacts and increases the need for state transfers.
  2. Higher share of self-employment: The region has a higher share of self-employment (without employees) than the rest of the state – 16.3% of all employment in the region compared with 11.4% in the rest of the state. This increases the importance of policy and supports to facilitate the self-employed to establish and sustain their businesses, such as soft business supports, quality broadband, networking, etc. Many may work from home or are mobile and are engaged in local services and therefore outside the remit of the enterprise agencies. They play a particularly significant role in sustaining rural communities and economies. This role, and their needs, requires further investigation and policy focus.
  3. Higher share of part-time working and recent jobs growth more likely to be part-time: There is a higher degree of part-time working in the region with 25.7% of all jobs in the region in 2014 part-time, compared with 23.5% in the rest of the state. Recent jobs growth has also been more likely to be part-time in the region than elsewhere. While part-time working can play an important role for those with caring and other commitments, the greater share of recent jobs growth in the region that is part-time raises some concerns over the nature of employment and the quality of recent jobs growth. A focus on stimulating more full-time jobs should be built into job creation policy for the region.
  4. Lower employment growth: Employment in the region grew over 2012-2014 by 1.4% but this was less than in the rest of the state (3.9%). The jobs recovery in the region is lagging that elsewhere. Initiatives to stimulate and facilitate job creation in regional locations are required to address the region’s weaker jobs performance.
  5. Declining unemployment influenced by out-migration: Unemployment has declined by 28.4% since 2012 but this has only partially been caused by jobs growth. The greater part is due to the loss of unemployed people from the region, either overseas or to other parts of Ireland. The decline in unemployment in the region has been stronger than elsewhere, leading to its unemployment rate dropping below that in the rest of the state (11.5% compared with 12.1% in 2014), reflecting the significant impact of out-migration on the region’s labour market.
  6. Higher youth unemployment rate: The Western Region has a higher youth (15-24 yrs) unemployment rate, 29.2% compared with 24.6% in the rest of the state. As the region has a lower total unemployment rate, this indicates that youth unemployment is a more serious challenge for the region. High youth unemployment can have very significant long-term impacts, as a period of unemployment at a young age can hinder the person’s career prospects and earnings potential. The needs of young jobseekers in the Western Region should be a key policy priority, nationally and for the region, both to prevent them from falling into long-term unemployment and also to reduce out-migration.

These aspects of the Western Region’s labour market should inform the development of the upcoming Action Plan for Jobs for the West, Border and Mid-West regions. The distinctive characteristics of the region’s labour market profile should influence which policies are prioritised for the region and the sectors of focus for job creation strategies. A new WDC Insights on the Western Region’s sectoral profile will be published in coming weeks.

Download two-page WDC Insights WDC Insights-The Western Region’s Labour Market-April 2015 (PDF 0.2MB)

Download full WDC report The Western Region’s Labour Market 2004-2014-WDC Report March 2015 (PDF 2.5MB)

Pauline White