The consultation sought views as to what should be included in the current Plan (€42 billion), over and above what is already included – arising from additional resources (€5 billion) being made available.
In addition, an interesting and welcome aspect was that the Consultation also sought views on the criteria which should inform consideration of the capital investment choices to be made. This was in the context of the remainder of the current plan, but also and arguably of more importance in the context of a longer term 10 year Capital Plan.
This idea of a longer term 10 year Capital Plan acknowledges another important Public Consultation underway – the National Planning Framework (NPF) and the need to consider investment priorities which would align and support the final NPF. A draft NPF is due for consideration over this Summer.
In discussing the Considerations for the Mid-Term Review of the Capital Plan (Section 2), the WDC highlighted the importance of infrastructure for regional development where all regions need quality infrastructure to compete effectively. The WDC submission also noted;
- The importance of long-term planning, as decisions made on infrastructure now have very long term impacts.
- The need to invest to join existing networks together and complete ‘unfinished sections’. For example once the Gort-Tuam motorway is complete, the priority should then be to improve the outstanding sections between Tuam and Sligo to ensure a high quality road network.
- Identify and utilise existing available capacity before considering new investments at congested sites. For example there is international air access capacity available at Shannon and Ireland West Airport Knock. Another example is to develop more attractive services on the rail network, which is a valuable transport asset with capacity to ease congestion on the road network and help us meet Ireland’s climate change obligations.
- Develop inter-regional linkages. While connectivity to Dublin from most regions has improved considerably in the last decade, inter-regional connectivity is relatively poor. By improving inter-regional connectivity, such as improving the road network between the urban centres in the Mid-West, West and North West then the investment potential of the key urban centres there can be enhanced.
The WDC submission also notes the importance of appropriate appraisal and evaluation methods when considering alternative investment projects. The capital appraisal and evaluation methods determining the costs and benefits of different investment projects need to be re-examined. The traditional cost benefit approach will naturally favour the larger and often largest population centres as the impacts are likely to be felt by a greater number, wherever the project is being delivered. To realise better spatial balance, there will need to be a change to the conventional appraisal and evaluation methodologies which are typically used to determine what projects proceed. The impact on the wider spatial balance of the country should be factored in.
In the section examining the prioritisation of Capital Expenditure and Selection of Projects/Programmes in current Capital Plan (Section 3), the WDC focused on the infrastructure areas it considers critical for Western development.
Key priority infrastructural investments include:
- Funding to deliver and complete the National Broadband Plan as soon as possible to ensure high speed broadband for all.
- National primary road improvements including N4, N5, N6, M17, M18, incorporating the Atlantic Road corridor.
- National secondary roads see WDC Submission for specific priorities.
- There is a need to increase regional and local roads funding to allow road maintenance programme to be enhanced.
- The importance of Bus services and the Rural transport programme to citizens in the Western Region is highlighted.
- Continue investment is needed to support increased rail frequencies and service levels on routes serving the Western Region.
- Ongoing support for improvements and access to Ireland West Airport Knock and Shannon.
- Investment in the electricity network and natural gas infrastructure is made through the commercial state sector, but it should be co-ordinated and monitored through the Capital Investment Plan.
- Apart from completing all energy commitments in the Capital Plan there should be investment to connect to the natural gas grid at Athenry, Ballyhaunis and Knock, all three of which qualified for connection in 2006.
In Section 4, Long-term Capital Investment Framework (10 years), the WDC Submission examines the longer-term considerations needed for effective capital investment. The WDC believes that capital investment which is by its nature long-term investment should be undertaken within the context of a longer term planning framework as is proposed in the National Planning Framework 2040. The WDC has made a detailed submission to the NPF (4.5 MB) consultation conducted by the Department of Housing, Planning, Community and Local Government.
Other considerations include:
Capital spending on new infrastructure should focus on supporting better spatial balance as well as supporting those citizens and that part of the country which is relatively poorly served. Quality infrastructure is one of the necessary conditions for regional development.
Investment in road infrastructure to join existing networks together and complete ‘unfinished sections’. For example in the West/North West. These are often infrastructure requirements needed to satisfy current as well as future demand.
As outlined previously, the state should capitalise on the capacity already available and ‘sweat’ the state investment already made, such as in transport, for example the rail network and the international airports with spare capacity such as Shannon and Ireland West Airport Knock. Other examples include educational infrastructure (Institutes of Technology), Health facilities and Housing.
Policy will also influence the infrastructure investments needed. The need to lower carbon emissions will help influence infrastructural investments (for example supporting cleaner transport modes).
Another consideration is to enable greater policy integration and joined up investment decisions across all sectors, for example planning, employment and transport policy sectors, which are proven to help to make sustainable and active travel more attractive alternatives to the private car.
A good example is the benefits which could be realised through increased e-Working, see WDC Policy Briefing No.7 (748 KB) which can reduce transport demand, traffic congestion and emissions. It has been estimated that if just 10% of the working population of 2.1 million were to work from home for 1 day a week, there would be a reduction of around 10 million car journeys to work per annum. Benefits arising from higher broadband speeds and greater levels of e-Working include time savings, enhanced communications, increased sales and productivity gains. To promote greater take-up, e-Work needs to be prioritised as a policy objective and a cross departmental approach is required. Lead departments would include the Department of Jobs, Enterprise and Innovation and the Department of Communications, Climate Change and Environment.
The WDC Submission is available for download here (4 MB).
Department for Transport, Smarter Travel: A Sustainable Transport Future, A New Transport Policy for Ireland 2009-2020 http://www.smartertravel.ie/sites/default/files/uploads/2012_12_27_Smarter_Travel_english_PN_WEB%5B1%5D.pdf#overlay-context=content/publications. p.35
 Indecon International Economic Consultants, July 2012. Economic / Socio-Economic Analysis of Options for Rollout of Next Generation Broadband. Analysis undertaken on behalf of the Department of Communications, Energy and Natural Resources (DCENR) as part of the Government’s National Broadband Plan, 2012. http://www.dccae.gov.ie/communications/SiteCollectionDocuments/Broadband/National%20Broadband%20Plan.pdf
‘What are the levers for effective regional development?’ was one of the most interesting questions posed recently by the Department of Housing, Planning, Community & Local Government in its recent ‘Issues and Choices’ consultation paper for the National Planning Framework.
In our WDC Submission to the consultation, we drew on previous WDC analysis including the WDC Policy Briefings ‘Why care about regions? A new approach to regional policy’, ‘Education, Enterprise & Employment – How Can Better Integration Of The 3Es Drive Growth In The Western Region?’ and ‘e-Working in the Western Region: A Review of the Evidence’ to answer this question.
In our submission we argue that Infrastructure, the ‘3Es’ (Enterprise, Employment and Education) and Innovation are the key levers for effective regional development. The central aim of regional policy, the National Planning Framework and the upcoming Regional Economic & Spatial Strategies should be to provide the conditions for regions to grow and realise their full potential. Developing infrastructure, the 3Es and innovation is the way to do this. When these three areas complement and support each other, they drive regional growth. Each has a distinctive role, and needs its own policy focus, but they are most effective when addressed through an integrated regional policy approach.
Investment in infrastructure has always played a prominent role in regional policy. The expectation that improvements in physical infrastructure will generate productivity gains for local businesses and increase the attractiveness of an area for investment and for tourism has been a recurring theme. Less developed regions need to have a similar quality of infrastructures for their residents and businesses as is available in more successful regions. Infrastructural connectivity has a critical influence on choice of location for both indigenous and foreign investors. The Western Region, and particularly the North West, is disadvantaged in terms of several forms of infrastructure. For example Sligo was the only NSS Gateway which was not connected to Dublin with a motorway under the Major Inter-Urban motorway investments between 2006 and 2010 and was the only NSS Gateway or Hub to have a 0 improvement in its ‘accessibility to employment’ score as a result of this period of intensive investment, according to research by Transport Infrastructure Ireland.
In its submission to the NPF, the WDC makes a range of specific recommendations in relation to infrastructural investments needed to facilitate development in the Western Region. The proposed investments include transport (national roads, regional and local roads, public transport (rail and bus), air and ports), communications (broadband and mobile coverage) and energy (electricity and natural gas). These infrastructure investments are also highlighted in the WDC’s submission to the Mid-Term Review of the Capital Plan.
While infrastructure is critical, OECD work emphasises that transport and other infrastructure developments are not enough by themselves; to have an impact on regional development they need to be associated with, and complemented by, human capital and innovation developments.
The ‘3Es’: Enterprise, Employment and Education
Regions are successful because enterprises in these regions are successful. When enterprises grow, employment grows and this depends on skilled and educated people. Policy to support the ‘3Es’ of enterprise, employment and education must work together at both national and regional level to create dynamic regions.
One of the most important issues that needs to be recognised and addressed by the NPF is that narrow definitions of ‘job’, ‘work’ and ‘employer’ as a full-time permanent employee travelling every day to a specific work location is extremely limited and does not recognise either the current reality of ‘work’ or the dramatically changing patterns likely to emerge up to 2040. Self-employment, the ‘gig’ or ‘sharing’ economy, contract work, freelancing, e-Working, multiple income streams, online business are all trends that are dramatically redefining the conception of work, enterprise, and their physical location.
A study conducted for Vodafone in 2016 found that nearly one in four broadband users in rural Ireland use the internet at home in relation to their work and one third have remote access to their company network. An estimated 150,000 rural workers avoid commuting some or all of the time because they can connect to work remotely. This trend is likely to continue.
If the NPF mainly equates the term ‘employer’ with a large IT services or high-tech manufacturing company, many of which (though by no means all) are attracted to larger cities, then it will only address a small proportion of the State’s population and labour force, and will not help to achieve effective regional development. The NPF must recognise and support existing and new sole traders, micro-businesses and freelancers working in sectors where lagging regions have comparative advantage or which are not location dependent.
Quality of life is a key determinant in the location decision of many people and current trends in the world of work and technology will increasingly help people to work from the same location where they want to live.
Enterprises create most jobs. The NPF must recognise the need to enable and support the diversification of the Irish economy. It must provide a support framework for indigenous business growth.
Many of the references to enterprises in the NPF Issues and Choices paper focus on high value, high skill exporting enterprises, which are central to export-led growth and tend to cluster in cities and larger urban centres. However such enterprises cannot provide a full solution for regional development or jobs growth. While they play a significant role, and have considerable multiplier impacts in other sectors, direct employment in such enterprises only accounts for one in five jobs nationally (2016 there were a total of 400,985 jobs in IDA and Enterprise Ireland supported companies nationally (DJEI) which was 19.5% of total employment (QNHS, Q4 2016)).
Enterprises in employment-intensive, lower-skill sectors are central to maintaining and growing employment both nationally and regionally. This is termed a ‘whole of enterprise’ approach acknowledging that enterprises across all sectors have the potential to innovate and increase productivity but vary in how they contribute to growth and employment. If the NPF focuses too narrowly on high skill, high growth enterprises and/or Foreign Direct Investment it will not lead to effective regional development. Recognising the role and needs of entrepreneurs in local and personal services is important for sustaining as well as creating jobs, in particular in smaller centres and rural areas. 93.1% of registered enterprises in the Western Region are micro-enterprises, employing fewer than 10 people, and in general the region is characterised by smaller enterprise size (CSO, Business Demography 2014).
While Ireland has emerged from recession, enterprise numbers are not back to pre-recession levels and even more so in the Western Region and particularly more rural counties. Between 2008 and 2014 (latest data available) the Western Region lost 8.6% of its enterprises, compared with a loss of 2.4% nationally. Construction, Wholesale & Retail, Professional Services and Accommodation & Food Service are the largest enterprise sectors. Indeed fewer than 5% of the Western Region’s enterprises are in the Financial & Insurance and Information & Communications sectors combined. The region’s enterprise base is currently quite concentrated and diversification of the enterprise base is a key objective.
As stated in the NPF, a skilled workforce will attract high value enterprises to a region, but a skilled workforce are less likely to locate in a region unless the job opportunities already exist. In reality this relationship is not so straightforward. Job opportunities are a critical, but not the only factor in people’s decisions on where to live, many other personal and social factors influence this decision. In Ireland many people have selected to live in one location but commute to work elsewhere in some cases e-Working for a number of days a week. Equally, areas with large pools of skilled labour e.g. counties in the wider Dublin commuter belt, have not necessarily been able to attract employers to locate there instead. 40% of workers living in the Mid-East region work in a different region.
In general, lagging regions have substantial reserves of unmobilised labour, indicated by higher unemployment rates and lower participation rates. During the Celtic Tiger this pattern was largely reversed in the Western Region with rising participation rates, falling unemployment and high levels of inward migration as many people returned to the region on response to economic growth opportunities. The WDC’s LookWest.ie campaign effectively illustrated many case studies of individuals and enterprises who (re)located to the region at that time. Labour markets in lagging regions have the potential to respond very positively to improved economic circumstances and stimulus.
The recession however led to high out-migration, which is particularly detrimental to lagging regions, as the propensity to migrate is higher among the more skilled, depriving the region of their skills and leaving the less skilled more dependent on local employment opportunities. The creation of job or entrepreneurial opportunities for graduates in lagging regions will help retain and attract a highly skilled labour force and, in turn, stimulate further growth and employment.
A key characteristic of the Western Region is that 1 in 5 people who are at work in the Western Region is self-employed (75,000 people were self-employed in the Western Region, QNHS special run, Q1 2016). While farming influences this to some extent, self-employment is higher in the region across most sectors and is particularly important in the most rural counties.
Between 2012 and 2016 the number of self-employed in the Western Region grew by 31.3% but the number of employees only increased 0.6%. Practically all recent jobs growth in the region has been driven by self-employment. In more rural areas and smaller towns, people who wish to continue to live in these areas have created their own job. The NPF must both recognise and support this trend. The Local Enterprise Offices, local development companies and local authorities are most active in supporting this type of business. It would be important to continue and expand initiatives to support them such as:
- Roll-out of fibre broadband.
- Provision of serviced, shared workspace including through Community Enterprise Centres, at a reasonable cost.
- Mentoring and provision of grants for start-up and established businesses.
- Network facilitation to allow self-employed, particularly in more rural areas who may be quite isolated, to connect with others in other own or other sectors.
- Training and upskilling for owner/managers and self-employed across all sectors including personal services (hairdressing, childminding), building trades, retail and hospitality.
What is most interesting in recent trends is that since 2012 there has been quite strong growth in the numbers self-employed who are employing other people (from 14,200 up to 19,000) showing the potential for the self-employed to be job creators.
Further and higher education has an important role to play in regional development. Educational institutions build a region’s human capital assets, attract and retain talent. Further education and training have a particular role in up-skilling those with lower education levels, who face higher unemployment rates and are at greater risk of long term unemployment. Lagging regions generally have a greater share of their labour force with lower levels of education. In 2011 54.7% of adults in the Western Region had only secondary level education or lower, compared with 51.9% nationally.
Higher education brings knowledge creation, knowledge transfer, cultural and community development and innovation to regions. It can also stimulate entrepreneurship. Within the Western Region, NUI Galway is a key regional asset and economic driver. It greatly contributes to the attractiveness and economic development of Galway city and its wider hinterland. To the North West the three Institutes of Technology of Letterkenny, Sligo and Galway-Mayo, are collaborating on the Connacht/Ulster Alliance, an initiative that has the potential to expand the contribution of higher education to regional development in this area.
The broader role of further and higher education, touching on innovation, enterprise and employment, needs to be a key focus of regional policy. Where this works effectively it becomes part of a virtuous cycle producing graduates and skilled workers, and enabling them to find employment in developing enterprises.
To remain competitive, manufacturing and service firms must continually upgrade skills and capabilities, access new ideas and technologies through industry networks, tap the knowledge of their workers, suppliers and customers and search for new market opportunities. This is all innovation.
Innovation policy is often focused on scientific and technological research, but while leading OECD regions produce several hundred patents per year per million inhabitants, more than one third of OECD regions generate fewer than ten patents per year. Lagging regions need a different kind of innovation policy, one that emphasises absorption capacity and innovation by adoption.
Policy needs to address the issues of regions that are not innovation leaders. A substantial element of innovation policy should be focused on adoption of innovations developed elsewhere and on initiatives in areas such as human resource management or implementation of new processes. It should stimulate innovation activity in areas where rural regions have particular strengths such as renewable energy and agri-food.
Regional policy which addresses the levers of effective regional development – Infrastructure, the 3Es and Innovation – through a co-ordinated, place-based, cross-sectoral approach is needed if the so-called, ‘business as usual’ spatial pattern of growth is to be disrupted and all regions facilitated to realise their potential for economic growth and provide sustainable livelihoods for those who live there.
 OECD, 2009, How Regions Grow: Trends and Analysis; OECD, 2009, Regions Matter: Economic Recovery, Innovation and Sustainable Growth
The WDC made its submission on Ireland 2040 – Our Plan: National Planning Framework yesterday. The Issues and Choices paper covered a wide range of topics from national planning challenges to sustainability, health, infrastructure and the role of cities and towns. A key element of the paper considered the future in a “business as usual” scenario in which even greater growth takes place in the Dublin and Mid East region with consequent increased congestion and increasing costs for businesses and society, while other parts of the country continue to have under-utilised potential which is lost to Ireland. The consultation paper therefore sought to explore the broad questions of alternative opportunities and ways to move away from the “business as usual” scenario.
The WDC submission considers these issues from the perspective of the Western Region, the needs of the Region, the opportunities its development presents for Ireland’s economy and society as a whole and the choices, investments and policy required to achieve regional growth and resilience.
This post highlights the key points made in the submission. The complete, comprehensive submission on the National Planning Framework by the WDC can be read here (4.5MB PDF). A shorter summary is available here (0.7MB PDF).
- The National Planning Framework (NPF) provides Ireland with an opportunity to more fully realise the potential of all of its regions to contribute to national growth and productivity. All areas of Ireland, the Capital and second tier cities, large, medium and small-sized towns, villages and open countryside, have roles to play both in the national economy and, most importantly, as locations for people to live.
- While spatial planning strives for ideal settlement or employment patterns and transport infrastructure, in many aspects of life change is relatively slow; demographics may alter gradually over decades and generations and, given the housing boom in the early part of this century, many of our existing housing units will be in use in the very long term. If the NPF is to be effective it must focus on what is needed, given current and historical patterns and the necessity for a more balanced pattern of development.
- To effectively support national growth it is important that there is not excessive urban concentration “Either over or under [urban] concentration … is very costly in terms of economic efficiency and national growth rates” (Vernon Henderson, 2000). Thus it is essential that, through the NPF, other cities and other regions become the focus of investment and development.
- As the NPF is to be a high level Framework, in this submission the WDC does not go into detail by naming places or commenting on specific development projects, as these will be covered by the forthcoming Regional Spatial and Economic Strategies (RSES). The exception to this, however, is in relation to the need for cities to counterbalance Dublin. In this case we emphasise the role of Galway and the potential for Sligo to be developed as the key growth centre for the North West.
- The North West is a large rural region and Sligo is the best located large urban centre to support development throughout much of the North West region. With effective linkages to other urban centres throughout the region and improved connectivity, along with support from regional and national stakeholders, Sligo can become a more effective regional driver, supporting a greater share of population, economic and employment growth in Sligo itself and the wider North West region.
- While the NPF is to be a high level document and the focus is largely on cities it is important not to assume that development of key cities will constitute regional development. All areas need to be the focus of definite policy, and the NPF should make this clear.
- While cities may drive regional development, other towns, at a smaller scale, can be equally important to their region. Recognising this is not the same as accepting that all towns need the same level of connection and services. It is more important to understand that the context of each town differs, in terms of distance and connectivity to other towns and to the cities, the size of the hinterland it serves and its physical area as well as population. Therefore their infrastructure and service needs differ.
- Towns play a central role in Ireland’s settlement hierarchy. While much of the emphasis in the NPF Issues and Choices paper is on cities and their role, for a large proportion of Ireland’s population small and medium-sized towns act as their key service centre for education, retail, recreation, primary health and social activities. Even within the hinterlands of the large cities, people access many of their daily services in smaller centres. The NPF needs to be clear on the role it sees for towns in effective regional development.
- Rural areas provide key resources essential to our economy and society. They are the location of our natural resources and also most of our environmental, biodiversity and landscape assets. They are places of residence and employment, as well as places of amenity, recreation and refuge.
- They are already supporting national economic growth, climate action objectives and local communities, albeit at a smaller scale than towns and cities. But a greater focus on developing rural regions would increase the contribution to our economy and society made by rural areas.
- The key solution to maintaining rural populations is the availability of employment. It is important that the NPF is truly focused on creating opportunities for the people who live in the regions, whether in cities, towns or rural areas.
Employment and Enterprise
- In the Issues and Choices paper a narrow definition of ‘job’, ‘work’ and ‘employer’ as a full-time permanent employee travelling every day to a specific work location seems to be assumed. This does not recognise either the current reality of ‘work’ or the likely changes to 2040. Self-employment, the ‘gig’ or ‘sharing’ economy, contract work, freelancing, e-Working, multiple income streams, online business are all trends that are redefining the conceptions of work, enterprise and their physical location.
- If the NPF mainly equates ‘employer’ with a large IT services or high-tech manufacturing company, many of which (though by no means all) are attracted to larger cities, then it will only address the needs of a small proportion of the State’s population and labour force.
- Similarly the NPF must recognise the need to enable and support the diversification of the Irish economy and enterprise base. It must provide a support framework for indigenous business growth across all regions and particularly in sectors where regions have comparative advantage.
- While job opportunities are a critical factor in people’s decision of where to live, they are by no means the only factor. Many other personal and social factors influence this decision such as closeness to family (including for childcare and elder care reasons), affordability, social and lifestyle preferences, connection to place and community.
- Many people have selected to live in one location but commute to work elsewhere or, in some cases, e-Work for a number of days a week. The NPF needs to recognise the complexity of reasons for people’s location decisions in planning for the development of settlements.
- New infrastructure can be transformative (the increase in motorway infrastructure in recent decades shows how some change happens relatively quickly). Therefore it is essential that we carefully consider where we place new investments. To do so, capital appraisal and evaluation methods determining the costs and benefits of different investment projects need to be re-examined if we are to move from a ‘business as usual’ approach.
- Investment in infrastructure can strongly influence the location of other infrastructure with a detrimental impact on unserved locations. The North West of the country is at a disadvantage compared to other regions with regard to motorway access. This situation will be compounded if investment in rail is focused on those routes with better road access (motorways) in order for rail to stay competitive, or if communications or electricity networks are developed along existing motorway or rail corridors.
- The WDC believes that the regional cities can be developed more and have untapped potential, however better intra-regional linkages are needed. The weaker links between the regional centres – notably Cork to Limerick and north of Galway through to Sligo and on to Letterkenny, are likely to be a factor in the relatively slower growth of regional centres in contrast to the motorway network, most of which serves Dublin from the regions.
For the future, the need to move to a low carbon, fossil fuel free economy is essential and needs to be an integral and much more explicit part of the NPF. The National Mitigation Plan for Climate Change is currently being developed, and it is essential that actions under the NPF will be in line with, and support, the actions in the Mitigation Plan.
- While much of the role of the NPF is strategic vision and coordination of decision-making, in order for the Framework to be effective it is essential that the achievement of the vision and the actions essential to it are appropriately resourced. The Issues and Choices paper does not give a detailed outline of how the NPF implementation will be resourced, except through the anticipated alignment with the Capital Investment Programme.
- It should be remembered that policy on services and regional development is not just implemented through capital spending but also though current spending and through policy decisions with spatial implications (such as those relating to the location of services). Therefore it is essential that other spending, investment and policy decisions are in line with the NPF rather than operating counter to it.
- While the NPF is to provide a high level Framework for development in Ireland to 2040, it seems this Framework is to be implemented at a regional level through the RSES. The Framework and the Strategies are therefore interlinked yet the respective roles of the NPF and the RSES are not explicit and so it is not evident which areas of development will be influenced by the NPF and which by the RSES.
- In order to ensure that the NPF is implemented effectively it is important that there is a single body with responsibility for its delivery and that there is a designated budget to help achieve its implementation.
It is expected that a draft National Planning Framework document will be published for consultation in May. Following that a final version of the Framework will be prepared for discussion and consideration by Dáil Éireann.
As mentioned above the full WDC submission on the Issues and Choices paper Ireland 2040 Our Plan- A National Planning Framework is available here (PDF 4.5MB) and a summary of key point and responses to consultation questions is available here (PDF 0.7MB).
On 31 January, the WDC was invited to give a presentation to officials of the Department of Social Protection working across the Western Region. The objective was to give an overview of the WDC’s analysis of data across a range of socio-economic issues.
Analysing regional data provides information on the areas for which we are responsible and highlights the multi-dimensional nature of the concept of regional development. A regional perspective is necessary since changes and inequalities not only occur among individuals but also the places where they live
This (very) comprehensive presentation analyses the following indicators:
- Population: Preliminary Census 2016 Results
- Labour Market: QNHS Q1 2016, special run
- Income: County Incomes & Regional GDP, 2013-2014
- Enterprise: Business Demography, 2014
These are some of the key points emerging from the analysis.
- Population of Western Region grew +0.9% 2011-2016 compared with +3.7% growth nationally.
- Three counties in the Western Region showed population decline 2011-2016 –(Donegal -1.5%, Mayo -0.2% and Sligo -0.1%) – only counties in Ireland to do so. In addition Leitrim and Roscommon had the lowest growth. Galway city had 5th highest population growth in Ireland.
- Every county in Ireland had a positive natural increase (more births than deaths) during 2011-2016. Donegal, Sligo and Mayo however had enough negative net migration to lead to population decline.
- All western counties, and all but six areas nationally, had negative net migration between 2011 and 2016. Donegal and Sligo had the two highest rates of negative net migration.
- Male out-migration considerably higher than female leading to a +1.5% increase in the female population of the Western Region and only +2% growth in the male population.
- The Western Region’s labour force declined marginally (-1.2%) between 2007 and 2016. Within this the male labour force fell by -6.1% while the female rose by +5.7%.
- The Western Region has a lower share of its labour force aged under 35 years and a higher share aged over 44 Its labour force participation rate is lower for both men and women, and across all age groups (except 65+).
- Total employment in the region fell by -5.8% 2007-2016 compared with a -6.5% decline in the rest of the state (all counties outside Western Region)
- There has been exceptionally strong growth in self-employment in the Western Region since 2012, increasing by +31.1% in the region compared with +7.2% in the rest of the state.
- Growth of self-employment tied to sectoral pattern of growth with strongest jobs growth since 2012 in Agriculture, Construction, Accommodation & Food Service and Wholesale & Retail, all with high self-emp
- Since 2012 the Western Region has had jobs decline in 7 out of 14 sectors, in the rest of the state there was only decline in 1 out of 14. Jobs recovery in the Western Region is not as diversified across the economy as elsewhere and more concentrated in domestic sectors
- Unemployment numbers declining steadily in region, but share of long-term unemployment growing. Western Region has higher unemployment rate in all age groups (except 65+ & 25-34) and particularly among youth.
- Disposable income per person in the Western Region was €17,260 in 2013 (92.3% of State). Provisional 2014 figures show some growth (€17,768) but still well below the 2008 peak (€21,167).
- Longer term, the gap is narrowing, the Western Region had disposable income of 84.3% of State in 1995, 92.3% of State in 2013.
- Within the Western Region, Roscommon had a significantly lower income relative to the State in 2014 (87.2%) compared with 2005 (95.8%). Clare has also fallen relative to the State starting at 95.5% in 2005 and dropping to 93.3% in 2014. Sligo, Galway, Mayo and Donegal have all improved their position relative to the State since 2005, albeit with some variation. Galway and Sligo had greatest improvements.
Gross Value Added
- Dublin region is the only region where the preliminary 2014 GVA per person figure is higher than the peak GVA per person in 2007. None of the other regions have recovered to the 2007 level, though the difference in the West region is slight.
- Dublin and Mid-East and South West, only regions with a greater share of national GVA than share of persons at work.
- In 2005 there were 60.6 index points between the lowest GVA per person in a region (Midland, 65.4) and the highest (Dublin and the Mid-East, 126.0). In 2014 the difference between Midland (59.2) and Dublin and the Mid-East, (130.6) was 71.4 index points (71.3 in 2013).
- The share of enterprises nationally that are based in the Western Region is declining and was 17.1% of the total in 2014.
- Construction, Wholesale & Retail, Professional activities and Accommodation & Food Service are the largest enterprise sectors in the region. Less than 5% of the region’s enterprises are in Financial & Insurance and Information & Communications combined.
- There has been a far greater decline in enterprise numbers in the Western Region than the rest of the state since 2008 and the region had a weaker performance – greater decline or lower growth – in every sector (ex. real estate).
- The enterprise base differs across more urban and rural counties. Highly rural counties of Roscommon, Mayo and Donegal have 34-36% of enterprises in Industry and Construction but in more urban counties of Clare and Sligo it is around 30%. A higher share of enterprises in Galway and Sligo are active in knowledge services sectors, though even Galway is below national average. Local services play a larger role in more rural counties.
- Western counties had among the greatest losses of enterprises since 2008. Donegal lost more than 1 in 3 of its Construction firms; Wholesale & Retail declined most strongly in Donegal and Clare; Accommodation & Food Service declined across most counties.
- Knowledge services performed best, though from a low base.
The full presentation can be downloaded here (PDF, 2MB)
Pauline White & Helen McHenry
Last week the WDC published two new WDC Insights publications. They were both based on our analysis of the CSO’s Business Demography 2014 data which measures active enterprises in the business economy. The publications were:
In a previous blog, I outlined our analysis of the data for the Western Region. In this blog the focus will be on the analysis at county level. It should be noted that in this CSO dataset, enterprises are assigned to the county where they are registered with the Revenue Commissioners. A business with multiple locations (e.g. chain stores, multinationals) is counted once. Although this limits the data somewhat, and tends to increase the numbers for Dublin, it is a good reflection of local business activity.
Change in enterprise numbers in western counties since 2008
There were a total of 40,797 active enterprises in the Western Region in 2014. Galway had the highest number at just over 13,000, while there were 1,750 registered in Leitrim (Table 1). All western counties experienced a decline in enterprise numbers between 2008 and 2014 that was greater than the national average (-2.4%). At -13.4% Donegal had the second highest decline in Ireland (after Monaghan).
Not surprisingly, the sector which declined most in all counties was Construction. Wholesale & Retail also declined across all counties and most strongly in Donegal and Clare – possibly influenced by their proximity to other large retail centres. Accommodation & Food Service declined across most counties, especially Clare. Combined with a large decline in Transportation & Storage, this may be due to reduced flights into Shannon airport.
In general the knowledge services sectors performed best. ICT, professional and financial services grew strongly in all counties (with only Clare having a decline in ICT services). Despite this growth however, these sectors continue to play a relatively small role in the enterprise base of most western counties.
Enterprise base of western counties
Construction and Wholesale & Retail are the largest enterprise sectors in every county (Fig. 1). In the highly rural counties of Roscommon, Mayo and Donegal 34-36% of enterprises are in the traditional sectors of Industry and Construction, while in the more urban counties of Clare and Sligo it is around 30%. In Donegal and Leitrim over 40% of enterprises are in the local services of retail, accommodation and transport which rely on domestic spending and tourism. These activities play a key role in the enterprise base of all counties, though Galway’s more diverse enterprise mix means it is least reliant on them.
Galway city and Sligo town are strong regional centres for knowledge service firms and this is clear from the quite high shares of their enterprises in professional, financial and ICT services. In contrast, these sectors account for only 17% of registered enterprises in Roscommon.
A few examples of particular sectoral enterprise strengths stand out, such as Administration & Support Services in Clare which includes aircraft leasing activities around Shannon and Information & Communications and Financial & Insurance in Galway. Construction remains hugely important to the enterprise profile of the largely rural counties of Roscommon and Mayo.
There is considerable variation across the seven western counties in terms of their enterprise base. In general, counties with a higher share of their population living in urban centres (Galway, Clare and Sligo) tend to have a greater share of knowledge services firms and lower reliance on traditional sectors. The general pattern since 2008 has been one of growth in knowledge services but decline in Construction and local services, a similar pattern to employment trends. This pattern has a spatial impact as the former tend to concentrate in urban areas while the latter are more important to rural economies.
 It excludes Agriculture, Health, Public Administration and Other Services, as well as activities of holding companies. It includes data on Education but this is not counted in ‘total business economy’ as many of the enterprises are publicly owned and is not analysed here.
‘People buy from people’. That’s according to Kevin Lynch (Airmid Natural Irish Skincare), who, along with Sallyann Marron (Sallyann’s Handmade Bags) and Urs Harttung (Bearfoot Enterprises) has just returned from the Urkult folk festival in Näsåker in mid-Sweden. The three West of Ireland craftspeople showcased and sold their work, all handmade in counties Clare and Galway, directly to festival-goers at Urkult’s craft market. They were supported by the Western Development Commission through a creative momentum project.
‘Participating in the Urkult folk festival gave me the freedom to be proud of my craft and to present it to a whole new audience,’ says Urs, originally from Switzerland but now based in Headford. Urs upcycles wood and other materials to produce a range of original products. For his unique Coo-Jo, he uses biscuit tins to create a banjo-like musical instrument. An idea that proved a big hit with festival-goers. ‘I’ve received invitations to come back and give two workshops and there was a lot of interest in my products that I’m very hopeful will lead to future orders’, he said.
According to West Clare’s Sallyann Marron, ‘I’ve found out that Swedish people like my bags as well, and that’s really encouraging’. Sallyann uses recycled jeans in the linings of her bags, making each a unique creation. During a Pecha Kucha event at Urkult, she explained exactly how she creates one of her highly individual bags.
Kevin Lynch found that people at Urkult, which has a very eco-friendly ethos, were genuinely interested in his range of organic and natural skincare products. ‘Our organic production of flowers and botanicals in the Burren was a story that really caught the Swedes’ imagination. I expect we’ll get a big increase in online sales to Sweden,’ he added.
In total, eight craftspeople from the West of Ireland, Northern Ireland and Finland were funded to participate in Urkult through a creative momentum project, an EU co-funded project supporting the development of the creative industries sector across Europe’s Northern Edge. The project operates the www.MyCreativeEdge.eu website and in the West of Ireland is implemented by the Western Development Commission and NUI Galway.
The CSO recently released their Business Demography data for 2014 which, combined with the Preliminary Results of Census 2016, shows the continuation of clear economic as well as demographic spatial patterns.
The Business Demography data measures active enterprises in the business economy and provides data at county level. An enterprise is assigned to the county where it is registered with the Revenue, so for a business that has multiple locations (e.g. chain stores, banks, multinationals) the business is only counted in the county where it is registered (often Dublin). This makes the data somewhat limited, however it does give a true reflection of enterprises that are registered and operating in a county.
Greater decline in enterprise numbers in Western Region since 2008
In 2014 there were 40,797 active enterprises registered in the seven county Western Region. This was 8.6% below the 44,621 in 2008. In contrast, in the rest of the state (all counties other than the seven counties of the Western Region) the number in 2014 was just 1% below the 2008 figure. And there were even greater differences when we consider sectors. Fig. 1 shows that with the sole exception of Real Estate, the Western Region had a weaker performance – greater decline or lower growth – than the rest of the state in every sector between 2008 and 2014.
Weaker performance for Western Region across almost all sectors
Unsurprisingly Construction experienced the greatest decline in the number of enterprises, while the locally traded services sectors of Transportation & Storage, Wholesale & Retail also declined in both the region and rest of the state. For three sectors (Financial & Insurance, Accommodation & Food Service, and Industry) there was a fall in the region, but growth elsewhere. The Financial & Insurance sector shows a very stark difference, while there was also a substantial difference for Industry.
In the sectors where the Western Region experienced growth, we can see there was a considerable gap with the rest of the state the knowledge services sectors of Information & Communications and Professional services.
Higher share of enterprises in traditional sectors and local services
The difference in the experience over the period contributed to the current enterprise profile of the the Western Region and rest of the state. Fig. 2 shows that, similar to employment patterns, the traditional sectors (Construction and Industry) and local services (Wholesale & Retail and Accommodation & Food Service) account for larger shares of all enterprises in the region, with a lower share of enterprises in knowledge services sectors.
Varying performance for western counties
From Fig. 3 it is clear that there were massive differences in the experience of counties over the period, ranging from a 14.2% decline in the number of enterprises in Monaghan to a 7.1% increase in Dublin, the only county with more registered enterprises in 2014 than in 2008. This is of course influenced by the practice of registering business headquarters in Dublin even if they have locations in other counties. Evan allowing for this, there is a clear spatial pattern with Border and Midland counties experiencing particularly large declines.
Among the western counties, two of the large rural counties (Donegal and Mayo) experienced the greatest declines in enterprise numbers. Roscommon, Clare, Galway and Leitrim meanwhile had quite similar experiences, declining by around 7%. Sligo performed best with a fall of just over 4% in its number of enterprises. The enterprise profile of each county and the performance of enterprises in different sectors is a key explanation for these county differences and we’ll examine county patterns in more detail in a future post.
In addition to the data on enterprise numbers, the Business Demography data also provides information on employment in these enterprises, which we’ll also examine in more detail in future. But this initial overview of the data clearly shows a significant decline in the number of enterprises based in the Western Region which is reflected in a weaker performance across all sectors of the business economy.
 It does not include Agriculture, Health, Public Administration or Other Services. While it does include data on Education, that sector is not counted in the total figures as many of the enterprises in the sector are publicly owned.
Both Enterprise Ireland (the state agency charged with supporting exporting indigenous enterprises) and the IDA (the state agency responsible for supporting Foreign Direct Investment) issued very upbeat end-of-year statements this week. So, how did the region’s fare?
In 2015 total employment in EI client companies was 192,223, of which 165,630 were full-time jobs. 2015 saw the highest level of new jobs created by EI supported companies in the agency’s history (about 17 years) with 21,118 new jobs created. Taking into account job losses over the year, the net increase was about half this at 10,169 net new jobs.
Of this net increase in EI client jobs, 64% occurred outside of Dublin. It is notable that the regional performance got considerably greater focus in this year’s end-of-year statement Press Release than has been the case for the past number of years. The evident dissatisfaction in many regional locations caused by a two-speed jobs recovery, which led to the preparation of the regional Action Plans for Jobs and several other regional EI initiatives last year, has led to greater emphasis on regional performance in this year’s end-of-year statement. As indeed has the fact that that performance has been quite strong.
While the overall regional picture may be quite strong, the relative performance across the various regions differs (Fig. 1). The increase in jobs in EI client companies in 2015, compared with 2014, varied from +36% in Dublin to just +2% in the North West. Indeed the North West, Mid-West and West – the three EI regions covering the Western Region – had the lowest increases in job numbers across the country at +2%, +3% and +5% respectively. Sticking with the two-speed jobs recovery metaphor, the Western Region appears to be running at the lowest speed of all, at least in the context of indigenous exporting companies.
A previous WDC Insights Blog post highlighted the particular issue of the North West’s poor performance in terms of all types of agency assisted employment (EI, IDA and Udarás). Between 2005 and 2014 the North West experienced the largest decline in agency assisted jobs of any region in Ireland. And now in 2015 it’s the region with the lowest increase in EI supported jobs. This points to a very real concern for the North West’s capacity to generate new employment in export focused businesses, even when Ireland is experiencing some of its strongest ever jobs growth in this type of business.
2015 saw the highest level of employment in IDA client companies in the organisation’s 67 year history reaching 187,056. A total of 18,983 new jobs were created by their clients during 2015, when job losses are taken into account, there was net job creation of 11,833, slightly higher than that recorded by EI clients.
Similar to EI, the IDA’s end-of-year statement gives more focus to regional performance than in some previous years. Overall, 53% of all jobs created by IDA clients in 2015 were based outside of Dublin, which is an improvement over the 49% share in 2014.
While 53% of new jobs were created outside of Dublin in 2015, this area accounts for 59% of total employment in IDA backed companies. The legacy of past investments in more regional locations continues to influence the overall pattern of FDI jobs, even as new investments tend to be attracted to more urban areas.
The IDA end-of-year statement doesn’t provide detail on the differences across the regions, though it does note that every region experienced an increase in employment in IDA backed companies. It will be very interesting to see the detailed regional breakdown of this performance to see if it shows a similar inter-regional pattern to the EI client companies, with the Western Region having the lowest growth. Although the strength of Galway in attracting FDI means the West region may show a stronger performance in foreign owned employment in 2015 than in Irish owned.
While overall, 2015 was very positive in terms of regional job creation by both EI and IDA client companies, the inter-regional differences in the results for EI companies would indicate that more needs to be done to increase the pace of the jobs recovery in the Western Region.
We hope you have been following and reading the WDC Insights blog in the last year. Take our Christmas Quiz (9 questions) and see how well you score on regional development and Western Region issues. The answers are below with links to more information and the relevant posts.
1 The WDC published its report on ‘Trends in Agency Assisted Employment in the Western Region’ in January. This included an analysis of data for each of the seven western counties. In 2013 what proportion of the total jobs in Sligo were agency assisted?
2 Agriculture in the Western Region of Ireland is characterised by smaller farm size, poorer land quality and a higher dependence on off farm income than in many other parts of Ireland. Nonetheless agriculture remains a significant employer and makes an important contribution to the regional economy.
What is the average farm size in the Western Region?
- 43.7 ha
- 15.2 ha
- 26.3 ha
3 In the latest CSO data on Income and Living Conditions (released 26th November) poverty and at risk of poverty rates are given. What is the difference between the at risk of poverty rates between the BMW and S&E regions?
4 In a recent a creative momentum project survey what proportion of creative entrepreneurs were exporting?
5 Examining regional indicators can help us to understand the growth and development taking place in our regions, to highlight changes and assess issues of efficiency and equity among regions.
Looking at the data since 2003 are regional disparities
- Staying the same?
6 Understanding the sectoral pattern of jobs in the region and patterns of sectoral growth and decline is particularly important to the development of job creation, skills and enterprise policy for the region.
What is the largest employment sector in the Western region?
- Wholesale and Retail
- Public Administration and Defence
What is the minimum download speed set down under the National Broadband Plan (in Mega bits per second (Mbps))?
- 30 Mbps
- 100 Mbps
- 12 Mbps
8 In February 2015 the IDA published a new 5-year strategy which put considerable focus on the regional balance of future FDI investments. The strategy includes a target to increase the number of investments in every region, outside of Dublin. By how much are the investments in the regions targeted to increase?
- By 10-20% over the 5 years of the strategy?
- By 30-40% over the 5 years of the strategy?
- By 80-90% over the 5 years of the strategy?.
9 With The Paris Agreement at COP21 marking a turning point in the response to climate change, it is time to consider how we will meet those targets in Ireland so we examine some of the issues for climate change mitigation in the Western Region in this post.
What percentage of households in the Western Region use oil to heat their homes?
The WDC published a report on ‘Trends in Agency Assisted Employment in the Western Region’ in January 2015.week. This included an analysis of data for each of the seven western counties. Taking Sligo as an example in 2013, there were 3,880 people working in agency assisted jobs there. 15.3% of total jobs in the county were agency assisted, which is below the state average (19.3%). Some 55.6% of assisted jobs in Sligo are in foreign owned companies; lower than a decade earlier. Irish owned assisted employment has grown steadily since 2011 and was up 4.8% in 2013. Sligo’s second largest assisted sector – Traditional Manufacturing – has had the strongest recent growth, up a fifth (21.5%) between 2010 and 2013.
For more about agency assisted jobs in the other Western Region counties see this post
Answer: 3) 26.3 ha
Agriculture in the Western Region of Ireland is characterised by smaller farm size, poorer land quality and a higher dependence on off farm income than in many other parts of Ireland. Nonetheless agriculture remains a significant employer and makes an important contribution to the regional economy.
The average farm size in the Western Region (counties Clare, Donegal, Galway, Leitrim, Mayo, Roscommon and Sligo) was 26.3 ha in 2010. Farm sizes are significantly smaller than in the rest of Ireland where the average farm in 2010 was 36.9 ha. Nonetheless farm size in the Western region has grown by a third since 1991 when the Western Region average was 19.8 ha with most of the growth occurring in the 1990s (almost 27% of the growth occurred between 1991 and 2000). For more information, read this post.
Answer: 1) 5.7%
The CSO released the latest data on Income and Living Conditions on 26th November 2015. The headline figures indicate a rise in incomes – increasing by 3.5% between 2013 and 2014, which in turn was higher than the figure in 2012. The release also provided data on poverty rates at a regional level. Analysis of consistent poverty rates by region, which will be influenced by rural-urban patterns, shows that the rate for the Border, Midlands and Western region was 10.8% compared with 7.0% for the Southern and Eastern region in 2014. The at-risk of poverty-rate was also higher in the Border, Midlands and Western region compared to the Southern and Eastern region, 20.5% and 14.8% respectively. The difference was 5.7%.
For more on poverty and at-risk of poverty rates see this post.
a creative momentum project survey
Answer: 3) 68%.
In order to inform the development a creative momentum project activities, an online survey was circulated to creative entrepreneurs based in the participating regions. The survey ran from 28 September to 18 October and there were a total of 170 responses.
68% reported that they made some sales outside of their own country, which was higher than indicated in previous surveys. Cross-border business between Ireland and Northern Ireland seemed to be a strong element in these export sales. Of those businesses who did not export currently (44), 70% indicated a desire to export.
For more on the survey see this post
Answer: 1) Widening
There has been a significant widening of the gap between the BMW and the S&E regions since 2008, the difference in 2012 was 48.3 points and in 2008 was 40.6 points (in 2003 it was 42.6).
Disparities in regional GVA have been increasing in recent years and have been particularly significant since 2008 while, in contrast, disparities in disposable income reduced between 2003 and 2010, but have increased since then. For more see this post
Answer: 2) Wholesale and Retail.
The largest employment sector is Wholesale and Retail and the two largest employment sectors in the Western Region are Wholesale and Retail, and Industry which together account for about 30% of jobs. 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. For more information see this post
Answer: 1) 30Mbps
The WDC in its submission to the consultation on the rollout of the National Broadband Plan suggests that one option would be to review the basic minimum standard, for both up and download speeds, every 5 years (or more frequently depending on technological change and demand requirements) and raise the minimum standard accordingly. For more from the WDC on broadband see here and here
Answer: 2) 30-40% over the 5 years of the strategy
The strategy includes a target to increase the number of investments in every region, outside of Dublin, by 30-40% over the lifetime years of the strategy. With Dublin maintaining a similar level to currently. For example for the West, which received 71 investments over the 2010-2014 period, the target is to achieve 92-99 investments over 2015-2019. For the Border region the target is 61-66 investments (it received 47 in the past five years). These targets do not just refer to new name investments, but include expansions by existing FDI companies and R&D investments.
Answer: 1) 63.1% of homes use oil as their main heating fuel
The pattern of fuel usage in central heating is very different in the Western Region and the rest of the state. This is primarily due to the lack of access to natural gas across most of the region. Less than 5% of households in the Western Region use natural gas to heat their home compared with 40% in the rest of the state. Lack of access to natural gas makes the Western Region far more reliant on other fuels, many which have higher carbon emissions. Oil is used by 63.1% of households in the region compared to 38.8% in the rest of the state. Wood fuels and other biomass are slightly more important in the Western Region 1.4% compared to 1.3% in the rest of the state but there needs to be a significant policy focus using renewable energies for domestic heating. These include solid biomass (wood chips, pellets and logs). In many rural situations users have more space and fuel can be sourced locally with less transport required, so these options may be more suitable than for urban dwellers. Uptake could be improved with appropriate, targeted incentives.
For more on rural urban differences, western region statistics and the need for climate change mitigation to focus on rural areas see this post.
How well did you do?
You got 8 or 9 answers correct–
CONGRATULATIONS! You really know a lot about regional development, the Western Region and the Western Development Commission’s work.
You got between 4 and 7 answers correct –
WELL DONE, a good score but some deficiencies in your knowledge. Perhaps you should read the WDC Insights posts more carefully in 2016!
You got between 0 and 3 answers correct
OH DEAR! Time to pay more attention to regional development and Western Region Issues. You’ll have to do some extra study over the holiday! Reread the WDC Insights blog and check out the WDC publications page and re-take the quiz in the New Year!
Western Development Commission
Dillon House, Ballaghaderreen
Co Roscommon, F45 WY26, Ireland
+353 (0) 9498 61441