Comment

Dawn McLaughlin explains how the north-west’s reputation as a prime location for foreign direct investment has been sixty years in the making. Sixty years ago, the US industrial fibre giant, DuPont, established a base on the outskirts of Derry/Londonderry. At the time, few international corporations were based in Northern Ireland, and very few would have considered this part of the world when choosing where to invest. DuPont’s decision was not only courageous but helped kick-start and sustain economic growth and development for nearly half a century. The company remained in the region throughout the dark days of the Troubles, sustaining jobs and keeping families in work at a time when our economy was underdeveloped and primitive in many respects. For 30 years, the company put the city at the cutting edge of innovation and technology by producing Kevlar, one of the world’s most important materials, at the site. As important as the jobs were to thousands of local working-class families, DuPont’s presence was almost more important for its role in attracting other global companies to the region. DuPont became an ambassador for the north-west and strengthened its status as a region well-equipped for foreign direct investment (FDI), with its low-cost structure, strong talent pool and high standard of living. Other American and European companies were encouraged by DuPont’s positive experience in the north-west and saw Northern Ireland as a viable and strategic place to invest. FDI has been a significant driver of the North-West City Region’s economic growth over the past three or four decades. The late John Hume’s role in bringing Seagate to the city is well-known, and it has gone on to be an integral part of the local economy. By the company’s 20th anniversary in the city in 2013, it had invested over £720 million in the region, contributed nearly £50 million in annual wages, and boomed to become the city’s largest employer with a workforce of almost 1,400. To this day, Seagate remains one of the region’s most important organisations. US tech giant and insurance company, Allstate, was one of the first foreign companies to invest in Northern Ireland after the signing of the Good Friday Agreement. Starting with an initial staff of just 20 in Derry, the firm has blossomed into one of the north-west’s most recognisable employers and has spread further into the region with its Strabane office. Taking a leap of faith like Allstate’s is a brave one for a business, but one that has generated great gains for both the company and the community. With more and more companies choosing to invest in the north-west, the economy has diversified and matured. We now have a cluster of cutting-edge and exciting tech, fintech, health and life-sciences, artificial intelligence, and diagnostics firms. The Derry and Strabane City Deal is a once-in-a-lifetime capital investment package, which will help attract even more companies and nurture this ecosystem of innovation, research and development, and technology. Inward investment and FDI have played a key role in our local economy over the past sixty years and will continue to do so. As we emerge from the pandemic, partners within the city will be working hard to attract more investment, jobs, start-ups, and business. Thanks largely to the courageous decisions of companies like DuPont to come to the north-west all those years ago, this region now has a diverse and innovative economy and is an ideal location for FDI. Dawn McLaughlin FCA is Founder of Dawn McLaughlin & Co. Chartered Accountants and President of Londonderry Chamber of Commerce.

You don’t have to listen very carefully to hear the rattle of bandwagons being boarded as governments, quangos and interest groups issue their calls to action on behalf of Planet Earth, writes Dr Brian Keegan. It is over 20 years since the Kyoto Protocol was signed. With hindsight, the aspirations back then were relatively modest, amounting to little more than a commitment by governments to reduce carbon output. That hasn’t got us very far, as highlighted by the report over the summer from the Intergovernmental Panel on Climate Change (IPCC). There is no one to blame except us when it comes to increases in planetary temperature. The political difficulty with the climate crisis is akin to the political difficulty facing many countries in relation to pensions. Everybody knows there is a problem, but the crisis is happening too slowly for urgent remedies to be acceptable. It is painful to increase the retirement age (an approach currently under examination in Ireland and the UK) or add to the tax burden. Both or either option would correct the ratio of pension beneficiaries to pension funders. Yet, there will be no immediate political benefit. The political dilemma is the same when it comes to decisions over climate policy. We have fixed climate problems before. Forty years ago, the big environmental concern was the hole in the ozone layer. Changes in industrial policy resulted in the virtual banning of chlorofluorocarbons in refrigeration and other industries to help repair it. But where is the political dividend for those who took these actions? This is the nub of the problem for both the Kyoto Protocol and, more recently, the 2016 Paris Accord. Both initiatives depended primarily on government action, but government action on its own isn’t sufficient. A similar fate awaits the Irish Government’s Climate Action Act and the British Government’s Climate Action Act of 2019. It is all very well setting legally binding emissions targets – net-zero by 2050 in both cases – but people still have to travel, work, eat, and stay warm. Even when governments mandated the curtailment of normal life, as was the case with successive lockdowns in the past 18 months across the world, the impact on global carbon emissions fell short of the 7% reduction per annum promoted as necessary by the UN. Preparations for the next international gathering on climate change, known as COP26, are being finalised for November 2021 in Glasgow. However, while all this activity and wordsmithery is happening, the real progress on climate change may be taking place elsewhere. There is evidence that private sector financing for non-sustainable business activity could dry up. Speaking to a TASC think-tank event recently, the chief executive of AIB, Colin Hunt, put the matter succinctly: “Companies that don’t take this seriously won’t be around to talk about it in ten years’ time”. He is echoing a sentiment that seems increasingly prevalent in the investment community and is supported by academic research. Of course, all this comment could be mere virtue signalling and a form of greenwashing in itself. Nevertheless, it does seem that environmental investment considerations are genuinely more prevalent. It follows that environmental, social and governance (ESG) reporting will come more to the fore, even without government prompting. The chief executive of the International Accounting Standards Board has suggested that if ESG reporting for investors is correct, by addressing investor concerns, we will also address broader societal concerns. Government carbon targets might indeed be met, but by private investment strategies rather than climate legislation. Dr Brian Keegan is Director of Advocacy & Voice at Chartered Accountants Ireland.

As ever, this is a busy time of year when the Institute commences its CPD programme for the autumn and we unveil our programme of events and conferences. The business environment has continued to change substantially in the last year, and we have formulated this programme of events, courses and specialist qualifications with a keen eye on equipping members to leverage that change in their professional lives. We have engaged closely with our members to ensure we are addressing your needs in our new programme. I look forward to your feedback. After a lengthy period of virtual engagement necessitated by the pandemic, we surveyed our members in recent weeks to hear your preferences on engagement in the coming months. It is clear from your feedback that a shift has taken place when it comes to events. We see an appetite to attend larger conferences, awards ceremonies, and social events in person, but it is also clear that the virtual option will remain a preferred one for many when it comes to CPD courses, briefings, and other smaller-format meetings. This feedback will inform our planning in the months ahead. As we move out of the shadow of COVID-19, another crisis will dominate this coming quarter – the climate crisis. COP26, which will take place in November, will drive this focus. Accountants’ skills and expertise strongly position them to help businesses adapt to meeting the sustainability challenge. The evolution of the CFO role in recent times is proof of this, but sustainability expertise is equally becoming critical among accountants at every level. The Institute will maintain its focus on equipping members for this task. Finally, I would like to direct your attention to our recently published position paper, The Next Financial Year, which details policy measures the Institute is calling for in the months ahead. Informed by extensive engagement with members in business, practice, and the public sector, it focuses on improving government policy for businesses on the island of Ireland without demanding additional exchequer funding or support. I look forward to engaging with you all in the coming weeks and months. Barry Dempsey Chief Executive  

In an age of information overload, what websites and internet resources can someone who wants to keep up-to-date with the world of finance and financial management rely on? Here’s Cormac Lucey’s selection. For daily business news… The RTÉ website offers us the opportunity to read the daily survey of business and financial news published by the main Dublin stockbrokers. This is not just a useful survey of the previous day’s financial economic news, it also offers readers the opportunity to understand how financially literate readers view that news.   Visit www.rte.ie/news/markets/broker_reports (and check out Goodbody Stockbrokers). For detailed financial data on leading Irish corporates… I opened up an account with Davy Stockbrokers largely to get access to the company’s Weekly Book. That is a compendium of corporate data for quoted companies covering recent financial history, near-term financial forecasts and key valuation metrics. For avid financial number crunchers such as myself, it’s the equivalent of crack cocaine! Visit www.davy.ie  For an up-to-date overview of the Irish economy… The National Treasury Management Agency (NTMA) borrows money on behalf of the State. That requires regularly updating international debt investors (who may buy Irish government debt) on economic developments here. Visit www.ntma.ie (and look for ‘Investor Presentation’).  For an overview of the Northern Ireland economy… EY’s Chief Economist, Neil Gibson, provides a regular and authoritative update on what is going on up North.  Visit www.ey.com (and search for ‘EY Economic Eye: Northern Ireland’). For a global economic overview from a monetary perspective… Simon Ward, Janus Henderson’s economic adviser, uses monetary and cycle analysis to assess economic and market prospects. Visit www.moneymovesmarkets.com For general trends in financial management… Two large international consultancies offer regular publications that combine a focus on the practical problems facing financial staff in corporations with intellectual rigour.  Visit www.mckinsey.com (and search for McKinsey on Finance, which offers readers a quarterly selection of useful and stimulating articles). Visit www.bcg.com/capabilities/corporate-finance-strategy/insights, which offers regular corporate finance updates. For current developments in international markets… The Financial Times has an excellent capital markets blog (www.ft.com/alphaville), and there is an offshoot of that (www.ftalphaville.ft.com/longroom/home) on which you can (once registered) access interesting research reports from the world’s top investment banks. Another website where you can access high-level research reports from investment banks is www.savvyinvestor.net (registration required). For the technical situation of main financial markets… Steve Blumenthal, executive chair of Capital Management Group, produces a useful technical survey of the main US markets each week.  Visit www.cmgwealth.com/ri-category/on-my-radar  For financial chatter, conspiracy theories and the occasional blinding insight... It’s all available here: www.zerohedge.com  Cormac Lucey is an economic commentator and lecturer at Chartered Accountants Ireland.

As businesses across the island of Ireland grapple with the post-Brexit trading environment, any and all opportunities for growth should be grasped with both hands, writes Dawn McLaughlin. The new trading arrangements brought about by Brexit and the Northern Ireland Protocol have caused much economic and political upheaval and controversy since the turn of the year. We are all well versed by now in the arguments for and against the Protocol. However, it remains the case that businesses, in the main, are largely supportive of the new arrangements in the absence of any better solutions. While no one would claim that it is a perfect situation, for businesses in Northern Ireland – particularly those in the north-west border region – there are advantages. Being able to trade freely with the rest of the UK and into the EU and the rest of the island of Ireland is a distinct competitive advantage afforded to businesses on one side of the Derry-Donegal border that isn’t available to the other. Another positive consequence has seen north-south trade in Ireland boom since the start of 2021. It has increased by over 60%, according to the Central Statistics Office’s most recent figures. Some local businesses have begun trading with their southern neighbours for the first time, shifting supply chains and finding new markets and customers. However, many of these businesses will not have realised that they are technically exporting their goods or services, often considered to be the preserve of shipping products across the world. The Londonderry Chamber of Commerce, in collaboration with our partners at Invest Northern Ireland, Derry City and Strabane District Council, InterTradeIreland, and Enterprise North West, have established Growth North West. This partnership is developing new initiatives to help businesses grow their operations across several business areas, such as exporting and innovation. Focusing on the export journey first, experts will cover different aspects of the exporting process to show attendees how to make the most of the export opportunities available to them. Then, businesses can schedule a one-on-one appointment for a more bespoke review of their exporting needs and challenges. This covers everything from export documentation, logistics and sales prospecting to maximising social media and perfecting your pitch. Growth North West is a one-stop-shop for everything your business needs to begin expanding into new markets and trading with new customers. As well as a series of monthly webinars, a mapping exercise has been carried out detailing all available export support. As a sole practitioner, I know that keeping up-to-date with ever-changing programmes and supports is hugely time-consuming. So, to help Chartered Accountants add value and guide clients on their export journey, Growth North West will hold awareness sessions in the coming months. These sessions will be publicised through the Chamber and are open to all. We look forward to engaging with businesses of all kinds, shapes and sizes as they begin or expand their export operations. There are significant opportunities for our local firms, both beyond these shores and on our shared island. As we all grapple with the post-Brexit trading environment, any and all opportunities for growth should be grasped with both hands. Growth North West aims to deliver stimulation and growth opportunities for our region at a time of economic uncertainty and upheaval. Throughout the pandemic, firms have been innovating their services and pivoting their operations to stay afloat. Looking outwards at new export markets is one way our local businesses can positively react to both the effects of the pandemic and the UK leaving the EU. Dawn McLaughlin is Founder of Dawn McLaughlin & Co. Chartered Accountants and President of Londonderry Chamber of Commerce.

Dr Brian Keegan takes the jobs theory of David Graeber to task, arguing that he fundamentally missed the point of the work that he deemed superfluous. As we emerge from pandemic lockdowns, people are realising that at least some of the work totems that we have subscribed to all our working lives were false gods. Many (though by no means all) businesses have recognised that working from home can be a successful and efficient way to carry out white-collar work, if only for some of the time. The tumbling of the ever-present-in-the-office totem may also foster a notion that a four-day working week, for the same pay, might be just as productive as the five-day week grind. The idea is not new. John Maynard Keynes theorised in the 1930s that, with the advent of technology, we could all possibly produce as much with just a two-day working week. At least one Irish trade union is taking up the short week cudgel, but among its most vociferous advocates was David Graeber, a professor at the London School of Economics and author of Bullshit Jobs: A Theory. Graeber is possibly best known for the latter, which outlines his theory on pointless jobs that exist, as he put it, just for the sake of keeping us all working. Graeber kept a “little list” of such occupations, though in practice, it was a long list of salaried professionals whose work he thought would not be missed were they to stop doing it. A world without nurses, refuse collectors, mechanics, teachers or dockworkers would soon be in trouble. Graeber wanted to know if the same could be said if we had no lobbyists, actuaries, telemarketers or legal consultants? Or even, perhaps, accountants. Most people, irrespective of what they do, have spent Graeber-esque days wondering if their jobs have any real meaning. Graeber’s theory may not differ from other economic or management theories that encapsulate a solitary insight but get pushed too far. The Peter Principle says that everyone ultimately gets promoted to their level of incompetence, beyond which they will go no further. That doesn’t, however, describe all career trajectories or the management structure of most successful organisations. Similarly, Parkinson’s law, which posits that work expands to fill the time available, also misses a fundamental point. As society progresses and demands higher standards, the same tasks take longer because the demand is there to do them better. Graeber’s theory falls down because it misses the point of the work he deems superfluous. Every society needs its members to share a commonality of goals, aspirations and standards. There are few processes slower and more tedious than the political process, with a small ‘p’ rather than a capital ‘P’. So many of the jobs dismissed by Graeber contribute to the creation of society’s culture, structure and shared understanding. That requires a degree of patience often lacking in an anarchic perspective like his. Many such jobs are also meaningful to those who do them and thus confer dignity to their time and effort. There is a maxim among anthropologists that fish don’t see the water they swim in, so the discipline’s contribution is to point it out. Equally, however, academics and theoreticians don’t always see that they themselves are swimming in an environment supported by the kind of work decried by Graeber. So, perhaps the real contribution of Graeber’s theory is to serve as a hazard warning for the rarefied academic environment from which it emanated. But then again, maybe a four-day week isn’t such a bad idea… Dr Brian Keegan is Director of Advocacy & Voice at Chartered Accountants Ireland.