Workers in Ireland are now 40 per cent more productive than those in the north

According to a study, Irish workers are 40 percent more productive than their Northern Irish counterparts.

The Economic and Social Research Institute (ESRI) said more investment and higher levels of education in Ireland, along with booming exports, have fueled the success of firms here.

Irish productivity – the value per hour worked – would be about 50 per cent lower if investment and education levels were at the same level as in Northern Ireland.

But the yawning wedge between businesses here and those north of the border can only be partially explained by investment, education and exports.

There are “no obvious explanations” for the fact that productivity per worker has fallen in Northern Ireland over the past 20 years, ESRI said, although the problems may have “dampened” the impact of policies to boost skills and investment.

“The research shows a widening productivity gap between Ireland and Northern Ireland,” said Adele Bergin, one of the report’s authors.

“The usual factors (education, investment, exports) turned out to be important determinants of Irish productivity. However, there is no significant link between these factors and Northern Ireland productivity. There may be other factors that need to be considered when crafting a policy response.”

Productivity levels in Ireland were well above those in Northern Ireland in 14 out of 17 sectors surveyed by ESRI, with particularly large gaps in administrative and support services, finance and insurance, legal and accounting, and scientific research. Northern Ireland workers fared better in the electricity and gas utilities and construction sectors.

Lower investment, including foreign investment, was a key driver of the productivity gap, but education and exports also played a role. Twice as many young people in Northern Ireland tend to be early school leavers, while a third more complete post-secondary or tertiary education in Ireland.

Exports account for about 15 percent of total business turnover in the North, compared to 54 percent here. Twice as many people in Ireland are employed by foreign-owned companies.

“Our models also suggest that without a comprehensive strategy to improve the competitiveness of Northern Ireland’s businesses, reforming education and skills provision and increasing investment alone are not guaranteed to boost Northern Ireland’s productivity,” the report says. Workers in Ireland are now 40 per cent more productive than those in the north

Fry Electronics Team

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