Money Magnet

Dec. 21, 2004
Despite uncertainties in the peace process, manufacturers are rushing to invest in Northern Ireland.
The spray-painted slogan seen on Falls Road was stark: "1 bullit, 1 ounce = surrender." It was a militant response to calls for the Irish Republican Army to disarm in a bid to save Northern Ireland's faltering peace process. On Falls Road, support for such a sentiment would be stronger than just about anywhere else in the six counties that comprise the province, for that staunchly republican West Belfast neighborhood has been a flashpoint for "The Troubles" for three decades. But it's also the home of Fujitsu Ltd.'s software development center, and the company's presence in Belfast is soon to grow thanks to the largest-ever investment by a Japanese company in Northern Ireland. Fujitsu's announcement that it would invest an additional 29.4 million (US$47 million) in its Belfast operations came on a day when the newspapers were full of grim news about the state of efforts to end 30 years of sectarian strife in Northern Ireland. Such is often the case there these days. A little over a week later, on the very day the IRA said it was breaking off talks with an international decommissioning body, Canadian telecom giant Nortel Networks Corp. made public another 29 million (US$46 million) investment in its facility in the Belfast suburb of Monkstown. A truly astonishing transformation has occurred in the province since the IRA declared a cease-fire in 1994. While the world has looked on with awe at the so-called Celtic Tiger economy of the Republic of Ireland, Northern Ireland has very quietly been growing faster than any other region of the UK, with manufacturing output jumping by more than 20%. Investment in manufacturing has grown by 58% during that period, driving unemployment down from its 1986 peak of 17.2% to 6.7% today. Those changes also are visible on the streets. Five years back, a visitor to Belfast could hardly miss the armored personnel carriers and foot soldiers who ceaselessly patrolled the city center and neighborhoods. Now, central Belfast is dotted with Seattle-style coffeehouses where a remarkably young population -- among the youngest in Europe -- can be seen sipping lattes and munching biscotti. In the Crown Bar, a majestic old gin palace directly opposite the most bombed hotel in Europe, a visitor can eavesdrop on business executives with Dublin or Detroit accents who have come to Belfast because they smell money here. While pessimists look at Ulster and see conflict, manufacturers look at the province and see opportunity. Investment is pouring in, with 21 foreign ventures promising 2,657 jobs announced in the year ending on Mar. 31, 1999. Asked whether the current breakdown in the peace process would spell an end to such investment, Bruce Robinson, chief executive of the Industrial Development Board of Northern Ireland, smiles indulgently as if to signal that he accepts such a question as inevitable. "The key issue here is that decisions about economic development and investment are taken over a reasonable period of time. . . . Since the mid-'90s, there has been steady political progress. Investors can see that. Investors don't make decisions based on one- or two-day events." That's exactly right, says Ron Martin, executive vice president of planning and development at Fujitsu. "I guess [the company's expansion] was a bit of a gamble . . . ," Martin says. Much of Northern Ireland's economic growth has come from high technology. In addition to Fujitsu and Nortel, Northern Ireland now plays host to Digital, IBM, Daewoo Electronics, and other big names in the sector. Homegrown company APiON Ltd. -- since acquired by Inc. -- has been a pioneer in developing wireless application protocol products. High-tech growth has been fueled by the comparatively young population and the steady stream of computer-science graduates being pumped out by Queen's University and the University of Ulster. "They're excellent universities," says Carl DeWilde, Fujitsu's senior vice president of development and strategic planning. Martin adds that the company's salary costs in Northern Ireland are about half of what they would be in the U.S. Philippe Morin, marketing director for Nortel's international optical networks, agrees. "The biggest challenge for companies like Nortel is to get the resources and the right skill set," says Morin, who notes that Northern Ireland fills the bill. The five-year-old peace process has faltered in recent months over the IRA's refusal to decommission weapons, a key demand of unionists, whose allegiance is to Britain. In February the British government suspended a governing body made up of both nationalists and unionists because of the IRA's reluctance to disarm. Weeks of recriminations followed, but current tensions are only a "hiccup in the peace process," says William Martin, who runs Nortel's lab in Monkstown, where employment is set to grow from a current level of 440 to 575. Gordon Bell, managing director of Liberty Mutual Group's software development arm in Belfast, says that he and the rest of the population in Northern Ireland "go about our business" regardless of any breakdown in negotiations to end the conflict. His parent company saw that and picked Belfast for the software operation because it represented an opportunity. "The bottom line," says Bell, "was that there was an availability of good people coming out of our universities and, equally, relatively low demand for them." Fujitsu's DeWilde -- who says he got "a pleasant surprise" during his first visit to Northern Ireland a year ago -- thinks other companies are noticing that low demand and will continue to invest in the province. "We certainly saw an opportunity to find some really good people there," he says, "and to get in before other people could get in."

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