Outraged Dragon says Boux to doing business in Belfast

Boux Avenue store interior with Theo and store team

Theo Paphitis: ‘Horrendous” experience doing business in Northern Ireland

I must admit that until this week I had never heard of Boux Avenue. I have now. Online it’s offering two-for-one PJs in a bag. How many shopping days are there to Christmas?

At £32 they are not exactly cheap, but this week, the brand’s owner Theo Paphitis was singing their praises. “Boux Avenue is designed to appear exclusive. It looks expensive – the changing rooms are so good people want to move in – but the price point is no different to what you’d pay in Marks and Spencer.”

So far so good. You’d expect Theo to be pushing his products. It’s what retailers do; and his jammies look nice, though they are clearly not aimed at me. I don’t suit vintage floral and his “amber oriental thong” only goes to size 16.

As you might have guessed, Boux Avenue is aimed at the female market – and a younger demographic: professional women who are in shape. This section of the market has considerable spending power, and taste. Though I am not sure ‘exclusive’ is a word you can use for what is essentially a mass-market product.

Until this week, Northern Ireland shoppers could only buy Boux products on line. But now, if you are in Belfast, you can nip into the store and see what Boux is all about. Theo’s latest shop is in Victoria Square.

Ahead of the launch Theo went on a publicity drive,  singing the praises of his brand to anyone who would listen. Drumming up business is what he does, and he does it well. But there was a sting in the tail of his PR message.

The former star of Dragons’ Den is not afraid to speak his mind, and he had some tough love for Northern Ireland. It was a “horrendous place” to do business in, he said. Ouch.

Over the years, business has had one hell of a buffeting as the economy has changed shape. The decline in manufacturing is part of a global shift in trade, but it hit Northern Ireland particularly hard. In addition, there were multiple self-inflicted injuries due to the breakdown in public order and the tide of terrorism.

Other regions of the UK and Ireland, similarly affected by the global trends, have focused on the development of new industries, the supply of goods and services – in particular retail – and the encouragement of the creative economy.

In Northern Ireland, entrepreneurs have had to cope with on-going political instability, the paralysing effect of a low-wage economy and over-dependence on the public sector. You can’t use retail as a driver in an economy where there’s no money to spend.

Over the years there have been countless trade missions in and out of Northern Ireland, and hundreds of millions have been ‘invested’ in development activities. Trade and Investment ministers have said all the right things about the attractions of Northern Ireland. But like Theo’s lingerie and pjs, their words just “appear” credible. On the ground it’s different.

At some point someone will realise that there is a direct link between political stability and economic growth. Investors are not stupid. They don’t look at words, they look at actions.

As the Executive tries to get itself back on the rails, the criticism from Paphitis is timely, and it must be heeded. To hear a man who wants to invest railing again the obstacles his company has faced in setting up shop is nothing short of a scandal. Government exist to improve people’s lives, not stand in the way of economic growth.

“I have been trying to come here for four and a half years,” he said. His challenges have been finding the right site “that is affordable”.

“Business rates and rental prices have been the main issues.” And then came the killer line about Northern Ireland: “It has been a horrendous place in terms of working with businesses.”

It’s remarkable the retail sector is as strong as it is.

Paphitis sees signs of change: a more benign business rate regime, better rental prices, and the potential offered by the devolution of corporation tax. “Politicians in Northern Ireland should look at this as a gift from the gods,” he said.

I don’t want to be unduly cynical, but their track record on taking advantage of gifts from the gods is not good.

For too long political parties in Northern Ireland have been focused on their own narrow self-interest. The most recent bout of institutional instability was driven by the desire to win short-term electoral advantage.

The fact that Paphitis has put his money in Northern Ireland should be an encouragement. He sees opportunity.

If the Stormont Executive is about anything, it should be about encouraging entrepreneurs like him, it should be about listening to business – not least those who have invested here during the toughest of times – and it should be about creating an environment that encourages economic growth and jobs.

  • A version of this article appeared in The Irish News on October 23 201

A stagnant economy in need of visionaries

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Belfast Harbour – once feeding one of the great industrial hubs of the world now serving a city which is not living up to its potential

The Financial Times has just been sold to the Japanese for £844 million. Who says newspapers are dead? The new owner is the Nikkei Corporation, little known on this side of the world, but a major media player in what we once quaintly called the Far East. The term is frowned on these days for its colonial overtones.

The Japanese economy is in the doldrums, and not without its corporate woes as the Toshiba scandal has shown. Executives there have fallen on the swords after revealing they overstated profits (as happened recently at Tesco). But nonetheless, Japan remains a powerful force in the world economy – as the Nikkei acquisition shows.

Other nations where Irish missionaries once won soldiers for the pope’s many battalions are also showing the west a thing or two financially: Taiwan, still contested territory, Singapore where this week David Cameron has been touting for business for Britain, and of course the mighty China.

Still nominally communist, Mao’s successors have embraced the free market, as once the pigs did the farmers in Orwell’s Animal Farm. China too has been on a bumpy ride this past week. Stock markets can plunge, even in an economy as meticulously planned as the Chinese.

Such is the interconnectedness of the global economy, that the fall in the Chinese market is said to have cost US investors almost $60 billion (the equivalent of a company the size of global technology giant HP). Those of you piling money into company pensions will have been impacted indirectly. China has been seen as a pretty safe bet to now.

Regardless of these specific difficulties, the Asian economies will continue to grow in strength at the expense of the west. China is likely to become the world’s economic powerhouse, supplanting America. Without wishing to indulge in racial stereotyping, our Asian brothers tend to work harder and pay themselves less.

The American Empire (with its protectorates in Europe) is on the wane. It is still enormously strong economically, politically and militarily as President Obama’s emotional ‘return’ to Africa has demonstrated. But all the signs of decline and fall are there.

By stealth China is buying up real estate and influence in western nations, but in Africa it is investing billions in major infrastructure initiatives – ports, roads, rail and power. Africa remains rich in natural resources critical for China’s economic development; the Chinese now pump in more than the US, and ship out oil and minerals essential for industry.

As the tectonic plates of the global economy shift, where does that leave Northern Ireland? It is a tiny economy whose deficiencies have been well explored on these pages. It is also hobbled by being wedded to a much bigger economy centred on London. Being part of a large economy can be a strength, but it is also a weakness, as cities like Manchester, Newcastle and Glasgow know well.

Regardless of the constitutional niceties, the UK link has created a dependency culture here. Devolution provided the opportunity for the region to take greater control of its own destiny.

But the Executive has not proved to be up to the task; and it is not just because of the tension between nationalism and unionism. There is no consensus about how the economic needs of society are best met – within the parties, never mind between them. And there is no consensus about the priorities for Northern Ireland.

This economy is in an accident and emergency department where triage isn’t practiced. Doctors are focusing their attention on minor injuries rather than potentially mortal wounds.

Worse still, those with the capacity to help Northern Ireland out of its difficulties feel they are being ignored. We have all been in a position where the person we are talking too nods encouragingly, but doesn’t listen.

That’s how business feels about the Executive.

There is no doubt about the problems facing those who govern us. Needs grow and resources dwindle. But there is a limit to how much more you can do for less. We need to find a way of growing the pot.

There was once a time when the relationship between Britain and Ireland mattered, where sovereignty mattered, where protectionism could help countries withstand global competition.

But that world has gone. In Northern Ireland we are still fighting the wrong war.

The big issue is how do we invest limited resources where they are best able to stimulate growth, generate income and create wealth to be reinvested in those areas that best improve quality of life.

  • A version of this column appeared in The Irish News on July 31 2015

World leading research needs investment

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Statistics must always be treated with suspicion. Mark Twain once said: “Facts are stubborn but statistics are more pliable.” He also coined the immortal phrase: “lies, damned lies and statistics”.

The university statistics industry went into overdrive last week. It may have escaped your notice – people have other things to worry about at this time of year – but on Thursday the results of the 2014 Research Excellent Framework were announced.

The REF, as it is affectionately known, is an audit of research quality: it determines where the money goes. University funding is labyrinthine, but put simply universities get a fixed amount for teaching. Money for research – £2 billion – goes to those who perform best in the REF.

But how do you compare the work of a biological scientist in Ulster University with that of a lawyer at Queen’s and a medieval historian in Oxford? The REF, carried out every six years or so, is the mechanism for doing that.

This time around (statistics warning) almost 200,000 academic papers were assessed, and the work of more than 52,000 academics was analysed by their peers – people who should know what is good and what is dud.

There is a starred rating system, four stars meaning research is world-leading (the gold standard), three meaning it is internationally excellent. Two-star and one-star research is not worth writing home about. The subject panels were also asked to assess the impact of research (an attempt to ensure university research is relevant to the needs of society).

So what does the REF mean for Northern Ireland?

UU new

First the bad news: overall the REF shows the growing strength of universities in south east England – the so-called golden triangle of Oxford, Cambridge and London. In particular, London universities are on the rise, challenging Oxbridge, and they will take even more of the funding pot.

That’s not good for civic universities like Queen’s, or their regions. Queen’s and UU will get research funding – in the region of £50 million – from the Department for Employment and Learning (DEL) but the big money comes from the UK’s Research Councils. Their £2 billion will be concentrated around London.

If it is to protect the economic benefits that come from university research, the Executive must counter-balance the London effect with cash. The CBI got it spot on last week when it said the Executive would be bonkers to disinvest in higher education.

For a raft of reasons, including recruiting the best staff and students, position in league tables is important. Queen’s, one of the elite Russell Group, is not yet where it needs to be; but it is in the top 20 of the headline REF table, just. Research Fortnight places it at 19 in its research power rank.

Ulster, a much younger university, comes a creditable 38 in the national research league tables, with good performances in biomedical sciences, nursing, art and design among others.

But in terms of research firepower, Queen’s blows UU out of the water. Both universities employ about 1,000 academic staff each. Queen’s submitted 868 of them. Ulster entered only 449. (One of the tricks used to maximise rankings position is to submit only staff with research credibility.)

This is one area where the statistics are misleading. When you look at percentages of staff ranked as world leading or internationally excellent, there is not much difference between Queen’s (75 per cent) and UU (72 per cent).

But translate percentages into people and you get a different story. At Queen’s, some 650 people are in the top two categories, double the UU figure. (Percentages are the most pernicious statistics of all.)

Queen’s may not benefit from its high staff return in the headline table, but Times Higher Education has looked at research intensity and places Queen’s at an impressive joint eight in the UK because of its breadth and depth.

Ulster will pay the price for its lower staff return when DEL hands out research cash. More than two thirds of DEL’s research pot is likely to go to Queen’s.

On the plus side, any region would want to have two top 40 institutions so Northern Ireland has something to be thankful for.

Universities attract clever people, and money; companies look for centres of academic excellence and invest there. Economies grow.

But with Executive disarray, and a budget that fails to meet the economy’s needs, Northern Ireland is unlikely to take full advantage of this REF, with dire consequences for all if underinvestment undermines our university’s competitiveness with better-funded institutions in the rest of the UK.

  • A version of this article appeared in The Irish News on December 22 2014