BELFAST BRIEFING:The business development agency's latest annual report is surprisingly upbeat

WHAT DOES it say about the North’s economy when the headquarters of the leading business agency is more than likely in the hands of the National Asset Management Agency?

Invest Northern Ireland’s impressive multimillion-pound Belfast headquarters was originally developed by the MRDE consortium back in the days when a property crash was pretty much inconceivable. The consortium was a joint venture between Cookstown-based McAleer Rushe and Liam Carroll’s Dunloe Ewart.

Today, Carroll’s tribulations are well-documented while McAleer Rushe has confirmed that some of its bank loans have been transferred to Nama. Where does that leave Invest NI?

Well, since it has a 25-year lease, it is pretty much unaffected. But that, sadly, is not the full extent of Invest NI’s potential exposure. The agency – which yesterday unveiled a surprisingly upbeat end-of-year 2010/2011 report – may yet find itself

caught up in the fallout from Nama.

Outgoing Invest NI chairman Stephen Kingon says the agency is aware of an increasing number of companies, whose core business is not related to construction or development, which are getting sucked into Nama because they once “dabbled” in property. Such companies are now in a situation where they cannot meet “contingent liabilities”, putting their core business, which remains viable, at risk.

Kingon believes the agency could be forced to consider ways to support such companies as they work through their difficulties.

Despite Invest NI’s strong performance last year – it managed to secure 41 inward- investment projects, which could deliver 2,816 jobs – Kingon says Northern Ireland faces a critical battle to maintain jobs.

There is “huge increased pressure” in the local economy, with many businesses struggling to keep afloat, Kingon says, noting that the most pressing problems revolve around issues of credit availability and working capital.

Kingon believes the situation may ease once Irish banks are fully recapitalised, as this might help credit flow in the North.

On the upside, the report shows that, despite economic challenges, Invest NI attracted and supported investment from foreign and locally-owned businesses totalling £638 million (€714 million). It says this could translate into a £170 million annual boost in additional salaries.

The agency also highlighted £111 million worth of research and development commitments secured from businesses.

On the indigenous side, 190 local companies were supported in their first steps to export, while 585 existing exporters were assisted in chasing new markets.

Invest NI says it has met all of the key targets established by the Northern Ireland Executive for 2008 to 2011.

If the agency seems inclined to blow its own trumpet, it is worth remembering that it has been the subject of some stinging criticism.

The authors of an independent review into economic policy in the North questioned Invest NI’s track record and concluded that it had “not made significant progress towards achieving the goal of improving productivity”.

The panel expressed concerns on two fronts: the level of financial assistance offered in support of investment projects and job quality. It claimed that, although Invest NI had spent in the region of £1 billion, it had not succeeded in raising productivity.

According to the agency, its latest figures illustrate that things are changing and that it has “succeeded in driving inward- investment job quality” forward.

The statistics show that the salaries of people who work for companies owned by foreign direct investors have jumped by 29 per cent to an average £28,499 in the past three years.

The actual cost “per job supported” has also fallen by about 5 per cent and last year was in the region of £11,000.

Perhaps more important than the figures are the ambitions harboured by Invest NI chief executive Alastair Hamilton, who has been in the job two years.

Hamilton says he is determined to change how the agency operates, moving it from a “reactive to a proactive” organisation. He is on a mission to “demystify” and “de-layer” Invest NI to make it easier for companies to get the help they need to succeed and to ensure new inward investors open for business at a much faster rate.

Not surprisingly, Hamilton is backing the campaign to persuade the UK treasury to give the North’s Executive the authority to set its own rate of corporation tax.

But in the meantime a new approach by Invest NI might just mean the difference between a job won and a job lost.