The growth of digital trade could be worth £10bn to the Northern Ireland economy by 2030, potentially supporting the creation of an additional 50,000 jobs, according to a new report.
Belfast technology firm IRP Commerce, which commissioned the economic study, describes it as the most detailed report on electronic commerce (e-commerce) in the North to date.
It estimates that e-commerce currently generates around £6 billion in GVA (Gross Value Added) each year for Northern Ireland, providing 132,000 jobs.
While GDP (gross domestic product) measures the total value of goods and services in monetary terms, GVA estimates the value that producers have added to the goods and services they have purchased.
The report, prepared by the economist Richard Johnston, expects e-commerce could be worth £9.5 billion in GVA to the Northern Ireland economy by 2030, providing 182,000 jobs, the equivalent of 17 per cent of all employment.
He said with better data and a supportive and focused policy environment, the scenario is even more optimistic, potentially rising to £12.1bn GVA and 231,000 jobs.
Although the report has been prepared on a freelance and independent basis, Mr Johnston is the former Deputy Director of the Economic Policy Center at Ulster University.
Since the drafting of the report, he has been appointed senior economic adviser to the head of the Northern Ireland Civil Service, Jayne Brady.
Based in the north’s innovation hub, Catalyst, IRP Commerce said its software platform has so far supported £1.5 billion in digital transactions across 170 countries.
Company founder Daniel Loughlin said: “IRP believes this report reveals the scale of the growing opportunities e-commerce offers Northern Ireland.
“If e-commerce is based on trade, export, profit and innovation, then Northern Ireland can become a hub for e-commerce with the associated benefits of export-led economic growth.
“This report provides an opportunity for discussion and further research on e-commerce.”
In the introduction to the report, IRP acknowledged that some in the industry believe the post-Brexit trade arrangements being developed for Northern Ireland through the Windsor Framework “present a unique opportunity to become an e-commerce free trade zone”.
“Whether or not this advantage is permanent is immaterial – Northern Ireland has the opportunity to become a center of e-commerce excellence,” the company said.
Nevertheless, in his analysis, Richard Johnston identified a “competitive advantage through unfettered access” for companies trading goods through e-commerce here.
He said Northern Ireland continues to benefit from the digital single market, an extension of the European single market that includes e-commerce.
He said the north could also benefit from future UK free trade deals with third countries outside the EU.
But he described the lack of official government data on the e-commerce sector in the north as “surprising”, something he says needs to change in the future.
He summed up the landscape and said; “Online trade continues to increase, Northern Ireland has a competitive digital infrastructure, a relatively skilled and youthful workforce and unique market access to both the UK and EU markets where trade is increasing.
“At the time of writing, the Windsor Agreement is under negotiation with the aim of reducing some frictions and many grace periods remain in place.
“There is a clear opportunity for Northern Ireland to use e-commerce to capitalize on global megatrends towards digitization while making the most of unique market access to drive trade, employment, wages, sub-regional leveling and GVA , a brighter and better economic future for Northern Ireland.”
Mr. Johnston also stressed that the estimated economic benefits are considered to be on the conservative side.
“For context, about 40 percent of companies are in it [the Republic of] Ireland and Denmark are already using e-commerce (compared to around 12 percent in Northern Ireland).
“It is estimated that by 2030, £10 billion in GVA and 180,000 jobs (17 per cent of the total) could be supported by e-commerce.
“However, with better data and a supportive and focused policy environment, the impact could be even greater.”
