Economy Minister Dr Caoimhe Archibald has outlined a comprehensive policy agenda to close Northern Ireland’s persistent productivity gap with Britain and the Republic of Ireland, as new official data suggests the region is beginning to turn the corner on one of its most stubborn economic challenges. Speaking at the Northern Ireland Productivity Forum conference at Queen’s Business School, the Minister highlighted progress in narrowing the productivity deficit while detailing plans for skills investment, artificial intelligence adoption, and closer collaboration between employers and trade unions.
The event, held on 29 April 2026, brought together stakeholders from government, academia and industry to examine emerging drivers of productivity, including AI and job quality. It comes as the Northern Ireland Statistics and Research Agency (NISRA) published new research showing output per job in the non-financial business economy rose by almost 30% in real terms between 2018 and 2023, while Office for National Statistics (ONS) figures indicate the gap in output per hour worked with Britain has narrowed from 20% in 2010 to 12% in 2023.
New Data Shows Progress on Productivity Gap
Recent statistics suggest Northern Ireland’s long-standing productivity challenge may be showing signs of improvement. According to the Minister, the latest ONS productivity statistics show the region is closing the gap with Britain, though significant disparities remain. Research from The Productivity Institute indicates that Northern Ireland’s productivity still sits approximately 11% below the UK average, and lags behind the Republic of Ireland where productivity is around 8% higher than the UK average.
The Minister welcomed the trajectory, stating:
“I welcome these latest research findings. We have long lagged behind Britain, and particularly the south of Ireland, on this fundamental driver of living standards. But the trajectory appears to be positive.”
The NISRA research, published last week as part of the Productivity Statistics Development Project, represents the first industry-level estimates of productivity since 2021. The project, funded by the Department for the Economy, aims to provide more timely and detailed productivity data for Northern Ireland.
Minister’s Four-Pillar Strategy
Dr Archibald outlined a multi-faceted approach to drive productivity growth, emphasising sector-specific Action Plans, international trade, skills development, and industrial relations reform. The Minister detailed the comprehensive agenda, stating:
“We have developed Action Plans to grow our most productive sectors of the economy. We are driving export growth by helping companies utilise dual market access, and by diversifying our international markets.”
The reference to dual market access comes amid ongoing debate about the economic benefits of Northern Ireland’s unique post-Brexit trading position, which allows seamless access to both the UK internal market and the EU Single Market for goods. While the Minister highlighted this as a tool for export growth, recent analysis from EY’s UK Attractiveness Survey 2025 suggests Northern Ireland secured only 2% of UK foreign direct investment projects in 2024, raising questions about whether the dual market advantage is translating into measurable investment gains.
The Minister also emphasised the importance of workplace collaboration, adding:
“And we are trying to create a more collaborative relationship between employers and trade unions, in which they work together to improve company productivity and create better jobs.”
AI and Future of Work
A significant focus of the Minister’s productivity agenda centres on artificial intelligence. The conference examined the establishment of the new AI Advisory Panel, which held its inaugural meeting on 16 April 2026. The Panel brings together experts from industry, academia and government to provide a co-ordinated approach to addressing the economic challenges and opportunities presented by AI.
The Minister highlighted AI’s potential to transform the economy, noting the region’s established strengths in software, cyber, data and analytics, alongside world-class universities and the Artificial Intelligence Collaboration Centre. The AI Advisory Panel’s initial focus will be supporting the implementation of recommendations from the Matrix report on AI and the Future of Work in Northern Ireland.
Delegates also heard about the forthcoming All-Island Working in Ireland Survey, funded by the Department, which will provide new evidence on pay, security, flexibility and meaningful work to inform future Good Jobs policy.
Skills and Education Investment
The productivity push is underpinned by significant investment plans in education and training. The Minister referenced the Skills Action Plan, launched in October 2025, which focuses on three key themes: collaborating with industry and education partners; improving skills systems; and creating an inclusive, forward-looking skills ecosystem.
Dr Archibald indicated that additional funding is being sought for Further and Higher Education, stating:
“We have a number of skills Action Plans, and I am seeking additional funding to invest in Further and Higher Education. We are embracing AI as a way to drive productivity growth.”
This commitment comes against a backdrop of severe funding pressures across the education sector. The Department of Education’s 2025-2026 budget stands at £3.36 billion, which is more than £250 million short of what is needed, with projections suggesting the gap could widen to over £1.15 billion by 2028-29. Meanwhile, the Republic of Ireland has committed to fully abolishing college fees from September 2026, potentially creating competitive pressure for cross-border student mobility.
Unanswered Questions and Broader Context
While the Minister painted a positive picture of narrowing productivity gaps, several critical questions remain about the sustainability of recent improvements. Research from Queen’s University Belfast suggests that Northern Ireland’s rapid productivity growth between 2020 and 2021—when it moved from last place to 7th among UK regions—was largely driven by the unique economic conditions of the Covid-19 pandemic, specifically a 10% decrease in hours worked coupled with only a 1% fall in output value.
Fourteen of the 18 productivity drivers tracked by the Northern Ireland Productivity Forum remain below the UK average, including exports, R&D per job, innovation activity, and access to finance for SMEs. The region also faces significant infrastructure challenges, with the lowest business density in the UK at 875 businesses per 10,000 people.
The conference did not address how the Department plans to measure the success of its productivity interventions, nor did it provide specific timelines or budget allocations for the additional Further and Higher Education funding the Minister mentioned.
Questions for Stakeholders
- How will the Department measure whether the AI Advisory Panel and Skills Action Plans are delivering measurable productivity improvements by 2030?
- Given that 14 of 18 productivity drivers remain below the UK average, which specific sectors or regions will be prioritised for intervention?
- Will the additional funding sought for Further and Higher Education be sufficient to close the gap with the Republic of Ireland’s fee abolition policy, and when will this funding be confirmed?
- How does the Department intend to ensure that productivity gains translate into higher wages and improved living standards, rather than just increased corporate profits?
- What mechanisms will be put in place to evaluate whether dual market access is genuinely driving export growth, given the mixed evidence on foreign direct investment?
The productivity agenda outlined by Dr Archibald represents the most comprehensive attempt in years to address Northern Ireland’s economic underperformance. With the gap to Britain narrowing but still significant, and with the Republic of Ireland maintaining a substantial lead, the success of these interventions will be measured not just in statistics, but in whether workers see tangible improvements in pay, job security, and quality of life. The forthcoming All-Island Working in Ireland Survey may provide crucial baseline data, but the real test will be whether the promised funding materialises and whether the collaborative approach between government, industry, and unions can deliver structural change rather than temporary gains.