Physics business brings in £1.5 bn to Northern Ireland economy

22 November 2012

A new report from the Institute of Physics (IOP) shows that physics-based businesses contribute more than £1.5bn annually to the economy in Northern Ireland.

IOP Chief Executive, Paul Hardaker with Alastair Ross, MLA and Norman Apsley, Chief Executive of the Northern Ireland Science Park at the report launch
IOP Chief Executive, Paul Hardaker with Alastair Ross, MLA and Norman Apsley, Chief Executive of the Northern Ireland Science Park at the report launch

Such companies would not exist without the physics base, or without employees who have an advanced understanding of physics.

The report notes that physics-based businesses employ more than 26,000 people, which is significantly higher than the number employed in finance, banking and insurance in Northern Ireland.

In addition, the value that employees in physics-based businesses add to the NI economy is almost double that of the average UK employee; in 2010, the Gross Value Added (GVA, analogous to Gross Domestic Product, or GDP) by the average UK employee was £36,000, while the average employee in a physics-based business in Northern Ireland contributed approximately £57,000.

Looking at the contribution from physics-based business to the NI economy from 2005-2010, while employing just under 4% of the workers, these businesses provided, on average, 8.8% of Northern Ireland’s GVA.

Launching the report at the Northern Ireland Science Park on November 22, Alastair Ross, Assembly Private Secretary, Department of Enterprise, Trade and Investment said: “This report underlines the importance of the physics-based sector in developing the high-technology businesses which are crucial to our future economy. Physics is a critical part of our evolving innovation and knowledge based economy and, along with the other science and engineering sectors, will ultimately help us to return to strong economic growth and secure our long term prosperity. This research will help inform and steer our thinking and policies as government, businesses and academia work together to continue Northern Ireland’s long-standing tradition of excellence in technological innovation.”

In common with the rest of the economy, the physics base sector in Northern Ireland has not been immune to the recession with a fall of 9% in the total jobs in this sector between 2008 and 2010. In the rest of the UK as a whole, though, the total number of registered businesses in the physics-based sector has risen since 2005 by more than 30%, showing that physics has an important role in emerging sectors of the economy to help drive economic recovery.

Norman Apsley, IOP’s recent Vice President for Business and Innovation, noted that he was “especially delighted that Physics in Northern Ireland was so demonstrably vital to the economy because there is a lot more to come”.

Commenting on the report, Dr. Kevin McGuigan, Chair of the Institute of Physics in Ireland, said , “High-tech manufacturing from aerospace to car components, and from imaging systems to data storage, is particularly important, representing around 65% of the employment in physics-based sectors while emerging fields such as nano-technology will have a key role.

Dr McGuigan added, “For these physics-based sectors to achieve their potential there must be more focused support through more ready access to capital and innovative public procurement.  In particular, the supply of a highly trained workforce is critical.”

He continued, “For this reason, the skewed provision of physics education at 2nd level is concerning - 90% of physics A Level entrants are in grammar schools, which only make up 31% of schools.”

What is a ‘physics-based’ business?
A challenge in the production of the report was identifying which business sectors can be classified as ‘physics-based’; technologies arising from  physics underpin a wide range of businesses – from Tesco’s checkout to Currys flat screen televisions, lasers and LEDs wouldn’t exist without physics. 

Tesco  and Currys, however, would not have been included in the analysis as IOP and Deloitte agreed that ‘physics-based’ businesses would only refer to those businesses that would be unable to exist without ability to respond and adapt to latest advances in research.

For further detail about the classification method and more detailed findings, please see the full report: The Importance of Physics to the Northern Irish Economy available from the IOP.