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Establishing the Economic Rationale for the Strategic Location of a Regional Logistics Park

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Establishing the Economic Rationale for the Strategic Location of a Regional Logistics Park Establishing the Economic Rationale for the Strategic Location of a Regional Logistics Park prepared by: Future Analytics Consulting 23 Fitzwilliam Square, Dublin 2 Establishing the Economic Rationale for the Strategic Location of a Regional Logistics Park 1 Introduction and Approach This report is intended to provide the economic context to support the strategic location of the proposed Regional Logistics Park within proximity to Carlow urban centre. The following will provide an economic profile of County Carlow and seek to highlight the economic benefits such a development will bring to Carlow and the wider regional context. The economic case for this development is predicated by a number of aspects, but specifically seeks to address a key theme that permeates through a number of government economic policy documents, namely fostering economic growth and competiveness. This is a critical concern for areas like Carlow and the South East Region, particularly in a time of scarce resources, where it is vital that development investment is targeted in the right areas. This report concludes that the subject lands are positively positioned to harness the identifiable potential for a logistics park, and function as a vital conduit for employment- led growth in County Carlow, the South East and the wider national economy. This report is informed by a profile of the economic performance of Carlow and the South East economic catchment following the collation and analysis of 2006 and 2011 Census datasets on relevant themes such as labour force and industry sector activity. This process adopts a SCOT (Strengths, Constraints, Opportunities and Threats) Analysis of County Carlow as detailed below. Further evidence-based analysis is set out for Carlow and the South East which establishes a number of key conclusions which support the economic feasibility of a regional logistics park located at the subject lands in Carlow. This approach involves collating and analysing road freight and port activity within the South East as well as identifying key businesses and sectors within the region which require effective and efficient logistic support solutions. 2 The Strategic Context of the Location An effective transport and logistics systems allows for the efficient flow of goods thereby facilitating trade, tourism and memberships of global supply chains and contributing towards balanced local and regional development. Improving logistics performance is at the core of the economic growth and competiveness agenda according to the World Bank1, with policymakers globally recognising the logistics sector as one of the key pillars for development. Improving logistics enhances the competitiveness of logistics-intensive sectors, such as the life sciences sector and component manufacturing, which join multi-national value chains. In its 2013 published review of transport in Ireland, Engineers Ireland (2013)2 highlighted a dichotomy in Irish transport, with a number of world-class flagship projects, such as the motorway network, alongside other sub-standard transport infrastructure. In order to maximise the economic benefits of M9 Motorway, provisions must be put in place to reinforce this world-class infrastructure 1 The World Bank (2014), “Connecting to Compete – Trade Logistics in the Global Economy”. 2 Engineers Ireland (2013), “The state of Ireland 2012: A Review of Infrastructure in Ireland”. 1 | P a g e and maximise what has been a considerable investment by the State. The development of a regional logistics park at the subject lands would achieve this as well as providing the impetus for more balanced regional development by providing a valuable asset for many of the export-focussed businesses and SMEs in the region. As illustrated in Figure 1, the subject lands are distinguished by their key strategic location adjacent to the M9 Motorway and N80 National Primary Route. This location provides for a considerable geographic catchment. Drive time analysis (see Figure 2) illustrates the geographic coverage available over a range of time intervals from the subject location. This analysis demonstrates the strategic geographic advantage of the subject lands in providing vital logistics support to a number of key settlements and employment centres within the region. Figure 1: Strategic Context of Proposed Regional Logistics Park The presence of a number of high profile multinational as well as indigenous companies within the South East Region is particularly pertinent in terms of the economic feasibility of the proposed use of these lands, with a significant number of these companies based on export-import driven business models. From analysis of some of the most high profile businesses from areas that could feasibly be serviced by the proposed regional logistics park, an identification of the key industry sectors can be 2 | P a g e formed. Using data collated from numerous sources including for example the Irish Times Top 1,000 Companies listing3, a distinct ‘economic corridor’ of high profile enterprises within the South East begins to emerge. This economic corridor or arc (see Figure 3) essentially links the key economic hub of the Greater Dublin Area with counties Kildare, Carlow, Kilkenny, Laois, Tipperary, Waterford and Wexford, and terminates with the vital freight gateways of Rosslare Europort and the Port of Waterford. The presence of important higher education facilities along this arc in the form of Carlow Institute of Technology (CIT), Tipperary Institute and Waterford Institute of Technology (WIT) ensures a healthy environment for further industry collaboration and economic development through spin-out companies developed from higher-level education research initiatives. In addition, their presence also ensures that a number of high skilled and educated labour pools are in close proximity to further economic development in the region. Figure 2: Drive Time Analysis Map from Proposed Logistics Park 3 The Irish Times Top 1000 – Our Guide To Irish Business - http://www.top1000.ie/companies 3 | P a g e Figure 3: Graphical Representation of Economic Arc within the South East Figure 4 depicts the wide geographical context of export-import driven economy of this South East region and illustrates succinctly the economic rationale for the proposed regional logistics park at Carlow. Its location at the heart of this economic arc, in tandem with the high level of connectivity served from this location, ensures that Carlow is well placed to facilitate a key logistics hub considered vital to supporting these enterprises. Crucially, a regional logistics park at this location would provide considerable support, in a regional context, for those existing logistics facilities and distribution centres with close links to the Greater Dublin Area and Dublin Airport and Dublin Port in particular. This supporting role, in a national context, will ensure that the proposed regional logistics park at Carlow fulfils a vital role in the national agenda for improving competiveness and economic connectivity. 4 | P a g e Further analysis of companies within this defined South East economic region reveals that the region has proven to be an attractive location for certain types of industries that have formed strategic clusters. In particular, the life sciences sector (which includes the pharmaceutical, bio-pharma and medical technology sub-sectors) is a significant employment generating sector within the region along with the agri-business sector which has a longstanding pedigree as an employment base within the South East. A key characteristic of these industries is their export-based business models and an inherent reliance on effective logistics and distribution solutions to function efficiently. Accordingly, the provision of a regional logistics hub at the subject lands would provide a valuable contribution to the future development of these existing industries in the region. Figure 4 provides an illustration of the key employers based in the South East classified by industry sector. It is noticeable from this figure that there is a high degree of balanced regional development already in existence in the South East. Figure 4: Key Employers and Sectors Identified within the South Eastern Economic Corridor Crucially, a common theme associated with those enterprises illustrated in Figure 4, is a strong export-import based environment. This further reiterates the importance of a regional logistics park in Carlow, where its location offers the most effective and efficient ‘centre of action’ position to facilitate logistics support to the existing industries within the South East and offers further 5 | P a g e motivation for companies to locate their international, regional or divisional bases to the area. Historical analysis of industry agglomerations reveal that commercial enterprises tend to cluster together in order to achieve ‘economies of scale’ and derive the benefits associated from ‘synergy effects’, ‘complementarities’ and the use of a developed infrastructure. The presence of these various industry agglomerations throughout the South East, allied to the potential for increased clustering effects within the region, further emphasises the requirement for an effective logistics support hub to serve the South East. Active policy implementation within Ireland has historically been a significant catalyst in forming and developing economic clusters and industrial agglomerations in Ireland. An important agency in facilitating these agglomerations has been the IDA, particularly
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