A report has found that the Republic's productivity levels have grown to 40% above the North's in the last 20 years.
It also revealed that export intensity is an important factor in driving Irish economic productivity.
The Economic and Social Research Institute (ESRI), which produced and published the report in partnership with the Taoiseach's Shared Island Unit, examined trends in productivity across both regions. Productivity is measured as the gross value added per worker.
Among the report's main findings were that productivity levels in the two regions were similar in 2000 but in the past 20 years they have diverged, with Ireland's increasing and Northern Ireland's "trending downwards".
As of 2020, the Republic's productivity was 40% higher than that of the North.
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In 17 sectors for which there is comparable data, productivity in Republic "noticeably exceed" the North's in 14 of the sectors, with large gaps in administrative and support services, finance and insurance, legal and accounting, and scientific research. The North has an advantage in electricity and gas supply, as well as in construction.
The report stated: "It is possible that the impacts of the Troubles, a relatively closed economy in terms of international trade, peripherality, limited results from regional policy and a historical reliance on public sector employment have all combined to subdue the impact of market forces among Northern Ireland firms leading to a productivity trend that appears largely exogenous with respect to key policy variables."
The ESRI said its analysis showed a need "to rapidly expand investment and improve skills in the North, particularly at the post-secondary level".
One of the report's authors, Professor Adele Bergin, said: "We believe that this is the first comprehensive study to compare productivity in Ireland and Northern Ireland. The research shows a widening productivity gap between Ireland and Northern Ireland; with productivity per worker being approximately 40% higher in Ireland."
