The ending of criminality by paramilitaries and the stability offered by the peace process are essential conditions required for the economic development of Northern Ireland, Northern Enterprise Minister Barry Gardiner said yesterday.

Mr Gardiner also targeted innovation, enterprise, skills and infrastructure as key drivers that are needed to close a productivity gap that exists between the economy in Northern Ireland and the economy in Britain.

He was speaking at the launch of a new economic policy document in Belfast, "Economic Vision for Northern Ireland", which sets out the broad direction of economic policy for the next 10 years, replacing a previous strategy called Northern Ireland 2010. The policy document identifies two principal goals to be achieved: increasing productivity and reducing the economy's reliance on the public sector.

But Mr Gardiner emphasised the key role the peace process and continued political stability had played in helping the economy in Northern Ireland to grow over the past decade and reducing unemployment.

"Peace is critical. And I cannot stress this enough, the ending of criminality is critical. No business wants to operate in criminality or in an unsafe environment," said Mr Gardiner, in a reference to the recent bank robbery in the North.

He said the political stability created through the peace process had enabled the government to get unemployment down close to 4 per cent. It had also led to a 19 per cent increase in visitors to Northern Ireland in the last year.

"Political stability is key and integral to everything we want to achieve for the economy in Northern Ireland," he said.

But he said the vagaries of the day-to-day political process should not change the ongoing economic situation. At the moment there is an ongoing ceasefire situation which is not going to change, he added.

The new policy document acknowledges that the economy in Northern Ireland has performed reasonably well over the past decade, achieving faster growth than the average rate in Britain and creating record levels of employment.

But it also highlights "enduring weaknesses" and new challenges that need to be addressed in the current climate.

Unemployment in Northern Ireland may be low but it tends to be of a longer-term nature than other regions in the UK. This makes it much more difficult to address, says the report, which was compiled after a lengthy consultation with business, trades unions, politicians and academia.

The private sector remains underdeveloped in the North, where one-third of all jobs are in the public sector. This compares to 20 per cent in Britain.

Northern Ireland's large public sector should not constrain private sector growth and compete for resources such as skilled labour. The policy document recommends a fundamental shift from the current overdependence on the public sector to a modern economy driven by business.

It is important that the public sector efficiency agenda is driven forward, it says.

The policy document also highlights continued low levels of productivity and economic inactivity. For example, the productivity of each employee in Northern Ireland is 15.6 per cent lower than in Britain.

There are also far more people labelled as economically inactive in the North, according to the report, which defines students, retired people, women working in the home, those in incapacity benefit and those with care responsibilities as economically inactive.

It says that 60,000 extra people would be in the workforce in Northern Ireland if "economic inactivity" reached the same level as that found in Britain.

The report concludes: "Unfortunately, despite the strong performance of the Northern Irish economy over the past decade there appears to have been little impact in terms of productivity or inactivity."

Manufacturing industries based in the North are also more concentrated in sectors that are under threat from low cost economies such as India, China and eastern Europe. For example, textiles, clothing, food, drink and tobacco account for 29 per cent of the manufacturing sector in Northern Ireland compared to just 18 per cent in Britain, says the policy document.

The government will prepare a new strategy based on the policy document for publication in the autumn. But the vision document sets down a range of recommendations such as: investment in infrastructure; increasing skills; increasing research and development; promoting enterprise; growing the private sector; and making more efficient use of the public sector resources.