Ibec, the group that represents Irish business, has said that Ireland’s business model is undergoing significant change with three distinct economic cycles now evident. The greater complexity of our economy and the speed at which change is taking place requires fresh thinking and new policy responses.
In a speech to the annual Ibec Business Leaders Conference 2019, Ibec CEO Danny McCoy called for fresh thinking in three broad policy areas:
· A proportion of surging corporate tax revenues should be allocated for long-term capital needs. The proceeds should be set aside for more ambitious ongoing capital investment and for the next economic slowdown so that Ireland has the resources to invest in critical infrastructure and productive investment even when budgetary arithmetic is difficult.
· A new SSIA-type scheme to encourage households benefiting from economic growth to save more in the good times. Further incentives could also be built into these schemes to encourage a future staggered withdrawal of these savings or even to provide a bridge to pension provision.
· Investment in productivity and innovation in sectors where capacity and competitiveness are common challenges. We should not leave behind those firms struggling to survive in a frontier economy.
Commenting, Ibec CEO Danny McCoy said: “Ireland’s business model is undergoing profound change. There are now three distinct business cycles involving traditional domestic sectors, indigenous and multinational exporters, and a new generation of intangible intensive, globally traded firms.
“The business model and economy are becoming more complex, so it is imperative that we fully understand these changing dynamics. If you do not understand the patient, you cannot prescribe the most effective medicine. Ireland’s business model is different and because it’s different we need new thinking in public policy to adapt to changing circumstances.”