Six reasons why Ireland is a model of substance
Ireland is a huge beneficiary of globalisation. It has a business model of substance with depth, diversity, and years of tactical policy planning and implementation behind it. Ireland has a diversity of industries; which do R&D and high-value manufacturing and it generates indigenous firms of scale with outward investment. It is one resilient enough to have emerged strongly from the recent global recession with the highest growth and population rates in the European Union. We use six qualities to characterise the substance of the Irish business model: evolution; global footprint; full business life-cycle; world class; global hub; and clusters.
Evolution refers to the history and evolution of Ireland’s economic policies. This economy of substance is decades in the making and developed out of targeted policies that take into account best international practice and specific regional strengths. Central to the evolution of this pro-business economy are: a transparent and competitive tax regime, a skilled and flexible workforce, and the right political and regulatory institutions.
In the late 1980s, Ireland was still classified as a cohesion country in need of structural funds. A generation on, Ireland is a net contributor to the EU budget, a hub of global business and Europe’s fastest growing economy. Exports of goods and services as a proportion of GDP rose from 24% in 1965 to 124% in 2015, making Ireland the fifth most intensive exporter of its goods and services in the world.
The Irish business model has a Global Footprint. This is what an economy develops when it serves worldwide markets and when investment circulates. It’s about matching foreign direct investment and the influx of multinationals with strong outward direct investment and the establishment of export markets abroad. Ireland’s outward investment matches Foreign Direct Investment and Irish companies employ as many people in the USA as US companies employ in Ireland. Ireland is now the largest net exporter of dairy ingredients, beef and lamb in Europe and the largest exporter in Europe of powdered infant formula, while over half the world’s fleet of leased aircraft is managed through Irish companies. Ireland is the world’s second largest software exporter.
Full Business Life-Cycle
Ireland specialises in the Full business life-cycle. This is because all activities from R&D to production, on to sales, marketing, logistics and finance take place within Ireland. Ireland manufactures a third of the world’s contact lenses, three quarters of global orthopaedic knees and 80% of stents globally, while over 30 million diabetes sufferers rely on injectable devices manufactured in Ireland. All of the top 10 global technology firms have strategic operations in Ireland.
World Class Economy
Ireland is a World Class economy, because it is globally competitive in terms of people and research with performance driven from a strong and collaborative business culture, with principles of operational excellence deeply embedded into the thinking of all leaders and employees. As world class economy, Ireland attracts people at the top of their game and invests in R&D to create a culture of excellence. Our non-national workforce is double the EU average and twice as likely to be educated to third-level. Ireland has the EU’s highest proportion of workers in high-tech manufacturing, with twice the level of Germany in second place, and 7.5% of Ireland’s workforce is in high technology sectors, far outstripping the EU average of 4%.
As a Global Hub, top international companies have converged to locate their headquarters in Ireland. Since 1990, changes in Irish GDP growth have mirrored World GDP growth, and ease of access to global markets has proved crucially important to companies operating here. Ireland is now home to all of the top ten global technology companies, 18 of the top 20 pharmaceutical companies and 18 of the top 25 medical technology companies.
Clusters develop when there is a range and diversity in the economy. Instead of relying on one type of activity, Ireland’s business model is characterised by a dynamic ecosystem involving multinationals in different sectors generating local SMEs and partnering with the indigenous sector along with higher education, health and research institutions. In an increasingly networked global business community, seeking collaborative innovation, the proximity of leading edge sectors and talent in Ireland gives a huge comparative advantage. On average in Ireland a life sciences and tech company are an hour and a half to drive apart.