x Abu Dhabi, UAESunday 23 July 2017

Ireland points the way on how to diversify an economy

Abu Dhabi Model Economies: Ireland's recent financial woes aside, the country has built up a thriving industrial base and leveraged a small population to become a leading research hub in Europe.

Ireland has lured in thousands of foreign businesses with the promise of whisper-thin corporate tax rate. Aidan Crawley / Bloomberg News
Ireland has lured in thousands of foreign businesses with the promise of whisper-thin corporate tax rate. Aidan Crawley / Bloomberg News

Given Ireland's recent bank bailouts and struggles with debt, it would probably rank low these days on any list of countries worthy of emulation.

A textbook example of how to make a financial hub work Ireland has made major investments in financial services, and has attracted some of the biggest banks in the world. Its success stands as perhaps a textbook example of how to develop a financial hub. read article

How to impress a client - have the PM speak on your behalf Ireland has put huge amounts of money and effort behind growing its small businesses. The government-led push has helped make thousands of homegrown companies successful and given them a lasting foothold in the global economy. Read article

Among Europe's elite for research Ireland has put considerable financial muscle behind raising its science and innovation profile in Europe, which has vaulted the small country into Europe's top leagues. read article

The island country of 4.5 million people, however, has pursued a successful development strategy for decades. And Abu Dhabi has chosen Ireland as a guide for its Economic Vision 2030, a sweeping plan to diversify the emirate's economy and reduce its reliance on oil revenues.

The attractions of the Irish experience are many.

Since Ireland began to push its economy beyond agriculture a half century ago, it has lured in thousands of foreign businesses with the promise of whisper-thin corporate tax rates, an educated workforce and strong government support.

Today the country is a European hub for technology companies including Google, Apple, Facebook, IBM and Microsoft and for pharmaceutical giants such as Pfizer, Abbott Laboratories and Boston Scientific as well as for many of the world's largest banks.

Ireland has also invested heavily in small business development and in research and innovation.

Over the past decade, it has put itself on the map in Europe's scientific community, funding nine centres for engineering and technology across the country.

They in turn have brought in academics from some of the world's leading universities to work in Ireland.

The country is not a cheap place to live and work, nor is it very large, but it has leveraged what it has to punch well above its weight.

"You talk to guys and you ask why is Google in Ireland? You look at the cost basis here and how can you compete?" said John Boland, the director of Crann in Dublin, a science research institute partly funded by the government.

"I mean, Google in Bangalore is a hugely productive and hugely less expensive operation, but the reality is that Google in Ireland per head even including costs is much more productive than Google in Bangalore, and it has got to do with intangible issues of bringing together different cultures and generating ideas," said Mr Boland.

The question now for Ireland is how to augment the success it has had over the years in the face of its most trying economic times in a generation. Job losses and government austerity have made that task harder, but the government so far is keeping to its commitment to helping local companies while attracting further foreign investment.

"In our current strategy horizon for 2020, we've recognised that clean technology and renewable energy are probably sectors of the future, and we've created a dedicated team to identify and win business in that area," said Kieran Donoghue, the head of financial services at the Industrial Development Agency, Ireland's main inward investment body.

"We've recognised that the centre of gravity of the global economy is shifting to the emerging economies like Brazil, Russia, India and China, so we've established a dedicated team focusing on that geography," he said. "The strategy is continuously evolving. It's like rolling out a carpet, and as you roll it out in front of you it's rolling up behind you, but you're continuing to move forward."

afitch@thenational.ae