Homespun focus ignores fact that big business is what we do best
The new Government should cast aside some old-fashioned thinking on where Ireland truly excels, argues Conor Skehan
THE apparently progressive policies of Ireland’s emerging political parties disguise very old-fashioned nativist tendencies.
There are signs some of these have already crept into the programme for government. These must be called out and resisted as grave threats to Ireland’s future prosperity.
It is possible to detect a rethinking of politics all over the world. These are a response to pressure for change arising from Covid-19 and Black Lives Matter. These are combining with previous controversies such as Extinction Rebellion and anti-austerity protests. Social media is accelerating this process, like petrol poured on a bonfire.
In response, many pressure groups have come to prominence and are trying to reset the political agenda. In Ireland, ‘Vote for Change’ was the winning slogan of the last general election. In the resulting programme for government, it is notable that many of the changes sought show a return to calls to support for the small-scale, local and indigenous. Where are the policies to become bigger and better at being a large-scale, outward-looking and internationalist economy?
Such policies overlook the reality that Ireland’s successes all arise from our ability to navigate and thrive on the international stage. Ireland is all about international businesses — both ‘ours’ that export and ‘theirs’ that come here. It’s what we do best.
Indeed, this is the very success that provides most of the best-paid, value-adding jobs throughout rural and western Ireland. Successful Irish exporters and multinationals from rural Ireland include Kerry Group, Portwest, Chanelle and Combilift, while the west coast is home to an internationally renowned cluster of multinational medical device and bio-pharma industries.
Contrary to what most people think, the counties with the highest above-average ratio of IDA-supported jobs Clare, Cork, Galway and Limerick, which are all similar to Dublin, which is closely followed by Kildare, Mayo and Sligo. These eight counties — nearly a third of us — are evenly spread throughout the regions.
Next time you hear a debate about how “we should do more to support Irish industry, because all we do is attract multinationals”, remind everybody there are more Americans working for Irish multinationals than there are Irish people working for American ones. How many realise the size of some of our bigger successes, such as CRH which employs more than 85,000 people around the world?
The vast majority of the programme for government jobs’ proposals concentrate on SMEs — which, we are constantly reminded, are ‘the backbone of the economy’ despite the fact the sector has low productivity and low wages. The quarter of a million employed by Ireland’s SMEs have a lower turnover than the top 10 Irish-based exporting companies.
The document is virtually silent on support for these larger companies. It is almost apologetic in its brief mention of the real backbone of the economy — foreign direct investment (FDI) — which produces an estimated 77pc of corporation tax. Sinn Fein and Green Party policies are completely silent on the cultivation of this types of success — preferring instead to emphasise indigenous, small-is-beautiful regional employment.
The economic policy documents of both parties are remarkably similar. Indeed, both only mention FDI to criticise it, saying the economy is too reliant on unstable corporation tax revenues from large multinational corporations and instead propose an emphasis on the indigenous business sector. Both parties advocate worker-owned cooperatives; both propose an enterprise agency focused on scaling up existing Irish ‘main street’ businesses as well as supporting non-export focused start-ups.
These policies appear to yearn after some 19th-Century homespun craft-based model which has no place for the likes of Ryanair, Kingspan, Smurfit Kappa, Ardagh Glass or any of the other top 10 Irish companies that have a cominclude bined annual turnover of more than €80bn — that’s about 20 times the annual spending of eight of Ireland’s government departments.
Saying Ireland has “too much FDI” betrays a profound incomprehension about Ireland’s place in the world. It betrays a lack of understanding about how difficult it is to attract such investment — not to mention the even greater achievement of getting these companies to put down deep roots by staying and repeatedly reinvesting.
Not only have we succeeded in attracting inward investment, initially for lowerskilled offshore jobs, but we have consistently improved and expanded our capacity so that today Ireland is a base for cutting-edge production and services in a wide range of specialisations, from pharma and ICT to digital businesses.
In the past, companies may have come for tax advantages — but today they stay for talent, productivity, interactions, stability and quality of life. We attract inward investment by the sum of our parts. The “over-reliance” that is complained of is the envy of most of the rest of the world.
Policies which promise to focus on “non-export focused start-ups” are promises to fail. Ireland is a tiny market in which “indigenous” business struggles to survive — witness the devastation of the hospitality sector this year as it struggles to survive only on the basis of local business — in the absence of international tourists.
International trading is the only way companies can scale and provide the returns on investment that secure jobs and tax revenues. Exporting and attracting inward investments are our specialisations. Why would any policy seek to ignore what we do best?
We must hold onto our high ambitions as an outward-looking nation. Ireland fighting for, and winning, the support of 129 other countries for a place on the UN Security Council is an example of where we belong and how we can get there.
In a similar vein is the news Phil Hogan is striving to become chair of the World Trade Organisation or that Paschal Donohoe has put his name forward for the Eurogroup president’s job. The lesson from these is not the success but having the ambition and self-confidence to apply.
Marcus Aurelius, arguably the greatest and wisest Roman emperor, said “a man’s worth is no greater than his ambitions”. In these challenging times, we must be ambitious and make no small plans, especially about jobs which provide the income that pays for all our other dreams and aspirations.