CelticTiger roars back into life after recession
Twenty-one years ago this week, I was appointed to my first professorial chair in entrepreneurship at the University of Glamorgan.
Since then, I have been lucky to have had a wonderful career which has taken me across the world and presented me with incredible opportunities to engage with so many individuals and organisations and hopefully help make a difference to people’s lives.
One of those opportunities that I value tremendously is my annual visit to Dublin, where I am privileged to chair the International Assessment Board for the Irish Research Council’s Enterprise Partnership Scheme.
This is an innovative initiative where the Research Council, working with private enterprises and public bodies, awards scholarships to the most promising researchers in Ireland, offering them the opportunity to gain real-world experience by working on a project with a non-academic organisation.
In return, industry gets access to an exceptional pool of competitively selected, high-calibre researchers and the opportunity to build links with relevant academic research groups within some of the best universities in Europe.
Since I started this role as chair of the Assessment Board, I have had the most wonderful experience to see, at first hand, the high quality of research being supported and, more importantly, to read about the real successes that have emerged from the programme over the past few years.
By supporting such schemes, it’s clear the Irish government is committed to the development of a knowledge-based economy, as one its key priorities in ensuring that the Emerald Isle continues to recover from the damage caused by the economic downturn of 2008.
In fact, it is easy to forget how hard Ireland was hit during one of the worse recessions in living memory.
In the first three months of 2009, economic activity fell by an unprecedented 8.5%. A year later, the country had the largest deficit of any European nation, including Greece.
In just five years, unemployment grew from 4% in 2007 to 15% in 2012. Between 2009-10, some 34,500 people left the country, reversing the annual in-migration of workers into Ireland that began in the mid-1990s.
As a result, it was not surprising that many economists lined up to write obituaries for the so-called Celtic Tiger, predicting that it would go the way of the other small economies which had overstretched themselves prior to the financial crash.
Yet something quite miraculous has happened in the past few years. Through a combination of hard and painful decisions by the government, allied with renewed confidence by inward investors and home-grown entrepreneurs, the Irish economy has confounded all expectations in its recovery.
In 2014, it became the fastestgrowing economy in Europe and has retained this honour every year since, with forecasters estimating that it will grow by 5% in 2017. More relevantly, it is expected that full employment will be reached next year – which, given the dark days of only five years ago, is nothing short of a miracle.
Indeed, Ireland is today home to all top 10 global technology firms and 18 of the world’s top 20 pharmaceutical companies. In addition, its homegrown food and drink sector is Europe’s largest net exporter of dairy ingredients, beef and lamb.
Some of the main reasons for this recovery include a highly competitive corporation tax of 12.5% and one of the youngest and most highly educated workforces in Europe.
These factors are not only attractive to multinational corporations lining up to invest in the country, but are also helping create a new entrepreneurial boom, with Dublin now seventh in the top 15 European cities ranked by their start-up eco-systems.
Of course, there may be some dark clouds on the horizon, given Ireland’s close trading links with the UK – some have predicted that if a hard Brexit is enacted within the next two years, it could result in a loss of 40,000 jobs in Ireland over the next decade.
On the other hand, it has also been suggested that companies operating in the financial services industry could be attracted from London to Dublin in order to access the European market, thus creating thousands of new jobs.
What is certain is that, regardless of the possible effect of Brexit, government and businesses in Ireland will continue to invest heavily in ensuring they have the technologically-savvy graduates who are a key influence in realising the enormous potential of the nation.
Are there lessons for Wales from our Celtic cousins’ experience in reviving their economy? Well, despite not (yet) having fiscal levers such as powers over corporation tax, we do have devolved powers over education and training.
As a result, there is no excuse why, if we really want to create an economy based on knowledge and talent, Wales should not also look to invest in industry-relevant programmes that will help to fully realise the potential of our young people for the benefit of the economy.