Small Business Q&A: Eoin O’Leary, from UCC
Entitled Irish Economic Development since 1970: A story of serial underachievement, the book examines why we continue to underachieve as an economy.
A lot of recent books have, unsurprisingly, looked at the past 10 years in Ireland. However, for this book I took a more long-term look at why Ireland has a history of economic underachieving. I’m looking at decades rather than years. I suppose when you look at it even before we had the Celtic Tiger we were an under-performing economy. We performed well in the 90s, but then we continued to grow. That growth, though, was driven by domestic demand, so when you take stock and you look at the last 50 years we see that four out of the last five decades has seen Ireland underperform. We we are nowhere near reaching our potential as an economy. We have become synonymous with foreign direct investment and to a certain extent that’s very good. Organisations like the IDA do a very good job. However, the real issue comes when we look at that model. It is industrialisation by invitation and means we’ve never had to completely look at the country with the sole purpose of developing indigenous enterprise.
I don’t think we’ve been good a developing long-term strategy. We’ve lurched from one crisis to the next and we’ve got lucky a number of times in that foreign direct investment companies were in the country and they have saved our bacon more than once in a crisis. If you look at it comparatively, other countries haven’t had the luxury of foreign companies so they’ve had to develop an indigenous strategy. For example, Finland had little choice but develop on the back of local industry. It did so with Nokia and developed clusters around that as well.
I don’t think there is a quick fix to this solution, because we have developed mindsets which are very deeply entrenched in terms of how we look at industry and the way we look at business as well. The most recent crisis was a very good example of a government totally irresponsible in hyping up an inward-looking property bubble. Trade unions were able to negotiate the salaries of public servants that have no basis on performance- related pay and wages. So the difficulty is in changing the mindset to one which focuses on indigenous business. Fundamental changes are required in mindsets. We have this idea that governments run the economy and that you need a government to help you do everything. However, I know lots of entrepreneurs who wouldn’t go near the Government for anything. We also have to stop fixating on two or three sectors for growth. Every sector has the opportunity to grow and that’s what we should be backing.
