Ireland's 'skills revolution' is the key to mitigating US tariff impact
Ireland is far more exposed to the 15% tariffs than other EU countries. As a percentage of all goods exports from Ireland, exports to the US account for 23%. The EU average is 8%.
Rapid technological change, globalisation, the new 15% tariffs on exports to the US, and the pressing need for new infrastructure have created an unprecedented disruption of a skills revolution in Ireland.
Multinational and indigenous corporations, the higher and further education sector, and skills agencies will need further government support to work even closer in partnership with industry to pipeline increased skills and innovation to multinationals and indigenous Irish companies alike.
Skills and innovation in the workforce, including the facilitation of technology use in new production processes and product development, are key factors in creating competitive advantage for multinational companies exporting from Ireland. They are also key to opening up new tariff-free markets.
Ireland’s highly-educated and trained workforce has always been a key factor in multinationals setting up here in the past 40 years. Before the tariffs, new skills were in strong demand by multinationals to allow them compete more successfully in global markets. Now they are crucial.
Ireland is far more exposed to the 15% tariffs than other EU countries. As a percentage of all goods exported from Ireland, exports to the US account for 23%. The EU average is 8%.
Irish manufacturing will need more high value-adding skills and innovation to diversify to other emerging global markets. New skills and innovation can also help compensate for the loss of competitiveness — which will be felt by exports from Ireland to the US, based on the 15% tariffs.
The biopharma sector is projected to have skills needs in automation, digital technologies, IT, cybersecurity, biologic therapies, data analysis skills, engineering, regulatory affairs specialists, and statistical modelling, between now and 2027, according to the Expert Group on Future Skills Needs. There will also be a high demand for ‘transversal skills’ in teamwork, collaboration, and adaptability.
The ICT sector is reporting skills shortages in areas such as cloud computing, cybersecurity, AI, robotics, and data analytics, with IT accounting for 10% of all job advertisements in 2024.
Notwithstanding the critical importance of multinationals and indigenous corporations in manufacturing, employment growth in construction is forecast to lead the way at 3% per annum from now until 2030, and by 9% up to 2035.
Drivers include future population growth and significant housing needs, but also a strong focus on climate action, which includes retrofitting homes, installing solar pumps and solar panels; and improving energy efficiency.
'Green transition'
The ‘green transition’ is a key driver in the strong forecast for employment growth in the business and other services also, along with the distribution and transport sectors, each registering projected annual employment growth of about 2% per annum by 2035.
To ensure employment growth, rapidly- emerging skills for the green economy are of central importance.
Solas, based on industry surveys, forecasts significant ‘green skills’ gaps up to 2030. driven by the current green transition to tackle climate change.
It predicts future green economy skills gaps within these occupations: architects and town planners; bricklayers and masons; carpenters and joiners; construction supervisors, plasterers, plumbers. and scaffolders.
Most of these are already hit by a shortage of supply, but new skills will also need to attach to each one in a multitude of areas, for example: new construction techniques such as embodied carbon measurement for architects; external insulation for carpenters; retrofit insulation skills for plasterers; carbon accounting, thermal bridging, and sustainable design for chartered architectural technologists.
Within engineering, energy and manufacturing, new skills gaps and work opportunities will also emerge: alternative fuel skills for electricians, and new skills for energy managers in carbon literacy, battery technology, and hydrogen conversion.
Within the distribution and transport sectors: bus drivers will need skills on carbon management; transport and distribution managers in energy knowledge and eco-driving, while mechanics and vehicle technicians will need skills in repairing electric vehicles.
Ramping up skills and innovation are vital for any government response to help sustain full employment and head off any drastic reductions in tax revenue. Current and future skills needs for all sectors of the economy, particularly in export-oriented manufacturing and construction for infrastructure, which would sustain strong domestic demand, will be paramount.
Consequently, University courses will need to be more targeted at future skills needs, and current 80-plus apprenticeship courses will need to grow further. These will be vital, as will further tertiary programmes which include key pathways from further to higher education.
- Tom O’Connor is an economist and education & training consultant, and former head of department at Munster Technological University.
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