Forbes offers boost but a long way to go

The Google campus in Dublin.

GETTING Ireland working again is the Government’s top priority. That is why it is my ambition to prove by 2016 that Ireland is the best small country in the world in which to do business.

It is why, from the outset, the Government set about restoring our international reputation to make our nation proud, prosperous, and respected again.

It is very positive that, across the world, people are reading online and at newsstands that Ireland is the best country in the world for business.

This story by Forbes about our recovery also stands in stark contrast to the alarming headlines from Ireland which were circulating internationally just three years ago.

But being recognised as the best location for business and enterprise is not an end in itself. There is much more to do. We want to continue to build on the 1,200 jobs already being created in the private sector each week so that we can see real improvements in the lives of all of our people.

Only a successful and thriving enterprise environment can provide the type of opportunities that our people deserve. The jobs from a growing economy can support their dreams, fuel their ambitions, and provide for their families.

The turnaround in our jobs performance stems from the resilience of Ireland’s business community. And the big sacrifices that have been made by the Irish people in order to cut the massive government deficit inherited from the previous government.

By getting our public finances under control, international capital has flowed back into the country and interest rates for the Government, banks, and Irish businesses have fallen.

But far more needs to be done to reverse the unemployment shock experienced in recent years. We are busy preparing the 2014 action plan for jobs to target more areas to support Irish businesses and to attract in more investment. We need Irish SMEs to target more export markets and to become more confident in winning new business abroad.

This week, 30 Irish companies accompanied me to Japan where, in addition to the breakthrough on restoring the beef market, we worked to increase our collaboration in areas of research and development and financial services.

This is part of our mission to transform the Irish economy from one that was based heavily on speculation and property to one based on enterprise, exports, and innovation.

This fundamental transformation of the economy will remain our focus as we approach the exit of Ireland’s bailout on Dec 15.

Exiting the bailout will be a significant milestone in Ireland’s recovery.

We still have a long way to travel, but clearly are now moving in the right direction.

We need to stick to the plan that is working. Ireland still has one of the biggest government deficits of any eurozone country. More difficult decisions will be needed over the coming years to put public debt on a sustainable footing and maintain the recovery.

Next year will see a renewed focus on important reforms to make our economy more competitive. Sheltered sectors will be opened up. New legislation on the NewERA project will be enacted to allow more funds to be invested in vital economic infrastructure. The huge changes to our social welfare and work activation systems will continue apace to ensure that work always pays.

So, that Forbes issue hitting the newsstands is welcome, but we won’t stop until Ireland is recognised by everyone as the best country in the world for business.

Ireland’s economic destiny is once again in our own hands. We owe it to all jobseekers and to future generations to finish off the job we started. To make Ireland the best small country in the world in which to do business. To create the jobs and opportunities our people need to thrive.

What Forbes said as Ireland grabs top spot for business

Three years ago, European governments and the International Monetary Fund sent Ireland an €85bn bailout package to support the country’s budgetary needs and prop up the Irish banking system.

The loan came after the Irish economy was devastated by the Great Recession. The bursting of the housing bubble was at the centre of Ireland’s problems and, even with recent gains, home prices are still roughly 50% off their 2007 highs. Moody’s Analytics doesn’t expect home prices to reach 2007 levels for another two decades.

Yet, despite these economic troubles, Ireland maintains an extremely pro-business environment that has attracted investments by some of the world’s biggest companies over the past decade. In Forbes’s eighth annual ranking of the Best Countries for Business, Ireland grabs the top spot for the first time.

Ireland scores well across the board when measuring its business friendliness. It is the only nation that ranks among the top 15% of countries in every one of the 11 metrics we examined to gauge the best countries. Ireland ranks near the very top for low tax burden, investor protection, and personal freedom.

Ireland moved up from its No 6 ranking last year on the strength of improved scores on the Heritage Foundation’s measure of monetary freedom, which gauges price stability and assesses price controls. Ireland’s rank also benefited from a stock market that has been on fire. The 44% return for the Irish Stock Exchange Overall Index in the 12 months through Nov 20 ranks first among the top 30 countries.

“Ireland has continued to attract direct foreign investment despite its problems,” says Melanie Bowler, a Moody’s Analytics economist focused on Ireland. Bowler highlights the educated workforce and 12.5% corporate tax rate — one of the lowest in Europe — as big draws for companies, as well as the language factor. “You want to have a common language if you are setting up operations in Europe,” she says.

The American Chamber of Commerce Ireland released a report in October that shows US firms invested $129.5bn (€94.7bn) in Ireland between 2008 and 2012. It represented a greater total than had been invested in the previous 58 years combined.

Ireland was the fourth biggest recipient of US foreign direct investment last year and attracted almost as much US investment as all of developing Asia.

Dublin serves as the European headquarters for a number of US tech firms including Google, LinkedIn, Twitter, and Facebook. Twitter opened new Dublin offices in September where it employs 100 people, with plans to double in size over the next 12 months.

Facebook established its presence in Dublin in 2009 and is opening new office space in Dublin that will make it the social media company’s largest operation outside of its global headquarters in Menlo Park, California.

Ireland’s recent troubles have made it more attractive for companies moving in. Nominal wages fell 17% between 2008 and 2011, which helped keep labour costs in check. Unemployment remains stubbornly high — a recent 12.8% — providing companies a large labour pool to pick from.

There are now more than 1,000 overseas companies with a presence in Ireland and they employ 150,000 of the nation’s 1.9m workers.

“Dublin has already established itself as a location for multinationals, so it has the necessary infrastructure for other companies to easily move into the country and set up shop,” says Bowler.

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