# What makes us uncompetitive?



## Purple (27 May 2006)

In a thread in the property investment section Bearishbull made the point that; "the Irish economy is highly vulnerable to any global shocks/recessions and is becoming more and more uncompetitive and over reliant on foreign multinationals and property" 
A good point in context but I disagree on one point; I am of the view that  the areas of the economy that are making us uncompetitive are: 
The construction industry, because price has little relationship to cost of production and it is in the throws of a speculative boom.
The professions, because they control entry into their ranks and if you control supply you can earn supernormal profits (leaving cert economics).
The increase in the number of public/state/semi-state sector jobs, because as with their equivalents anywhere in the western world there is no major imperative to be cost efficient.
Government fiscal policy which is fueling an overheated economy.

I would have thought that the multinational sector is probably the most efficient part of the economy as it is constantly being benchmarked against international competition.
Am I wrong or am I missing anything?


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## bearishbull (27 May 2006)

i didnt mean the multinational sector was becoming especially uncompetitive although with inflation rising at near 4% and wages rising at 4-5% their costs are rising relative to other countries.Competitiveness is not just based on prices/costs but they are an important component.Even if ireland is less competitive than another location the multinationals wont immediately leave as they have large investments here with set time frames for those investments.
With other aspects of competitveness such as innovation we are really bad.
http://www.finfacts.com/irelandbusinessnews/publish/article_10003440.shtml


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## D8Lady (27 May 2006)

Its also worth looking at the competition.  Are we willing to complete with those in China who earn just one dollar a day?

bearishbull, I agree with your comment on innovation. We a just now starting a '4th level' education but we don't value scientists, technologists & other innovators. 
Infrastructure is pathetic, broadband being a prime example. 

As for government jobs....don't get me started......


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## Purple (27 May 2006)

> With other aspects of competitveness such as innovation we are really bad.


We use Enterprise Ireland and find them great. We also use third level institutions...in Wales, in Germany, in England. Despite state funding and hybrids between universities and state agencies we find the support we need is not available or accessible in this country. I work in an Irish medical device manufacturing company. All of our customers are multinationals, most of them in Ireland.


> Even if ireland is less competitive than another location the multinationals wont immediately leave as they have large investments here


 Their skill base and supplier base is a factor, as is the claw back of tax breaks. Their investment is not a factor. If they are moving to China the Chinese will build them a factory, just like we did. They also write off their investments very quickly.


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