Irish economy - are there clouds ahead?

I'm not normally a fan of David McWilliams hyperbole-laden pop economics but I actually thought this article was quite plausible.

The idea that we could go through 13 years of unprecedented boom followed by nothing more than a mild slowdown, smacks of DNG's "everything-will-be-fine" theory.
 
room305 said:
I'm not normally a fan of David McWilliams hyperbole-laden pop economics but I actually thought this article was quite plausible.

The idea that we could go through 13 years of unprecedented boom followed by nothing more than a mild slowdown, smacks of DNG's "everything-will-be-fine" theory.
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"Soft-landings" are becoming so de rigeur in Ireland at the moment after years of being out of fashion. First the property market wants one and now the economy wants one too. However, the hawkers down at the ECB stall are out of stock after selling them all to the Germans and are pushing "hard-landings" as the big thing for next season.
 
In the first half of 2006 Switzerland exported 3.8 billion euros worth of watches alone,this is a traditonal indiginous industry.
Switzerland has 7.5 million population.
http://www.fhs.ch/en/news/news.php?id=477

In 2005 Ireland exported 1.6 billion in software from indiginous companies.
Irish beef exports for 2005 were 1.34 billion.
 
And a view on our future prospects from across the point - pretty well thought out, imho.

[broken link removed]
 
ivuernis said:
No building dependence, says Cowen :rolleyes:
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This piece is pure comedy. Apparently, we have no building dependence even though we have the highest number of workers in that sector in Europe and the highest output %age of our economy in that sector!!!! Officially 1 in 8 of employees are in construction - that must be really nearer to 1 in 5 or 6 when you take into account the supply chain and so on which surrounds that sector. Scary.
 
Neffa said:
And a view on our future prospects from across the point - pretty well thought out, imho.

[broken link removed]
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That's a very well written article. I particularly like their point about investment in foreign property:

One can only imagine what kind of economic growth could have been generated if even half that money had been invested in innovative and productive Irish firms.
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As I mentioned before, Enterprise Ireland has only invested 0.5% of the amount Irish people have invested in foreign property, into venture and seed capital over the last five years.
 
room305 said:
As I mentioned before, Enterprise Ireland has only invested 0.5% of the amount Irish people have invested in foreign property, into venture and seed capital over the last five years.
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People are always banging on about Enterprise Ireland but I don´t think government funding is necessarily the best way to promote entrepreneurship.

I would question how effective Enterprise Ireland´s strategy has been in any case. The success stories like Baltimore and Iona are not really the shooting stars they once were.
 
dontaskme said:
People are always banging on about Enterprise Ireland but I don´t think government funding is necessarily the best way to promote entrepreneurship.
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What is? The idea is that EI provide the funds or part of the funds necessary to take a good idea and export it to the global market. Perhaps there are better ways and means of promoting entrepreneurship but I would certainly like to see something done. The bulk of the wealth we have created has been wasted on unproductive assets like property, both foreign and home based. The key point is that we would be in a much more secure postion economically if we had taken at least half of this money and invested it in R&D and innovation.

dontaskme said:
I would question how effective Enterprise Ireland´s strategy has been in any case. The success stories like Baltimore and Iona are not really the shooting stars they once were.
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A general downturn in the tech-industry from which it has never really recovered rather than a failure on EI's part.

However, which has been more productive for the Irish economy - Iona or a bunch of Irish-owned apartments in Bulgaria?
 
room305 said:
What is? The idea is that EI provide the funds or part of the funds necessary to take a good idea and export it to the global market. Perhaps there are better ways and means of promoting entrepreneurship but I would certainly like to see something done. The bulk of the wealth we have created has been wasted on unproductive assets like property, both foreign and home based. The key point is that we would be in a much more secure postion economically if we had taken at least half of this money and invested it in R&D and innovation.
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Government bodies and entrepeneurship go together like fish and bicycles.

I agree that the intention is good, but the end results have not been inspiring.

I don´t think there are quick fixes, but the education system seems to have been designed by civil servants for the creation of civil servants.

Compulsory Irish is useful for aspiring civil servants, less so for potential entrepreneurs.

Also, computing or computer studies is not a leaving cert subject.

If you spend 13 years teaching people compulsory Irish and telling them to sit quietly in rows and to learn by rote the irregular French verbs then you can´t really complain when you don´t create a generation of entrepreneurs.

Property is a lower risk investment than r&d - how much r and d spending is wasted? You could spend a million on r&d and end up with nothing marketable. And you have to compete with the microsofts and googles who have billions to spend. Some of Ireland´s most successful entrepreneurs, such as Dermot Desmond and John Magnier have ploughed plenty into property over the years.

room305 said:
A general downturn in the tech-industry from which it has never really recovered rather than a failure on EI's part.

However, which has been more productive for the Irish economy - Iona or a bunch of Irish-owned apartments in Bulgaria?
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Well, this is debatable, if both are generating positive cash flows and profits for Irish investors then they are both adding value surely.

It could also be claimed that the tech-industry was oversold and overhyped and that the "downturn" was just a return to realistic valuations.

However, while Iona employs people in Ireland, it has been reporting losses for the past few years. On the other hand, properties in Bulgaria don´t employ people here but they should be generating cash flow for the foreseeable future without the risk of takeover etc.

Don´t get me wrong, Enterprise Ireland is a good idea and they do make a positive contribution, but people seem to expect too much from them.
 
Dell Ireland look to be having serious problems.

Ireland's second largest company (turnover) and employer of 4,500 people (Ireland's second largest ICT employer) has asked 3,000 of their staff if they'd like to move to Poland!

A loss of Dell would be one massive body-blow to the region, indeed economy at large. They've been propped up by the government for years now (including every Irish government department essentially buying only Dell machines), and now it looks to me as if the tipping point between competitiveness and cost savings has been breached.

Here's the article I found:

[broken link removed]

Another one posters might have read already:
http://www.tmcnet.com/usubmit/2006/07/28/1749679.htm
 
dontaskme said:
Property is a lower risk investment than r&d - how much r and d spending is wasted? You could spend a million on r&d and end up with nothing marketable.
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On a short-term basis, yes. But on a long-term basis, my bet would be on r&d. Of course a lot of money is “wasted” with r&d. But research needs to have the freedom to take risks and make mistakes. A lot of science is focused on the seemingly “negative” tasks of creating speculative theories and then attempting to disprove them. But without this rigorous system, we would not have the knowledge of the world that we have today, and neither would we have many of the products (computers, cars, medicines, etc) that make our lives so much easier.

And sometimes you find something you’re not looking for. Wasn’t Viagra originally a blood-pressure medication?

The U.S. is a prime example of a country with a strong r&d and risk-taking tradition, both with its third-level institutes and its “guys tinkering around in the garden shed”. The oh-so-cautious Swiss have put a lot of money into r&d. In both cases you have economies that have weathered storms over the long term.

I agree with a lot of what you say about the Irish educational system. The level of basic scientific illiteracy among people who have achieved their Leaving Certs and even third-level degrees astounds me sometimes. As an example, how many people out there use “average” to interchangeably refer to a median and a mode? How many people have no idea of what “scientific method” actually is, and therefore have no way of logically discussing things like evolution, global warming, or MMR vaccines?

As for language learning – well, most Irish people are functionally monolingual despite years of learning the Gaeilge and probably another language such as French. Bilingual or multilingualism is the norm worldwide and there is no reason why we are incapable of it. Instead of banging away at the same methods that have failed us, why not look at other places where language teaching does seem to be working (e.g. Switzerland, Scandinavia, Holland) and adopt their methods?

Anyway, you’ve got me on one of my hobby horses so I’d better stop now!
 
CelloPoint said:
Ireland's second largest company (turnover) and employer of 4,500 people (Ireland's second largest ICT employer) has asked 3,000 of their staff if they'd like to move to Poland!
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Nonsense, quotes from the article...

DELL confirmed yesterday that some of the 3,000 workers in its Limerick plant have been asked if they would be prepared to move to a new computer manufacturing facility they want to build in Poland.

Ireland is well placed to serve our customers in western Europe but central and eastern Europe are becoming stronger markets.

...we would be looking for people in Limerick who have already got the necessary expertise to help set up a new operation. They would be needed to get it up and running.
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Duplex said:
This trend of moving production to Poland (etc.) will probably gather pace.
It sheds some light on where our Polish guest workers will be in a few years time. (Not here).

http://www.ananova.com/business/story/sm_1938060.html?menu=
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As a frequent business visitor to Poland i can testify to the low wages and low cost of living. I can eat/drink out there all week and still have change out of 100euros for the whole week! Now i know why you dont see many polish out and about in Dublin.
 
This reminds me of one of my favourite paradoxes that is peddled by some Irish/Overseas Property buyers.

* Immigration from high-unemployment/low-prospect countries will fuel housing demand here for the next 15 years.
* I'm buying that over-priced apartment(s) in one of the above countries as I expect their economies to pick up and to experience great capital appreciation "just like Ireland".

Pick One.

In terms of the economy, is there anyone here who hasn't learned how Globalisation works by now..? For now, the likes of Sid will scoff and say "sure they're only being asked to move to Poland to help setup the place..".

In other words, they are being asked to train their low-paid replacements.

Then further down the line the 'asking' stops.. and the real movement of jobs and capital kicks in.
 
soma said:
This reminds me of one of my favourite paradoxes that is peddled by some Irish/Overseas Property buyers.

* Immigration from high-unemployment/low-prospect countries will fuel housing demand here for the next 15 years.
* I'm buying that over-priced apartment(s) in one of the above countries as I expect their economies to pick up and to experience great capital appreciation "just like Ireland".

Pick One.

In terms of the economy, is there anyone here who hasn't learned how Globalisation works by now..? For now, the likes of Sid will scoff and say "sure they're only being asked to move to Poland to help setup the place..".

In other words, they are being asked to train their low-paid replacements.

Then further down the line the 'asking' stops.. and the real movement of jobs and capital kicks in.
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Yes I have this rather quaint understanding of Capitalism. Capital flows to where profits can be maximised. I know, I know its old hat and no longer applies, but for some reason I cant shake it off.
 
This Dell business is looking like the thin end of the wedge, you might as well abolish Limerick if Dell packs up.
 
soma said:
In terms of the economy, is there anyone here who hasn't learned how Globalisation works by now..? For now, the likes of Sid will scoff and say "sure they're only being asked to move to Poland to help setup the place..".
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I think you're missing my point. I had no point. I was correcting CelloPoint's assertion that 3000 employees were asked if they'd be interested in working in Polond.

Instead, according to article, a few employees (out of 3000) were asked if they'd be willing to help set up a base in Poland.
 
SidTheDweeb said:
I think you're missing my point. I had no point. I was correcting CelloPoint's assertion that 3000 employees were asked if they'd be interested in working in Polond.

Instead, according to article, a few employees (out of 3000) were asked if they'd be willing to help set up a base in Poland.
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Yeah but in the future all production will move to plants in low cost eastern europe, sticking pc's together in a high cost economy is only viable when the tax benefits outweigh the higher costs but it looks like this is not gonna be the case much longer. dell will probably maintain a small base here so they can benefit from low cost production europe and low taxes here but the jobs and supplier contracts that pump money into irish economy will not be here.
 
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