In the 1990’s until the financial crisis of 2008 Ireland was known as the Celtic Tiger; its strong and sustained growth was widely compared to the economic development of the Asian Tigers, Hong Kong, Singapore, South Korea, and Taiwan. But since the crisis started, Ireland experienced rough economic conditions which lead to a 2-year recession from 2008 to 2009. After having gone through difficult structural changes, the Irish economy seems to be recovering, at least in the export oriented sectors of the economy. In 2011 GDP rose by 2.2% and 0.2% in 2012. Despite a slight fallback in 2013, Ireland’s GDP experienced a negative growth of 0.2%, it is expected that Ireland’s economy will pick up speed in 2014 and 2015: According to the European Commission’s economic growth forecasts Ireland’s economy will grow by 1.8 per cent his year, and 2.9 per cent in 2015. For investors it may seem interesting to notice that some sectors did rather well in 2013 as the construction industry, which grew by 10.6 per cent, while the agriculture sector expanded by 6.9 per cent. The Irish beer pint is definitely half full rather than half empty.
Ireland is aggressively and effectively promoting its best features to attract investors into the country and get rid of the stigma of being a crisis haunted country. Ireland has created the Inward investment promotion agency, IDA Ireland (Industrial Development Agency) which is responsible for the attraction and development of foreign investment in Ireland. IDA Ireland has developed the “Horizon 2020” Strategy which aims at creating the conditions for Ireland to be one of the most attractive countries for Foreign Direct Investment. They have created six policy enablers to do this:
- Improve their competitiveness to ensure that their work practices and cost base make us a highly attractive location for a variety of employment-intensive projects with multinational companies.
- Ensure that their tax regime remains compelling when compared to those in other locations.
- Ensure that they quickly enhance their broadband infrastructure and deploy Next Generation Networks that enable the most advanced uses of cloud computing technology – all across Ireland.
- Ensure that Ireland’s energy infrastructure delivers world-class networks and energy at a competitive price.
- Continually enhance their education system and training programs to ensure they have a workforce with relevant skills and that supports advanced RD&I activities.
- Ensure that the regulatory environment of Ireland is fit for purpose. Regulation must be strong, credible and flexible to adapt to changing conditions to maximize the opportunities for job creation, innovation and the emergence of new sectors.
These are just some examples of the steps taken by Ireland to become more attractive to foreign investors. It may be also a sign of a crisis shaken country that wants to become the old Celtic Tiger it was known to be not too long ago.