The Economy

Ireland is currently facing severe economic challenges and is addressing these in cooperation with our EU partners and the International Monetary Fund. Ireland had a period of extraordinary growth from 1993 to 2007 and had become one of the world’s most dynamic, innovative and globalised economies, with extensive external trade and investment links.

In 2008, partly due to the open nature of its economy Ireland began to feel the effects of the global economic downturn. Pressure on the economy was significantly accentuated by the end of a prolonged Irish property market boom and problems within the domestic banking system. This led to a period of recession in Ireland and a sharp contraction in economic output.

But Ireland is facing the serious economic downturn from a strong starting position. Many of the strengths that drove our recent economic boom and brought unprecedented levels of prosperity, with growth and GDP per capita among the highest in the European Union, remain in place. these strengths will position Ireland to take advantage of the global economic recovery as it emerges.

Ireland’s economic success is generally attributed to its educated and flexible workforce; its social partnership model, which involves close cooperation between government, trade unions and employers; government measures to ensure macroeconomic stability and to attract foreign investment; and membership of the European Union, which now provides a market of almost 500 million people. Ireland is a member of the eurozone.

Ireland continues to be one of the most open economies in the OECD, and exports are now showing strong growth after a slowdown in recent years. Ireland has developed a strong entrepreneurial culture in terms of new businesses being established.

Ireland has a strong track record in attracting investment in Information Communications Technology (ICT), Life Sciences, Financial Services and Globally Traded Business (GTB) including Digital Media, Engineering, Consumer Brands and International Services. Ireland’s positioning as a ‘smart economy’ continues apace combining our innovative, enterprise economy with an ever–increasing emphasis on the emerging areas of Clean/Green Technologies, Services Innovation and Convergence. Ireland is also a centre for digital media in Europe with major multinational companies locating their European headquarters and a range of business support activities here.

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Inward and Outward Investment

Inward investment has been critically important to Ireland’s economic development, providing tens of thousands of jobs, disseminating technological know-how and expertise within the wider economy, linking up with indigenous industry, boosting productivity, and underpinning export growth. Outward investment by Irish companies has increased noticeably in recent years, albeit from a very low historic base. This emerging trend is consistent with the pattern observed in other economies as they move to higher stages of economic development.

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Education and Training

Education and Training is a vital component of Ireland’s knowledge-based economy, and is a priority investment under the National Development Plan. Ireland enjoys one of the best education systems in the world, with approximately 1 million people in full time education.

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Innovation and R&D

R&D in Ireland has expanded dramatically in recent years reflecting the Irish government’s massive injection of funding into the sector. Leading global companies have found Ireland to be an excellent location for knowledge-based activities. The young Irish workforce has shown a particular aptitude for the efficient collection, interpretation and dissemination of research information.

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Corporation Tax

Since 2003 Ireland’s corporate tax regime has been fixed at a rate of 12.5%. This applies to all Irish corporate trading profits. A rate of 25% applies to non-trading (passive) income.

Economic and Social Research Institute
Central Bank of Ireland

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Trade

Ireland’s total trade in 2009 was approximately €270bn; with a merchandise trade surplus of more than €39 billion. This consists equally of Merchandise Trade and Services Trade each of which stand at approx. €130bn. The main merchandise goods traded include Organic chemicals (mainly for the pharmaceutical sector), Medical & pharmaceutical products and Computers. The main services areas are Computer Services, Trade Related Business Services, Insurance and Financial services.

Ireland’s main trade partners are the United states, Great Britain, Belgium, Germany, France, Spain and the Netherlands.

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Industry and Services

The Industrial sector has a highly skilled technological labour pool. Within this high technology grouping, the most active sectors currently are life sciences, medical and information technology sectors. Many of the world’s leading companies have subsidiaries in Ireland.

The service sector in Ireland accounts for approximately half of GDP. Just under half of total Irish exports are services, and Ireland is in the top ten countries worldwide for exports of commercial services. Throughout the last decade output of services has grown strongly, largely as a result of growth in financial services, telecommunications and tourism.

Three agencies deal with industrial development in Ireland. Forfás provides overall policy advice and co-ordination for enterprise development and science, technology and innovation in Ireland. Enterprise Ireland helps develop Irish-based enterprise with the potential to trade internationally. IDA Ireland has responsibility for securing new investment in manufacturing and internationally traded services. It also has responsibility to encourage existing Foreign Direct Investors to expand and develop their businesses in Ireland.

There are also a number of regional development agencies such as Shannon Development which was set up in 1959 to promote Shannon International Airport, and Údarás na Gaeltachta, which is the regional authority responsible for the economic, social and cultural development of the Gaeltacht (Irish speaking parts of the country).

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Financial Services 

Dublin’s International Financial Services Centre (IFSC), which was set up by the Irish Government with EU approval in 1987, is recognised as a leading location for a range of internationally traded financial services, including banking, asset financing, fund management, corporate treasury management, investment management, custody and administration and specialised insurance operations. More than430 international operations are approved to trade in the IFsc, while a further 700 managed entities are approved to carry on business under the IFSC programme.

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Agriculture

Of the total land area of approximately 7 million hectares (17 million acres), 5 million hectares (12.32 million acres) are utilised for agricultural purposes (including forestry). Beef and dairying are by far the most important sectors of the agricultural industry. The main crops are barley, wheat, potatoes and mushrooms.

The Agri-Food industry makes a significant contribution to the Irish economy. The combined agri-food and drink sector accounts for 6% of GDP, almost €8bn of exports and accounts for 133,400 jobs. In particular, the industry plays a major role in the indigenous sector.

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Fishing

The Irish seafood industry provides employment for over 11,000 people. It makes a significant contribution to the economic and social fabric of the many small communities located in mainly rural areas or small towns and villages around the 3,172 kilometres of our coastline.  

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Tourism

Approximately 6 million tourists visit Ireland each year, spending approximately €3.9bn, and sustaining more than 180,000 jobs. Tourism Ireland was established under the framework of the Good Friday Agreement 1998 to co-ordinate the work of the two tourist boards on the island, Fáilte Ireland and the Northern Ireland Tourist Board.

Ireland’s successful tourism industry is built around the three themes: Irish people; Irish culture and the physical beauty of the country.

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Radio and Television

The national radio and television service is operated by Radio Telefís Éireann (RTÉ), the public broadcasting company which transmits on two television and five radio channels. RTÉ derives its revenue from licence fees and the sale of advertising time. TV3 is a commercial broadcaster and there are many commercial radio stations including Today FM and Newstalk. In addition to the wide availability of British radio and television programming, satellite broadcasts are achieving an increasing audience.

Irish speakers are served by a dedicated radio channel, Radio na Gaeltachta (operated by RTÉ) and by TG4, an independent Irish language television channel.

The Broadcasting Authority of Ireland (BAI) was established in 2009 under the Broadcasting Act 2009, as an independent regulator for radio and television broadcasters in Ireland. The BAI has a range of objectives and functions and incorporates the work of the Broadcasting commission of Ireland. the Authority is funded through a levy on all broadcasters licensed in the state.  

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Newspapers

Newspapers have been published in Ireland for over 300 years. Today there are a number of daily broadsheet and tabloid papers, two evening newspapers, and five Sunday newspapers. There are also about 60 local newspapers usually published weekly and a wide variety of magazines dealing with current affairs, economic issues and leisure interests. 

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