Ireland’s growth forecasts – 14.6% this year, according to the European Commission – have led to multiple theories and readings, from the economic “miracle” in the context of Covid-19 to the thesis that yields its gross domestic product (GDP) results. Only from the presence of a major group of multinational companies attracted by aggressive monetary policy in terms of attracting foreign investment.
Not an economist, I was still an appraiser of Enterprise Ireland, the state agency for business development in the 1990s, and I still have some experience in Irish politics, with a great deal of focus on innovation and innovative training.
This work by the Irish, which today separates them from countries such as Portugal, results in a number of things, with the European Commission citing GDP growth of 4.5% this year.
The tax benefits that Ireland offers to companies are certainly competitive. As the official language is English. But at present, in the absence of competitors offering more favorable conditions, these gains do not justify the stability of multinational companies in the country. They do not explain why Irish companies themselves thrive when others are suffering.
Ireland does not enjoy the privilege of resisting crises. In 2020, in the wake of the first major impact of the Kovid-19 pandemic, the fourth quarter unemployment rate ended close to 20%, however, it has already fallen to values below the Portuguese figure. After Brexit, he suffered like everyone else. Moreover, a few days ago, the European Commission approved the allocation of 920.4 million euros to the country under the adjustment reserve to Brexit, as European Commissioner Eliza Ferrero accurately explained, “Within the EU, the people of Ireland are feeling the brunt of the British exit.”
The country is showing strong resistance regardless of the circumstances. It is the result of an entire ecosystem that has focused on innovations that have been carefully designed and consistently applied since at least the sovereign debt crisis at the turn of the century.
Anyone who wants to know the secret of what is considered an Irish “miracle” should read the “Ireland 2040” report, which was overseen by the then Deputy Prime Minister Francis Fitzgerald, my current member of the European Parliament, whom I was delighted to host in March. This year, in a project by the Institute Sa Carnero and the National Strategic Council of the PSD on the role of innovation in economic development.
This Irish ecosystem includes the simplicity, stability and transparency of public policy, especially in matters of taxation; Focus on creating attractive conditions for foreign investment with special focus on new technologies, ICT and bioengineering; Furthermore, as a central component, the policy of investing for decades in population qualifications offers companies a one-time incentive to invest, a reason to continue.
Portugal, too, has been investing heavily in qualifications, especially since the 1990s, and should continue to strengthen it. It’s also a source of hope. Because, for any country that wants to be more competitive, this is probably the most difficult and slow mission.
But in our case, the truth is that the economy and companies are still not fully reaping the benefits of that effort. Not because it has to create the remaining conditions for innovation. Which Ireland was able to identify and implement in a timely manner.
We do not have to copy Ireland. But we can look at it and certainly learn from our own mistakes.
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