According to the Economic and Social Research Institute (ESRI) the small European nation could stage a return to growth reaching 4,9% of GDP in 2021; and this against a gloomy background of pandemic, job loss and Brexit. In comparison to many other global economies, this figure is quite enviable. It is mostly down to the country’s strong export performance, driven at large by the pharmaceutical, tech and IT service sectors and the many multinationals operating in these areas. Its strong economic fundamentals in place pre-crisis have also given Ireland a resistant buffer throughout 2020 which it can continue to capitalize on. Interestingly the Celtic nation has as well a history of bouncing back quickly from economic crisis, being one of the first to emerge from the 2008 global financial meltdown; and could very well lead the way once again in this post COVID renaissance.
More than any other EU member state, Ireland will feel the Brexit impact this year and next as it faces all kinds of new hurdles, barriers, complexities and bureaucracy. In the long-term view though, passed the initial headache, economists and analysts are confident the country will reap benefits as it becomes the de-facto English-speaking operating point for tapping EU markets. Its fiscal attractiveness coupled with the nation’s prestigious academic tradition, talented workforce and thriving R&D sector have already once made Ireland a preferred investment destination for overseas businesses. This trend is expected to accelerate considerably post Brexit as the UK is no longer on the investors’ menu. Meanwhile, the election of President Joe Biden in the US, a democrat of Irish decent, can only strengthen Ireland’s hand in its global relations.
Ranked as one of the best countries for doing business by Forbes magazine, Ireland offers one of the world’s most competitive corporate tax rates at 12.5%. Companies such as Google, Apple, Facebook, Twitter, Pfizer, Huawei, Fujitsu, Intel, Novartis, GlaxoSmithKline or Trend Micro, are among the long list of multinationals who have set up shop in Ireland. Capital city Dublin, already hailed as a rich cultural and tourism destination by millions of visitors every year, now tops FDI city rankings ahead of Amsterdam, London, Basel, Luxembourg or Barcelona. In numbers, multinational companies account for 90% of the country’s manufactured exports, and 10% of the employed workforce. Multinationals have played a major role in the country’s economic take-off and recovery in the past, and are well poised to do this again following the COVID crisis. Yet their strong presence and performance also stresses the need to address the sharp economic dichotomy who some might worry will leave domestic businesses behind.
Complementing its arsenal of appealing tax incentives, Ireland boasts a highly skilled and adaptable English-speaking workforce, a product of its excellent higher education system. All seven Irish public universities stand within the world’s top 700 and have a long tradition of academic excellence and international collaborations. Aiming to become a Global Innovation Leader, the country invested an unprecedented €8.2 billion under the Irish government’s strategy for Science Technology and Innovation, deploying a plethora of support mechanisms in the form of employment and training grants. Home to multiple research centres focused on the specific needs of key industries, Ireland currently ranks #11 globally for the overall quality of its scientific research.
Country Reports’ special feature on Ireland will provide exclusive insights, analysis and fresh perspectives on these topics, based on our team’s exclusive exchanges with top political and business leaders.
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