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How Has Ireland Created Such A Sucessful Economy?
As of last year, Ireland was the 2nd richest country in the European Union, only behind Luxembourg, with a per capita GDP higher than Germany, France and Britain. Ireland has had a drastic turnaround in less than a generation, largely due to the fact that they are embracing globalization, while countries that are following the French-German social model are dealing with high unemployment and low growth.
The turnaround first began in the 1960’s, when secondary education was made free, allowing more working-class youth to achieve a high school education or technical degree. Later on in 1996, Ireland also made college education essentially free, establishing an even better educated workforce. When Ireland joined the European Union in 1973, it then had a better educated workforce to draw from. It still did not have enough competitive products to sell, and it wasn’t the government, the main trade unions, farmers and industrialists organized and decided on a program of fiscal responsibility, dropping corporate tax far below the rest of Europe to 12.5%, moderating wages and prices, and aggressively seeking foreign investment.
The results have been quite astonishing, now with 9 out of 10 of the world’s top pharmaceutical companies with operations in Ireland, as well as 16 of the top 10 medical device companies, and 7 of the top 10 software designers.
Ireland’s 8 points of advice for a successful economy include: Making high school and college education free, keeping corporate taxes low, actively seeking global companies, an open economy for competition, speaking English, fiscal responsibility, build a consensus around the labour and management package, and finally hang in there for the bumps in the road.
Data compiled from the Toronto Star, How Ireland learned a smart way to get rich, July 4, 2005.
