Last Updated 27 Jul 2020

Ireland’s Economic Miracle

Category economics
Essay type Research
Words 1201 (4 pages)
Views 400

When we look back 20 or 30 years ago in Ireland, the impression it give us is difficult to get rid of poverty. Indeed, the image of “European beggar” has described the situation of Ireland in 20years ago vividly. Ireland was originally a British colony, and has Declare Independence in 1949. Traditionally, Ireland is an Agriculture-oriented and animal husbandry-oriented country with a limited resource, relatively backward economy, and a high unemployment Rate internal-oriented economy.

In history, it also had the title of "European Village", "third world" in developed countries and so on. However what the surprising is, this member of European Union has been admired as one of the most modern knowledge economies in the world now. (Top 10 richest countries of the world, by Roman). During their innovation of government technology and political strategy, the Irish economy is growing rapidly, in 2006, the Irish GDP per head is 36. 8 thousand Euros, is far exceed than German, French and British, becoming the richest country in Europe.

And their unemployment rate is just 4. 3 percent, while maintaining 2. 5 percent of the low inflation rate. No matter from which angles, the Irish economy is good enough to raise jealousness by other country. And now their title has been changed from “European beggar” to “Celtic Tiger”. Many people might be so curious about: “why they are so successful? How did their government to incentive their economy growth? ” in this essay, we are now going to discuss it under the PESTEL structure, and focusing on the Technology; Political and environmental aspect.

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Body: • Technology: The Irish government making great efforts to develop high technological products constantly upgrades industrial structure and enhance international competitiveness. They are dedicated to increase its value-added manufacturing industry and international service by introducing foreign investment. The large influx of foreign investment, has promoted Irish economy undergone a qualitative leap, foreign companies have become the main force of import and export trade.

Technology-intensive chemical and computer manufacturing, biological pharmaceuticals, telecommunications, software and financial services are in a dominant position in Irish economy. Information and communication technology industry in Ireland, occupies a pivotal position in the economy, employment up to hundreds of thousands of people, the annual export volume accounted for 25% of Ireland's total exports. In software area, Ireland defines itself as “a processing base for Europeanizing products of American Software Company”.

It also serves as a collecting and distributing center for American products entering European market. Irish computer software industry has witnessed a rapid development which creates its remarkable international competitiveness. For this reason, Ireland has earned reputations such as ‘European software center’, ‘the new silicon valley’ and ‘European high-tech center’ Ireland software industry has two distinctive features: one is foreign investment plays a dominant role; the other is mainly to export-oriented ,which in fact is also one of the Irish economic features.

Software industry, spurring Irish economic development, has become the pillar industry for the development of Irish national economy. • Political In order to attract foreign investment, Ireland had made a series of preferential policies which creates a good environment for investment. As for taxation, Irish corporate income tax is 12. 5% which is the lowest compared with European countries not including Cyprus. It is very attractive for investment. In addition, Ireland has reached bilateral agreements with many countries, which contributes to avoiding double deduction and forming a better tax environment.

In Ireland, no matter legislators, rulers or enterprises in a business environment, the communication and integration among them are easy. Enterprises could communicate with the government face to face to solve existing problems. Irish Development Authority (IDA) is one of the remarkable communities for assistant of investment, it committed to providing service for foreign enterprises investing in Ireland. The main function of IDA is to get in touch with an enterprise helping them understand European business environment, assisting them starting and expanding a business before it enters Irish market.

If an enterprise meets any difficulties and problems after entering Ireland, IDA will offer help by coordinating with the government and relevant agencies to solve present problems. Therefore, from a business start-up to operating, IDA will provide good services. Since Irish national capacity is small, 80% of its manufactured products need to be exported. These products rely on foreign-funded enterprises to take out. So government attaches a great importance to foreign investment and is very supportive to foreign owned enterprises’ development. IDA Ireland by wikipedia) • Legal A sound legal system could also enhance the economy of a country, to incentive the investment and regulate the market, the Irish government has promulgated regulations to protect the Interest on both enterprises and customers, It is impossible here to analyze all of the regulations, some of examples are: in IT area, the Irish Government is committed to the Ireland into Europe's "e-Center", to support the development of electronic commerce.

In order to regulate and coordinate the healthy development of information industry ', the Irish government has enacted three laws, which are , , , which are regulate the areas of data release, update, disseminate, collect, change, and personal privacy. In order to make the operation of the capital market healthier, the Irish Government has promulgated the and the in 1989, 1993 and 1999, respectively.

Moreover for enhance facilitate and enhance the safety of the e-trade between customers and enterprises, the Irish Government has promulgated the ;, this is one of the most influential law in the international information industry, And this is also the first time a clear definition of the electronic signature been made. The Electronic Commerce Act 2000 is mainly regulate the establishment of the knowledge-based industries, sale and transfer Some other regulations also include such as and the (Environment of Irish software industry policy, by ameisky) Conclusion:

From those areas above, it is clear to see that the main reasons lead Ireland become successful are: targeting development on high technology industry, high incentive political assistance for investment, and a sound legal protection. However, their recent economic growth has slowed down, How the future development of Ireland? Are they able to maintain their good economy? Now we have to consider the most serious issue in the world: financial crisis. International financial crisis brings Irish economy and financial system with a severe blow and seriously affected Irish reputation for foreign investment.

IDA chief executive officer Barry O’Leary said that some international companies planned to invest in Ireland in 2009 postponed because of Irish deteriorating investment environment and many companies straddle on the issue of investing to Ireland. As statistics shows, IDA has attracted 125 foreign investments in 2009, 70% of which comes from the reinvestment of invested enterprises in Ireland. (IDA End of Year Statement 2009, Barry O’Leary). Meanwhile, Ireland is facing low-cost competition from East Europe and Asia.

The effect brought by financial preferential policies to attract foreign investment is weakening. Many multinational enterprises has reduced and even ceased their investment in Ireland. The sustainable development for Irish economy faces challenge. To change this situation, some suggestions would be intelligent training for the labor force needs to strengthened, product efficiency and adaptability need to be enhanced. The key to success is whether the economy could transfer into knowledge-based economy. We will wait and see the development of the Irish.

Reference

http://www.financialjesus.com/how-to-get-rich/top-10-worlds-richest-countries/

http://www.idaireland.com/news-media/press-releases/ida-ireland-end-of-year-s-3/index.xml

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Ireland’s Economic Miracle. (2018, Aug 21). Retrieved from https://phdessay.com/irelands-economic-miracle/

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