By Tom Still
GALWAY, Ireland – The signs of prosperity are unmistakable in and around this western Irish city. Construction crews are at work everywhere, even in the picturesque countryside of County Galway and County Mayo. The stores are full of shoppers. Real-estate prices are booming – almost too much so, according to some. And the streets are filled with young people, many of them students at Galway’s universities.
The “Celtic Tiger” of the late 1990s is still hunting new prey in 2005. While there are signs of trouble ahead, due in part to continued sluggishness in the rest of the European Union, the Irish economy remains an example for the world.
Recent visitors to Ireland cannot help but notice the abundance of new housing stock, the high living standards and the robust nature of cities such as Dublin and Galway. Statistics tell much of the story: Irish productivity rates are among the highest in the world, and the economy continues to grow at a rate exceeding 5 percent per year. More than one-third (39 percent) of the Irish population is under 25 years old – and they’re well educated. Unemployment, an Irish curse for generations, has fallen to 4.3 percent. Corporate taxes in Ireland are the lowest in the EU, the government provides financial incentives to expand there, and significant de-regulation has boosted key sectors of the economy.
Since 1996, Ireland’s economy has outperformed all others in the 25-nation EU. Technology and other “knowledge-based” businesses have helped to lead the way. Ireland is now the world’s largest software exporter and a hub of “outsourcing” for U.S. firms, many of which have opened branch offices here.
Still, there is much work to be done. The Irish infrastructure is still creaky in many ways, from health-care delivery and technology to roads (93 people died on Galway’s narrow, twisting roads in the last four years) to broadband use, which is surprisingly low.
A respected survey on world competitiveness by a Swiss business school showed Ireland slipping from 10th to 12th in 2005, due mainly to infrastructure, rising labor costs and rising energy costs – up 22 percent since 2002. Of course, not many Irish are ready to complain about high labor costs, especially every decades of trailing most of Europe in that category. But they are concerned about energy prices on an island that is almost entirely dependent on imported fuels.
Somewhat curiously, Irish businesses have been slow to adopt some of the very technologies they are helping to produce. A survey released this month by Eurostat, the statistics office of the European Commission, showed that only 3 percent of households and one-third of Irish businesses had broadband connectivity at the beginning of 2004. That compared to an EU average of 53 percent broadband access for businesses. On another important indicator, however, 92 percent of Irish businesses were connected to the Internet in early 2004. That compared to 89 percent throughout the EU.
Still, there are competitive worries over the lack of broadband use. In Galway, home to one of 20 metropolitan area networks financed by the Irish government, some 45 kilometers of fiber optic cable have been laid since early 2003. But the only customer so far in the $10-plus million project has been the Galway Technology Centre, home to 25 high-tech enterprises.
Lack of knowledge, confusion over the range of services, fear of the unknown and the comfort of staying with established providers are all reasons for the lag, according to Galway Chamber of Commerce Director Michael Coyle.
Coyle told the Galway City Tribune: “The time is right in terms of a ‘wake-up’ call to businesses and firms in the city. There is a lot of competition out there… In an ever-growing global market, if your competitor has broadband and you haven’t, then you’re at a major disadvantage straight away.”
In Ireland these days, there is a growing sense that even the “Celtic Tiger” economy cannot rest on its laurels. The challenge facing Ireland is an unfamiliar one – maintaining and building upon an already strong economy. In that regard, Ireland is becoming much like the rest of North America and the EU. Once a “have-not” nation economically, Ireland has become one of the “haves.” Now, its people must continue to work hard to stay there.
Still is president of the Wisconsin Technology Council. He is the former associate director of the WisconsinState Journal in Madison.