Engine of indigenous industry never fired during boom years

ei.sdraob

http://www.irishtimes.com/newspaper/finance/2010/0723/1224275294606.html

During the recent boom, home-grown companies collectively haemorrhaged world market share, the only metric that really matters for a small, open economy’s sustained prosperity.

This happened despite these companies having every possible advantage. Near perfect financing conditions existed to fund an assault on new markets as interest rates were historically low and a booming home market generated big profits. Taxes of all kinds were comparatively low. A trend decline was taking place in the costs associated with geographic peripherality, such as transport and communications (owing to technological and other developments). The workforce was flexible and increasingly educated. English was ever more dominant as the language of international business. Know-how and expertise continued to spill over from the foreign-owned high-tech sector. A global diaspora existed to facilitate market entry. Transactions costs fell as a result of adopting the euro.

Despite all these advantages, the engine of indigenous industry never fired. If much of what happened during the boom years makes one’s head shake in disbelief, what didn’t happen makes it hang in despair.

Yeh doesnt make for a good reading

How are we as a country meant to grow a smart/knowledge/insertbuzzword economy when even during the best of times not many seeds took root

And worse alot of the SMEs got involved in property and now are either gone or having hard time getting credit

silverharp

you could argue that the boom by misallocating resouces diverted talanted people or companies for that matter into lazy or safe decision making. Why work hard being innovative if you have a talent for winning overpriced government work or trying to carry out the latest LBO wheeze.

George Orwell 1982

To put it very simply the money that should have been invested in growing indigenous businesses got channelled into the property boom. Our loss.

Scarab80

ei.sdraob wrote: »

http://www.irishtimes.com/newspaper/finance/2010/0723/1224275294606.html

Yeh doesnt make for a good reading

How are we as a country meant to grow a smart/knowledge/insertbuzzword economy when even during the best of times not many seeds took root

And worse alot of the SMEs got involved in property and now are either gone or having hard time getting credit

Interesting article, however he provides no support for his assertion that irish companies lost world market share. Does anyone have any links to support this? The only one i could find is a report from the ESRI comparing indigineous irish production in Europe from 1991 to 2001 which shows a modest gain in market share.



Not that i am disagreeing with previous posters, there was clearly a massive misallocation of resources to property in the last decade, most of it actively supported by ridiculous tax breaks.

dan_d

I think we're flogging a dead horse with articles like this. It's blindingly obvious that this was the case.Why don't journalists spend a bit more time on suggesting what we do from here on out, rather than continuously highlighting what we didn't do?

It's easy to be a critic, especially in hindsight.

thebman

The issue was highlighted by someone else.

If you can make crazy money in something you can leave school before doing the leaving cert then why would anyone do anything else?

Construction has been eating everything in our economy for years but don't tell the boys at the Galway races that.

ei.sdraob

Scarab80 wrote: »

Interesting article, however he provides no support for his assertion that irish companies lost world market share. Does anyone have any links to support this? The only one i could find is a report from the ESRI comparing indigineous irish production in Europe from 1991 to 2001 which shows a modest gain in market share.

Its the indo sure what you expect

btw the 91 to 01 period we had more or less real growth, its the years afterwards when the "boom got boomier"

Scarab80

ei.sdraob wrote: »

Its the indo sure what you expect

btw the 91 to 01 period we had more or less real growth, its the years afterwards when the "boom got boomier"

Yeah, i'd like to see some figures during the fake boom years.

I would expect to see a greater amount of indigenous investment abroad, but in bricks and mortar, sure you can't lose with bricks and mortar!!

It would be interesting to see if there was a shift from sustainable industry into property as opposed to just new investment going into property.

jmayo

ei.sdraob wrote: »

Yeh doesnt make for a good reading

How are we as a country meant to grow a smart/knowledge/insertbuzzword economy when even during the best of times not many seeds took root

And worse alot of the SMEs got involved in property and now are either gone or having hard time getting credit

Very true, but then again the banks appeared far more willing to lend to someone involved in the sure bet of property rather than buying plant, equipment, etc that would help create something exportable.

ei.sdraob wrote: »

Its the indo sure what you expect

btw the 91 to 01 period we had more or less real growth, its the years afterwards when the "boom got boomier"

Exactly.
We had growth and real jobs until the dot com crash brought a lot of our indigenous IT/telco companies crashing down.
Anyone remember how well Baltimore, Trintech and Iona Technologies were doing ?

Subsequent to 2001 Ireland climbed aboard the cheap credit gravy train and rode it for all it was worth.
But did we really use that cheap credit for anything other than bricks and mortar ?

Meanwhile the doomsayers were telling everyone old established factories/producers, be they multinationals such as Lappel in Carlow or Castlemahon Food Products in Limerick were scaling back or even closing down.
Of course these jobs losses were being masked in the unemployment register by all those either constructing ever more houses, retail parks, hotels or those working in all the new out of town retail parks and 5 star hotels with the ubiquitous lesuire centres.
And remember how the doomsayers were told to stop talking things down or go committ suicide.
Also folks remember how the unions laugher at that little tasteless joke.

Just to illustrate how bad things are now for borrowing for long established constructive productive entreprise, there was a manager from Holfeld plastics on radio the other week explaining how their long established company in Wicklow has 1 million availbale to purchase new machinery but they are unable to borrow the other two million necessary. :rolleyes:

kuntboy

dan_d wrote: »

Why don't journalists spend a bit more time on suggesting what we do from here on out, rather than continuously highlighting what we didn't do?

Maybe because there's very little we can do?

silverharp

I see Arnotts is the latest Irish company that forgot to stick to the knitting. Taken over by Anglo and another bank today. The zombiefication of the Irsh economy seems to be continuing apace

jmayo

silverharp wrote: »

I see Arnotts is the latest Irish company that forgot to stick to the knitting. Taken over by Anglo and another bank today. The zombiefication of the Irsh economy seems to be continuing apace

As ex Arnotts excutive pointed out this morning on Morning Ireland, it is a bit funny to read Anglo are going to oversee the running of a department store when they can't oversee the running of their own business.

I reckon Arnotts just blew too much money sponsoring a cr** football team

ardmacha

I reckon Arnotts just blew too much money sponsoring a cr** football team

No, Elverys sponsored the crap team, Arnotts lost their way buying property.