Policy for improving Ireland's weak indigenous export capability

DeadMoney

Hi, I am a final year student preparing for an exam entitled Irish economic analysis. One of the questions which has come up in recent years relates to Ireland's weak indigenous export capability, and policy currently in place to improve this capability. In my notes I can find the reasons for this weakness, but I can not seem to find much on policy in place to improve it. From various resources such as forfas articles and IDA reports, all I can see is 'investment in R&D Innovation' as being a means of improving Ireland's indigenous export capabilities. Can anybody offer any help as to what policy(s) are currently in place to improve this performance?

Thanks!!

srsly78

Ehhh Ireland has one of the strongest export sectors in the world, how can this be classed as weak?

Yeah we don't get as much from it because our corptax rate is low, but seriously? Anyone asserting that Ireland has a weak export sector should receive a fail in their exam unless they argue about net exchequeur income etc. And even then they should fail unless they recognise that MNCs would not be here but for the tax rate.

maninasia

Read this part - ' indigenous '

Cookie_Monster

maninasia wrote: »

Read this part - ' indigenous '

our food and agri export business is still hugely stong, maybe other sectors not so much but we'd don't have a whole lot of indigenous manufacturing and haven't for quite a while.

High costs of everything (energy, staff, compliance, rent&rates etc) and general uncompetitveness means we never we will have low tech manufacturing either. Thats what we'd need to tackle.

Scarab80

DeadMoney wrote: »

Hi, I am a final year student preparing for an exam entitled Irish economic analysis. One of the questions which has come up in recent years relates to Ireland's weak indigenous export capability, and policy currently in place to improve this capability. In my notes I can find the reasons for this weakness, but I can not seem to find much on policy in place to improve it. From various resources such as forfas articles and IDA reports, all I can see is 'investment in R&D Innovation' as being a means of improving Ireland's indigenous export capabilities. Can anybody offer any help as to what policy(s) are currently in place to improve this performance?

Thanks!!

See Enterprise Ireland supports available to indigenous exporting companies.

http://www.enterprise-ireland.com/en/Export-Assistance/

DeadMoney

Thanks!!

DeadMoney

I actually have another question if someone doesn't mind offering opinion. FDI comes up a lot on my exam and mostly the question asked is to discuss it's contribution to Ireland's economy (particularily during the boom). I have this pretty well covered but another question that is sometimes asked is to 'discuss the merits of pursuing a policy for attracting FDI'.

With regards to 'a policy' for attracting inward FDI, all I can find in my notes is incentives such as a low corporate tax rate, Educated work force, EU membership etc. These are some of the reasons why Ireland has attracted so much FDI in recent years, but does this also account as 'policy' currently in place to attract more FDI?

Thanks!!

Godge

DeadMoney wrote: »

I actually have another question if someone doesn't mind offering opinion. FDI comes up a lot on my exam and mostly the question asked is to discuss it's contribution to Ireland's economy (particularily during the boom). I have this pretty well covered but another question that is sometimes asked is to 'discuss the merits of pursuing a policy for attracting FDI'.

With regards to 'a policy' for attracting inward FDI, all I can find in my notes is incentives such as a low corporate tax rate, Educated work force, EU membership etc. These are some of the reasons why Ireland has attracted so much FDI in recent years, but does this also account as 'policy' currently in place to attract more FDI?

Thanks!!

In answering a question asking you to discuss the merits of something, you also need to discuss the weaknesses.

For discussion of the policy, consult the reports on the IDA website.

In considering the weaknesses, mobility is the main one i.e. the ability to move out as well as in as a whim or other reason dictates. Dell is the most recent example but there are many others in the past, huge giants of FDI who are now gone. I remember Amdahl been held up as a superior example of HRM and how to manage your employees and look after them well. Yet, when it came to it, they were sold/left (can't remember which) without one look back.

However, while being indigineous would imply greater loyalty look to the south-east and Waterford Crystal to see that does not necessarily follow. Similarly, was it ICL who fired all its Irish workforce and replaced them with cheaper Eastern Europeans?

DeadMoney

Godge wrote: »

In answering a question asking you to discuss the merits of something, you also need to discuss the weaknesses.

For discussion of the policy, consult the reports on the IDA website.

In considering the weaknesses, mobility is the main one i.e. the ability to move out as well as in as a whim or other reason dictates. Dell is the most recent example but there are many others in the past, huge giants of FDI who are now gone. I remember Amdahl been held up as a superior example of HRM and how to manage your employees and look after them well. Yet, when it came to it, they were sold/left (can't remember which) without one look back.

However, while being indigineous would imply greater loyalty look to the south-east and Waterford Crystal to see that does not necessarily follow. Similarly, was it ICL who fired all its Irish workforce and replaced them with cheaper Eastern Europeans?

Thanks for this. My lecturer has set a question asking the student to discuss the relative merits of FDI versus Indigenous industrial development. He has implied that while FDI has advantages it is perhaps a "second best" alternative and we are to discuss why this is.

This is confusing the hell out of me. I've spent the last few days reading about how amazing FDI is and its positive effects on our economy's growth and now apparently it is not good??? Also I was of the assumption that strong FDI investment was good for indigenous development?? I cant seem to find anything in this issue online, can anybody possibly direct me to where I can read something on this?

Thanks!!

Amhran Nua

DeadMoney wrote: »

This is confusing the hell out of me. I've spent the last few days reading about how amazing FDI is and its positive effects on our economy's growth and now apparently it is not good??? Also I was of the assumption that strong FDI investment was good for indigenous development??

FDI is useful as an intermediate step, but its effects on promoting indigenous business are greatly overstated - these companies when they go bring their IP with them, and they don't share it while they are here. Indigenous businesses get exactly as much as they need to supply the requirements of the multinationals, and that's far from enough to build an independent industrial base. FDI is not the final destination.

The major issue with FDI in Ireland is that much of its profits are repatriated - some 90% of the profits from Irish exports leave the country, and are of no benefit to us. What does benefit us are the low and semi skilled jobs that FDI brings to the table, from companies for whom taxation is more important than labour costs. Of course, this can never be more than a milestone, a fact which seems to have escaped the government for the last decade or so.

maninasia

It's not that FDI is bad and indigineous good but just like everything there should be a balance.
http://www.finfacts.ie/irishfinancenews/article_1021376.shtml
http://www.finfacts.ie/irishfinancenews/article_1021343.shtml

In general I'd say more FDI would be good but too much FDI would drive inflation up (cost of goods/services/wages) so that would make it hard for some indigineous companies to compete even if some indigenous companies could do well supplying services to those multinationals and could pick up some technological knowhow.