IDA -vs- Enterprise Ireland: Sustainable future economy?

Killer Pigeon

I'm fairly new to economics so please don't lambash me if some of these facts are ridiculous.

I'd love to see more big Irish owned and Irish based industries here that export their produce abroad but the IDA in it's current form doesn't encourage this; it pushes more towards foreign direct investment. I feel that many new Irish owned companies operating particularly in the area of engineering, technology, etc.. are unable to grow and export their produce while also competing against larger multinational companies. The government prefers to draw in foreign companies in general rather than procuring large sustainable Irish companies. It's almost as if the government doesn't trust or have faith in its own people, I think such an attitude only adds to unemployment and even immigration.

The thing is, if there is a major economic depression here (as we've seen), wouldn't these multinationals be more likely to move elsewhere, ideally to some cheaper country (as we've seem), in which case there will be major job losses here (as we've seen). The only thing that keeps them here at the moment is our relatively low corporate tax rate.

If we take some large industrious Irish company, with their HQ here, would they be a little less likely to move their business elsewhere? Foreign direct investment obviously has its benefits but I think it's a quick fix initiative to Ireland's lack of large domestic industry in comparison in to other countries.

We need something long lasting and sustainable. Obviously it's going to take some time but at least it will be well worth it in the long run. I think that Enterprise Ireland and other domestic enterprise boards should receive greater funding, even greater than that of the IDA, to fund starting and developing Irish companies. Or even if the IDA alter it's remit and give more preference to Irish companies. Obviously I'm not suggesting the reallocation of funds to happen over night rather a gradual reallocation over a number of year; the former would probably be disastrous and force the remaining multinationals to leave thus increasing the unemployment rate.

What's your opinion on this?

Also, if these multinational companies don't have us by the balls in relation to the our 12.5% corporate tax rate and we have more domestic companies we could easily raise it to 20-25% to gain much needed revenue without incurring major losses in the long run.

ei.sdraob

Killer Pigeon wrote: »

I think that Enterprise Ireland and other domestic enterprise boards should receive greater funding,

No they should not since they are wasteful (first hand experience)
instead
They need to be scrapped and the money used to setup venture capital fund/company modelled on silicon valley venture firms which churn out and help grow so many good companies

Killer Pigeon wrote: »

Also, if these multinational companies don't have us by the balls in relation to the our 12.5% corporate tax rate and we have more domestic companies we could easily raise it to 20-25% to gain much needed revenue without incurring major losses in the long run.

I thought the aim was to help small companies?

Killer Pigeon

ei.sdraob wrote: »

No they should not since they are wasteful (first hand experience)
instead
They need to be scrapped and the money used to setup venture capital fund/company modelled on silicon valley venture firms which churn out and help grow so many good companies

Like a strategic investment bank of sorts?

ei.sdraob wrote: »

I thought the aim was to help small companies?

Yeah but we're going to need the revenue to pay for the IMF/EU bailout. I wouldn't suggest a raising in the corporate tax to happen over night, rather a gradual increase over a number of years.

ei.sdraob

Killer Pigeon wrote: »

Like a strategic investment bank of sorts?
.

I suppose make profit generation the main aim with the state being the main shareholder as is the case with venture funds, companies getting funding and help would be the desired side-effect

The most important help venture funds provide is the know how and connections, EI already have these so most of the same people could be re-employed

Killer Pigeon wrote: »

Yeah but we're going to need the revenue to pay for the IMF/EU bailout. I wouldn't suggest a raising in the corporate tax to happen over night, rather a gradual increase over a number of years.

There is nothing worse in business than uncertainty, knowing that taxes will rise year on year is a huge disincentive to bother.