Irish Times - Economy impaired by lack of competition

Nuno

Hi Folks

Here's a short article I found in todays Business Section of ireland.com

Irelands lackof broadband is given a mention.


The Chairman of the Competition Authority warned today that the competitiveness of the Irish economy is seriously impaired by the lack of competition in many sectors.

In a speech to the National Competitiveness Council today Dr John Fingleton said that non competitive markets are characterised by higher prices, lower output, less innovation and lower levels of buyer satisfaction.

"In many markets in Ireland, competition has been severely restricted or, in some cases, totally prevented by state regulation," he said.

Dr Fingleton said such restrictions are widespread and exist in retailing, transport, banking, communications, energy, and many private and public services.

He urged the National Competitiveness Council to continue to exert a strong voice for competition in sectors that supply exporting business.

He noted that Ireland’s ranking near the bottom of the OECD league table for broadband indicates that monopoly interests still have a strong voice in policy determination.

"Tackling such vested interests is essential if firms that employ and produce in Ireland are to have access to efficiently produced and competitively priced inputs," he said.

Dr Fingleton also suggested that the National Competitiveness Council put greater emphasis on competition in consumer markets. "Just as the Culliton Report 10 years ago opened our eyes to how weak competition in input markets can limit competitiveness by raising business costs, we now need to open our eyes to how weak competition in markets for final consumer goods damage competitiveness."

Dr Fingleton contended that competition for everyday consumer goods like clothes, food, retailing, and transport assists competitiveness in several ways.

He said lower prices for every day products feeds in to the consumer price index. With national wage bargaining based on the CPI, lower prices would moderate wage pressure.

Second, Ireland competes with other countries to retain and attract skilled individuals not just on salary and tax, but also on lifestyle factors.

Third, companies that learn through competition how to serve consumer needs in the domestic market would be much better placed to compete internationally."

pork99

This gets to the core of what IOFFL should be about. I think its easy for eircom etc to dismiss us as a pack of geeks and misfits but we're actually very mainstream just a bit "ahead of the game" and the business and economic necessity of broadband/FRIACO cannot be emphasised enough. IOFFL is a direct challenge to the protected "semi-feudal" status of Irish telcos, esp. eircom.

The lack of competitiveness in the Irish economy is fine as long as we can bring in multinationals and cream off the corporation tax to pay for everything. This is plan A but it is failing at the moment and there does not seem to be a plan B. Plan B should be to rely on innovative indigineous tech and other companies to drive the economy.