Ireland: Best small country for business in 2016?
Ireland has had a positive environment for business for many decades as successive governments sought to make the country an attractive location for foreign direct investment (FDI), besides the offer of low tax rates. During the general election campaign in early 2011, Enda Kenny, taoiseach, stressed the aspiration that by 2016 the country would be "the best small country in the world in which to do business."
“I will seek the trust of the Irish people to implement Fine Gael’s plan to get Ireland working again,” Kenny said on Jan 27, 2011. “I firmly believe that by 2016, Ireland can become the best small country in the world in which to do business, the best country in which to raise a family and the best country in which to grow old with dignity and respect.”
"Since coming into office 7 months ago I have told nearly all audiences that by 2016 I intend to make Ireland the best small country in the world in which to do business," Kenny said on October 28, 2011. "An integral part of this vision is to transform Ireland into the Digital Capital of Europe."
"Those of you from Ireland will have heard me say many times that my ambition is for Ireland to become the best small country in the world for business by 2016," Kenny said on February 28, 2013. "It is an ambition I believe we will achieve. The scale of reform and action across Government to improve our competitiveness is unyielding until we reach our goals."
In his 40 years in national politics, Kenny has never been a convincing advocate for reform and the record since 2011 in reform of governance structures including the new Fiscal Advisory Council for example, which was given no powers, and the lack of attention to the dysfunctional land development system, are just a sample of a litany of areas that are overdue for change.
The cowardice on legal services reform by a government with a huge parliamentary majority and which includes a nominally left of centre party, should be writ large on its epitaph. Even if the Legal Services Regulation Bill 2011 is enacted prior to the general election, most of the key issues will be subject to "further consultation."
Irish Government's timidity on legal services reform
The Verdict
Based on recognised international benchmarking indexes, there has been no material change in Ireland's rankings since 2008. We are not the best and we are average among the better countries.
In February 2012 Enda Kenny and Richard Bruton, enterprise minister, launched what was called an Action Plan for Jobs (APJ) programme with quarterly targets to add jobs incentive schemes or tweak existing ones.
These micro changes do help but measurement of outcomes is poor and the Department of Enterprise, Jobs and Innovation has informed Finfacts that no longitudinal studies are commissioned to track the successes and failures of firms that get public supports.
Two years ago in its last biennial Economic Survey of Ireland, the Organisation for Economic Cooperation and Development (OECD) recommended empirically-proven policies and sunset clauses in enterprise and innovation supports but there is no experience of this in the Irish system. It said the number of programmes and agencies multiplied during the period of booming growth. "There are now over 170 separate budget lines, sometimes for very small amounts of money, and 11 major funding agencies involved in disbursing the Science Budget, although it is small by international standards."
The OECD highlighted innovation policy where credible data on outcomes is very limited:
"Focus limited fiscal resources on policies empirically-proven to improve employability; this will require systematic evaluation of labour-market programmes through consistent tracking and randomised trials, followed by decisions to close down ineffective schemes while strengthening successful ones. Reflecting significant uncertainties about the effectiveness of various innovation policy tools, independently and regularly evaluate all actions in this area, strengthen programmes with proven higher returns, and wind down the others. To promote effective evaluation, ensure all innovation and enterprise supports have sunset clauses."
In Nov 2010 legal services reform was a condition in the international bailout agreement. Five years later, it is still pending.
The Commercial Court was set up in January 2004 as a division of the High Court to try cases where the claim has a value of at least €1m.
It has been a very significant development for business while Kenny's declaration: "The scale of reform and action across Government to improve our competitiveness is unyielding until we reach our goals" is very hollow in the context of the lack of resolve in passing legal services reform — Key Irish legal services reform parked in Limbo
Doing Business 2015
Top 6 are Singapore, New Zealand, Hong Kong China, Denmark, South Korea and Norway.
The World Bank's flagship Doing Business ease of doing business report "measures business regulations that affect domestic small and medium-size firms in 11 areas across 189 economies. Ten of these areas — starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency — are included in the distance to frontier score and ease of doing business ranking. Doing Business also measures labour market regulation, which is not included in these 2 measures."
Greece was at 100 in 2008 and at 61 in 2015.
Ireland's ranking for getting electricity was at 67 and dealing with construction permits (planning permissions) at 128 of 189 countries.
Ireland at 13 in 2015 — due to a change in methodology using a 'distance to frontier' measure, Ireland was boosted by 4 points compared with 2014. It would have been a 2 point rise using the old system.
Ireland at 8 in 2008.
The top 6 in 2008 were Singapore, New Zealand, US, Hong Kong, Denmark and UK.
Global Competitiveness Report 2014-2015
Top 6 are Switzerland, Singapore, US, Finland, Germany and Japan.
The Global Competitiveness Index is produced by the Swiss-based World Economic Forum and is based on a wide range of indicators across 12 pillars. It covers 144 countries.
France is at 23 and Saudi Arabia at 24.
Ireland 25 in 2014/2015
Ireland 22 in 2008/2009
Global Information Technology Report 2015
Top 6 are Singapore, Finland, Sweden, Netherlands, Norway and Switzerland.
The Global Information Technology Report 2015 produced by the World Economic Forum in partnership with INSEAD, the French business school, features the latest results of the NRI (Net Readiness Index), offering an overview of the current state of ICT (information, communication and technology) readiness in the world. It covers 143 economies, accounting for 98.4% of global GDP.
Estonia is at 22, France is at 26 and Quatar is at 27.
Ireland 25 in 2015
Ireland 23 in 2008/2009
World Competitiveness Scoreboard 2015
Top 6 are US, Hong Kong, Singapore, Switzerland, Canada and Luxembourg.
The World Competitiveness Scoreboard is produced by IMD, the Swiss business school, and the 2015 rankings are for 61 economies covered by the WCY ( IMD World Competitiveness Yearbook). The economies are ranked from the most to the least competitive and the results from the previous year’s scoreboard (2014) are shown in brackets.
United Arab Emirates has a 12 ranking and Malaysia is at 14.
Ireland 16 in 2014
Ireland 12 in 2008
Methodology based on hard data (2/3) and a business executives' opinion survey (1/3).
The Global Financial Centres Index (GFCI)
Top 6 are New York, London, Hong Kong, Singapore, Tokyo and Zurich.
The Global Financial Centres Index (GFCI) was first published by the London-based Z/Yen Group in March 2007. The aim of the GFCI is to examine the major financial centres globally in terms of competitiveness.
The index provides profiles, ratings and rankings for 83 financial centres, drawing on two separate sources of data — instrumental factors and responses to an online survey.
Dublin at 52 in March 2015 up from 70 in 2014
Dublin at 13 in 2008
Digital Capital of Europe
In 2014 the European Commission's Joint Research Centre ranked the top tech hubs in Europe as being in Munich, London, Paris, Karlsruhe, Cambridgeshire, and Stockholm.
Dublin got a 16 rank
Data published last June by GP Bullhound, a British investment bank, show that Europe has had 40 one billion-dollar+ startups (“unicorns”) since 2000.
The UK is top with 17 followed by Sweden at 6, Germany and Russia 4 each and France is at 3. Ireland has 1 but it's an American company, Fleetmatics. See here and here.
Pic above: Enda Kenny (r), taoiseach, with Brian O'Driscoll, the former Irish star international rugby player, at the Aviva stadium, Dublin, on 2 Sept, 2015, to publicise Ireland's bid for the Rugby World Cup 2023.
Can Ireland reduce its reliance on FDI by boosting Irish firms?
Update
Doing Business 2016: Singapore on top; Ireland slips to 17 ranking
Switzerland global competitiveness star again; Ireland at 24th rank