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Ireland’s economy is growing steadily - 2018

Dublin-city-grand_canal_ireland
Strong growth is expected for Ireland’s economy heading into 2019. The European Commission has predicted that Ireland’s GDP growth in 2018 will be 5.6%. This is the highest rate predicted in the EU. The Irish economy is currently in good shape. Unemployment levels are at their lowest since 2008, coming in at 5.4% in September 2018. Ireland’s economy had a record year for exchequer receipts in 2017 of €50.7 billion. 

Challenges

Brexit: The uncertainty created by Brexit is cause for concern, not only for the UK and Ireland, but for the whole of the EU. However, the Irish economy is no stranger to a challenge. Just 10 years ago Ireland was the first country in the Eurozone to enter into recession post the 2008 global economic collapse, yet now the country’s economy continues to grow after having its record year in 2017.

At the time of writing, Brexit negotiations are stagnant. The Irish Government has just published their Budget 2019, which contains further measures to ‘Brexit proof’ the Irish economy, such as €110 million to be used across a number of Departments, including funding for essential customs requirements. Although uncertainty caused by Brexit does create problems, opportunities also exist for Ireland to secure investment from business looking for an EU base for the operations. 

US Tax reform: The TCJA (The Tax Cuts and Jobs Act 2017). The purpose of the TCJA tax reform was predominantly to create domestic job creation in the US, increase their economic growth, and make the country more competitive on an international level. It is difficult to access the future impact of the TCJA at this early stage, the act was only signed into law in December 2017. However, it is another issue that Ireland’s economy has to factor in when assessing its own position and future plans. Ireland has a lot to offer business looking to relocate.

Reasons companies move to Ireland

Education 
Ireland boasts one of the most educated workforces in the world. 52% of 25-34 year olds in Ireland have a third level qualification, compared to an OECD average of 43%.
In Budget 2019 Minister for Finance Paschal Donohoe has allocated The Department of Education with €10.8 billion for 2019. This is in support of the creation of up to 18,000 additional permanent school places and 5,000 replacement places. The budget also provides €150 million for investment in the areas of Higher Education, Further Education and Training, and Research.
Ireland’s education ranks in the top 10 globally for:

  • Quality of the education system.
  • University education that meets the needs of a competitive economy.
  • Knowledge transfer between universities and companies.


Industry and Academia - A "collaboration culture"
Ireland has one of the highest graduate rates in the mathematics, science and technology field within the EU (Eurostat 2015). The “collaboration culture” that exists here between industry leaders, research centres and academia enables Ireland to develop as a world-class graduates. One example of this collaboration in action is the Atlantic University Alliance (AUA), which is a consortium of three Universities on the Atlantic coast of Ireland – NUI, Galway, the University of Limerick and University College Cork. At the heart of the Atlantic University Alliance is its interaction with academia and industry, bridging the needs of industry with the expertise of University academics.

Another example of “collaboration culture” in Irish education can be seen at BioInnovate Ireland, which is based on a programme in Stanford University, California, called Stanford Biodesign. Ireland’s BioInnovate is a medical technology innovation programme based in the National University of Ireland (NUI), Galway. It focuses on developing the next generation of MedTech entrepreneurs. The programme represents an enormous opportunity for engineers, doctors and business people looking to make an impact in the MedTech sector.

Springboard Programme
This programme is designed to help job seekers, both those in employment or self-employment who wish to upskill/reskill in the Biopharma/Medtech and ICT sectors. Springboard provides over 6,400 free education places in 198 courses at both public and private educational institutions across the country.

Taxation 

  • Ireland favourable corporate tax rate of 12.5% is the lowest in Europe.
  • Ireland has 73 tax treaties with other countries such as; US, UK, China, Japan, Australia, Canada and more.
  • Start-up companies are exempt from corporation tax for their first three years, once profits are less than €320k.
  • R&D Tax credit of 25%.

Language 

  • Ireland will be the last remaining country where English is the primary language spoken post Brexit.

Population 

  • Ireland has the youngest population in Europe. 49% of the population is under 35 years old.
  • 20% of Irish students are in 3rd level education studying Science and Engineering.
  • 25% of Irish students are in 3rd level education studying Social Sciences, Business, and Law.


Market Access 
One of the main reasons companies look to invest in countries outside of their home markets is to gain access to new markets. A report from the Economist Intelligence Unit found that three in five, or 58%, of respondents, emphasised market access as one of their top three motivations for setting up international operations. Market access was prioritised over of eight other factors;

  • Availability of key skills - 34%
  • Government incentives - 32% 
  • Ease of doing business - 32%

Access to the EU - Ireland’s specific advantage 
The report shows that when asked about Ireland’s main competitive advantages, the country's access to European markets was top of the list. 46% of respondents highlighted market access, much more than any other factor.

Concluding

Although uncertainty caused by Brexit does exist, the Irish economy continues to grow at a steady pace and continues to attract new investment. With the Irish Government taking measures to ‘Brexit proof’ the economy, their continued investment in education, and the establishment of a ‘rainy day fund,’ Ireland is driving its economy in the right direction. The fact that SOTI, Eurofins BioPharma Product Testing Ireland, and Edwards Lifesciences Corporation have all announced major job creations and expansions in the last nine days alone, is a testament to the strength of Ireland’s economy.  

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