Friday, March 16, 2007

Celtic Tiger: The World's A Jungle

As someone who first saw the Emerald Isle in the early 1970's, when things were not-as-bad-as-they-used-to-be-but-still-pretty-grim, it's been interesting to watch the little short of miraculous growth of the Irish economy. Yes, there are still backwaters, but Ireland these days is prosperous, modern and, for the first time since the Danes invaded, a nation full of immigrants instead of emigrants. No more Irish wakes as Paddy and Bridget headed off to the coffin ship, never to return.

One of the big growth areas contributing to the Celtic Tiger has been the pharmaceutical industry.

So I read with interest an article by Etain Lavelle and Dara Doyle (on Bloomberg March 15) about some shifts that are occurring in the Irish economy.

First off, the article noted that Ireland (specifically, University College Cork's Alimentary Pharmabiotic Centre) in competition with a dozen other countries, was awarded GlaxoSmithKline's business for research into things-gastrointestinal. (The date of this decision is not clear from the article, but it was August 2006.) Amgen and Wyeth (schizophrenia and Alzheimer's research) also have scientific facilities in Ireland.

Scientific research, it appears, is booming there.

But the boom in research is counterbalanced by the bust in pharma manufacturing, which had fueled such a hefty proportion of Ireland's economic growth. (Viagra, among other drugs, was made in Ireland.)

Ireland, it seems, is losing their manufacturing jobs to lower-cost options like Puerto Rico and Eastern Europe.

``The Irish government regards research and development as the heart of future success,'' says Enterprise Minister Micheal Martin. ``If we are to remain competitive, we have to move quickly up the value chain and ramp up much more quickly our investment in research.''

Prime Minister Bertie Ahern's government made attracting research a priority in 1999. The country's 12.5 percent corporate tax rate, which had lured drugmakers in the 1970s, was no longer enough to retain low-skilled jobs as wages climbed in the euro region's fastest-growing economy.

Ireland still provides attractive tax rates to corporations, but the big draw is the educated populace. According to the article, 26 percent of Irish adults have a college education.

While the manufacturing jobs leave Ireland, some of the slack gets taken up by the research jobs. But most of the growth in the Irish economy these days is coming from the construction and services sectors.

Sounds familiar, doesn't it?

Just another example of the head-spinning, accelerating pace at which the world economy runs.

Seems like only yesterday, Ireland was THE place to locate manufacturing jobs. Now they're trying to figure out how to bring in the high-level knowledge-centric research jobs, while watching service jobs - which can mean anything from high-end jobs in financial services to dead-end jobs cleaning hotel rooms - replace the manufacturing jobs that weren't there all that long to begin with.

Looks like Ireland's seeing 100+ years of changes in the structure of their economy - from farming, to manufacturing, to services - telescoped into 25 or 30 years.

You sure do have to be fast to keep up with things. Even for the Celtic Tiger, it can be a jungle out there.


Bob Wands said...

Mo, why is it the Irish have so much of the gift of gab? Could it be the barley and hops?

When I was in Ireland last, Software development and distribution was a growing industry.

Love reading your blogs, even though I'm not much of a literary snob.

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