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And what's the view from Dublin? Why Ireland is going to need the luck of the Irish

By Brendan Keenan

Published 23/08/2016

Brendan Keenan
Brendan Keenan

The most distressful country that ever yet was seen. Even a brief acquaintance with school history would be enough to realise that Ireland's story was a sad one.

Religion, great power politics, the vagaries of the industrial revolution, all combined to bring misery, death and poverty. I can hear the hoots of laughter but, let's face it - since the start of the 20th century, Ireland has rivalled Australia as the lucky country.

There was both luck and judgment in the success of the opening of the economy to foreign investment from 1960.

The judgment is well-documented - particularly Dr Ken Whitaker's seminal policy paper - but there was luck in that it coincided with global expansion and the rise of a new breed of technology companies in the USA.

In the 1970s, the decision by Britain to apply for membership of the European Common Market was also a huge dose of luck for Ireland - and we knew it, even if the emphasis was on gains for agriculture. But it was the British decision which mattered, which is another reason for Brexit to leave a bitter taste. It will be a long time before we know if that decision is good fortune or bad for Ireland.

That has often been the case in the past. The first impact of free trade with Britain, and then with the Common Market, was the destruction of the protected manufacturing industry.

This was a considerable employer and some 100,000 jobs were probably lost in the process.

Most economists would still argue free trade brings overall benefits. There is no doubt reducing poverty among developing countries, thanks to globalisation, is one of the greatest boons in the history of humanity but there is growing concern about specific losers among overall winners. The issue is simply stated. Every purchaser benefits from cheaper coal or steel from abroad, but the miners and steelworkers lose their jobs, although total employment does not fall.

Manufacturing jobs in the USA have declined from almost 30% of the total in 1960 to less than 10% now but the share taken by services jobs had almost doubled. The two concerns are that the new jobs pay less, have less security and are in different places from the old.

They are also taken by new people, often women. There are as many jobs in the rich economies as there ever were, but not for men without third level education, or anyone in the old industrial heartlands.

Lucky old Ireland's experience has been quite different, although the Eastern European nations show similarities.

The clean-out of industry was a rapid process, on a smaller scale and a long time ago.

More importantly, unlike most countries, the new jobs did not pay less. Most of them paid more, because they were in the foreign high-tech companies created by Mr Jobs and his ilk.

Despite some dubious statistical claims to the contrary, Ireland did not experience the regional unemployment and widening wage inequality seen in other countries, which many analysts attribute to a combination of technology and globalisation. So far.

There may be risible laughter at these observations in newspaper offices themselves. They are fascinating cases.

Most of the production jobs were lost as a direct result of new printing technology. But the others - services jobs in effect - are under threat indirectly because of the new technologies which people use to access media.

We have been fortunate in that new jobs and revenues in the likes of Apple and Google have compensated for much of the damage done by the creation of such an operation in the traditional economy.

But one cannot rely on that forever. The other stroke of good fortune, which explains much of the successes of the past 20 years, is the young population. That presents the opportunity to create a workforce adept at the skills which most analysts think will be needed in the next 20.

Belfast Telegraph

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