Tuesday, 16 December 2008

The Celtic Tiger- An Endangered Species

The economic bad news continues to flow into Northern Notes HQ with rumours circulating that Dell could shut its European hub in Limerick. It's been reported that IDA bosses, who have pumped over €74m in government cash into Dell since the mid-nineties, are preparing themselves for news in the New Year that the computer giant is to move its operations wholesale to Poland before the end of 2009.

The Limerick Leader says that the European Commission is examining an estimated €52.7m Polish state aid for Dell's plant in Lodz. However, if Dell has already made up its mind to move eastwards, then any legal wrangles will lead to little more than a delay. 3,000 people are currently employed at the Limerick plant, and it is estimated that around six in every 100 people in the region are reliant on Dell for an income.

So what does this mean for the north? Well, with the economy here largely reliant on the public sector, the Executive has vowed to move us towards a more mixed system. Some of the ways they're seeking to achieve this is through attracting American investment and lobbying for corporation tax harmonisation between the north and the south.

However, as the Dell situation has shown, a low company tax rate and having a red carpet laid-out for big US companies is not enough to keep them in Ireland. If the south, which has over a decade of experience of hosting these corporations is having trouble holding onto them, then the north will have a tough time doing any better.

Nonetheless, it's vital that our workforce is skilled-up to make it as competitive as possible. The weak pound will make the north somewhat more attractive than the eurozone as a manufacturing base, so we need to be able to exploit this. There are good lessons to be learnt from the south, which looked at where the market was going in the early nineties and directed its education and traning towards ensuring that its workforce was prepared to meet the needs multinational corporations. The north should do the same now.

As the financial crisis continues, there are opportunities available for the north. But we need to be in a position to make the most of it.


Anonymous said...

I agree with your comments to an extent - but when Dell and other companies can now move to Poland much easier because of the EU - then it is only inevitable that as soon as the opportunity arises that they will pack their bags and move to pastures new - Ireland North and South cannot compete with Poland which has a well educated, hardworking and cheap workforce - the recession in the ROI has only hastened the imminent departure of many US companies and I am not sure McGuinness and Robinson can sell NI in this economic climate -what a pity they wasted time squabbling over policing when they should have been concentrating on the real issues of the day - the electorate should not forgive them for this silly and costly mistake

Anonymous said...

The Celtic Tiger is nothing but a whimper - if the governmnet of the South had handled things better in times of boom think they may have been in a better place to weather the storm