Emerging markets in focus: Ireland (part one)
We have created a series of articles focusing on thriving economies. In this article, we investigate the opportunities offered in Ireland for start-up businesses.
Prior to joining the EU in 1973, Ireland’s economy largely depended on international trade, with a particular reliance on the UK market. This lack of financial independence resulted in Ireland suffering severely in the global financial crisis. Following the downturn, the EU introduced strict measures to protect member nations from future shocks, including the development of an Economic and Monetary Union (EMU).
Being a small open economy leaves Ireland vulnerable to external factors, but access to the single market environment provided by the EU, alongside the development of an Industrial Development Agency (IDA), has enabled Ireland’s economy to flourish. These fiscal improvements have attracted multinational corporations to establish bases in Dublin, further boosting the economy and initiating the growth of an EU hub outside of London.
Analysing Ireland’s economic future, the European Commission stated, ‘Ireland has emerged from a deep crisis to become one of the Union’s fastest growing economies’ (European Commission). In fact, the state of Ireland’s economy today means that Ireland has become ‘a net contributor [to the EU] after decades of being a net beneficiary’, with the third best economy in the world for business efficiency (IDA Ireland).
What does Brexit mean for Ireland?
Ireland’s prosperous economy has recently been put at risk with the advent of Brexit. The Dublin Economic Monitor warns that ‘the risk of a no-deal scenario and a significant shock to the Irish and UK economy remain very real’ (Dublin Economic Monitor, August 2018). However, the measures taken to repair the economy following the global crash mean that Ireland is already in a positive position when it comes to preparing for any financial instability that may arise from Brexit over the next few years.
Featuring James Caan CBE, the Irish Independent said, “While scepticism about the potential for jobs creation on the back of Brexit has seeped into the discourse in Ireland, Caan firmly believes Ireland will be a beneficiary of Britain’s exit from the EU’. Striving to stay ahead of the curve, Caan notes that he intends to put in place infrastructure to support the ‘huge amount of interest in financial services that have identified Ireland as a very exciting market prospect”.
Already, a shift in focus from London to Dublin is becoming noticeable, with the fiscal benefits of the move attracting many global organisations to relocate from the UK to maintain an EU presence. In fact, the increasing number of these multi-national companies in Ireland has already begun to strengthen the market, with the economy growing by 7.3 percent in 2017 (triple the growth rate of the wider euro area), (Irish Times).
Activity over the past few years indicates widespread confidence in Ireland’s growing economy, suggesting the possibility of Dublin becoming a global financial hub; last year the Bank of China built up branches, Barclays have revealed plans to move their EU headquarters to the capital, and global giants such as Google and Apple already have established bases (Braithwaite). With an increasingly positive global presence, Dublin is well-placed as an alternative to London; Taoiseach Leo Varadkar states that Ireland ‘has become a beacon for liberal western democratic values’ (Irish Examiner), and James Caan suggests the nation ‘will become the hub for Europe’.
Ireland’s recruitment industry
During the recession, the Irish recruitment sector wilted by 70%, with fewer companies hiring, and many redundancies made. However, Adrian McGennis, chief executive of Sigmar Recruitment, notes that the sector ‘has rebounded again significantly’. Currently worth around €1.73 billion a year (according to Ireland’s National Recruitment Federation), substantial growth is projected over the next five years as demand continues to grow, with focus on finance, IT and healthcare sectors.
“Ireland offers one of the most exciting environments for business growth in 2018”
Nearly three-quarters of Irish businesses plan to hire in the next 12 months, suggesting a widespread confidence in the strength of the economy (Hays, 2018). Businesses are beginning to invest more to retain and develop talent; honing an employee value proposition is essential in such a competitive, candidate driven market. Furthermore, the employment market has seen an increase in competitive sponsorship and relocation packages available to anyone looking to relocate, return to or gain experience in Ireland (Morgan McKinley).
With increasingly attractive benefit packages, and a growing presence as an EU hub in the global market, Ireland presents exciting opportunities for career progression. Their unemployment rate is projected to continue decreasing; currently 6.7%, just below the European average of 7.1%, it has more than halved since 2012, where it peaked at 15%.
With 51% of employees looking to move jobs within 12 months, and an influx of professionals looking to take advantage of the wide-ranging benefits that currently come with relocating, existing and new recruitment agencies face exciting prospects for growth and success. This dynamic landscape also provides the perfect platform for those ready to take the next step and launch their own recruitment business, with global corporations reaching out to make new connections in Ireland.
A positive outlook
Despite fluctuations over the past few decades, and a potentially tumultuous period following Brexit, Ireland’s economic outlook remains positive. With one of the most educated workforces in the world, and the youngest population in Europe (with almost half the population under the age of 34, according to IDA Ireland), the nation has a lot to offer the global market and stands in good stead to become an international finance hub. The highly-successful education system provides employers with a top-quality pool of candidates; Ireland ranks in the top 10 globally for knowledge transfer between universities and companies.
Ireland’s time is now: if the market succeeds in withstanding the economic aftershocks of Brexit, the nation could emerge from the widespread uncertainty as a beacon of strength, prosperity, and stability, leading the way as a post-Brexit European business hub. RE is well-placed to assist aspiring entrepreneurs to also advantage of the opportunities this unique series of events brings.
The second part of this series will provide an insight into Ireland’s key markets to watch, with a focus on the healthcare, technology and finance sectors.