Ireland is thriving like never before

A race has started in the British Isles. While the British have been talking about Global Britain for years, the Irish are winning the hearts of many global tech and pharmaceutical companies. Why is Ireland so popular?

After playing a ballad by The Dubliners, the folk singer watches the hundred diners at Johnnie Foxes, a 224-year-old pub in the hills south of Dublin. ‘Where are you from?’ she calls. ‘Chicago!’, it sounds, ‘Brazil! Serbia! Dublin! India!’ At the bar, meanwhile, a tipsy Irish regular tells a French banker that St. Patrick, Ireland’s patron saint, was actually a Welshman who became a Catholic in France and then converted Ireland. “Let’s drink to that,” laughs the banker. ‘Cheers!’

The boisterous atmosphere on this weeknight at Ireland’s highest inn reflects the jubilation over the economy. The current year is heading for an economic growth of 7.5 percent, excluding the contribution of the multinationals on the island. This is well above the European average and that of its big neighbour, the United Kingdom. The Irish state has already collected 64 billion in taxes this year, a quarter more than in 2021. Irish employment is at an all-time high.

silicon docks

Looking out over Dublin, where Liebherr cranes are pulling offices out of the ground, Tommy Fanning smiles. He is the strategist for the Industrial Development Agency (IDA), the agency responsible for developing the Irish economy. ‘We’ve had the best half year in our 70-year history.’ He adds that Chinese biotech giant WuXi recently opened a billion-dollar facility in his hometown, Dundalk. A city that was a base of the Irish Republican Army (IRA).

Under the motto of ‘invitational industrialization’, the IDA has over the years lured dozens of American multinationals – tech and pharma first and foremost – to Ireland, taking advantage of its low corporate tax rate of 12.5 percent. The docks in Dublin have come to be known as Silicon Docks due to the Twitters and Tiktoks that live there. And Cork, the country’s second city and home of pharmaceutical company Pfizer, is called Viagra Town. Foreign multinationals account for 10 percent of employment and two-thirds of exports.

Both the European Union and the United States have viewed this tax policy with skepticism for years, which is why the Irish government has embarked on a more sustainable course. ‘Talent is the new tax’, is how Fanning summarizes the change of course. The traumatic St. Patrick’s Day of 2008 plays a role in the back of my mind, the holiday on which the Celtic Tiger went down and the Irish house of cards collapsed. The credit crisis led to a deep recession in Ireland, after which it came under the grip of the EU, the IMF and the ECB.

Medication Mecca

As banks and construction companies went bankrupt, the National Institute for Bioprocessing Research and Training complex, the world’s leading training institute for the biotech industry, arose in south Dublin. A few years earlier, the American pharmaceutical company Wyeth, now absorbed by Pfizer, had chosen Ireland for a site where a drug against arthritis was to be developed. Problem: The Irish could not provide the required 2,000 well-trained biologists and pharmacists.

‘The IDA immediately sprang into action by building this facility for €80 million,’ says business developer Killian O’Driscoll, ‘for the pharmaceutical industry this was a boon. Ireland is known for U2, Guinness and James Joyce, but above all we are now the global mecca of medicine.’ The value of pharmaceutical exports in Ireland is around €50 billion. The said training institute is now opening franchises in the United States, Canada, Australia, China and South Korea.

Irish ambition

All those foreign investors have created a true ecosystem of Irish companies that have the ambition to go out into the world. In a few weeks Eddie Dillon (47) will therefore be in the United States to gain a foothold for CreditLogic, his five-year-old fintech company that makes software that allows banks to offer mortgages quickly and efficiently. ‘The home market is interesting, but small. An Irish entrepreneur almost has to look across the border.’

Both in setting up his company, which employs thirty people, and in entering the US market, he receives practical and financial help from Enterprise Ireland, the sister organization of the IDA that focuses on supporting Irish entrepreneurs. “When I was young,” says Dillon in Grand Cafe en Seine, “a steady job was the Irishman’s dream. Now that applies to entrepreneurship. In no other European country are there so many start-ups as in Ireland. Everyone has become a U2, brazen adventurers who want to conquer the world.’

Much more than just U2

That the famous rock band is more than a metaphor is evident on the other side of busy Dawson Street in Nuritas’ laboratory. Two of the band members have invested in the food technology company where genomics (the study of DNA in a cell) and artificial intelligence are used to make health products. Dutch biologist Henri Molhuizen has been working there as chief scientific officer since late summer, a foreign adventure after having worked for years in his own country for Unilever, among others.

He mentions the active support of the Irish government and the presence of top universities as the main positive points, as well as the quality of life in the Irish capital. ‘Dublin is a very international city with many foreign employees. At Nuritas we have a diverse team with seventeen nationalities at the moment.’ The latter represents a major cultural change: Ireland has traditionally been a country of emigration – the emigration museum on the north bank of the Liffey bears witness to this – but now it has become an alluring destination.

This leads to additional pressure on the housing market. No European country values ​​homeownership more than Ireland, but a record number of Irish people are trapped in the private rented sector with San Francisco-like high rents. “We are dealing with a dysfunctional housing market,” says Eoin O’Broin, 50, housing policy spokesman for the opposition party Sinn Fein and author of the bestseller Home: why public housing is the answer. “There is a dire shortage of affordable housing. Not enough is being built. Easy.’

At his office in parliament, O’Broin googles an image of an elegant flat full of council housing. ‘Do you recognize it? This flat is located in Nijmegen, the Hatert. Rent from 850 euros for 90 square meters, if I’m right. The Irish kill for that, so cheap. Such projects are also needed here. Even the Chamber of Commerce is begging for it, but the government is not ambitious enough even though it is starting to hurt the economy. The only sector where the targets are met are expensive apartments. ‘

The shadow sides

The housing crisis is helping progressive-patriotic Sinn Fein outperform the two centre-right governing parties Fine Gael and Fianna Fáil, despite a booming economy. The increasing Irish self-awareness plays a role here, which is reflected in the growth of the Irish language, Gaelic. This coincides with the 100th anniversary of the Irish Free State next month. Although Ireland managed to free itself from the British yoke in 1922, Ireland has long remained the little brother of the United Kingdom.

The extent to which this is changing is reflected in the exports of agri-food, traditionally the most important sector of a country that was still experiencing a famine in the 1940s. Thirty years ago, 90 percent of Irish food exports went to the United Kingdom, now it’s ‘only’ 33 percent. The same percentage goes to the EU and the rest to other continents. A major buyer of barley is Nigeria, where the world’s largest Guinness brewery is located. Irish agriculture, which has hardly any bio-industry, has an export value of 13.5 billion euros.

The Dutch connection

Although the consequences for British-Irish trade have been less than expected, Brexit has strengthened the decoupling. There are fewer British shops in the Irish high streets, the number of Irish people in the United Kingdom is declining and the Irish are busy developing direct ferry connections with the European mainland. More and more goods trade that used to go via England is now going from the southern Irish port of Rosslare to France. Recently, passenger boats also sail there to the Basque Bilbao.

‘Brexit has improved our view of the European mainland’, as an official at the Ministry of Foreign Affairs puts the geopolitical change into words. According to Anne Lanigan, head of Enterprise Ireland, the Netherlands has a special role to play in this. ‘Because of the accessibility of that market, the fact that English is widely spoken and it has a long trading history, the Netherlands is the gateway to the mainland for Irish companies. It is already our largest export market within the EU.’

Growth will be lower for the coming year, partly due to high global inflation, and in recent weeks there has been a painful round of layoffs in the tech sector, but according to the government there is no danger of recession. Next year, the Irish, who own Europe’s largest airline with Ryanair, will celebrate the fact that they joined what was then called the European Economic Community, later the EU, half a century ago, together with the British. After the shock caused by Brexit, they have formulated a successful response to the neighbours’ Global Britain with Global Ireland.