Irish economy - are there clouds ahead?

Interesting posts.

I am also at the coalface as an engineer for one of the big mulitinationals. Theres no innovation or ingenuity going on in the technologies sector in Ireland. It all about reading the manual from the HQ in the states and copying what they do. Whether it's manufacturing pharmaceuticals, electronics, or computers, or "developing" software (i.e. translating Word into french), that's what Hi-tech in Ireland boils down to. Knowledge based economy my This post will be deleted if not edited to remove bad language

There are no bright kids tinkering in their garages, risking it all on hair brained schemes. They are too petrified that if they take risks, they might not end up on the property ladder. Better to take the safe job in the US multinational or the Public Sector or one of our over regulated greedy professions than take any of the risks required to grow profitable export driven enterprises.

I think the company EDO works for is the exception. I have a pretty good idea who they are (cutting semi wafers with lasers, right?), and I always thought they stuck out like a sore thumb in this place considering they research, design, develop and manufacture cutting edge technology all on this Island and are Irish owned.

Got orders this week from the US to start training an engineer in India for "another project". Why do I think this project my actually be the next one I was supposed to be doing...........
 
At the end of the day all we do in this country is build houses for each other and make each other salad rolls and take away coffee.We have a small sideline in making computers and tabs for erectile dysfunction.!!!Sound industrial basis for a modern economy methinks.!!!
 
That's scary - 100,000 people directly employed by US companies with 250,000 others 'directly supported' by them!.........350,000 dependants! If a high proportion of these are vulnerable then not only the property and construction sector but the service sector (takeaway rolls and coffee etc.) will be also. That's a seriously anxiety-provoking situation - if you happen to be a responsible adult. Is there anything that can be done - by business leaders (!) and/or government - to salvage the situation, given the level of developmental imbalance and the ominous signs elsewhere (US etc.)?
 
Oh - I've just read the 'Times' article.........'clampdown on tax-evasion' figures as one antidote!!!
 
Powderblue 78

"There are no bright kids tinkering in their garages, risking it all on hair brained schemes. They are too petrified that if they take risks, they might not end up on the property ladder. Better to take the safe job in the US multinational or the Public Sector or one of our over regulated greedy professions than take any of the risks required to grow profitable export driven enterprises."

Well said - could not have expressed it better myself.

As for my place of employment - you're totally on the money - its a small world of Hi tech in this country and getting smaller all the time.

I was at one of the young scientist thingys here recently - one of my nephews was participating in it - and its great to see the wonderful and creative ideas that these young girls and boys come up with it and their wonderful confidence and optimism - pity that this country will soon drive it out of them as it makes getting a roof over their head the be all and end all of their economic existence.

From personal experience when a financial institution will offer , rather get down on their knees and beg you to take, an outrageous amount of money for a tiny piece of land with a few questionably placed bricks on top of it, yet would turn down a request for a tenth of that amount if you have a bright idea to generate exports and employment - you really wonder where its all going to end!

Gotta go work for the taxman

Later
 
I have been away the last few months and just got back in the country on Saturday. since then I've heard a few "Payment holidays" adds on the radio. I believe it is in relation to mortgages (I wasn't listening to closely). Are these new or have they been going on the last few months? Are peope starting to feel the pinch?
 
Funny how a bit of distance can change your perspective. I worked in Dublin in the late 90s - a real sense of boomtown about the place - fueled perhaps by the multinationals but also native industries - looked like a non-stop train. Then I lived abroad from 2001-2005 for personal reasons. Returned last year and the boom seems to have turned into a frenzy - but it's all property property property. There've been a few improvements in infrastructure, like the Luas, but nothing like what's needed (or what was promised). That large parts of the Dublin commuter belt lack broadband access is just ridiculous. The native industry hardly seems to feature apart from that associated with property. Nothing wrong with multinationals - i work for one myself - they were the fuel that started the boom - but did we make best use of that fuel? Will they stay much longer with rising costs, lack of infrastructure, and easy relocation?

I've talked to a few people who tried running their own businesses, and whether it was an IT company or a hairdressers they express the same frustrations. Of course there are always risks involved and some will inevitably go to the wall through poor planning or bad luck, but it doesn't sound like an encouraging environment even for the best prepared.

As for people feeling the pinch - well I just had to cancel a holiday - my two travelling companions can't afford to go because their mortgages have increased.
 

If every house built in the last 3 years alone(over 200000) had a simple convection solar panel fitted then how much oil and gas could we have saved in the last 2 weeks alone?
Is there an irish company designing and making solar panels?
A trickle of water been pumped over a dark backround contained under a sheet of glass is hardly high tech.
 
Interesting posts edo, but how much of what you say is happening is just due to a natural shift to services rather than manufacturing? It's not essential for a country to make things to be successful.

Also, decentralised power generation is in some ways a bonkers idea. When a technology advances it's much easier to upgrade one power station than one million.
 
Sure Nermal - lets go the "Services" route - do you want fries with that?
 
Nermal said:
Interesting posts edo, but how much of what you say is happening is just due to a natural shift to services rather than manufacturing? It's not essential for a country to make things to be successful.

Services are even more outsourcable than manufacturing.
 
Nermal said:
Interesting posts edo, but how much of what you say is happening is just due to a natural shift to services rather than manufacturing? It's not essential for a country to make things to be successful.

The problem with the services industry in Ireland is that we are not exporting services, simply supplying local demand. It is hard to imagine us competing internationally on services because of our high costs.

So while there might be jobs in the services industry, someone, somewhere, needs to be exporting something so that we take in the money from other countries to pay for these services. We cannot all get rich taking in each others washing (or selling each other houses for that matter).
 

And not just the financial institutions. I have attempted to set up my own business twice and the lack of help from any of the agencies (IDA, Enterprise board, forfas etc..) was astounding. I approached so many of them, and their responses to me ranged from 'Can't help ya' to 'Do a course'. They'd break your heart. I guess a meeting with the likes of myself can then be filled into their calander as a job well done.
I have two colleagues who have attempted to set up their own business also and they have had the same experience. So one of them is now spending what savings he had building a house and the other has moved to Belgium.
A girl who works with me set up her own business in the north and she said they couldn't have been more helpful.
 
shnaek said:
I have attempted to set up my own business twice and the lack of help from any of the agencies (IDA, Enterprise board, forfas etc..) was astounding.
A bit of advice. Myself and some prospective partners have been seriously looking at establishing a software firm and we've recieved alot of interest and encouragement from Enterprise Ireland but here's the key - they are only intersted in us because we'd be an exporter. In fairness, I don't really blame them (to a certain extent), as the domestic market is so small and incredibly vulnerable to external shocks.
 
Sorry about the smart-This post will be deleted if not edited to remove bad language reply earlier Nermal !

Its just a reflex action with me when people automatically assume that manufacturing and industry are , so like totally , 19th century and services are the way of the future.

I don't what it is , but I get the impression when you mention the word "industry" or "manufacturing" many people seem to get visions of the opening sequence of the Deerhunter film , or giant posters from the Communist era with all us industrial workers piling into work arm in arm , with our cloth caps on , sitting down the bottom of mineshafts eating pot noodles etc etc - dinosaurs waiting for the end - while services is the shiny new modern future for the western elite - let all them easterners and other assorted foreigners toil away to make the bits and pieces that make up the fabric of our lives while we make our fortunes selling each other expensive coffees and danish pastries!

An oversimplification I know - the truth is probably somewhere between the two.

Irelands Service industry remarkably mirrors the manufacturing industry with the vital exception of tourism. The vast majority of the Irish owned entities are small scale and inward looking - servicing the domestic marketplace ,therefore at the this moment in time massively overdependent on property and the public sector spending.

The multinational sector of services has been shrinking , call centres etc etc have been contracting and moving department by department to lower cost locations , primarily the indian subcontinent and even back to Europe and the States as rising costs , lack of skilled labour prepared to work at competitive international wages and most importantly our chronic neglect and deficit in both of physical and electronic infrastructure -something that comes up again and again.
The IFSC has been a great success both in badly needed financial revenue and jobs for the first decade of its existence - more importantly was the image it gave of a country that was ready to do business. That was vital in bringing in so much foreign investment in the 90's - pity the illusion ends the minute you walk out of the place.

Currently its importance is less as there is a rapid turnover of companies in the centre apart from the anchor tenants (Nearly all our large commerical banks are dependent on the home market for a large % of their revenue - their foreign adventures , how shall I put it, have been less than awe inspiring) and because of the financial sweeteners given out its impact on revenue is less than it should be - its not for the scenery and the craic that it is listed as a tax haven in the classified section of the Economist magazine- and lets be honest : its not New York , London , Hong Kong or Frankfurt - in this electronic age where would you rather be doing business?

Anyway Im starting to digress and fly off on tangents here so back to main point I was going to make originally in response to your comments vis a vis services taking over from industry as a natural way of things.

One thing I have noticed in my travels around this air filled bubble we call Earth is that primary economic activity , manufacturing, agriculture, etc etc is the creator of wealth that all other sectors , services and banking feed off, either directly or indirectly- with a few economically perverse exceptions like stock market and property bubbles.

Im thinking primarily of the economy, culture and nation that we try to imitate (whether conciously or subconciously) most here - the USA. I travel there on Business 4 to 5 times a year and lived and worked there for a couple of years and have travelled the length and breath of it as tourist many times - Its a country that drives me nuts - I have a real love- hate relationship with the place but I'll will be fascinated with the country and its people till the day I die. One thing that has stood out to me , with relevance to this thread and Ireland is that the places where services , property prices and general around standard of living are highest , are areas where there is a high concentration of industry , manufacturing and research and development - period. Take any example you want -

Seattle and the north west - Aviation (Boeing), Computers (Microsoft) , horticulture) Damn nearly 30% of all the apples produced in the world come from Washington State -

California - the bay area - Computers (HP , Intel , IBM ) , Aviation and defense ( Lockheed Martin)(Raytheon), wine and a vast arrray of pharmautical , Agribusiness and other primary producers

LA and San Diego - Film/Media, Aviaton and Defense (McDonnell Douglas , Grumman, etc etc

I could go on and on thru the Sunbelt and midwest and North East - Each time what you will find are the same things - indigenous industry props up and is the main wage earner , whether its the same company or companies
that have replaced them having sprung and flourished in the fertile soil of big industry spending , the high class educational facilities, great infrastructure and extensive research and development that comes with from the large tax base that manufacturing wages and purchasing bring in - property banking logistics all feed from that - there should be lessons for us here - the US Senators and Congressmen are aware of this too - you should see the fighting that took place over the budget bill when Defense bases and contracts came up for discussion - puts our own mob in the ha'penny place when it comes to bringing home the bacon !

The other side of the American dream should have lessons for us aswell.

the next time you go stateside , take a train, say the Lakeshore Limited from NYC to Chicago - or the Empire Builder from Chicago to Seattle . They will take you through the rustbelt - what happens when the Big industry dies or moves away - Ghosttowns , cities falling apart, and rusting away - once the primary generator of income goes , the tax base contracts , public services and facilities are starved , Banks close up , unemployment and crime increase, who the hell would want to live there , property goes south - anyjobs that are left are dependent on the much reduced income of the remaining inhabitants , so the pay and conditions will match , low skilled , low paid unless you happen to be the local drug baron or the pastor of the local evangelical mission (heh Heh If I was a member of the lrish Catholic Clergy I'd be on me fecking knees praying for a property crash - nothing like the end of your financial world to bring you back to God!) . Its an eyeopener Ill tell you - Its Happened here in Ireland before - nothing is written that it wont happen again.

the Arguements I have been making on this thread have been quite simply - we have to start investing seriously in our native industry and our entrepeneurs and industrialists of the future . That means serious investment in our infrastructure, educational and research estabishments, the introduction of a risk taking culture ( in industry and tech and development only - there has been quite enough in property already thank you very much!) backed up by state funding if necessary (As I have been witness to a million and one ways to blow a buck courtesy of our public service - we couldn't do any worse could we?). As a Country that depends massively on the world market for our standard of living (Both exports and Borrowed foreign funds to buy and build our little castles) the above is vital and will be more vital as the free money from Europe is drying up and our consumer / property boom cannot last forever - bills will have to be paid in the end. Get The primary industry right and the rest will follow.

Night All


 
edo said:
we have to start investing seriously in our native industry and our entrepeneurs and industrialists of the future .

Edo, given that we have an election coming up, have you ever considered running for the Dail?

You have my vote. Nailed down. In fact, I'm happy to dedicate my spare time to canvassing the local area here (along with Sinn Fein probably) and try whip up some support.

Perhaps a new political party is in order.
 
Edo, dont be so hard on "services". Wealth is created by making ever more ingenious mousetraps, yes. And agreed, this is fundamental. But wealth is also created by developing new, better IDEAS. More ingenious ways of doing abstract things also makes us better off. E.g. Paying your bills on-line is far more efficient than queuing up at the local bank/post office. This is a "wealth" creating invention. You can build an economy largely based around services, look at Switzerland or Singapore.

Selling each other the same land with brick dwellings on them for ever higher prices creates nothing.
 
Well Called W2DW - I was expecting those 2 and Dubai, Macau and Hong Kong to be thrown in me face aswell and its a fair point - on first glance!

I didn't mean to knock The "services " industry per se - Jeez there'll be a mob lynching seeing as how many people in this country work in services.

The Point I was trying to make , obviously a tad unsuccessfully it would seem, is that services have to "service" something!

Par Example

I work in an Engineering firm - ok its not your average welding shop - but im not an engineer or designer or researcher or technician - Im an Arts Grad who seems have a vague talent in persuading people to sell me raw materials at a good price, and am able to organise the storage and shipments of those raw marterials , the shipping and expedition of the finished articles to the customer , make sure the facilities are kept in good nick, pay the electiricity bills , organise the waste disposal and still remember the jaffa cakes for elevens - in essence Im in Services! - to the rest of my company - But I wouldn't have a job unless the rest of geniuses in my company weren't creating and producing something of value in the first place . Dont mean to be patronising - But do you see what I mean?

Switzerland - kinda hard to compare us with Switzerland - They do have a very big hi tech industry - but its true When we think of Switzerland all we think of is Bank accounts and skiing and very jammy soccer team. As regards their service industry - you have to remember they have centuries of history here as the one place where your gold was safe - too high up in the mountains to invade - but close enough to the richest industrial belt in Europe (the Rhone and Rhine Valleys in the West and North - the PO valley in the South) that you can take your gold too and leave in the knowledge that it was safe from Attilla the Hun and other assorted mad bastards who have charged around Europe over the last millenium. they have built up that banking experience and reputation over centuries - plus they are totally neutral and not in the EU - You can't expect us on the far west corner of Europe ,with no massive hinterland on our doorstep to replicate all that in a few decades.

Ditto Singapore - Im just back from there - We have a couple of multnational cliients who have their Asian manufacturing bases there - the road all the way to Malaysia and then over the border is jampacked with industrial estates making all kinds of everything - Singapore again has a massive hinterland to service - and sitting astride the worlds busiest sealanes and the maritime tradition and history of being part of the British Empire has been no hinderance either

Ditto Hong Kong and Macau - you gotta have a primary industry hinterland to service.

Dubai -thats an interesting one - I spent a year there - The Sodom and Gomerrrah of the middle East - you can go and have your jollies and bit of hows your father and still be back in Riyadh in time for evening prayers - jurys out on that one - Wait till the petrodollars run out and the revolutionary guard is on the beach and it might be a different story -then again location, location, location - on the crossroads of a mighty trading route - its vital for a good service industry.

Im starting to ramble - but basically what Im trying to say is that a service industry requires an industry be it in trade or manufacturing to service - seeing as Ireland is a) not on the intersection of any great trade routes (but give M O'Leary time - you never know - then again if the baggage allowances get any crazier - maybe not), B) have no great industial /agricultural hinterland to service c) no great history of having been a safe place to put your money - the question is what else and you put your finger on it - ideas ideas ideas and the will and the finance to back them up.

Im Done - Edo has the left the building