IT & COMMUNICATIONS TheRoleofInformationTechnology in Attracting Foreign Investment, Creating Industrial Zones and Developing Human Resources a report by John Travers Chief Executive, Forfás 1 John Travers is the Chief Executive of Forfás – the policy and advisory Board for industrial development and science and technology in Ireland and the body in which the main legal powers of the state for industrial promotion and technology are vested. Previously, he worked as Chief Economic Advisor in the Government Department of Enterprise and Employment and in senior management posts in the Department of the Taoiseach (Prime Minister) and Department of Finance. He has also worked as a consultant on United Nations and World Bank projects in the industrial development field in a number of countries and formerly worked in business in the industry and services sectors. He is a member of the Management Board of the Department of Enterprise, Trade and Employment; a member of the Government-appointed National Science, Technology and Innovation Board for Ireland; and a member of the Governmentappointed National Competitiveness Council. Mr Travers holds postgraduate qualifications in planning, economic development and business management from both the National University of Ireland and the University of Pennsylvania. He is a member of the Board of the Graduate School of Business at University College, Dublin. Ireland has been appropriately dubbed the “Celtic Tiger” and, within Ireland, Dublin is the urban pivot of a remarkable success story. First, some basic facts: The Republic of Ireland has a population of 3.7 million people with a labour force of 1.6 million. One-third of that population and labour force live and work within the greater Dublin conurbation. Ireland is, however, an integral part of the EU – a single market of some 370 million people. Ireland is a founder member of the European Monetary Union (EMU) and is the only English-speaking country of the 11 Member States of the EU which established EMU on 1 January 1999. Of these 11 countries, Ireland was ranked in the top three in meeting the entry criteria relating to low inflation, stable currency exchange rates, internationally competitive long-term interest rates and a low and stable government budgetary deficit. Indeed, Ireland is one of the few EU countries which has consistently achieved government budgetary surpluses in recent years. This admirable performance for a small country has been facilitated by the fact that Ireland has achieved rates of economic growth over the past 10 years that are higher than those of any other Organisation for Economic Co-operation and Development (OECD) country. Table 1 illustrates this growth. Table 1: Average Annual Change in GDP, 1989–1998 (%) Ireland 6.83 UK 1.96 EU 2.14 US 2.53 Total OECD 2.43 Source: OECD Economic Outlook, December 1998. The exceptional rate of economic growth which Ireland has achieved has been reflected in equally impressive rates of employment growth, as Table 2 indicates. Table 2: Average Annual Employment Change, 1989–1998 (%) Ireland +2.71 UK +0.29 EU +0.24 US +1.33 Total OECD +0.90 Source: OECD Economic Outlook, December 1998. Over the most recent five-year period, to the end of 1998, employment growth in Ireland has accelerated to an average annual rate of increase of over 4.75% per year. Current indications are that significant employment growth is set to continue over the next five years. Unusually, by reference to most other OECD countries, employment in the manufacturing sector in Ireland, underpinned by strong productivity growth, has shown substantive increases over the past 10 years, with a significant acceleration in performance over the most recent five-year period, as Table 3 illustrates. Table 3: Manufacturing Employment Chance, 1990–1997 (%) Ireland +38.6 UK -1.0 EU +3.9 US -2.0 Source: EU, Eurostat. The services sector remains the main source of employment increase in Ireland, however, with a total employment increase of over 40% (265,000 jobs) in the sector in the 10 years to the end of 1998. In considering Ireland’s economic performance, it is essential to note that Ireland is one of the most trade-dependent economies in the world. Exports of goods and services in Ireland accounted for over 92% of GDP in 1998 and imports accounted for over 78% of GDP. The average annual increase in 148 1. Forfás is the Government Policy Board for Industrial Development and Science and Technology in Ireland. It is also the legal entity through which the promotion of FDI and Irish-owned enterprise is undertaken by the specialist agencies IDA Ireland and Enterprise Ireland.