45126-Invest. Qual-No111

Ireland’s Long Run Economic Development and Vulnerability●●●●●●Gave rise to a doubling of the Structural Funds (whichwere doubled again following agreement of the MaastrichtTreaty);Ireland’s competitiveness and large educated English–speakingworkforce, made it an attractive location for US investment;Irish development policy assisted both inward investment andindigenous business revival because it:Targeted emerging global leaders in high-growth sectors;Produced an increased supply of computer science andother graduates;Changed its focus from building capacity to developingcapability;Initiated innovative institutional arrangements in softwareand bio-technology;There was strong progress in indigenous business, because ofcost competitiveness, increased organisational capability,improved industrial relations and greater entrepreneurship;As employment and profits increased a virtuous circledeveloped: buoyant tax revenue allowed tax reductions thatsupported continued wage moderation and further increasedIreland’s competitiveness, which increased inward investment,yielding income that increased domestic demand, giving rise tonon-traded business activity and further employment;The sense of an economic miracle was reinforced by two factorsthat are, in part, arithmetical:Increasing employment and labour force participation, andfalling dependency, meant rising income per head ofpopulation and rapid convergence to EU levels of incomeper head;Increasing concentration in high-productivity sectors gavethe impression of particularly strong productivity growth;The employment impact of FDI increased for two reasons:49