Local Business Climate in Ireland
The official languages in Ireland are English and Irish.
The population of Ireland currently stands at 4.8 million, 50% of whom are under 35 years of age. The predominantly young work force is capable, adaptable, mobile and committed to achievement. Over 50% of Irish between 30 and 34 years old have a third level degree – higher than any other country in the EU. This places Ireland in the top position in the world in terms of the availability of skilled labour.
Ireland continues to be one of the most open economies in the Organization for Economic Co-operation and Development. Ireland is emerging from the economic recession and showing strong export recovery. A recent EIU report shows a seasonally adjusted merchandise trade surplus of €4.6bn in April, up sharply from the previous month and from a surplus of €2.8bn a year earlier. Over the first four months of 2015, the cumulative value of goods exports was up 22% year on year, while the import bill was 13% higher. The data published by the Irish Central Statistics Office support our forecast that net exports of goods and services will make a substantial contribution of over 1 percentage point a year to annual average real GDP growth of 3.2% in 2015‑19.
Ireland is ideally suited to high-value manufacturing, research and development and global business services from the following industries: Pharmaceuticals & Biotechnology, Medical Technology, Information & Communication Technologies, Business Services, Consumer Products, Industrial Products, Entertainment & Digital Media and Finance Services.
Ireland is a member of the EU, and the only English-speaking country in the Eurozone offering barrier free access to over 500 million consumers in Europe. This, coupled with the relatively low corporate tax rate of 12.5 percent and tax treaty network with 68 countries, allows Ireland to rank first in the world for inward investment by quality value.
The country has the freest economy in the whole of the Euro-Zone and is ranked in the top 10 easiest places in Europe to do business and top 20 globally in the ease of starting a business.
Learn more about business in Ireland from the World Bank’s Doing Business Ireland Profile.
International Fund for Ireland
The International Fund for Ireland (IFI) promotes economic and social advance. It also encourages contact, dialogue and reconciliation between nationalists and unionists throughout Ireland, tackling the underlying causes of sectarianism and violence and to build reconciliation between people and communities throughout the island of Ireland.
The government of Ireland is committed to the courses of IFI and is currently supporting the Northern Ireland Peace process. The Government announced an allocation of €5 million to IFI to support its work on reconciliation in Northern Ireland and the border counties, and is spearheading the expeditious implementation of the Stormont House Agreement; an agreement that proposes a comprehensive framework to address the legacy of the more than 3,000 deaths that occurred during the Troubles in the Northern Ireland.
Multilateral and Bilateral donors
Ireland has set up an inter-departmental Committee on Development to strengthen internal coherence in the government’s approach to multilateral development and to make the best use of expertise and skills across the public service
The Department of Agriculture, Fisheries and Food and the Department of Enterprise, Trade and Employment have worked closely with Irish Aid over the trade negotiations on the Doha Development Agenda.
The Government is also committed to reach the United Nations Official Development Assistance (ODA) target for overseas aid of 0.7 percent of gross national income (GNI) by 2015. This has seen it join hands with 70 other Irish anti-poverty organizations on the 2015 Now campaign to make sure that the Irish government reaches this target.
Irish Sector Information
House prices are a concern, especially for those looking to buy property. Lack of supply of houses is pushing up prices, particularly in the Dublin area. However, the latest official planning permissions data showed a sharp rise in the third quarter of last year, indicating that things may be starting to improve on this front, which should help to reduce the increase in house prices over time.
Following an average increase of 12.9 percent in house prices last year, an increase of 10 percent is seen in 2015, with the Dublin price rise set to be in the high to mid-teens.
Banking and Capital Markets Sector
The banking and capital markets sector is being transformed by increased competition, regulation and globalisation.
Investment banking is facing significant challenges with recent developments in the financial markets resulting in enhanced focus on risk management by all stakeholders. While still highly profitable, the outlook for retail banking appears to be clouded by concerns over consumer debt, falling property prices and the slowdown of economic growth.
The outlook for the banking and capital markets sector is also being shaped by regulation including the move to Basel II. These challenges have heightened the importance of effective risk management in delivering stable returns and supporting robust governance and compliance processes.
Ireland is emerging as a global technology hub. The sector is thriving, with exports and employment in both indigenous and multinational technology firms continuing to grow. In the last three years over 17,500 jobs have been announced by technology companies and the sector is responsible for 40% of national exports (€72 billion per annum).
Ireland is home to:
- 10 of the top 10 global technology companies
- 9 of the 10 global software companies
- 3 of the 3 top security software companies
- 3 of the top 3 enterprise software companies
- 4 of the top 5 IT services companies
- The top 10 ‘born on the internet’ companies
The manufacturing sector plays a critical role in the Irish economy as an employer, a source of revenue and a key driver of growth. The sector also has significant spin off effects such as indirect employment in sectors like services, logistics, mining/quarrying and agriculture. Manufacturing firms also source materials and services worth billions of euros from Irish-based suppliers, and are a key driver of research and development activities and innovation. The Revenue Commissioners estimate that the manufacturing sector accounts for almost 40 percent of net corporation tax receipts.
The Irish manufacturing sector has strengths in a range of industries, including food, medical devices, pharma/bio pharma, ICT, engineering and green technologies. It is highly diverse, with a range of engineering companies in terms of size, scale and product. The sector includes companies primarily concerned with metal and plastic processing and machine manufacture, encompassing agricultural machinery, materials handling, precision engineering, process engineering, plastics and tool making and metal fabrication and processing. Many enterprises produce their own final products whereas others concentrate on sub-component manufacturing, supplying in to manufacturing value chains.
Agriculture, Horticulture, Forestry and Food Sector
Ireland has a reputation for producing high quality food and agribusiness products. The Department of Agriculture, Food and the Marine estimates that the agri-food sector in Ireland contributes a value of €24 billion to the national economy, generates 6.3% of gross value added and provides 7.4% of national employment
The Irish food and agribusiness sector will however need to continue to drive down costs and increase yields if it is to produce quality agriculture products at a price point that will increase exports and sustain the sector into the long term.
There are approximately 139,860 family farms in Ireland with an average size of 32.7 hectares per holding. The land area of Ireland is 6.9 million hectares, of which 4.5 million hectares is used for agriculture and a further 760,000 hectares for forestry (DAFM 2015). Of the acres dedicated to agricultural uses, 81 percent is devoted to pasture, hay and grass silage (3.63 million hectares), 11 percent to rough grazing (0.48 million hectares) and 8 percent to crops, fruit and horticulture production (0.38 million hectares).
The 2015 abolishment of milk quotas presents a real opportunity for growth of the Irish dairy sector, which will require significant capital investment. Producers now have the opportunity to increase herds and invest in land and milking capacity. Processors will also need to install additional capacity to accommodate the increased milk supply.
Tourism in Ireland is one of the biggest contributors to the economy. Over 7.3 million people, about 1.6 times Ireland’s population, visited the country in 2014. Each year the country makes about €5 billion in revenue from economic activities directly related to tourism. This accounts for about 4 percent of GNP and employs over 200,000 people. In 2011 alone, Ireland was voted ‘Favourite holiday destination in the World’ by readers of Frommer’s Guide, and Lonely Planet listed Ireland as the world’s friendliest country and Cork City as one of the top ten cities in the world. The Irish tourist boards’ website, DiscoverIreland.com, was named the best tourist board website in the world. Most tourists visiting Ireland come from the United Kingdom, the United States, Germany and France.