Time for tough conversations as Ireland emerges from pandemic

Ireland needs to reappraise its place in the world in light of the lessons learned during the Covid-19 pandemic, according to American Chamber of Commerce chief executive Mark Redmond. “The world is in a different place now,” he says.

“We have learned a lot during the pandemic and as we emerge from it, we must apply those lessons. At the American Chamber we view that from the perspective of FDI in and outbound investment from Ireland to the US and we have learned lots of lessons in relation to Ireland’s place in the world and what it needs to look like as a place to live and attract investment.”

He believes Ireland will face some stiff headwinds in the coming years but there will also be opportunities amid the turbulence. However, a number of issues need to be addressed if those opportunities are to be grasped. First among these is physical connectivity.

“We have received a sobering reminder that we are located on an island which we share with another political jurisdiction,” he points out. “We have effectively cut ourselves off from air connectivity. We have had one of most severe lockdowns and one of the most severe mandatory hotel quarantine regimes anywhere. For a country that prides itself on its openness, it will be really important to return air connectivity as soon as possible. And it must be pandemic-fit connectivity.”

Digitisation

The next is the ongoing transformation of public services. “We have seen remarkable agility on the part of the public service over the past year and a half. I believe as we emerge out of the pandemic our public servants deserve to see the same level agility in the framework in the way public services are delivered. We must really invest in digitisation and cyber security to support that. Indeed, there is an opportunity to make Ireland a global centre of excellence for cyber security if we get that right.”

The intensifying global war for talent, particularly in light of new workforce models, is another challenge to be faced. “There is going to be an explosion in consumer demand and in competition for talent,” Redmond explains. “New models are emerging that are going to enable cross-border working. People will have greater choice than ever in terms of where they want to live. That may not be the same place as where they are officially working. That will be massively challenging for Ireland which has traded as a place where global markets can be served, and global companies can be led.

“We need to live up to our reputation as a great place to live,” he continues. “It won’t be a case of people coming to live here just because they have to. It will be one where they will choose to live here because they want to.”

Immobile talent also requires attention. “There are 110,000 people working in multinational manufacturing companies here in Ireland. They can’t leave and work remotely. How do we protect that extraordinary resource? How do we step up investment in research, development and innovation to support that sector?”

How is Ireland going to maintain its manufacturing resource but also look ahead to the next wave of industry 4.0 and advanced manufacturing companies in life sciences, medical technology, semiconductors? Redmond asks. “We are seeing a convergence in these sectors with the use of AI and so on. That’s where the game is going to be won and lost and it requires at least a doubling of State investment in R&D. We need to attract world-class research capability and continue to develop our world-class research centres. But we need to pick winners and not spread ourselves too thinly. Ireland is a small country with finite resources and that means picking a shortlist of winners.”

Indeed, he points out that Ireland accounts for just 0.06 per cent of the world population and already enjoys more than its fair sure of manufacturing and other investment. That small size leaves the country quite exposed to international events such as global tax reform.

Interestingly, the moves towards a minimum global tax rate are actually welcomed by multinational companies. “They really want global tax reform,” says Redmond. “They want the increased certainty that it will bring. As the UK chancellor said recently, we are currently operating with an international tax framework designed in the 1920s. It’s a century out of date. It looks like there will be more certainty on this before the year is out. The multinationals will make decisions their decisions then.”

And those decisions will be taken very quickly. “Multinationals don’t have luxury of time. Speed is our friend is what they say.”

Respond

And Ireland will have to respond to those decisions with equal speed. “Ireland needs to step up and have a tough conversation with itself about the barriers to investment here. It’s critically important to remove those barriers very quickly. The first one is the lack of air connectivity. We have to make sure we reopen very quickly. The second is to solve our broadband and physical infrastructure deficits. People’s tolerance for sub-standard service levels is gone. The third is the crisis in residential accommodation. Now that people have a choice of working location, we need to make sure that not being able to find a place to live is not the reason for people choosing not to live here.”

We also need to make the most of what we’ve got. “We must maximise the opportunities presented by the multinational presence here. Is Ireland effectively mining the expertise available to it from that resource? Are there efficient knowledge transfer mechanisms in place? Are there enough partnerships? In that regard, the American Chamber is putting in place a productivity programme to facilitate the transfer of knowledge and expertise from multinational companies to Irish SMEs.”