Reports of the demise of the Celtic Tiger have been part of Irish economic life for some years. Economists have habitually, in their New Year prognostications, been forecasting declines from the super-growth pace of 10 per cent in GDP each year to more modest and reputedly more "sustainable" levels, but the Celtic Tiger has repeatedly easily beaten their forecasts .
The Organisation for Economic Co-operation and Development (OECD), in its latest economic survey of the Republic, noted that the State has had 10 years of rapid growth but "rather than slow as might have been expected, Ireland experienced spectacular growth of well over 10 per cent in 2000".
When the chill of the sudden slowdown hit the US economy and hammered its stock markets last autumn, the alarm bells rang throughout the Irish media regarding the knock-on effects on the US companies in the Republic and on the serious consequences for the Celtic Tiger.
This crude analysis was flawed because Irish subsidiaries of US companies sell most of their output to the European, Middle Eastern and African markets and as long as these markets are not declining, the outlook for the Irish operations remains positive. Adverse effects on Irish subsidiaries due to the US downturn have been limited and they have generally suffered less than their US-based counterparts.
It does look, however, as if a combination of events will at last slow, but by no means slay, the Celtic Tiger economy. The US slowdown has reduced business confidence internationally; the collapse of dotcom companies and associated nervousness by venture capital investors has had tragic consequences for some young Irish companies and their staff; the foot-and-mouth disease following the BSE crisis hit Irish farming hard and had damaged the tourist industry just as it was coming to the normal peak season.
Yet, as the dust begins to settle, the OECD is predicting expansion of almost 8 per cent in the Republic's GDP this year and the Economic and Social Research Institute (ESRI) has forecast GDP growth of more than 6 per cent in 2002. These are growth rates beyond the expectations of other European countries.
So, at a time when the most recent labour force survey found that unemployment in the Republic had dropped to the historically low figure of 3.7 per cent - or 66,000 individuals - in the first quarter of this year, how do we square the circle of continued growth and an apparent lack of available labour? Fortunately, we have the benefits of a most impressive piece of research in the shape of the FAS/ ESRI labour force studies for the years up to the end of 2005. What their findings demonstrate is that the Republic will need about 78,000 people each year to support the more moderate growth. About half will come from school leavers and college graduates, and about one-quarter will be "returnees" from family duties or retirement. The remainder - almost 20,000 a year - will be immigrants. Of the immigrant workers, just over half are likely to be of foreign nationality .
After a shaky start in terms of administrative procedures for immigrant workers and societal attitudes, we should be able to handle this level of immigration reasonably comfortably. However, while the overall demand and supply of labour can be matched, there will be an excess of unskilled workers in the Republic and a serious shortage of skilled manual workers.
This scenario offers a real opportunity to be innovative in reaching out to assist those who lack the skills or education to participate in the Celtic Tiger or face traditional barriers.
As chairman of the Northside Partnership, the area-based company that has 100,000 population in its catchment area from Coolock to Baldoyle, I have seen how the co-operative efforts of community and State organisations have led to a halving of long-term unemployment in the past four years to an absolute level of 2,000 now. We have welcomed and co-operated with the outstanding industry-led FIT programme (Fastrack to Information Technology), which has provided IT training for 1,400 unemployed people, of whom 500 have already got jobs.
We now face the biggest challenge because those still out in the cold need the greatest help and change in attitudes by all in the public and private sectors. The Northside Partnership in its recently published business plan has committed itself to the social inclusion by 2003 of recovering drug-abusers (target 200); ex-offenders from the area (target 200); people with disabilities (target 800); and the travelling community in the area (target 500).
A moment's reflection on the low participation of these groups in the workplace and the recruitment barriers they face will bring home to readers the tough challenge ahead but also the potential for imaginative progress .
Padraic White is co-author with Ray Mc Sharry of the book The Making of the Celtic Tiger - the inside story (Mercier Press) and is chairman of the Northside Partnership Ltd in Dublin's north city area.
