While our economy pitches itself as an ideal locus for multinational business operations, we must strive to ensure we keep it attractive, writes Seán Murphy.
Recent reports have indicated that HSBC is actively considering moving its global headquarters from London to Dublin. Following the announcement that Merrill Lynch's Europe operations will now be run from Dublin, these two stories are indicators of the depth of the opportunity for Ireland if we can ensure that our international services offering remains competitive.
Figures from the Economic and Social Research Institute (ESRI) tell us services exports have grown by some 27.5 per cent since the 1990s. Furthermore, employment in internationally traded services grew by 58 per cent between 1994 and 2004.
Our share of global services trade was 2.2 per cent in 2004, a major achievement as we account for 0.32 per cent of the world economy.
Dublin could become a "rainmaker" for international business services activities for Ireland - with global business brought to Dublin and actively processed at other provincial locations - in the same way locations all over the south of England process huge amounts of back-office work for the City of London.
The question is how can we drive yet more of these developments into a virtuous circle of investment that enables our society to successfully "catch the next wave" as our construction boom tapers off.
The first element is ensuring the correct levels of regulation. The excessive burden of parts of the Sarbanes-Oxley Act, enacted by US Congress after the demise of Enron, is now recognised as having contributed to enabling the London Stock Exchange to surpass its New York equivalent in the market for initial public offerings.
This offers a case study in the need for correctly applied and policed regulations. In addition, we must defend our low corporate tax rate. We also have the possibility of developing new international commercial dispute-resolution services given our English-speaking common-law background. What is needed is more engagement.
Infrastructural and access issues continue to bedevil Ireland. This summer, Dublin airport became the eighth most-used airport in Europe, passing out Copenhagen. This is despite the fact that passengers and businesses operating in the airport currently have a below-expectation experience most of the time.
We hope this will change with the arrival of the second terminal on time and on budget in autumn 2009.
While the Government has announced Transport 21 with much fanfare, the key challenge will be to deliver on it and to accelerate this investment programme in the event of a construction slowdown.
We are making significant investments in third- and fourth-level education. However, many of our advanced research programmes in science and engineering will not be manned by Irish nationals. We do not have the numbers of advanced researchers in the current Irish population to fill these positions.
Accordingly, a key challenge will be to integrate internationally educated researchers and other skilled workers from the international traded sectors attracted into Ireland by the growth in our services economy.
For example, at the recent announcement by Google of its intention to expand its employment levels to 1,400, one senior manager was quoted wishing he could find more locations like Dublin where 167 languages were spoken.
Another recent arrival in Ireland with limited fanfare is mtld.mobi. This company - backed by 13 blue-chip investors, including Microsoft, Nokia, Samsung and Google - opted to base its global headquarters here because of the positive regulatory regime, competitive corporate tax and pro-business environment with which its investors were familiar.
As a result, Ireland has secured the global registry for all websites using the .mobi domain name. This domain name offers every possibility of becoming the mobile-enabled version of the now ubiquitous .com. It is a huge coup the firm opted to establish its headquarters here.
These types of investments, coupled with the growth of our processing work emanating from the IFSC, represent a massive opportunity for Ireland.
We know that the fundamental building blocks of these investments have been tax policies, measured regulation and people/skills - in that order. However, to continue, we will need to look at other issues that will enable us to stay prosperous.
The Doha round of world trade talks represents a huge additional opportunity for Ireland. Despite being one of the most globalised economies on Earth and having prospered on internationalisation following a period of abject failure when we tried to go it alone, a large swathe of our population appears to mistrust free trade.
The Government also seems to have lost sight of the fact that a failed Doha trade round is much more dangerous for Ireland - given where we sit in the international trading system - even if such a development suits the short-term interests of our agricultural lobby.
Quality of life is a significant issue for companies wishing to transfer staff. Cultural and social wealth such as opera houses and theatres, as well as first-rate schools and medical facilities, are almost as much of a prerequisite for cities wishing to attract sophisticated international executives as tax levels.
Tolerance of and openness to ideas and lifestyles not in accord with our norms are required if we are to welcome and sustain these people choosing to make their lives here. This is not to say that Ireland needs to change its core values, but it may well call for more liberal attitudes to other types of lifestyle choices.
We will need to be ambitious, rapidly catch up on our infrastructure deficits and surpass our international competition on all relevant benchmarks, including broadband, if we are to maintain the positive experiences of the past 20 years.
We know we have the people. We have gone through an extraordinary transformation but the only certainty is that this change will actually need to speed up if we are to continue to stay ahead and thrive in the future.
Seán Murphy is director of policy with Chambers Ireland