From Tiger to Underdog
As recently as the early 1990s, Ireland was still poor by Western European standards. From the mid-1990s to the mid-2000s, Ireland’s growth explosion as the “Celtic Tiger” was the rare Western counterpart to the surging “Asian Tigers” of China, Singapore, South Korea, and Taiwan. However, the booming times came to an end when Ireland became the first Eurozone country to officially enter recession as the global economic crisis began. The European economic financial crisis has had a severe impact on industries, communities, and businesses across the continent. The most competitive European economies, such as Germany, Switzerland, Finland and the UK, have been strong enough to largely carry on through the difficult crisis, although the human impact of austerity has proven contentious. The road has been tougher for the economies of Portugal, Ireland, Italy, Greece and Spain (PIIGS), which have desperately tried to stay afloat despite increased sovereign debt, massive unemployment rates, slumping wages, and anemic consumer spending. The weight of austerity has ignited political controversy in these countries and across the continent, unleashing populist and right-wing reaction to the economic crisis.
Ireland Weathers Economic Headwinds
Ireland’s economy was plunged into a full-fledged nationwide recession. The ripple effect of slashed wages and unemployment rates as high as 15% thrust hardship on families across the island. While Greece and Cyprus (to a lesser degree) languish, the EU bailouts have allowed the economies of Ireland, Spain, Portugal, and Latvia to turn towards a recovery.
Even though the Irish economy is far from a full recovery, Ireland has seen a steady rebound within the past few years as the government has focused on initiatives to strengthen the economy. For once, the government has taken active efforts to encourage start-ups and bring in foreign investment and jobs to Ireland. Low corporation taxes, an accessible location, access to the EU single-market, and strong political support has made attractive incentives for upcoming businesses to invest in Ireland. As mentioned in our Ireland’s Upcoming Claim to Fame Goes Beyond Guinness post, part of the rebound has been focused on transforming Ireland into a breeding ground for startups and biotech.
The focus on incentivizing startups and companies to build in Ireland has had a positive effect in helping Ireland rebound from the recession. As more businesses start setting up shop in Ireland, unemployment has dropped and average earnings are on the incline. In 2012, Ireland’s unemployment rates were peaking 15% and now unemployment is starting to settle below 9%. As said by Michael Noonan, Minister of Finance, Ireland, “I have always regarded the labour market as the best barometer of trends in the Irish economy and am particularly pleased that the latest figures show broad-based employment growth across the Irish economy, with increases recorded throughout the country and in virtually all economic sectors. The latest figures show that 140 000 net jobs have been created since the low point of the crisis, representing an 8% increase in the level of employment.” Some of these statistics are fueled by the recent pharma presence and are projected to continue to have a positive impact. It’s a win win for Ireland’s economy and overseas companies because people can now have a source to find jobs and companies have talent to pick from.
Pharma’s Future Landscape in Ireland
Even though the pharma sector is a fairly new contributor to Ireland’s economy, there are been a slew of positive outcomes that are projected to continue for years to come. The 1960’s were a pretty significant decade for Ireland, after all singer Bono was born. But unfortunately this post is not about Bono and U2. Pharma setup a substantial presence in the 1960’s focused on the production of active ingredients in bulk. Those products would then be exported to other countries, who would process them into finished products like tablets, capsules, etc. With the change of events, companies can start focusing on production in Ireland versus exporting to other countries. This allowed for efficiencies within the manufacturing processes, reducing export and import costs.
An influx of pharma companies are also feeding into the research space. We are seeing more companies setting up research hubs that not only feed into production, but also feed into collaborative initiatives with many universities in Ireland. As a result, this is not only fueling the job market, but it is also fueling the education system in Ireland.
With over 120 companies setting up shop in Ireland, the potential of this market is ever growing and evolving. In Ireland, 9 out of 10 of the largest pharma companies have presence. As said by the Irish Pharmaceutical Healthcare Association (ipha), “Ireland is now the largest net exporter of pharmaceuticals in the EU accounting for over 50% of all exports from the country. An important aspect in the development of the sector, which has helped to significantly boost its contribution to the Irish economy, has been the success of the sector in diversifying the nature of its investment in Ireland from the original bulk active plants to higher value activities. The maintenance of a culture of support for innovation is significant to the success of such a move up the value chain.” With this focus, Ireland is growing and evolving as it is considered to have high quality standards, a promising economy, which makes it ideal for manufacturing.