An optimistic take on SA from the Emerald Isle
10 years ago, Ireland was pretty much where SA is today, which means there is hope — with support from the government and an eye on innovation
Just 10 years ago, Ireland’s economy was on the brink of economic collapse and required a (substantial) bailout from the EU. Beset with stagnant economic growth, a two-year recession, high levels of household debt, unemployment of nearly 20%, and mass emigration, Ireland’s prospects did not look good.
But through a series of interventions, with the wholehearted support of government, Ireland’s innovation ecosystem powered up, driving the growth of a knowledge economy. IT multinationals established bases in Ireland, favourable intellectual property (IP) tax systems supported the growth of innovation start-ups, and the focus swung from domestic consumption to exports. By 2014, there were signs of economic recovery, with the economy recording 4.8% growth — the highest in the EU.
By 2018, Ireland had the highest GDP growth in the EU, with growth of 7.5% in the first three-quarters of the year and a jobless rate of only 5.3%. Ireland, now a recognised innovation leader and key English-speaking springboard into Europe, is home to scores of innovation start-ups, as well as globally renowned fintech, agritech, education, medical device, engineering, and oil and gas specialists, which are exporting to countries around the world and partnering with businesses in SA and across Africa.
As the Irish government agency responsible for supporting Irish businesses in the manufacturing and internationally traded service sectors, Enterprise Ireland has seen Ireland’s economic growth reflected in the successes of our clients. Our 2018 end-of-year statement indicates that our clients generated more than €26bn in exports last year, 67% of them outside the UK. A record 215,207 people are now directly employed in Enterprise Ireland-backed companies — the highest in the history of the agency.
Employment growth has occurred throughout Ireland, with 64% of total employment outside of Dublin, and has occurred across key sectors, including construction, electronics, life sciences, ICT, engineering, food, and primary meats.
2019 looks promising, despite looming changes brought about by Brexit. With the impact of Brexit yet to be felt, Enterprise Ireland has actively encouraged our clients to prepare for Brexit and our most recent survey, taken during 2018, confirmed that 85% of our clients have taken Brexit actions.
Enterprise Ireland is powering ahead with initiatives to drive innovation and competitiveness, and to drive the development of disruptive tech start-ups. As part of our diversification strategy, we will also be expanding our global footprint in 14 priority markets over the next 18 months, as well as focusing on 270 key trade missions and events to expand Irish companies’ access to international markets.
The situation now seen in SA is reminiscent of the dark days Ireland experienced less than 10 years ago. Characterised by stagnant growth, rising unemployment — particularly among the youth, and a predominantly resource-based economy — SA may appear to have little hope of turning the situation around in the short term. But, as Ireland has illustrated, with collaboration and a concerted effort to empower small business and a knowledge economy, dramatic progress is possible in only a few short years.
• Klinkenberg is director, Sub-Saharan Africa at Enterprise Ireland.