In 2012, the Government set a target of achieving 100,000 extra jobs by 2016. Aided by a stronger than anticipated recovery in the Irish economy, that goal was secured some two years sooner than expected. By 2020, it now expects that its industrial strategy can help produce an additional 221,300 jobs in the context of its 10 year (Enterprise 2025) programme announced yesterday. However, the timing of this latest action plan for jobs – within months of a general election – means that it risks being seen as part of an election manifesto.
The rapid reduction in the rate of unemployment – down from over 15 per cent at its peak to close to 9 per cent – and the sharp rise in employment reflect the strong rebound by the economy from recession, helped by export-led growth from the multinational sector.
This is not to disparage the Government’s success in so easily surpassing its initial employment target, or indeed to question its ambition in setting a far more challenging jobs goal for 2020. However, the employment gains since 2012 came from a low economic base and to double that number in the next five years, in a less predictable international environment, will be far harder to achieve.
Much uncertainty surrounds both the outlook for the global economy and the likely negative initial impact on Ireland that the OECD’s proposed changes in corporate taxation may have in attracting foreign direct investment.
OECD chief economist Catherine Mann warned in Dublin this week that Ireland will have to sell itself better in future: less as a low tax centre, and more on whatever other comparative advantages it can offer to secure investment. As she noted: “Global capital has come into Ireland… but somehow it hasn’t translated into Irish owned firms”.
The Government is now proposing a step-change in the performance of this sector in the shape of a 50 per cent increase in exports by Irish companies by 2020. But the means by which this ambitious goal can be achieved are less clear.