Ireland’s economy is growing post-Brexit, but infrastructural pressure calls for more even development.
More than a year after the UK voted to leave the EU, it is still difficult to make out a clear picture of where either party will be in March 2019.
What we are certain of is that Brexit will bring about great changes, and where there are changes, there are opportunities.
The most compelling is the prospect of establishing Ireland as a new home for UK-based multinationals seeking an EU base.
A recent EY report ranked Dublin as the number one destination for UK-based financial services companies relocating after Brexit, ahead of Berlin, Paris and Luxembourg. JP Morgan has pledged to create up to 500 jobs at a new address on the River Liffey, while Bank of America has chosen Dublin as its new European headquarters.
On the surface, we tick all the boxes. Ireland has emerged from recession as the EU’s fastest growing economy. We are world leaders in many areas–tech, pharma and engineering in particular–and are increasingly viewed as disruptors in finance, banking and insurance, especially where these sectors converge with technological solutions. Our corporate tax rate is business friendly, we are a member of the EU, and our highly skilled workforce speaks English.
Despite some early wins, we must maintain perspective. The Irishjobs.ie Jobs Index showed that in Q2, vacancies in banking, financial services and insurance rose only 2 percent year-on-year.
This suggests that a post-Brexit exodus of companies from the UK to Ireland, as reported optimistically by some elements of the media, is not occurring yet. Indeed, we could be waiting some time for any Brexit surge to materialise, and even then, a favourable or even tolerable UK-EU deal could persuade many companies to stay rooted firmly in London. Moving complex business units is risky, expensive and logistically extremely challenging. Furthermore, against this backdrop, Ireland still faces fierce competition from other European cities seeking the same lucrative businesses as us.
Laurels must not be rested upon. For Ireland to come out on top in this highly competitive race, we must first tackle our infrastructural issues. Ireland’s infrastructure is struggling to keep up with our fast rate of economic growth. We are chronically short on houses, lack a fully developed national transport system and in the capital city, the cost of living is high.
With Brexit, solving these problems has never been more pressing. A modern glass-fronted office block, low corporate tax and an Irish welcome are by themselves not enough: workers demand places to live, schools for their children, and a short, painless commute. Creating and importing potentially thousands of new jobs will stress these struggling systems further.
Recently, it emerged that the Department of Housing, led by Minister Eoghan Murphy, is toying with the idea of constructing a new city to cope with Ireland’s rapidly growing population–and to alleviate the increasing pressure this is putting on Dublin. This ‘Baile Nua’ would help to house not only our current population but the additional 900,000 people expected to be living in the country by 2040.
But is a new city the solution? Ireland already has existing urban centres beyond Dublin, and Cork and Limerick, in particular, have been growing from strength to strength, especially in the last two years.
Cork is home to some of Ireland’s biggest employers, including Apple and Dell EMC. Last year, Facebook acquired a city centre location for its Oculus virtual reality division.
In Q2 this year, job vacancies in Cork rose 12 percent year-on-year. Limerick, the country’s pharma and engineering hub, has the second highest jobs vacancy rate per 1,000 people. Waterford and Galway, too, are growing fast. Galway has witnessed a 20 percent year-on-year increase in jobs vacancies, meanwhile, Waterford has recorded a 10 percent rise during the same period.
Ireland’s regions are growing and growing fast, but ultimately they will be restricted by their own infrastructure. To maintain our skyward economic trajectory, and to spur on development outside of the capital, spend needs to be spread out over the entire country.
Major infrastructural projects, like the M20 motorway connecting Cork with Shannon via Limerick, will help to join up the west coast and make it a region to rival Dublin. This competition would give workers and businesses more choice, opening up the rest of the country and driving down the cost of living.
It is true that economic development is nearly always centred in a country’s capital city and we are no different. This is a quirk of history. Dublin has been the commercial and governmental heart of Ireland for centuries, attracting the lion’s share of investment from both businesses and politicians.
But, faced with a moment of unprecedented opportunity and tough competition, this attitude needs a rethink. Converting media speculation and the Government’s very public courtship of these multinational companies into a real, measurable influx of new jobs will require sensible investment on a national scale, much of it on an infrastructural level. A more evenly developed Ireland will benefit workers and businesses local and international, and make us a more attractive location for multinationals in the immediate short-term post-Brexit and into the future.
Orla Moran is General Manager at Irishjobs.ie.