Ireland goes into regular fret cycles about whether the technology sector — and the tax receipts from multinationals that continue to keep Government coffers comfortably full — is soon to crash out and move elsewhere, leaving Ireland financially destitute, reliant on patchier income from less lucrative industries.
Those with long memories may recall just such a scenario put forward in memorable terms by some non-government official, who imagined the inevitable arrival of tumbleweeds bouncing forlornly down the streets of Leixlip. That was 20 years ago.
Due to industry uncertainties following the Dotcom crash (does anyone remember that?) Intel had slowed a project to develop a major new chip fabrication plant in the town. Some were sure this meant that Intel was plotting to fully exit the country, taking down thousands of highly skilled jobs and Irish companies in the process.
So serious was the perceived threat of an imminent cascading effect that almost an entire programme of RTÉ radio’s lunchtime news was dedicated to this alarming storyline.
I was asked on to its panel discussion and what I argued then is almost, without any variation, what I would argue about similar fears now. It’s worth remembering that not only did Intel remain, and — once the global economy improved — resume construction of a fab that would make Ireland one of its most cutting-edge facilities for years after, but Intel also continued to expand its presence in Ireland.
These concerns seem to pop up in cycles about six to eight years apart
And, sometimes, to contract. Adding new areas of research and production, losing some, adding others, like many multinationals here.
Because that’s what happens in a dynamic, continually evolving sector that is solidly embedded in Ireland in so many ways, for many reasons, both hard and soft, economic and social. It’s extremely unlikely that tech multinationals would migrate somewhere else.
But these anxiety cycles repeat themselves. Less than a decade later, a global and Irish recession prompted similar worries. Further on, it was GDPR, EU regulation, tax regime change, plus added Trump. Now, it’s job cuts (many due to recent, now-excessive Covid-era growth) and general sectoral malaise.
These concerns seem to pop up in cycles about six to eight years apart. They focus on a legitimate concern: that Ireland’s economic prosperity is so closely entwined with multinationals, and worse, of those concentrated primarily in one sector, technology — which is actually incredibly diverse and in some cases, lumps in companies that utilise tech without actually being tech.
Musk's Twitter takeover troubles Irish regulators
That isn’t ideal — economic eggs in one tech basket, etc — but nonetheless has been a stable foundation for Ireland’s economic performance for going on 30 years, through different tech waves dominated by many different companies. It wasn’t always Meta/Facebook, Google, Amazon. It was also Digital (which seeded a generation of Irish indigenous tech spinoffs) and Dell, and others now gone, replaced by newer waves of companies.
Some have adapted and grown over decades of presence in Ireland, like Apple, IBM and Microsoft. Tech changes. Jobs come and go. But they mostly, overwhelmingly, come, and for three decades, tech workers, despite occasional downturns and lay-offs, remain in demand.
A decade from now, it’s likely a new set of companies will come to the fore (speaking of which: I did a Stripe story in 2011, when they had a grand total of 17 employees and had outgrown their Palo Alto office). Tomorrow’s newcomers will find a strong tech ecosystem here, another deeply attractive reason to opt for Ireland as a base.
Bottom line is that US multinationals need a European base and will prioritise another English-speaking country with natural, long-standing US ties, a non-wacky government and middling regulation (and I’d argue firmer regulation, somewhat higher corporate taxation and more transparency would not lower but stabilise Ireland’s global attractiveness and better support the Irish economy).
Many have noted that Ireland cossets its multinationals, yet fails to adequately support indigenous entrepreneurs and companies
With Brexit, the United Kingdom has blown itself up as the alternative choice, with a currency outside the euro zone, politics as unpredictable as the US, and an EU-dismissive regulatory approach that creates enormous uncertainty as to whether any company based there will be able to do something as basic as transfer data to and from the EU.
On the other hand, much really, really needs to change. Many have noted that Ireland cossets its multinationals, yet fails to adequately support indigenous entrepreneurs and companies — that’s why two generations of Ireland’s successful tech founders have left Ireland for the US to grow their companies. And yes, thinking about developing other non-tech sectors is an overdue priority.
Then, as my colleague Cliff Taylor recently noted, many of Ireland’s ongoing problems aren’t coming from reliance on multinational tech, but a lazy, short-sighted failure to have basic services keep pace with economic growth. As he says: “In too many areas, despite really impressive growth and rising private prosperity, Ireland is queuing for a living.”
We need to pull Ireland’s two-track economy — the booming multinationals, the more “meh”, sometimes struggling domestic economy — into closer, beneficial alignment. But tech sector multinationals aren’t going to rush for the exits. And better managing that powerhouse multinational economy is a “problem” lots of other countries would only love to have.
