Lesson from Irland
During the financial crisis, Ireland was one of many European countries suffered a great economic meltdown but today it is the first European country to emerge from the crisis and its economy is growing with higher employment among young people, especially college graduates. The reason is Ireland has the best technology sector that attracts more foreign businesses investment than any country in Europe.
During the crisis when everything must be cut, the government decided to preserve the technology sector and put more efforts into the technology education for its citizens. College training programs were updated to keep up with technology trends and the investment paid off. Today Ireland government's strategy in growing its technology industries has received favorable comment around the world.
First, Ireland's tax rate is 12.5 percent, compared to more than 30 percent in the U.S. and other European countries; it attracts a lot of high technology companies to move to Ireland for the tax incentives. However Ireland's efforts to attract more tech companies go beyond just tax incentives. Many technology owners say Ireland's low tax rate is just one item on appealing things that includes a large number of government officials ready to help foreign companies set up business there via the Ireland's Industrial Development Agency, or IDA. All paper works have been reduced to minimum and it only takes few days to get government approval to move company or set up business in this country. (i.e., It took several weeks in China and many months in India)
Second, Ireland has one of the best skilled workforces in the world. Most of them are college educated due to its advanced education system which constantly updates its training to meet industry needs. With a young workforce where over half of the population is under 35, young Irish workers are eager to work for foreign companies with the hope that after few years, many may leave to do their own start-up. In the past few years, more startups were created in Ireland more than any European countries.
With a growing economy, Ireland continues to thrive in technology as more companies are moving in. A software company owner said: “For years we are operating in Silicon Valley but now we decide to move to Ireland because the cost of doing business in the U.S is too high and Ireland has a lot of experienced software workers who do not demand high wages or switch job often. The government is very friendly and they have everything ready and well prepared for companies like us. They know what we need."
A government officer said: “Many American companies are moving here and we help them to settle quickly. We work with them on whatever they need and continue to support them and that is why we attract a lot of technology companies moving here. Last year we have created between 5,000 and 8,000 new positions and it helps our economy. One job in high technology can support at least 5 local jobs. It is a “Win-Win” situation.
Today Ireland competes with other European countries such as the Nederland, The U.K and Germany for technology investment but it really stands out as the best place for tech investment. In a short time, many Silicon Valley's most famous investors are investing heavily in this country as more companies are relocated here.
Irish officials say the combination of low tax rates; strong government support and large skilled technology workers are the key factors that lift this small country out of the economic crisis.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
