Previously, this column has discussed the concept of a “10 million mindset”. Essentially, this is the belief that the island’s population is on track to reach 10 million by the close of the century, and that we need to prepare for it. At the time this was first suggested, it was considered rather audacious. However, the recent projections from the CSO indicate a possible population of up to seven million by 2057, a mere 33 years away. If we include the population of the North, the total could approach nine million.
Looking ahead to 2057 might feel like peering into the far future, unless, like me, you’ve been around long enough to appreciate how swiftly time passes. Just consider that 33 years ago marked the release of U2’s Achtung Baby, REM’s topping of the charts with Shiny Happy People, Jack Charlton’s football prowess, the competitive showdown between the Dubs and Meath in Leinster GAA, the introduction of condoms for sale at Virgin Megastore in Dublin, and the release of the Birmingham Six. These events may seem historical, but they’re still within living memory. Therefore, it’s not unreasonable to envisage a future where our population exceeds seven million, 90.9% of which will be due to net inward migration, and only 9.1% due to natural increase, according to the CSO. Such a significant increase represents a considerable economic, social, cultural and demographic transformation.
It’s going to raise questions among locals about whether or not they want this growth, and whether anyone asked their opinion. These questions will grow louder and opinions will become more polarised. Furthermore, the CSO predicts the workforce could swell to potentially 3.3 million by 2037, a short 14 years away. This leads us to ask what jobs will all these new residents hold? Immigration functions due to push-pull dynamics; people arrive because we need their skills and labour (the pull), and leave their homes because they seek improvements (the push). Given that we can’t control push factors in other nations, our emphasis must be on pull factors; the question of what roles these future millions will fulfill.
The Central Statistics Office (CSO) must have predicted that the Irish workforce is set to expand by the size of the current population of Dublin within the next 14 years. This forecast was likely based upon the assumption that these individuals would be gainfully employed. It prompts the question of the Irish approach to growth and development. The best manner to capitalise on this aspiring workforce is to promote and grow a strong and bustling local, small business economy alongside our existing multinational corporations; a network filled with energetic, inventive businesses owned within the local community.
However, generating such an economy is a complex challenge. We are standing on the precipice of witnessing an Irish population boom, reaching an estimated 7 million individuals. We have to devise a strategy that allows the nation to effectively manage and optimise this resource. It’s worth noting the incongruity, with Ireland grappling with an overwhelming volume of revenue, much unlike the fiscal challenges burdening the United Kingdom.
The job landscape is evolving, with traditional roles disappearing and being supplanted by ones unimaginable a few decades ago. Ethical social progression will necessitate a wage increase, even for unlikely figureheads of revolution such as Aer Lingus pilots. The strategic plan has to extend beyond pouring funds into infrastructure and housing, though these areas evidently require investment.
Currently, dual economies are operating side by side – one is the profit-rich, productivity-rich foreign corporate sector, and the other is the domestic low-profit, low-productivity sector. The contrast in productivity becomes apparent; while the national aggregate labour productivity concluded at €97.10 per hour last year, foreign sectors garnered €381 per hour compared to domestic at a stark €53.80 per hour.
While it’s tempting to perceive this disparity as a threat and deduce that local businesses lack competitiveness, an alternative perspective is warranted. Consider how the influence of massive multinational corporations can foster a flourishing, inventive tiny enterprise economy.
Discussions surrounding multinational companies are often focused on taxation and its sustainability, viewing these corporations primarily as revenue-generating entities. But falling into the trap of fretting about their loyalty to the Irish economy only highlights inherent insecurities. Such lack of confidence is inherently Irish, yet it’s both unnecessary and misplaced.
Diarmaid Ferriter suggests that the population of Ireland might exceed its pre-famine peak in 33 years. At this juncture, Ireland holds the potential to leverage multinational corporations (MNCs) for economic development – not merely as product manufacturers, but as beneficial clients to promote the next level of Irish economy. He proposes recalibrating how we perceive the productivity variance between sectors – rather than acknowledge it as a shortcoming, treat it as aim, an abyss to bridge. Going beyond considering taxes paid by MNC’s as a goal, they should be viewed as a reflection of business opportunities we’re yet to tap into. To establish a unique enterprise economy, imperative factors like finance and markets must be addressed and MNCs can aptly serve this purpose.
In terms of finance, Ferriter has habitually championed a sovereign wealth fund. Rather than allotting it solely as a pensions reserve, a segment should be assigned as a start-up fund to offload financial risks associated with starting a new venture. Essentially, enterprising individuals could pledge their share in the sovereign wealth fund to banks in exchange for financing their new business. If the venture fails, which is a common occurrence, the banks would acquire liquid shares, therefore diminishing their exposure to commercial risk. This approach could transform the Irish banking system from a mere dormant safe deposit box to a valuable source of finance for their economy.
On the other side of the coin, is the issue of market opportunities. Establishing a small business with export potential requires considerable investment in marketing and international networking. A viable solution could be to sell to companies that are closely associated with exports, such as MNCs. These MNCs maintain high global export standards and can be viewed as potential clients for local providers. MNCs based in Ireland are connected to an international supply chain, and the goal should be to integrate new Irish manufacturers into this system wherever feasible. This can be achieved by understanding the needs of procurement personnel in MNCs like Amazon, Intel and Pfizer – getting a sense of their buying patterns, who their current suppliers are, how they equip their factories and the business processes they currently outsource that could possibly be produced locally while maintaining high standards.
By viewing multinational corporations as potential clients, we can connect our domestic trade with their operations. This encourages these firms to remain local, while also providing a surrogate export market for the burgeoning Irish business economy through export volumes and pricing. We should perceive these multinational establishments as mini nations to whom we can export whilst remaining locally situated.
This method allows for the development of a self-contained, forward-thinking and modern economy. The goal here is to narrow the productivity disparity between local and international businesses through the consistent pressure of genuine trading. Their high standards and managerial methods become ours. As productivity amplifies, local profits are also expected to escalate.
It goes without saying that such a strategy needs to be implemented from the government’s end, signalling a new phase of cooperation with the multinational sector. This could merge our unique global edge – the remarkable inward investment policy – with the necessity to stimulate a completely new economic sector, involving hundreds of thousands not just as workers but as business owners as well.
If absorption of such a vast number of new people lies in our plans, we need a strategy that doesn’t solely focus on infrastructure or housing investment, despite its importance. We necessitate an economic and commercial scheme for the future that capitalises on our strong suits, mitigates our drawbacks and identifies our most productive and dynamic economic segment as a consumer, not solely a tax contributor.