Home > Economy > Irish economy threatened by reliance on a concentrated number of large companies

Irish economy threatened by reliance on a concentrated number of large companies

Written by Robert McHugh, on 13th Dec 2017. Posted in Economy

article headline

The National Competitiveness Council (NCC) yesterday published its Competitiveness Challenge 2017 report, outlining a range of actions designed to boost Ireland’s international competitiveness. The Council has also published its submission to the Action Plan for Jobs (APJ) 2018.
   
The report shows despite intense global competition and significant challenges in the external environment, Ireland’s competitiveness performance is positive. Improved competitiveness is reflected in strong employment growth across sectors and regions.

However, growth is putting upward pressure on costs and infrastructural investment is unable to keep up with the needs of this rapidly growing economy. According to the report, a significant challenge for policy is whether, in one of the world’s most globalised economics, Ireland can avoid another boom-bust cycle of fast growth followed by recession by putting competitiveness at the centre of its economic model, thereby achieving a stable and sustainable economic growth rate.  
   
The Council is concerned about the sustainability of Ireland's economic model. The NCC warns the sustainability of Irish economic performance is threatened by the reliance of the economy on a concentrated number of large, highly-productive companies.

The Council believes that an innovative mix of responses is required to enable more SMEs to compete internationally, to innovate and to ensure they can survive the challenges of Brexit. NCC believe this involves a relentless focus on innovation, product diversification, cost control, productivity and the pursuit of new markets.
   
Speaking at the launch of the report, Chairman of the NCC, Prof Peter Clinch said, "The sustainability of Irish growth is not only threatened by the potential for boom and bust, but the reliance of the economy on a small number of highly productive large companies. Many Irish-owned companies export a narrow range of products and services, and rely on a small number of export markets. Smaller companies, which provide the majority of employment, are far less productive, less likely to invest in innovation, least likely to be able to afford the management talent they need and most prone to cost increases, in particular, wage demands driven by increases in the cost of living, most notably, housing."

He added, "We are at a critical juncture. Ireland is ranked highly in terms of our competitiveness but it is the decisions we make now that will determine our competitiveness in the future and, consequently, our prosperity. We have difficult choices to make if we are to maintain growth, limit increases in the cost of living, and continue to support quality jobs and public services."

Source: www.businessworld.ie

More articles from Economy

image Description

Sterling at two-month high, buoyed by retail sales

Read more
image Description

Sterling falls after report on UK refusal over EU Irish border offer

Read more
image Description

China won't weaken currency to boost exports, premier says

Read more
image Description

China says it will retaliate after Trump imposes fresh tariffs

Read more
image Description

Sterling rises on Irish border hopes before EU summit

Read more