About
Dublin Overview
In 2003, Dublin was rated the sixth best city to live and work in by Mercer Human Resources. Sipping a latte in one of the many trendy cafes in the city centre and watching the smartly dressed and confident residents of Dublin rush by, it is hard to imagine that not too long ago it was known as the capital of Europe’s ‘poorhouse’.
With only a few indigenous industries, such as leather, silk, glass, hardware and wool, Ireland remained economically underdeveloped until well into the 19th century and was almost completely dependent on agriculture. In 1801, the Act of Union put Ireland under direct rule from London as well as establishing a free trade area between the two countries. While Britain was on its way to becoming a powerful capitalist nation, Ireland – vulnerable to the capers of nature and changes in the market – was heading for disaster. This arrived in the shape of the Great Famine. Millions died of starvation and many more were forced to emigrate, and the country was crippled by poverty and lack of opportunity.
Indeed, one of the greatest challenges facing the Irish Free State from the outset was how to establish a strong and diversified economy that could compete in the world market. Protectionism and self-sufficiency were tried, and although successful in establishing a base for new industries, did not yield the aspired results. However, in 1959, Sean Lemass came to power and recognised the need to open up the Irish economy to foreign investment, in the hope that it would stimulate the domestic market and boost employment. And the rest is history, as they say. Initiatives like the IDA Ireland (Industrial Development Agency) helped revolutionise and transform the economy in the 1990s into what was fondly dubbed the ‘Celtic Tiger’.
While growth has certainly slowed down, the Irish economy remains in great shape, mainly thanks to trade and tourism. In 2006, the Gross Domestic Product (GDP) increased by 5.7% in constant prices compared with 2005. While foreign penetration of business in Ireland is still the highest in Europe, with foreign-owned firms controlling 50% of the total turnover and employing almost 40% of the workforce, Ireland’s indigenous industry has started to catch up. The emergence of Irish entrepreneurs in the high-tech sector, which was formerly completely dependent on foreign capital, has meant that Ireland is now less dependent on its main foreign investors, the US, Great Britain and Germany.
Agriculture remains an important sector, although it only added €2,875 million to Net National Income, compared to the €79,746 million generated by other industries in 2006. The light industry is the top contributor to Ireland’s healthy trade figures, followed by pharmaceuticals, luxury textiles, beverages and crystals. In 2004, the GDP came in at €36,354 per inhabitant.
Ireland was the only English-speaking EU member state to adopt the euro, making it particularly attractive for US investment. Although the common currency has certainly contributed to the fact that Dublin now ranks 13th in the list of the word’s most expensive cities, the euro was a success. As the euro is strong and inflation varies between 4.8% and 5.2% (2007), Ireland’s employment rate is still increasing (3.8% in the first quarter of 2007) and according to an EU survey, the risk of poverty for those over 65 is falling substantially by the year. In 2005, the average gross household income was just over €51,000 per annum, a 3.6% increase compared to 2004. Unemployment is expected to be between 4.1% and 4.4% in 2007. Overall, the future certainly looks promising, although certain inflation trends are a cause for concern, particularly within the property market.
It will be interesting to see what the next few years have in store for Ireland and indeed the EU, to which it is now closely tied. For now though, Ireland remains the fastest growing of the 15 original EU member states.
With only a few indigenous industries, such as leather, silk, glass, hardware and wool, Ireland remained economically underdeveloped until well into the 19th century and was almost completely dependent on agriculture. In 1801, the Act of Union put Ireland under direct rule from London as well as establishing a free trade area between the two countries. While Britain was on its way to becoming a powerful capitalist nation, Ireland – vulnerable to the capers of nature and changes in the market – was heading for disaster. This arrived in the shape of the Great Famine. Millions died of starvation and many more were forced to emigrate, and the country was crippled by poverty and lack of opportunity.
Indeed, one of the greatest challenges facing the Irish Free State from the outset was how to establish a strong and diversified economy that could compete in the world market. Protectionism and self-sufficiency were tried, and although successful in establishing a base for new industries, did not yield the aspired results. However, in 1959, Sean Lemass came to power and recognised the need to open up the Irish economy to foreign investment, in the hope that it would stimulate the domestic market and boost employment. And the rest is history, as they say. Initiatives like the IDA Ireland (Industrial Development Agency) helped revolutionise and transform the economy in the 1990s into what was fondly dubbed the ‘Celtic Tiger’.
While growth has certainly slowed down, the Irish economy remains in great shape, mainly thanks to trade and tourism. In 2006, the Gross Domestic Product (GDP) increased by 5.7% in constant prices compared with 2005. While foreign penetration of business in Ireland is still the highest in Europe, with foreign-owned firms controlling 50% of the total turnover and employing almost 40% of the workforce, Ireland’s indigenous industry has started to catch up. The emergence of Irish entrepreneurs in the high-tech sector, which was formerly completely dependent on foreign capital, has meant that Ireland is now less dependent on its main foreign investors, the US, Great Britain and Germany.
Agriculture remains an important sector, although it only added €2,875 million to Net National Income, compared to the €79,746 million generated by other industries in 2006. The light industry is the top contributor to Ireland’s healthy trade figures, followed by pharmaceuticals, luxury textiles, beverages and crystals. In 2004, the GDP came in at €36,354 per inhabitant.
Ireland was the only English-speaking EU member state to adopt the euro, making it particularly attractive for US investment. Although the common currency has certainly contributed to the fact that Dublin now ranks 13th in the list of the word’s most expensive cities, the euro was a success. As the euro is strong and inflation varies between 4.8% and 5.2% (2007), Ireland’s employment rate is still increasing (3.8% in the first quarter of 2007) and according to an EU survey, the risk of poverty for those over 65 is falling substantially by the year. In 2005, the average gross household income was just over €51,000 per annum, a 3.6% increase compared to 2004. Unemployment is expected to be between 4.1% and 4.4% in 2007. Overall, the future certainly looks promising, although certain inflation trends are a cause for concern, particularly within the property market.
It will be interesting to see what the next few years have in store for Ireland and indeed the EU, to which it is now closely tied. For now though, Ireland remains the fastest growing of the 15 original EU member states.
