Database Topic Title

1
MGT751 International Seminar Stát na hÉireann
(The Irish State) Spring 2006 Irelands (and New
Mexicos) Economy
William I. Bullers, Jr.
2
2006 Development Report Card for the States

• Corporation for Enterprise Development (CFED),
  http//www.cfed.org
• 19th assessment of state economies (January 26,
  2006)
• Grades States on
• How well its economy is doing for its people.
• How well the economy is doing for the states
  businesses.
• How well the state is preparing for its future.

3
2006 Development Report Card for the States

• Report Card Measures (68 metrics)
• Performance
• e.g., employment, income, quality of life
• Business Vitality
• e.g., business competitiveness, entrepreneurial
  energy
• Development Capacity
• e.g., infrastructure, human financial resources

4
2006 Development Report Card for the States
5
Report Card Measures

• Performance Index
• Assesses how well the economy is doing for a
  states citizens. In part, these measures capture
  the return on public and private investment
• employment,
• income,
• the distribution of each within the population,
• stewardship of finite natural resources, and
• social condition.

6
Report Card Measures

• Business Vitality Index
• Assesses the vigor of businesses. Individual
  companies, as well as whole industries, operate
  within the global economy and must be able to
  meet changing market conditions. The speed and
  ease with which businesses anticipate and react
  to changes depends on
• the acumen of their leaders,
• the agility of the labor force, and
• the economic and civic environment in which they
  operate.

7
Report Card Measures

• Development Capacity Index
• Assesses the way current resources are used to
  prepare for the future. Communities must foster
  the conditions and inputs that firms need to
  profit, as well as the services and amenities
  that people need to thrive. These include
• an education system that provides students with
  skills for 21st century jobs,
• physical infrastructure, and
• financial, natural, and technological resources.

8
NM Report Card Grades

• Performance F
• Business Vitality D
• Development Capacity D

9
NM Report Card Grades

• Performance F
• Pluses
• Quality of life C
• Employment B
• Adding new jobs
• Long term employment growth 8th
• Short term employment growth 8th

10
NM Report Card Grades

• Performance F
• Minuses
• Marginal quality of jobs high income inequality
• Earnings Job Quality F
• Equity F
• Available jobs offer little opportunity for
  workers
• Average annual pay 41st
• Employer-provided health care 50th
• Working poor 49th
• Involuntary part-time employment 38th
• Poverty rate income gap between wealthy poor
• Poverty rate 49th
• Income distribution 44th

11
NM Report Card Grades

• Business Vitality D
• Pluses
• Business sector performance
• Competitiveness of Existing Businesses D
• Entrepreneurial Energy C
• Manufacturing sector confidence
• Manufacturing investment 13th
• Potentially important economic edge for future
• Technology industry employment 10th
• Opportunity to cultivate home-grown businesses

12
NM Report Card Grades

• Business Vitality D
• Minuses
• Economy is not well diversified
• Industrial diversity 38th
• Trade beyond NMs borders
• Strength of traded sector 48th

13
NM Report Card Grades

• Development Capacity D
• Pluses
• Capacity for innovation
• Large number of high-tech jobs 10th
• Pool of Ph.D. scientists engineers 1st
• Federal RD 1st
• Graduate students in science engineering 8th
• Trickle-down effect from high-tech research
  sector
• Households with computers 3rd

14
NM Report Card Grades

• Development Capacity D
• Minuses
• Educational attainment
• Reading proficiency 49th
• Math proficiency 49th
• High school attainment 46th
• College attainment 44th
• Investment in teaching force
• Average teacher salary 40th
• Performance gap trend
• Farther behind in basic levels of educational
  attainment than in secondary education implies
  performance gap could worsen

15
The Irish Economy

• National Competitiveness Council (NCC)
• http//www.forfas.ie/ncc/index.html
• Major References
• Forfás, National Competitiveness Council, Annual
  Competitiveness Report 2005, Aug. 2005. Available
  from Forfás (http//www.forfas.ie/).
• National Development Plan, Ireland National
  Development Plan 2000-2006. Available at NDP
  (http//www.ndp.ie).
• Forfás, Expert Group on Future Skills Needs
  (EGFSN), National Skills Bulletin 2005. Available
  from Forfás (http//www.forfas.ie/), EGFSN
  (http//www.skillsireland.ie).

16
The Irish Economy

• National Competitiveness
• Broad concept that encompasses a diverse range
  of factors that support the ability of firms in
  Ireland to achieve success in international
  markets, in a way that provides Irelands people
  with the opportunity to improve their living
  standards and quality of life.
• Framework Benchmarks (170 metrics)

17
Irish National Competitiveness Council
The NCC Competitiveness Pyramid
18
Irish Competitiveness Performance
19
Irish Competitiveness Performance
20
Irish Competitiveness Performance
21
Irish Competitiveness Performance
22
Irish Industry Employment Trends
Fig. 2.1 Employment by Sector in 000s, 2004
23
Irish Industry Employment Trends
Fig. 2.2 Annual Average Employment Growth by
Sector 1999-2004 ()
24
Irish Industry Employment Trends
Fig. 2.3 Employment by Manufacturing Sector 2004
(000s)
25
Irish Industry Employment Trends
Fig. 2.4 Annual Ave. Employment Growth in
Manufacturing Sector () 1999-2004 and 2003-2004
26
Irish Competitiveness Overview
Fig. 2 GDP / GNP Growth to 2004
27
Irish Competitiveness Overview
Fig. 4 Industrial Production, Merchandise
Services Exports, 1998100
28
Irish CompetitivenessSustainable Growth - Income

Fig. 6 GDP per Capita (PPP, Euro), 2004
29
Irish CompetitivenessSustainable Growth - Income

Fig. 7 GDP per Capita Ireland vs Selected US
States EU Regions (US), 2002
30
Irish CompetitivenessSustainable Growth - Income

Fig. 9 Annual Average Real GDP Growth Rates,
1999-2004
31
Irish CompetitivenessSustainable Growth - Income

Fig. 12 Regional Income Distribution
32
Irish CompetitivenessSustainable Growth - Income

Fig. 13 Consumption per Capita (PPP, Euro), 2002
33
Irish CompetitivenessSustainable Growth
Quality of Life
Fig. 15 Human Development Index, 2002 (e.g., life
expectancy, school enrollment, literacy income)
34
Irish CompetitivenessSustainable Growth
Environmental
Fig. 17 Sustainable Development, 2004 (Scale 1-10)
35
Irish CompetitivenessEssential Conditions
Labour Supply
Fig. 24 Irish Net Migration, 1987-2004
36
Irish CompetitivenessEssential Conditions
Labour Supply
Fig. 25 Measure of Aging Population Population
Over the Age of 65 as of Total in 2015
37
Irish CompetitivenessEssential Conditions
Labour Supply
Fig. 26 Labour Force Participation Rates, 2004
38
Irish CompetitivenessEssential Conditions
Labour Supply
Fig. 27 Female Participation Rates, 2003
39
Irish CompetitivenessEssential Conditions
Labour Supply
Fig. 32 Employment Growth, 2004
40
Irish CompetitivenessEssential Conditions
Labour Supply
Fig. 34 Average Hours Worked per Person 2004
41
Irish CompetitivenessEssential Conditions Bus.
Performance
Fig. 71 Exports of Goods Services ( of GDP),
2004
42
Irish CompetitivenessEssential Conditions Bus.
Performance
Fig. 73 Irelands Share In World Merch.
Services Trade, 1993-2004
43
Irish CompetitivenessEssential Conditions Bus.
Performance
Fig. 74 Irelands World Market Share
Merchandise, 1998 2003
44
Irish CompetitivenessEssential Conditions Bus.
Performance
Fig. 75 Irelands World Market Share Services,
1999 2004
45
Irish CompetitivenessEssential Conditions Bus.
Performance
Fig. 77 Pct. ROR of US-Owned Cos. in Foreign
Countries, 1995-2002
46
Irish CompetitivenessPolicy Inputs Taxation
Regulation
Fig. 81 Standard Corporate Tax Rate (), 2003
47
Irish CompetitivenessPolicy Inputs Taxation
Regulation
Fig. 84 Effective Income Tax Rate ( of Gross
Labour Costs) 2004
48
Irish CompetitivenessPolicy Inputs Econ/Tech
Infrastructure
Fig. 99 Overall Infrastructure Quality, 2004
(Scale 1-7)
49
Irish CompetitivenessPolicy Inputs Econ/Tech
Infrastructure
Fig. 105 ICT Expenditure per Capita, (), 2004
50
Irish CompetitivenessPolicy Inputs Econ/Tech
Infrastructure
Fig. 110 Total Housing Stock, 2003 (Dwellings per
000 of Population)
51
Irish CompetitivenessPolicy Inputs Econ/Tech
Infrastructure
Fig. 111 Housing Completions in 2003 (Dwellings
per 000 of Population)
52
Irish CompetitivenessPolicy Inputs Econ/Tech
Infrastructure
Fig. 114 National House Price Index Change (),
1997-2005
53
Irish CompetitivenessPolicy Inputs Education
Training
Fig. 122 Annual Expenditure On Educational
Institutions per Student ( PPP) Secondary,
2001
54
Irish CompetitivenessPolicy Inputs Education
Training
Fig. 123 Secondary Graduation Rates as of Total
Population At Typical Completion Age, 2002
55
Irish CompetitivenessPolicy Inputs Education
Training
Fig. 124 Percentage of Population Aged 25-64 that
has at Least Upper Secondary Level Education,
2002
56
Irish CompetitivenessPolicy Inputs Education
Training
Fig. 125 Percentage of Population Aged 55-64 that
has at Least Upper Secondary Level Education,
2002
57
Irish CompetitivenessPolicy Inputs Education
Training
Fig. 128 Reading Literacy of 15 Year Olds, 2003
58
Irish CompetitivenessPolicy Inputs Education
Training
Fig. 129 Scientific Literacy of 15 Year Olds, 2003
59
Irish CompetitivenessPolicy Inputs Education
Training
Fig. 130 Math Literacy of 15 Year Olds, 2003
60
Irish CompetitivenessPolicy Inputs Education
Training
Fig. 131 Annual Expenditure On Educational
Institutions per Student ( PPP) Tertiary
Education, 2001
61
Irish CompetitivenessPolicy Inputs Education
Training
Fig. 132 Percentage of Population Aged 25-34 that
has at Least Third Level Education, 2002
62
Irish CompetitivenessPolicy Inputs Education
Training
Fig. 133 Science Engineering Graduates (per
000 of Population Aged 20-29), 2002
63
Irish CompetitivenessPolicy Inputs Education
Training
Fig. 134 Total New Science Engineering PhDs
(per 000 of Population Aged 25-34 Years), 2001
64
Irish CompetitivenessPolicy InputsEntrepreneursh
ip/Innovation
Fig. 137 Total Entrepreneurship Activity Rate,
2004
65
Irish CompetitivenessPolicy InputsEntrepreneursh
ip/Innovation
Fig. 137 Total Entrepreneurship Activity Rate,
2004
66
Irish CompetitivenessPolicy InputsEntrepreneursh
ip/Innovation
Fig. 144 Competent Senior Managers, 2005 (Scale
1-8)
67
Irish CompetitivenessPolicy InputsEntrepreneursh
ip/Innovation
Fig. 146 Adapability to Market Changes, 2005
(Scale 1-8)
68
Irish CompetitivenessPolicy InputsEntrepreneursh
ip/Innovation
Fig. 148 Gross Domestic Expenditure on RD ( of
GDP), 2003
69
Irelands Competitive Position

• Strengths
• Business friendly operating environment
• Adaptable labour force
• Membership of EMU EU the only English
  speaking member of Eurozone
• Corporate tax regime
• Existing base of high performing business
• International reputation for flexibility
  responsiveness

70
Irelands Competitive Position

• Weaknesses
• High non-pay costs, particularly for energy,
  waste disposal, housing logistics
• Weak productivity in locally trading (e.g.,
  services)
• Congested transport infrastructure
  under-developed ICT infrastructure
• Limited management experience in innovation
  international sales marketing
• Small domestic market
• Young national scientific research system

71
Irelands Competitive Position

• Opportunities
• Acceleration of global services trade
• Increasing mobility of research knowledge
  activities
• Further dis-aggregation of the manufacturing
  services value chain (allowing separation of
  skilled from unskilled activities) facilitated by
  logistics ICT
• Clustering of skilled service manufacturing
  activities reflecting network economies shared
  support services labour pool
• Increasingly mobile global talent pool

72
Irelands Competitive Position

• Threats
• Vulnerability to global demand swings exchange
  rate volatility
• Slow growth in EU export markets
• High dependency on energy imports
• Carbon constraints to further growth
• Competition from lower tax countries
• Increased regulatory compliance burden

73
Irelands Competitive Position

• Threats
• Intensifying competition for trade FDI from
  eastern Europe Asia in manufacturing services
  at all levels of the value chain, including
  research
• Growing EU restrictions on state aids
• Business government complacency

74
The Irish EconomyMedium-Term Challenges

• Globalisation Increased Competition
• Irelands Rising Cost Base
• A Shift from Manufacturing to Services
• Increasing Role of Knowledge Technological
  Change
• Quality of Life Issues Demographic Changes