Ireland and the World, FT Special Report

8/10/2019 Ireland and the World, FT Special Report

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FT SPECIAL REPORT

Ireland and the Worldwww.ft.com/reports | @ftreportsWednesday October 22 2014

Inside

Young, gifted andheading for the exitYouth brain drain israising concern butimmigration continuesPage 2

Rural roots still countin a modern economyOther sectors get theattention but agricultureremains a big employerPage 3

Tech, tax and Dublinsthriving Silicon DocksFavourable rates are

not the only advantageof the technology hubPage 4

How an Irish passportopens important doorsVeteran correspondentConor OClery on beingan Irishman abroadPage 5

On FT.comHow the heavyweightstook off overseasft.com/reports

Strange things have started tohappen around the world tocelebrate StPatricksday.

The statue of Christ theRedeemer above the Brazil-

iancityofRiode Janeiroandthe SphinxandpyramidsofEgyptarebathedinsoftgreen lighting. The water in the WhiteHouse fountain is also turned green.Even the Great Wall of China does notescape.On March17 thisyear,theforti-ficationwaslit inthe Irish nationalcol-ourforthe firsttime.

Thisgreeningof theworld,as Irishtourism officialshave calledit,is mostlyadvertising. Irelandreimbursessomeofthecost ofarrangingall thatgreen light-ing.But itpays off.TourismIrelandsaysthe effort reaps about 10m worth of

publicityfor thecountryfor anoutlayofabout60,000.

It is also something of a diplomaticand cultural triumph. The willingnessofpeoplewho mayhaveno connectionwithIrelandto gogreenfor a dayistes-tament tothe affectionand esteem forthissmallcountryon theedgeof north-westEurope.

Given the economic crisis the Irishhave endured for the past six years,which broughttoan enda goldenera ofeconomic expansion and increasingwealth, they may be cynical enough todismisssuchesteem.

But Ireland retains a hold on theworlds imagination. Through its enor-mousdiaspora,its literaryand culturalheritage, its anti-colonial struggle and

even thehumblepintof Guinness firstexported in 1769 and now available inmore than 130 countries the countrywieldsa lotof softpower.

This idea of Ireland is particularlystrong in countries where Irish emi-grantstraditionallyended up the UK,Australia, the US and Canada. JimmyDeenihan, Irelands minister for thediaspora, says there is a natural con-nectionbetweenthe diaspora andIre-landbasedonthe pullof place.

Or, as Paul Keating, the former Aus-tralian prime minister, put it in anaddressto theDil,the Irishparliament,21 years ago: If Ireland did not exist,countries like Australia would have toinventit,andperhapsweshould.

Philip King, a musician and broad-

caster, says the thing that defines theimageof Irelandabroadis authenticity.Itsindigenousculture,vibrant andvisi-blein sportandmusic,isthe realthing.

TheIrish,he says,possess acreativ-ity, distinctivenessand capacityforself-expressionthatcreateitsimagein themindsofothers.

Asthecountrynavigatesitsway backto economic health, it must call onthosequalities.

Geographically andeconomically,Ire-land has few natural advantages. Formuchof itsindependenthistory,it hasbeena paradox arelatively stablepol-ity(at least comparedwithother post-colonial states)with, fora generation,aviolent ethnic and religious conflict intheislandsnorth,whichwasandstillis

Recoveryhinges onglobalconnections

Thenationwill draw on worldwide goodwill as itemerges from economic crisis.By Vincent Boland

partof theUK.NeithertheRepublicnorNorthernIrelandhas been particularlywellgoverned; the Republics economyhas tended to endure boom-and-bustcycles, while emigration has long beentakenfor grantedas anIrishsolutiontoanIrishproblem.

Irelands current difficulties are for-midable, butthey arenot insurmount-able. The country has many strengthsthatallowedit tosurvive theupheavalsofthe20thcenturyandto enterthe21stonaconfidentfooting.

Evenafterthefinancialcrisisthathitin2008,itremainsa stablesociety.Frombeingarigid,economicallyconservative,Christian Democratic country until the1960s, the republic has in the past

continuedonpage2

St Patricksday2014: landmarksin Brazil, ItalyandEgypt arebathedin green lightto celebrate


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2 FINA NCIA L TIM E S Wednesday 22 October 2014

Ireland and theWorld Migration

40 years become a more social demo-cratic society, with a liberal economythat welcomes foreign direct invest-mentandfostersentrepreneurship.

A main reason for this shift is mem-bershipof theEU,whichIrelandjoinedin 1973 with the UK and Denmark.Accession was the key event in theRepublicshistoryuntilthe 2008crisis.

Ireland has leveraged its EU mem-bership to the hilt. This is evident inthe volume of money, received since1973throughthe commonagriculturalpolicy and structural and cohesionfunds, spent on education and infra-structure. For example, the EuropeanCommission sayssome6bn hasbeenprovided for education and trainingsinceaccession.

EU membership helped Ireland toafford to develop the infrastructurerequired of a modern state. But it hasalso allowedtheIrishto seethemselvesina wider context,beyondthecolonialand postcolonial relationship with theUKon theonehand,andthesometimessentimental but also highly political

relationshipwith theUS.EU membership re-established his-torical links with Europe that manyIrishpeople hadforgottenabout.

Educationplayeda bigrole.In 1960,only 5 per cent of Irish 18-year-oldswent on to higher education. By 1980thathadswelledto 20per cent,andthe

continuedfrompage1 proportion is now about 65 per cent,according to the National Strategy forHigher Education to 2030. That hasbeena boonforthe economy:universi-ties,collegesof technology andcollegesof education churn out thousands ofwell-educatedpeople everyyear.

This is an important factor in theemergenceof theCelticTiger, theeco-nomic expansion between the early1990s andthe mid-2000s.At thesametimeas theeconomywas roaringahead,theendingof theTroublesin NorthernIrelandwasunder way.

Peaceand economicprosperity, how-ever, hada hidden cost.Theirsimulta-neousarrival destabilisedthe oldinsti-tutions that used to run the republic clientelist and parochial politics, theCatholic Church and the elites of the

civilserviceand business.Ireland responded with a series ofausteritybudgetsto theend ofthe CelticTigerphaseandthecostof thefailureofits banks and property developers a64bn hole in the national finances,requiringanemergencycallto theInter-nationalMonetaryFund.

Asthe economybeginstogrowagain theEconomicand SocialResearchInsti-tuteprojectsby 5 percentthisyearandnext that era may be over. But it willtakelongertorebuildfailedinstitutions.

Thecrashin Irelandwasheardaroundtheworld,yetthecountryis stilla buoy-ant place. For example, it still attractsinternational investment. When Hub-Spot, a US online marketing company,wantedto establish a Europeanbase,itchoseDublin.

We were looking for a city like Bos-ton,a networkof universities, an estab-lished tech nexus, talent, scale, saysJeetu Maht ani, managing director ofHubSpotsinternational business.Dub-lin met all those requirements. Thecompany arrived last year and nowemploys100people.

In times of crisis, one discovers whoones friendsare.In thepast fewyears,Ireland has developed a new relation-ship with its diaspora, which haschangedfromoneof emigrantlabourerstoone ofemigrantentrepreneurs.

As Kingsley Aikins, who runs Dia-spora Matters, which advises govern-

mentson diasporaissues,observes,Ire-land has an empire built by the factthat10mpeopleleft,achievedalot,andare now reconnecting. They are not alostasset.Theyarea nationalasset.

And they are part of the reason theworld likes to go green for a day everyyear.

Recovery hinges on global connections

65%Proportion of Irish

18-year-oldsentering highereducation

5%Economic and

Social ResearchInstitutes 2014growth forecast

Irelandshistoricroleas alarge-scalenetexporter of people came to an abrupthalt in the late 1990s, coinciding withtheboom thatledto thecountrybecom-ingknownastheCelticTiger.

Datafrom IrelandsCentral StatisticsOffice show net emigration every yearfrom 1987to1995,despiteup to40,000immigrants arriving annually. But bythe middle of the decade, historyreversed andIreland becamea destina-tionforlargenumbersof immigrants.

That inflow picked up sharply andpeakedat 151,100new migrantsenter-

ing Ireland in 2007 alone. The immi-grantswereboth returningIrish nativesand foreign-born, with the majority ofthe latter from countries which joinedtheEUin2004.

Even now, six years after the 2008financial crisisdroveunemploymenttomorethan13 percent,immigrantscon-tinue toarrive, albeitmoreslowlythaninpre-crisisdays,but infar largernum-bersthanthey didbeforetheboom.

Evenin thelowestpost-crashyearofimmigration, the total number wasgreaterthan inany yearbeforethe Tigerboom. (There was, however, net emi-gration of 21,400 in the year to April2014seestoryon emigration,left.)

The biggest change is that in theearly 1990s, we didnt have an immi-grantcommunity andnow we do, saysAlanBarrett, an economist specialisinginmigrationfor Irelands Economic andSocial Research Institute. Immigrantcommunities, he says, have network

effects, drawing innew members, evenwheneconomicconditionsaretough.

An immigrantcommunityhas takenroothere,Mr Barrettsays.

Onereasonforthe surge maybe thatin2004Ireland,withtheUK andSwe-den,wasoneof three Europeannationsimmediately to accept migrants fromcountriesthatjoinedtheEUthatyear.

But non-European Economic Area(EEA)migrantshave alsobeen arrivingin large, albeit dwindling, numbers. In2013, non-EEA migrants with permis-sion to remain totalled 120,000, downfrom132,000threeyearsearlier.

The top six registered non-EEAnationalities, which account for morethanhalfthetotal,areIndiawith11 percent,Brazilwith10 percentand China,Nigeria,the USand thePhilippineswith9,8,and6percentrespectively.

Nearly onein sixof Irelands4.6mres-idents were born outside the country,accordingto currentestimates.Roughly70 per cent of that influx comes fromwithinEurope,includingtheUK.

Strong growth in national output intheyears beforethe crash particularlyin housing and commercial propertymarkets fuelleddemandforworkers.Officialdata showa heavybiasin favourof male migrants most likely to beemployed inconstruction.In 2009 and2010, for example, roughly twice asmany men as women who came from

new EU countries decided to leave, asjobsinconstructioncollapsed.

Theinfluxof migrants intoa countrythat historically was a net peopleexporter has had social repercussions.While surveys in the 1990s showed a

majority of those questioned believedimmigrants provided a net benefit,views began changing, even before theeconomyimplodedin2008.Astudythatyearby professorsat Universityof Lim-erickfound growingopposition.

Professors Christine Cross and Tho-mas Turner wrote: Overall, a sizeableminorityof respondentsbelievedimmi-grants undermine their countrys cul-ture, have a negative impact on wagesandthepooranda negativeimpact onjobs and the economy. Given the con-sistent upward trend in the number ofimmigrants intoIreland andthe ageingpopulationdemographic,suchnegativeattitudes area major cause forconcernboth for organisations and for govern-mentpolicy makers.

Despite growing tension, Ireland hasnotdevelopedan anti-immigrantpoliti-cal movement. And while there is evi-dence thatimmigrantsare applyingfor

joblessbenefitsin greaternumbersthannatives (under the Habitual ResidenceCondition, longer-term migrants nowqualify),the pictureis complex.

Forexample,a 2010 study foundthenumber of immigrants claiming bene-fitsroseby morethan200 percentovera two-yearperiod,whilethe numberofIrish nationals signing on went up by130 per cent. Many of the immigrantsmay have been men employed in con-structionwho havesinceleft.

Amongimmigrantswho camebeforeEU expansion, those employed in sec-torssuch asinformationand communi-cation or health and social work thathave a high share of skilled and highlyskilled positions have been relativelyunaffected by the crisis, according toIrelandsCentral StatisticsOf fice.

MrBarrett notesanti-immigrantsen-timent in Ireland is more muted thanelsewhere.Nomajor politicalpartyhasan anti-immigrant platform, he says.Irish people have been more sympa-thetic because a huge proportion ofthemhavebeen migrantsthemselves.

Workers from abroadcontinue to arrive inspite of tough times

Immigration

A network effect means

communities from Europe

and beyond have taken

root.By an FT reporter

Street scene: a Polish shopin Dublin

David Garrahy will one dayreturnto livein Ireland, hesays, but Im not entirelysurewhenandat whatstageofmy life. The34-yearold

from Doolin, County Clare, who has adegreein lawand Europeanstudiesanda Masters in international relations,works in Brussels for the EuropeanYouthForum.

Mr Garrahy is part of an exodus of

young,highlyeducatedpeoplefromIre-land. Persuading them to return isbecoming anincreasingly critical politi-calissueas thenationcontemplatestheeconomic andsocialcostof thelossof itsfutureworkforce.

We are going to see serious skillsshortages, says Marie-Claire McAleer,seniorresearchand policyofficer attheNational Youth Council of Ireland,whichrecently sponsoreda conferencetolookat howto encourage young peo-pleback.

Were losing our revenue base, andthis is coupled with an ageing popula-tion, Ms McAleer says, describing theoutflowaspotentiallycatastrophic.

Indeed,theissueis socloseto thetopof the political agenda that Irelandrecently nameditsfirst ministerof stateforthe diaspora,JimmyDeenihan.

A lookat theofficialnumbers showswhy this is such a pressing matter.Although net emigration has fallen to21,400in theyear to April 2014,downfrom 33,100the yearbefore,morethan228,000Irish nationals left the countrybetween2009and 2013,the majorityofthem young and educated. More than132,000 of them nearly 60 per cent haduniversity degrees.

Ireland hadinvested significantlyintheireducationand werelosingthem toother countries,saysMs McAleer.

The population aged 20-24 fell by

13.2percent between2006and 2011,anoutflow not seen even in the depths ofthe recession of the 1970s, when Ire-lands overall economic base was farsmallerthanitistoday.

Thepopulationaged25-29fellby 3.2percentin those years.Andwhilesomeofthe drop isdue torecentimmigrants largely from countries that hadrecently joined the EU returninghomeas jobsdriedup,morethanhalfofit was down to young Irish nationalsleaving home.

A 2013survey byresearchersat Uni-versityCollegeCork,foundthat 75percentof those questioned believedemi-grationis havinga negativeeffect. Thestudy also underlined that emigrationismost likelyamongthe well-educated.While 47 per cent of Irish people aged25-34 have a university qualification,the figure for recent Irish emigrants is62percent.

The exodus is generally held to be aconsequence of the financial crisis,which led to soaring unemploymentwith younger workers most affected.

Datafromthe OECDshowthat Irelandstotalunemploymentrate rosefrom 4.4percentin2005to14.7percentin 2012,althoughit hadfallento11.1 percentbylastmonth

Butamongthoseaged15-24, theper-centage in work nearly halved since2005, going from 47.8 per cent of thatgroupto27.9percent in2012.

Theeffectsof massemigrationare notlimitedto theeconomy;socialreverber-ationsarebeing felt,too.The UniversityCollege Cork study found that at leastone household in four in rural areas ofIrelandhas beenaffected byemigrationofatleastonepersonsince2006.

Moreover, the researchers noted,emigrationis highwhen compared withIrelands unemployment rate. GreeceandSpain, withhigher unemployment,havenot seendeparturesonthe scaleofIrelands.

MsMcAleersays thatthere isanecdo-talevidencethat,for example, adearthofyoung peoplemeansthat sportsclubsinruralareascannotfindenoughpartic-ipants. Moreover, emigration often

means the dissolution of intergenera-tionalhouseholds,with attendantgriefforparents.

Not everyone has the means to flyoverto seetheirchildrenin Australia,MsMcAleernotes.

In some professions construction,nursing and teaching in particular there are also concerns that highlytrained workers will find careers andlivingconditionsso muchbetter abroad

thattheymay never return,even iftheeconomypicksup.

To this end, the government andemployers are beginning to makeefforts to encourage expatriates tocomehome.Thereare moves tocreatea database to keep track of emigrantsandithasbeensuggestedthatnoticesofskilledjobvacanciesbe postedto thoselivingabroad.

Butto listento MrGarrahy,who worksasa policyandadvocacyco-ordinatoratthe European Youth Forumin Brussels,Irelandfacesanuphillstruggle.

ThoughI thinktheresan instinctivedesire innearly allIrishpeople to comehome, it would not make much senserightnowin mycareerpathto dothatthe career opportunities are just notthere,Mr Garrahysays.

While conditionsin Irelandwould bebetterforhimthanwhenhe left attheheightofthe financialcrisisin2008,thisisnotenoughtodrawhimback.

This balance is still missing in thejobs market, the housing market andthe taxation system, he says, addingthat he has little confidence that thecareer path he is on in Brussels existsbackhome.

Ms McAleeracknowledgeshow diffi-cult it will be to bring young peopleback. Thistime around,there reallyisa sense that the young people have iteasierwhen theyemigrate.

Exodus of young talent promptsconcerns about skills shortagesEmigration Persuading highlyeducated workersto returnhome is an uphillstruggle.By an FT reporter

On theway: Australiais among popularemigration destinations foryoungIrish adults EricLuke/The IrishTimes

Irishpeople are

sympathetic because a

hugeproportionhave been

migrants themselves

Irish Migration

Source: CSO Years ending April

000

-100

-50

0

50

100

150

2004 05 06 07 08 09 10 11 12 13 14

ImmigrantsEmigrantsNet migration


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Wednesday 22 October 2014 FINA NCIA L TIM E S 3

Ireland andtheWorld Business

OverthreedaysinlateSep-tember, in glorious Indiansummer weather, nearly300,000peopleturned outforthe biggestpublicevent

inIreland.It isnota technologyfair.It isnota footballorhurling match.It isnotevenSt Patricksday.

Itis theNational Ploughing Champi-onships, the mostbeloved rendezvousin Irelands rural calendar, as IrishPresident MichaelD Higginssaidas hedeclaredtheeventopen.

Held on 800 acres of prime farminglandinCountyLaois,thisyearschampi-onshipsattractedthe biggestcrowds intheir83-yearhistory.

Aswellas ploughing(a skill atwhich

Irish farmers have traditionallyexcelled), the event also includes vastexhibitions of Irish food, agriculturalproducts, animals, machinery andfarmingtechniques.

Theeventisclaimedto bethe biggestofits kindin Europe.RuralIrelandhasalways turned out in force, but it alsoattracts large crowds from Dublin aswellaspoliticalleaderskeen tobe seen.

AsMrHigginsremarked,a visitto thechampionships is an encounter withruralIrelandand therealeconomyin itsbestsense.

Much of the international focus onIreland concerns its recently acquiredstatus as a European technology hub,thegrowthof thepharmaceuticalsectorover thepastfour decades, andthefac-tors especially favourable tax treat-ment thatattractthetechandpharmaindustries.YetIrelands domestic econ-omyisrootedinagriculture.

The technology sector, the result of

Irelands long-established policy ofattracting foreign direct investment, isvitaltothe Irisheconomy(seepage4).Itemployed160,000 people atthe endof

2013,andisone reasonwhythecountryhas become an admired business loca-tion by US multinationals, despite thetraumaof itsfinancialcollapse.

Tech companies led by Google andMicrosoft accountedfor sixof Irelandstop10 exporterslastyear,while the listincluded two pharma companies,accordingto theIrish Exporters Associ-ation. (Ireland runs a large trade sur-plus:3.4bnat theend ofJune.)

But two factors affect the businesslandscape.The firstis that thescale oftheIrishfoodindustryis bothlarge andunderappreciated.

According toBord Bia,the Irish foodboard, exports of Irish food and drinkreached 10bn last year up 40 percentoverthepastfour years.Whilethecountrys total exports are about

180bn,thesectoristhe largestindige-nous industry in Ireland. The depart-ment of agriculture estimates that itemploys167,000people.

Thesecondfactoris thatIrelandisnotjusta locationfor foreigndirect invest-ment, but a source of it. Like Switzer-land, Irelandis hometo moremultina-tionalsthanthesizeof itseconomyanddomesticmarketwouldwarrant.

Many of these global companies namessuchasSmurfitKappainpackag-ing,CRH inbuildingmaterialsand DCCindistribution beganlife assmalllocaloperators.Theyhaveexpandedoverthepast 30 years, mainly through acquisi-tions. Only 1.8 per cent of SmurfitKappas annualrevenue(8bn in 2013)issourcedinIreland,forexample.

Ian Hyland, the founder and presi-dent of Ireland INC, a body that pro-motes Irish business overseas, saysIreland-based companies employ170,000peopleinthe US morethanUS

companiesemployin Ireland.We needto respect whatIrishcom-

panies are doing right across theworld, Mr Hyland says, pointing to

Irish companies not just in the US butalsoin placessuchasChina.

Themostprominentofthe firstgener-ationof international businessfiguresisTonyOReilly,the formerchairmanandchief executive of Heinz, the US foodgroup, andof IndependentNewspapers,Irelandsbiggestmedia company.Othersinclude Michael Smurfit, who madeSmurfit Kappa into a global operatorfromitsbase ina Dublinsuburb,and thelateTonyRyan,founderofRyanairandapioneerin aircraftleasing.

Theyhavenow beenreplacedby thenext generation, led by MichaelOLeary,whohasturnedRyanairintoaninternationalbrand.

There is a limitation to being an Ire-land-based indigenous multinational:thesmallsizeofthe Irishstock

exchange.In2011, CRHbecame

thefirstto shift itspri-mary stock market

listing to London. It was followed byGreencore (inthe foodindustry),UDGHealthcare, Grafton (building materi-als)andDCC.

Muchofthe tradingin those stocksisstill donein Dublin,but theemigrationofsuchbignameshasbeenablowtotheDublincapitalmarkets.

Nevertheless, business chiefs say,Irish multinational businesses haveweathered the financial crisis and thecollapse of the economyrelativelywell,giventheir extensive exposureto inter-nationalmarkets.

More domestically focused compa-nies are still recovering, as consumersentiment revives slowly from thedownturn andsix yearsof austerity.Buttheyremainanessentialpartof theeco-

nomic and business landscape. Its

not allabout technology,saysMr Hyland. Our indige-

nouscompaniesarevitallyimportant for us.

Domestic economy remains rooted in agricultureIndustry Technologyand pharmaceuticalcompaniesare thefocus of internationalattention, but farmingis at the nations heart,writes Vincent Boland

Competition: theNational

PloughingChampionships

(above), openedby President

MichaelD Higgins(below) AlanBetson/The IrishTimes


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The flood of big technology companiesarrivingin Irelandhas encouragedsomeyoung Irish start-ups to move in theoppositedirectioninthehopeofmakingtheirfortuneonthe USwest coast.

Google, Apple and Facebook choseIreland for their European headquar-ters, promoting careers in technologyand inspiring some tech entrepreneursto launch their own companies. But tofind venture capital funding, contactsand a much larger market, many headtothe homeof those largercompanies:SiliconValley.

Theseexpats rangefrom LiamCasey,whoheadsthelargesupplychainman-agement company PCH International,which has worked with companiesincluding Apple, to newcomer Stripe,the payments company working withTwitter and run by two Irish brothers,Johnand PatrickCollison.

Eoghan McCabe, 30-year-old chiefexecutive of Intercom, a softwarecom-panythat helpsbusinessesinteractwiththeircustomersonline,made theleap in2011 and has since raised $30m. Hisjourney to becoming a Silicon Valleytechie began when his parents gaveintoan AOLCD-Romthatwas pushedthrough their letterbox in Ireland in1996enticingthemtogetonline.

Mr McCabe built his first websitewhen hewas12 andlaterspenttimeasa freelancer,building crappywebsitesfor companies, while he studied com-

puterscience at TrinityCollege Dublin.Intercommaintainsan officein Dub-

lin,but MrMcCabewasattractedto SanFrancisco bythe concentrationof peo-ple who are equally passionate abouttechnology.

SanFranciscoreally isthe onlypartof theworld withgreat investors,peers,customers and talent. You cant findthat concentration anywhere else, hesays. You dont try to get to the verytop of the finance or movie industrybasing yourself in Helsinki or Tim-buktuor Dublin.

However, Mr McCabes Irishconnec-tions still benefit the company, whichhasinvestedthe majority ofits researchand development money in Ireland toavoidthe talentcrunchin thevalley.

Softwareengineersin theSilicon Val-ley can command much higher wagesand often want to work on the coolest

new thing. Hiring them in Ireland ismucheasier.

In Ireland and within the Irish peo-ple,thereis a verybroadrangeof engi-neeringexperience andskills theyareex-Amazon, ex-Facebook, ex-Google,who happen not to want to leave theirhome,Mr McCabesays.

Mark Moore, a recent arrival fromIreland, agrees, and his company haskeptitsmain officeinDublin.He ischiefexecutive of OralEye, a teledentistrycompany that has developed an appenabling peopleto sendaphotoof theirteeth to their dentist. He is currentlyfundraisingin SiliconValley, wherethe

worlds largest concentration of tech-nologyventurecapitalistsison hisdoor-step. He says Dublinand SiliconValleybothhaveadvantages whenit comestorecruitment.

In Dublin, we have a stronger net-work, people we went to universitywith,Mr Mooresays.In SanFrancisco,people are far more open to new pros-pects,thejobmarketismorefluid;therearemore peoplewho areindependentlysupported,since theyleft theirpreviousjobandopen tosomethingnew.

ForeignershaveflockedtoSiliconVal-leyfordecadesanda newwaveofhope-ful start-up founders from around theworld is eager to raise funds from theventure capitalists whose offices lineSandHillRoad.

DavidSmith, vice-president of inter-nationalprogrammesat theUS MarketAccessCenter,workswith about20 for-eigngovernmentorganisationstryingtohelp companies from their countriesmake headway. Mr Smith originallycamewithEnterpriseIreland, butsayseven his non-Irish colleagues recogniseIrishstart-upsoftenhaveanedge.

Irishcompaniesare byand largebet-terthan [thosefrom]mostcountrieswesee. They are much more realistic,much more prepared, theirtechnologyismore substantialand theirdifferenti-atoris usually muchmore substantial,hesays.

Theycanalsomakeuseofa well-con-nectedIrish community. MrSmithhasbetween 800and 900Irishcontactsinthevalleyalone.

The Irish diaspora here will go thatextramile foryouto getyouconnectedtothe rightpeople.[They think]thingsarereallybadat home,somethingneedstohappenand youguyscreate employ-ment, so this is my bit to help therecovery.

Digital entrepreneurs stand outfrom the crowd in Silicon Valley

Start-ups

Irish energy and experience

are impressing venture

capitalists in San Francisco,

writesHannah Kuchler

Ireland andthe World Technology

Dozens of giant light-sticksilluminatethe pathto Dub-linsGrand CanalTheatreatnight,glowingredand flash-ing in dazzling rhythms.

Landscape architect MarthaSchwartzsneon red carpet offers a new kind ofIrish welcome. It announces to visitorstheyhavearrivedsomewherebold andmodern:DublinsSilicon Docks.

Many of the biggest names in global

technology now call the docks theirEuropeanhome andthe areaisthe mostvisible signof thegovernments redcar-petstrategyforhigh-techinvestment.

Thecombinationof lowtaxes,a welleducated English-speaking workforceand a vibrant tech ecosystem has longproven to be alluring. IDA Ireland, thestate body charged with attracting for-eign investment, has been wooing for-eign pharmaceutical and technologyfirmssincethe1950s.

Wedidntdevelopthisovernight,butweve had huge success in recentmonthsand years, saysMartin Shana-han,the IDAsnew chiefexecutive,whopredicts the sector will create an addi-tional45,000jobsby 2018.

IBM opened an Irish operation in1956,Pfizerarrivedin 1969andIntelin1989.By 2007,tour guidescouldtellvisi-torsthat Ireland wasthe worlds largestexporterof softwareandViagra.

Theinvestorsof theearlyyearshave

now been joined by second-generationweb companies such as Facebook,Google and Twitter. It is an impressivelistfora citythathas establisheditselfas

a global tech hub and is struggling tobuildenoughoffices.

But Irelands investment model hascomeunder attackfor allowing compa-niessuchas Google toavoidpayingtaxonmuch oftheir profits.The mostnoto-rious trick is the double Irish, wherecompanies exploit differences in inter-national tax codes, funnelling profitsoutof Irelandand intotax havenswherethey hold intellectual property. The

European Commission is also investi-gating Apples tax arrangements to seewhether the company received specialtreatmentfromrevenueauthorities.

Michael Noonan, Irelands financeminister, movedto phase outthe dou-bleIrishin last weeksbudget,buttoldIrishMPsthat theheadline12.5per centcorporate taxrateneverhasbeen andnever will be up for discussion andwouldnotchange.

JohnFitzGerald,researchprofessorattheEconomicand SocialResearchInsti-tute, saysthe focus ontax missesmanyof the reasons why companies havebasedthemselvesinIreland.

The situation is more competitivenowthe UKcorporatetaxrateisnow20percent sothebenefitismorelim-ited,he says.

Youcanset yourself upin EstoniaorSlovakiaand paylesscorporatetax thaninIreland,so therehaveto beotherrea-sonsfor Irelandssuccess,he adds.Its

a combinationof skills, flexibilityin theeconomyand soon.

Mr Shanahan agrees. To simplifythis as just about tax is an error and

misunderstands what Ireland is doing.YouwalkaroundDublinandyouseeavibrant, attractive city. The clusteringeffect from companies that want to beco-locatedisveryimportant.

Neartheneonred carpet,FacebooksEurope, Middle East and Asia head-quarters employs 500 people. SoniaFlynn, head of Facebook Ireland, sug-geststhe officecould doubleits currentsize.Dublinis ourlargestofficeoutsideCalifornia.We haveteams hereon engi-neering, IT, marketing, sales andfinance,she says.

MsFlynn,whowasheadhuntedfromGoogles EuropeanHQ acrossthe canal,says Dublin had already created avibrant tech ecosystem by the time

Facebookopenedthere.WhenFacebooklooked atIrelandas

a location, our people were struck bythe wealth of experienced leadership

andtalent. Thelocal talentreallyshonethroughandthatmadeiteasyto setupquickly.

Forsome,the presenceof techbehe-moths such as Facebook is a mixedblessing.Youngerstart-upscan struggleto compete for skilled labour. Early-stagestart-upsrarelyturn profits, sodonotbenefitfromthetaxregime.

But William McQuillan, a partner atFrontline Ventures, a venture capitalfund,says that Dublinstech ecosystemis nonetheless spinning off plenty ofinnovative companies.

The larger companies upskill thelocalpopulation in developing, manag-ingand sellingtech andtheyalso bringin international talent. People come

here, they get a girlfriend or boyfriendandaftera fewyears they settledown.Many of them eventually set up theirowncompanies,hesays.

Brett Meyers arrived from Australiain2000toworkinfinancebeforefound-ingCurrencyFair a currency exchangewebsite that processes 5m worth oftransactions a day. The company is oncourseto growfivefoldby 2015,he says.MrMeyershasbeen impressed byhowDublinhas embracedtech innovation.

Once youhavea baseof start-upsandresources, it creates a community andthatattractsmorepeople todo thiskindofwork.Dublinhas gotmomentumnowandtheresa multipliereffect,he says.

Over time, you get people exitingfrom successful tech companies. Then,they can go on and invest and mentornew Irish start-ups. Im seeing it everydayandthat makesme veryoptimistic

aboutthecitystech scene,headds.

How Irelands heavyweight internationalcompaniesmadeit big:www.ft.com/ireland

Cluster effectreinforces

success ofDublins docksTechnology Low tax and big-name neighbours arenotthe only advantages, writesAndrew Byrne

Momentum:

DublinsSilicon

Docks arehome

tomanyofthe

worldsbiggest

namesin global

technology Alamy

Onceyou

have a base

of start-ups,

it creates a

community

andthat

attractsmorepeople

tothis work

Contributors

Vincent Boland

Ireland correspondent

Andew Byrne

FT reporter

Hannah Kuchler

San Francisco correspondent

Conor OClery

Irish writer and journalist

Jerry Andrews

Commissioning editor

Helen Barrett

Sub editor

Steven Bird

Designer

Andy Mears

Picture editor

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Charles Blandford

+353 86 2528885 and

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Good connectionsIntercom founderEoghan McCabe

moved to Californiabut much of hisR&D is in Dublin


5/6

Wednesday 22 October 2014 FINA NCIA L TIM E S 5

Ireland andtheWorld International connections

Anunusualeventwilltake place inthesouthernFrenchcity ofToulouse,whichlooks likely to open a new chapter ininternationalsporting rivalry.

OnNovember15, FranceandItaly aredue to meet in the first Gaelic footballmatchbetweenthetwo countries.

The Gaelic Athletic Association, thebodythat organisesIrelandsindigenousgamesof hurlingand Gaelicfootball, isshipping goalposts to Toulouse for theoccasion. The crowd will be small; theGAA makes no pretence that outsideIreland its sports are anything otherthanminoritypursuits.

The French team is exclusivelyFrench-speaking, though it includes ahandfulof Irish.Andif thegameisany-thing like the Irish version of Gaelicfootball,it willbefast,entertainingandalittlechaotic.

This unlikely international fixturetestifiesto thesuccessof theGAAin pro-ducing what may be Irelands mostunexpected export: its indigenousgames. Thisis becausetheorganisation,founded in 1884 and virtually synony-mous with Irish identity, retains asstronga pullon todaysIrishemigrantsgenerallyhighly educated as it didonthe generation of labourers who left inthe1950sand1960s.

Few other organisations hold suchsway over the Irish imagination. TheIrish language may be a lost cause forthe majority of Irish people. Yet theirsense of identity is deeply entwinedwith growing up watching hurling (agame played by two teams with a ballanda stickcalleda hurley),andfootball(theclosestequivalentof whichis prob-ably Australian Rules football). If onewishes to understand the Irish, onemustseea match.

TheGAAis somethingof aparadox,agrassrootsorganisationthathasbecometruly global.To geta sense ofits reach,standoutside thedoorof themuseumatCroke Park in Dublin, the super-mod-ern stadium that is both the venue for

thebiggestgamesand theassociationsheadquarters. A visitor will see a walldisplayingthe crestsof allthe organisa-tionsmember clubs.

There are more than 2,200 clubs ontheislandofIreland;86fromthe UKand57 from New York. There are 28 clubsthat have sprung up in Asia in recent

years, including Mongolia. There is athrivingclub inBuenosAires.Argentinaissaidtobe hometoan Irishdiasporaofperhaps400,000people.

Many clubs have been set up byrecently arrived emigrants as a way ofholding on to something precious, andstayingconnectedwithhome.

The GAA is the glue that attachespeople totheir homeland,saysJimmyDeenihan, minister for the diaspora intheIrish governmentand winnerof fiveAll-Ireland football championshipfinalswith hisnativeCountyKerry.

PatDaly, theGAAsdirectorof gamesdevelopment and research, says theclubs springing up across Asia and theAmericas including the Hurling Clubin Buenos Aires offer a sense ofbelonging in a world where you canbelonganywhereor nowhere.

TheGAAhasitsnexusineverycom-munity, parish and county across theisland.

The first sports that most Irish chil-dren encounter at school are hurlingand football, notwithstanding theincreasing popularity and success ofrugby union. Every small town has a

GAApitch (fieldofplay).Players, especially at the top of thegame where the 32 counties play oneanother devotemany hours aweek totrainingandpracticeon topoftheirdayjobs. They attract often huge crowds CrokeParkhasa capacityof 82,300andis full for the big matches. The players

bringjoy anddespair,dependingon theresult. But they do not get paid. Theamateurspirit prevails.

In a further example of the globalappeal of Irish sports, the 19th annualAsian Gaelic Games, a series of mostlyfootball matches featuring clubs andteamsfrom18 countriesacrossAsiaandfeaturingboth expatsand playersfroma range of nationalities, were held inOctoberinKualaLumpur,Malaysia.

Andas wellas sporting highlights,theevent offers an increasingly valuableforumforbusinessnetworking.

Thebusinessconferencehas becomeanintrinsicpartof theweekend,whichiswhywe wereattractedto itinthe firstplace, says Denis Cleary, a managingdirector at Fexco, the Irish financialservices company that sponsors theAsianGaelicGames.

Were lookingto raise ourprofileinAsia, especially with the Irish diasporainthe region,he adds.

As Mr Cleary points out, Fexco isbasedin a part ofIreland thetownofKillorglin in County Kerry in the farsouthwest thatknows allaboutGaelicgames,emigrationandstayingintouch.

Kerryhas won moreAll-Irelandfoot-ball titles than any other county. Wehave our origins in a place where theGAAandemigrationhavebeenpartandparcelofeverydaylife,Mr Clearysays.

The Asian Gaelic Games are a goodopportunity for us to give somethingback,he adds.

Gaelic football and hurlingmaintain ties with diaspora

Sport Clubs arespringingup in Asia and Latin America, writes Vincent Boland

Goodsport:the amateurspiritprevailsin Gaelicfootball Alamy

Hello, I said.MynameisConorOClery.I am theinternational businesseditorof TheIrish Times

of Dublin, Irelands leading newspaper,calling frommy NewYorkoffice.Aftera fewmomentsthe Intelexecutive ontheline responded.Cool!

Theinterview wasa breezeafterthat.His amusedresponse typified aphenomenonI frequentlyencounteredina quarterofa century reportingabroad forThe IrishTimes,especiallyinthe US.It reflecteda friendly andsometimespatronising attitudetowards Ireland,andtowards meas anIrish correspondent.Similarly whenIsoughtan interviewin Bostonwiththepresidentof the Massachusetts senate,hesweptme onto thesenate floor,

provokinga protest, Strangerin theHouse! Nostranger,saidmy escort.Hes The IrishTimes.

The aftermath of the 9/11 terroristattackon the WorldTrade Center,whichI witnessedfrommy officewindow threeblocks away, andwhichkilled hundredsof Irish-Americanemergency workers,emphasisedforme a specialrelationshipbetweenIrelandand theUS.Irelandwas oneofthefewcountriesoutsidetheUS toobserve a dayof mourning.

After theattack, I hadto relocate totheW Hotel uptown.A fewdayslatermy telephonebill exceeded$5,000.I toldthemanager I wasusingtheroom asan emergency office andatthis rate itwouldbankruptthenewspaper.

The IrishTimes? hesaid.Illnotletyou leaveuntilwe agree a fairprice. Hecut thefinalbillin half.

Thisbenign attitude wasa valuable

assetwhen I wasWhite Housecorrespondent someyears earlier.Theofficesof important Irish-Americanlawmakersopened theirdoors to me.

Mybusiestday wasMarch17,whenpoliticalIrelandwould descend onWashingtonto celebrate St. PatricksDayat black-tiedinners,and thetaoiseachof thedayvisited theOvalOffice, a fixedannualprivilegegrantedto no otherworld leader.

I foundeverypresident likesto claimIrish ancestry, includingBarackObama,who located a great-great-grandfatherfromCo. Offaly.When PresidentClintongot involvedin theIrish peaceprocess,I hadmy callsreturned andlanded threeinterviewswith him,

unheardof fora Europeanreporter.Thisuniqueaccesscontinuedeven

afterI became Asiacorrespondent andPresidentClintonvisited China. I was

puton averyshortlist forquestionsathispressconference, muchto thechagrinof my colleaguesfromtheworlds media, because he wantedtosaysomething publiclyabout eventsinNorthernIreland.

InAsiaandthe MiddleEastespecially, I foundbeingIrish wasadistinct plus,mainlybecause we areseen asconvivial:Irish barsin everycity;we nevercolonisedanybody;andwe arehistorically unaligned.

Thisneutralityhad a practicalapplicationin Beijing, when

demonstrators setupon westernjournalistsafter the Natobombing ofthe Chinese embassy in Belgrade.Multiple correspondents of The Irish

We are seen as convivial it is a distinct plusGLOBAL RELATIONS

ConorOClery

Familyties:

Barack and

MichelleObama

visitCo. Offaly

(above); Conor

OClery(right)Jewel Samad/AFP

I found everyUS president

likesto claimIrish ancestry,

including Barack Obama

Timesbearingmy name appearedonthestreetsthatday after I handedoutmy business cardsto colleagues,enabling themto tellangry protesters,Im Irish. AndIrelandis not in Nato.

I enjoyed goodrelationswith fellowcorrespondents, butsome Americans

abroadtendedto look down onaminnowsuchas TheIrish Times.I wasaffrontedwhenone USTV networkheavyweightremarkedto meat a pressconference in Jakarta,You area longwayfrom home. I regrettednotreplying, Soare you.

ButI gotsomesatisfactionlaterinKualaLumpur,whenI came acrosshimina huddleof journalistsoutside thehomeof WanAzizahWan Ismail,hopingfor an interviewfollowingthejailing of herhusband,Malaysiasdeputyprime minister AnwarIbrahim.

I alonewas summoned inside, whereWan Azizah, whohadtrainedas aneyedoctorin Dublin, satme ona couchandsaid, Tellme allthegossip about[former taoiseach]CharlesHaughey.Practicallyeverywhere I went,positiveperceptionsof Ireland surfaced.

Chinese leader JiangZemin greetedanIrishvisitorby saying,Itseemseveryonein Ireland haswonthe Nobel

Prizefor literature.In Moscow,however,duringthe

Gorbachevera,I wasputin myplacebythe blue-rinsed motherof a Britishdiplomat,who expressedastonishmentthatIrish peoplewere interestedinwhat went onin theUSSR.

Being theonlyIrish reporter intheSovietUnion hadits advantages.On

myown,I wasfeedingan insatiablecuriosityamong readers about

the crumblingSoviet Union.This ledto ananecdoteformertaoiseach GarretFitzGeraldliked to tell,abouthow hetriedtocontactme inMoscow.Hegavemy telephone numberto the Irish exchange,without identifyinghimself

orwhomhe wascalling.OhTaoiseach, saidthe

operator,Conorisout,he will be

backthisevening.Smallcan bebeautiful.


6/6


Ireland and the World Culture

OnedampSaturdaynightin

the middle of August,something extraordinaryhappened in the village ofFeakle,in thewesternIrish

countyof Clare:the worldturnedup onitsdoorstep.

The attraction was the 27th interna-tionalfestivalof traditionalIrishmusic.Thevenueswerethe villages pubsandcommunity hall. And the audiencecame from all over not just Irish butBritons, Italians, Spaniards, Americansandmore.

Thisyear,thefestival aplatformforthe best Irish traditional music per-formers featuredthe IrishConcertinaEnsemble, Martin Hayes (one of thegreat exponents of Irish traditionalmusic), set dancing, poetry readings,singing,workshops on traditional Irishmusicalinstruments,and a cili.Severalthousand people attended the week-long event thisyear not badfora littleplaceofbarely150 residents.

TheFeaklefestivalis oneof hundredsofeventsthat takeplaceacross Irelandeveryyear,drawinga mixof locals,tour-ists, dedicated festival-goers, serious

scholars,and themerely curious. While

Irelands cultural heritage is deeplylocal,italsohasabroadglobalappeal.

Thecountryssoftpower in partic-ular its music and literature asexpressed in its annual festivals, sum-merschoolsandmuch more, isamongitsassets.

Ireland in the summer is one bigfestival, says Sheila Pratschke, whochairsthe ArtsCouncilofIreland.

Or consider Riverdance, the globallysuccessful Irish-dancing theatre pro-duction that erupted on to the sceneduring the interval of the 1994 Euro-vision Song Contest and became theunofficial soundtrack of the CelticTiger the period of rapid economicgrowth in the decade that followed. Ithas been playing to sellout audiencesacrosstheworldeversince,invari-ousiterations.

Irelands soft power cer-tainly appeals to tourists.Research by Tony Foley, an

economist atDublinCityUni-versity, found thatmorethan80 per cent of those sur-veyed said their number

oneexperience on holidaywas listen-

ing to Irish music in a pub. The mostvisited fee-charging attraction is theGuinness Storehouse in Dublin, homeofthefamouspintof stout.

While Mr Foleys research may sug-gest that tourists have a fairly narrowviewof whatIrelandhastooffer,it isnotnecessarilywrong.The pubis timeless,anditisaveryrealpartofthelandscape.The Lonely Planetguide says most Irishpubsstilloffera uniqueexperience.

Many Irish pubs offer excellent foodand drink. The question is whether itreflects modern Ireland the countrythat has experienced an extraordinaryeconomicboom followedby abust,andisnowgoingthrough a periodofsocialandculturalupheaval.

Thecollapse of institutionsthatgoverned Ireland for decades

the political elite, business,civil service and the Catholicchurch ontop ofeconomiccollapse,are allcontributing

tothat upheaval.WhetherIrelandsartis-

tic and cultural institu-tionsareup tothetaskof

reflecting such change is questionable.

Thefinancial crash of 2008-10and thesubsequent years of public spendingcutshave eaten intoartsbudgetsacrossthecountry.

Thisyear,the AbbeyTheatre,perhapsthe most important institution in thecountrys cultural firmament, was thesubject of controversy after a reportcommissioned by the Arts Council ofIreland and leaked to The Irish Timesappeared to question whether its pro-ductions really were the world-classofferings it claims to show. The DublinTheatre Festival, meanwhile, has lostUlsterBankasits titlesponsor.

Irishmoviesarealsointhelineof fire.JohnMichaelMcDonagh,director ofthefilmsThe Guardand Calvary, caused afurorelast monthwitha diatribeagainstthe quality of Irish films, and his wishnottohaveCalvarythe taleof apriestgivena weekto liveby a victimof cleri-calsexualabuse marketedas anIrishfilm. Im not a fan of Irish movies, I

dont find them to be that te chnicallyaccomplishedandI dont findthemthatintelligent, hesaid inan interviewwiththePressAssociation.

MsPratschkesays thestrengthof cul-

tural institutions goesin phases.Theydependonthe timesweare in,she says,acknowledgingthatnow isa toughtimefor artsadministrators and institutionsthatdependto agreateror lesserextentonpublicsubsidies.

The Arts Council of Irelands budgethas shrunk to 58m this year, from87m at its peak before the crash. Shesays a small increase in funding wouldhaveadisproportionatelypositiveeffectonartisticqualityandoutput.

Philip King, a writer, musician andbroadcaster, says one of Irelands mostimportant advantages is that it has anauthenticbrand. By this,he meansIrishculture is deeply rooted in the experi-encesofworkingpeople.Irishcreativity,hepointsout,isondisplaynotjustasacultural phenomenon but also in areassuchastechnology

What Ireland lacks, he says, is thestrategic vision to bring it together, inparticular by harnessing the power of

theIrishdiaspora andwhathe callsIre-lands disproportionate cultural influ-ence globally.

Justlikein Feakle,indeed.

Struggle tocapitalise on

soft power ofcreative talent

Culture Tourists wantauthenticitybut institutionsarecomingunder pressure, writes Vincent Boland

Grassroots:fiddlerMartin Hayes

andDennis Carhillat Feakle(above);Brendan Gleesonin CalvaryFeakle Festival

Documents

Ireland and the World, FT Special Report