Danny McCoy, CEO, Ibec, speaking at Ibec’s Business Leaders Conference
‘Assessing and being agile in our thinking is going to be the crucial determinant on whether we’re going to be successful or not,’ Danny McCoy, CEO of Ibec.
Ireland’s GDP has grown by 100% in ten years, according to Danny McCoy, CEO of Ibec, at the Ibec Business Leaders Conference today, and this makes it difficult to assess where the Irish economy is now.
In 2010 the Irish economy was like a plane, with two engines – Foreign Direct Investment joined by domestic companies exporting and a significant and vibrant domestic economy involving construction, retail, banking and so on. And those two economies working together constituted this idea that Ireland was a small open economy.
“In the last couple of years, we’ve had a new dimension… a change in the global economy, moving from tangible to intangible assets driving corporate balance sheets. Ireland now is clearly a frontier economy, explaining this doubling of economic activity in a decade, as we’re now home to significant corporate balance sheets driven by these frontier activities.
He continued, “Ireland’s business model is undergoing profound change. There are now three distinct business cycles involving traditional domestic sectors, indigenous and multinational exporters, and a new generation of intangible intensive, globally traded firms.
The business model and economy are becoming more complex, so it is imperative that we fully understand these changing dynamics. If you do not understand the patient, you cannot prescribe the most effective medicine. Ireland’s business model is different and because it’s different we need new thinking in public policy to adapt to changing circumstances.
He concluded, “This is an abnormal economy we’re facing, therefore the old policies of riding the cycle have to be disrupted with agile thinking.”
Brexit uncertainty and how it affects Ireland
Michael Jackson, Managing Partner, Matheson, speaking at a panel on ‘The future of Europe’ pertaining to the implications of Brexit for Ireland said that the uncertainty about the direction of the Brexit process is very concerning for the business community. He continued:
We have heard some sobering assessments recently on the impact of a “no deal” exit on 29 March. As the Tanaiste said on Friday, this would be a “lose, lose, lose” outcome – for Ireland, for the UK, and for the European Union. Notwithstanding the developments of recent days, that no deal scenario remains a serious danger.
“While we would all welcome the certainty that agreement on a deal would bring; I think that we can equally agree that an extension to the Article 50 process would be preferable to a “no deal” scenario. While there is increasing speculation about such an extension, it is essential that it be agreed in good time for the necessary legislative measures to be enacted in London. Secondly, any extension can’t be just to allow the current process – which is not producing any tangible progress – to continue. An extension must have a clear and agreed purpose. Otherwise, it will create ongoing uncertainty.”