According to American folklore, Irish gold miners were notorious for striking it lucky. Yet, historian Edward O’Donnell claims the phrase ‘The luck of the Irish’ comes with a hint of derision. It’s as if to say, ‘Only by sheer luck, as opposed to brains, could these fools succeed.’
A hundred years or so later, the Irish are still accused of dumb luck. At the end of the 20th century, Ireland leapt up the OECD’s GDP-per-capita ranks to sit alongside a handful of nations at the top of the table.
Depending on who you ask, this was down to Ireland’s good fortune in having the European Union subsidise its infrastructure. Or to Ireland’s luck in being an English-speaking access point for foreign firms wanting to do business with Europe. Or perhaps more scandalously, it was because Ireland had the gall to set low corporate tax rates – and the luck to get away with it.
But you will hear a different story from the three dozen or so business leaders settling back into their day jobs after The New Zealand Initiative’s members’ delegation to discover Ireland’s secrets.
Ireland has implemented a multi-decade strategy of targeting foreign direct investment and foreign expertise to boost its economy. Its Investment Development Agency has attracted global companies in key high-tech sectors. FDI has transformed cities like Dublin, Cork and Galway into international hubs for technology, pharmaceuticals and medical devices.
It has not been “Irish luck” that has attracted these investments. Ireland has deliberately created a business-friendly environment. Low tax rates have been part of this. But Ireland has done nothing other countries could not do. And as corporate tax rates in Ireland move upwards in response to a US-led multilateral corporate tax treaty, Ireland’s pro-business policy settings continue to attract foreign capital.
A second strand to Ireland’s success is its pursuit of educational excellence. It is not ‘luck’ that has led Ireland to invest in the quality of its education system. Nor to the teaching profession being held in high regard. Nor to Ireland’s focus on STEM subjects to align its workforce with the high-paid job opportunities created by the industries it targets for FDI.
The Irish may be enjoying their good fortune, but they haven’t struck it lucky. They have crafted a compelling narrative of economic prosperity through smart regulatory settings and educational excellence.
The lucky countries are those that can learn from Ireland’s success.