Ireland’s Economy

Fado, fado, Ireland's economy was at the simplest and most basic level of development. The ancient Irish hunted the land, fished the lakes and streams, and foraged the forests in order to find the foods they needed to survive. Interestingly, they never turned to the sea as a major source of food. A huntinggathering (and for some cultures, fishing) level of subsistence was not something unique to the Irish. Virtually every culture on this planet began by first developing a process of obtaining a food supply. Eventually, the Irish, like most of the world's people, settled in one place and changed their economic system to subsistence agriculture.

Ireland's economic geography is really a two-part story. The first is the well-known tale of Ireland's traditional livelihood. The second is a much more recent story. It is so new, so exciting, and developing so quickly that few people really understand its total importance and impact. Instead, they simply observe it in amazement.

THE TRADITIONAL ECONOMY

Historically, Ireland's traditional economy is the tale of a land of great poverty. For thousands of years, the people have lived at or near subsistence levels. They eked out a meager food supply with agriculture and had a limited dependence on hunting, collecting, and, for some, fishing. Subsistence agriculture simply provided enough food to sustain the island's people. Eventually, with the invasions and occupation by outsiders, occupying landowners introduced various types of crops and farming techniques that were able to produce a surplus of agricultural goods.

For hundreds of years, occupying landowners controlled Ireland's agricultural wealth. They focused on producing an agricultural surplus that was exported to gain wealth. They claimed ownership of the wild game and foods of the forests and fish in the rivers. Irish who hunted, collected, or fished could be arrested as poachers, jailed, or even deported to a new British prison colony in faraway Australia.

By 1703, Catholics owned only 14 percent of the land in present-day Ireland. Since they were not landowners, Irish Catholics served as laborers. They were dirt poor. Even following independence, poverty was still the rule for the vast majority of Irish people. Twenty-five years ago, Ireland was still one of Western Europe's poorest countries.

IRISH AGRICULTURE

The traditional economy of Ireland is agricultural. The country's land use reflects the importance of agriculture, as the majority of the land in Ireland is still used for crops or pasture. Of the agricultural lands, approximately 80 percent are devoted to pastures. Livestock dominates Ireland's agricultural economy, with cattle (both dairy and beef) and sheep scattered throughout the island. As one drives along rural roads in the west of Ireland today, it is common to come upon a flock of sheep in the road. In any given year, there may be more sheep than cattle in Ireland, but cattle remain far more important economically.

Export of animals and animal products is a vital part of Ireland's traditional economy. Its importance continues today, as the country exports about 90 percent of its beef and 75 percent of its dairy production. Ireland also exports sheep and sheep products. A well-known sector of the traditional Irish economy is the production of Irish-knit wool sweaters, especially those made in the Aran Islands, located in the west.

A particularly unique aspect of Ireland's traditional animal industry is today's high-tech stud farms. Ireland is home to numerous stud farms, where many of the world's most successful thoroughbred racehorses are born and bred. Some of the most famous are in County Kildare. Today, this traditional segment of the economy has grown into a multimillion-euro agricultural industry. Irish-born racehorses are running on almost all the world's major racetracks.

While secondary to livestock in land use, Ireland's agricultural economy includes crop production. People perceive Ireland as being a land where potatoes dominate agriculture. While that was true prior to the Great Famine, it is not true today. The major food crop grown today is barley. It leads all crops in acreage planted and is used both as livestock feed and as a major ingredient in many of Ireland's famous beers.

The base of all beers is grain. The grain, whether barley, rice, or something else, is malted, milled, and mashed during the brewing process. One of Ireland's principal products is beer, and Guinness is by far the land's leading drink. It is a key part of Ireland's social life and an icon of Irish culture. The first Guinness brewery is located in Dublin, and every Guinness brewed throughout the world starts from an extract brewed at the Dublin location.

The best lands for crop production are in Ireland's south and southeast (near Dublin).Here can be found field after field of barley.Other major crops important to the economy include wheat, oats, and hay. Ireland also grows sugar beets, turnips, tomatoes, and a variety of seasonal vegetables.

Seasonal vegetables are consumed locally. The Irish make wonderful soups and are great soup lovers.Whatever vegetable is in season on any given day is pureed into vegetable soup. One day vegetable soup could be potato, the next day leek, and the next turnip.

Although agriculture still dominates the Irish landscape, Ireland, like the United States and most of Europe, continues to experience a decline in the number of farms and farmers. As a result, the average farm size is increasing. Many Irish farmers and/or their spouses are employed in non-farm jobs in order to earn sufficient income.

In addition to agriculture, three other sectors of Ireland's economy fall within the traditional economy of Ireland: forestry, fishing, and mining. Each of these sectors is experiencing a renewed focus as part of Ireland's overall economic development plan.

THE FOREST INDUSTRY

The Irish people and their government are making major efforts to achieve reforestation. The goals are to diversify land use, reduce timber imports, restore natural vegetation zones, enhance the economy, and provide a variety of wood and lumber products for the island's newer industries. The successes are a result of intensive efforts at reforestation, not nature. Today's forests are primarily coniferous trees that grow quickly and provide softwoods for timber and paper industries. Most of the forests in Ireland are under government control.

FISHING

Historically, fishing has played a small role in Ireland's economy. Although fishing villages existed along the coasts, the fishing was part of a localized, subsistence economy. Today, Ireland is developing a fishing industry that focuses on two production fronts—the sea and the rivers. From the sea, the fishing industry harvests saltwater fish species such as cod, herring, plaice, and mackerel. The catch from coastal waters includes lobster, crab, mussels, prawn (shrimp), oyster, eel, and crawfish. Fish farming is expanding in selected coastal inlets. On rivers and lakes, fishing is for commerce and for sport. The River Shannon is especially noted for salmon. Sport fishing is popular near Conna in County Cork on the River Bride.Whether at sea or on rivers, in Ireland, most of the commercial fish catch is exported.

MINING AND MINERALS

While mining has not been a major player in Ireland's economy, it provided the minerals needed during the Bronze and Iron ages and early manufacturing. Ireland's landscape is dotted with small quarries. Most quarries provided nonmetallic minerals such a limestone, sand, and gravel.

Marble is a metamorphic rock created when limestone experiences great heat and pressure over time. Ireland has over 40 different patterns of marble. The greatest concentration of marble quarries is in the Connemara region. The beautiful green shades of Connemara marble are the most popular colors. Marble from the quarries is shaped into jewelry, architectural stones, and gift products in the city of Moycullen in the Connemara region.

THE HIGH-TECH ECONOMY

The high-tech economy is composed of industries and economic activities that have achieved prominent importance in the Irish economy within the last twenty-five years. Some of the industries have existed on the island for far longer periods of time, but until now, they were not major factors in the economy. Their growth, development, and importance correspond with changes in technology, investments, planning, development, and the economy.

The story of the high-tech economy tells of how Ireland, one of Western Europe's “poor four” in the 1980s, became one of the fastest-growing economies in the world by 2002. Many factors were involved in bringing about this economic miracle. Perhaps none was more important than the government's decision to join the European Union. The European Union has promoted the planning and development of a modern transportation network, has allocated funds for both tourism and industrial development, and has offered economic assistance programs throughout the country.

Foreign corporations that have invested in Ireland, establishing businesses and factories, have also played an important role. At the same time, the Irish government also deserves credit for this success. For over fifty years, it developed plans and programs that it believed would provide a better standard of living for the Irish people. Some were immediately successful, some failed, and some took a long time for results to be seen.

IRELAND TODAY

Today, Ireland's economy is among the strongest in Europe. In recent years, the growth of Ireland's Gross Domestic Product (GDP) has exceeded that of Germany, France, and the United Kingdom. It has even exceeded the growth of the United States. A lot has changed for Ireland's economy in the last decade. Changes began after the country joined the European Union in 1973. Six countries—France, Germany, Italy, Belgium, the Netherlands, and Luxembourg—created a steel and coal community in the 1950s. The European Union began as a way to trade goods across country borders without taxes and quotas. Over time, the European Union has grown to be an economic and political union among 15 countries, including Ireland and the United Kingdom.

One of the main goals of the European Union has been to help its poorest members—historically Ireland, Portugal, Spain, and Greece—gain wealth. Through its many programs, the wealthy European Union countries help build infrastructure (roads and bridges) and communications (phone and cable lines) in the poorest regions. This, the European Union hoped, would help bring business into the poorest areas of Europe.

Ireland offers a perfect door into the European Union, particularly for American corporations.Most North Americans speak English and American schools have stressed English over foreign languages for decades. In Ireland, American companies have found employees whose primary language is English. These companies have been attracted by many things, including Ireland's less expensive land and its new infrastructure and communications (built with European Union funds). Today, many migrants come to Ireland in search of jobs. Ironically, many of these immigrants arrive from the United Kingdom.

The European Union has invested billions of euros in the Republic of Ireland. The money has been invested in job creation, upgrading transportation and utilities, developing tourism, and protecting the environment. It has changed the economy of Ireland from one of Europe's poorest countries to one of its most vital.Northern Ireland, however, remains one of the poorest regions in the United Kingdom. It now lags well behind the Republic of Ireland in infrastructure development, tourism, and technologies. The primary reason, of course, is the ongoing civil conflict and related acts of terrorism that continue to occur there.

One of the most important factors contributing to Ireland's recent success is the development of an excellent educational system. For centuries, the Irish people were denied full access to learning. Yet the children of Irish people who moved to other lands did well in school and eventually prospered in a great variety of economic ventures. This helped the Irish people recognize the importance of learning. It also encouraged them to support the development of a quality educational system for the Republic of Ireland. For many years the country did not have enough jobs for its people.

The education system was knowingly educating Irish children so they could emigrate (an emigrant is one who leaves) to other lands and earn a living. Recently, Ireland's new and expanding industries have successfully retained technical school and university graduates at home. Some businesses and industries have even sent recruiters to Boston and New York City to persuade thousands of young Irish to return home to work.

BUSINESS AND INDUSTRY

Today, business, industry, and tourism are the major forces in Ireland's economy. The country is a major European and world manufacturer for a wide variety of high tech and new industrial products. It is the European center for computer hardware and software.Virtually every big player in this industry has a presence in Ireland. The country serves as the headquarters, manufacturing center, or service center for many international companies. They include Microsoft, Dell, IBM, Apple, Hewlett Packard, Motorola, Seagate, and Mitsubishi, to name just a few. Over 1,200 different companies from around the world have selected Ireland as their center for European operations. The greatest concentration of industries is in Dublin and surrounding communities such as Malahide and Swords.

Increasingly, however, they are becoming widely scattered across the Irish landscape.

Related industries are now developing. These industries produce equipment, services, or other essentials for firms involved in data processing, office machinery, communications, and electrical products.Other growth categories include cement and related construction and building materials needed for the expansion of housing and highway building. Furniture manufacturing for both office and home is of growing importance. Ireland's pharmaceutical and chemical industries are thriving. So, too, is petroleum refining and natural gas distribution.

TOURISM

In recent years, Ireland has become a major European tourist destination. Tourists from America, Canada, Australia, New Zealand, the European mainland, the Middle East, and Japan, in particular, increase in number annually. Such increases have stimulated the building of transportation facilities, hotels, and other accommodations to which tourists are accustomed.

For the last quarter century, Ireland has vigorously promoted tourism. Their effort has paid off, because tourism is now the largest single contributor to the country's new economy. More than 6 million people visit Ireland a year, and the number continues to grow. Tourism, in the form of tourist expenditures and related taxes, generates over 6 billion euros a year for the Irish economy. Tourism employs one out of every eight Irish workers. It also employs a significant number of temporary summer workers from other countries. One significant benefit of tourism is that it often attracts visitors to small towns, rural areas, and unique landscapes.

Ireland's most important tourist attraction is its people. The Irish people make tourists from around the world feel welcome. Ireland provides the visitor with a land of great beauty, a safe and clean environment, and a “no problem” pace of life. It also offers a variety of recreational and sporting opportunities, especially golf and fishing.

Among Ireland's major tourist attractions are uniquely beautiful natural areas and landscapes such as the Cliffs of Moher and the Ring of Kerry. Cultural attractions include Muckross House, Kilkenny Castle, and the Cobh Heritage Centre. Religious attractions include St. Brigid's Cathedral, Glendalough Monastery, and the Shrine at Knock. Other attractions include handicraft centers, museums, historic sites, architectural achievements, tidy towns, and traditional homes and communities.

The rise in tourism has affected another area of Ireland's economy, the production of traditional goods. Tourists want souvenirs, and the industries that produce Irish-knit wool sweaters, linens, and crystal are expanding to meet the tourist demands.

For example, the famous Aran wool sweaters are handwoven on the Aran Islands. They have become increasingly popular with tourists and are now sold throughout the world. As a result of the increased demand, similar wool sweaters currently come from cottage industries located almost anywhere in Ireland. Today, Ireland dresses people from head to toe. It is noted for fine woolen suits and blazers, scarves, and hats. It produces cotton slacks and dresses and cotton and nylon hosiery. It also produces several lines of footwear. Irish lace and linens are also cooperative cottage industries centered at Carrickmacross. The prices paid for lace and linen products now reflect the time and artistic talents required to produce them.

Another traditional Irish product in great demand is beautiful pottery and china produced in several communities. Perhaps the most valuable traditional product today is crystalware. This industry centers at Waterford where it began in 1783. In the mid-1900s, the crystal industry fell upon hard times and almost ceased. Waterford Crystal rebounded, however, and has gained spectacular acceptance on the world market. Today, other crystal manufacturers have successfully emerged in Tipperary, Galway, and elsewhere to meet the demands of high-tech economies.

BANKING AND FINANCE

The European Union, industrialization, and tourism expansion have stimulated the growth of Ireland's banking and financial services. The Central Bank of Ireland is located in Dublin and the basic unit of currency is the euro. The Central Bank of Ireland is also a member of the European Central Bank (ECB). Ireland swiftly and almost seamlessly converted from the Irish pound, or punt, to the euro in 2002. Commercial Irish banks have developed an extensive network to serve the needs of the people. They also have established operations in a variety of other countries around the world. At the same time, major foreign banks have established operations in Ireland, primarily Dublin.

WORLD TRADE

Ireland's major trading partners are other European Union countries, especially the United Kingdom, Germany, and France. The United States and Japan are also major trade partners. In addition to food and beverage products, major exports include computers and electronic equipment, pharmaceuticals, chemicals, and clothing. Principal imports are machinery, trucks and automobiles, iron and steel, petroleum products, and food products.

TRANSPORTATION

The transportation infrastructure of Ireland is undergoing significant change. It has 54,476 miles (87,674 kilometers) of highway. Almost 95 percent of the road system is paved.Many of the roads are very narrow, providing access to isolated pastures, farmsteads, and communities. Today, the highways connecting the major cities and towns are undergoing substantial upgrading to handle the increased traffic resulting from the expansion of trucking, automobiles, and tour coaches. Until recently, all roads passed through the city center of each community. The new highways include bypasses, which direct traffic—and some say business—away from the traditional economic center.

Ireland has two types of railroad, broad gauge and narrow gauge. Both differ from the standard gauge found in the United States; one is larger and the other narrower. The railroads are government-owned and operated. The broad gauge railroad is administered by the Irish Transport Company. It links major cities and ports through approximately 1,200 miles (1,931 kilometers) of track. The narrow gauge track is operated by the Irish Peat Board. It is used to transport peat to briquette processors and power plants.Narrow gauge rails total 850 miles (1,368 kilometers) of track.

The railroads and highways lead to Ireland's major port facilities. These port cities serve as the land's export and import centers. They are also harbors for the ferryboats that transport motor vehicles between Ireland and other European gateways. The major port cities are: Dublin, Cork, Galway, Limerick, Waterford, Drogheda, Dun Laoghaire, Arklow, Foynes, and New Ross. About 75 percent of Ireland's world trade flows through these seaports.

Ireland has developed major international airports at Dublin, Shannon, Cork, and Knock. Dublin and Shannon are by far the two most important air hubs in Ireland, with numerous daily flights to major world cities. Ireland also has 40 small paved and unpaved airport and landing facilities.Well in excess of ten million passengers a year fly through Ireland's airports. Pipelines for natural gas transmission and distribution are becoming increasingly important in Ireland. Natural gas and petroleum must move from the coastal fields and refineries to distribution centers. The island is experiencing increasing demands for natural gas and propane for home and industry.

TELECOMMUNICATIONS INFRASTRUCTURE

One of the most important factors in the recent economic growth of Ireland is its telecommunications infrastructure. The development of a “world class” digital telecommunications system put Ireland at the forefront of European Union expansions. The Irish government operates or authorizes all communications services. This includes the postal service, telephone, telegraph, radio, television, Internet service providers, optical fiber, and telecommunications. Deregulation now allows telecommunication companies to compete for Ireland's business. This is expected to further expand such facilities. Government agencies, or statutory bodies, operate all Irish postal, telegraph, telephone, radio, and television services.

SUMMARY

The story of Ireland's traditional and high-tech economies is one of spectacular change. In just 25 years, Ireland has escaped thousands of years of economic suppression and poverty to become one of the world's fastest-growing economies. In a short time, it has moved from an economy based primarily on agriculture to a diversified high-tech economy that includes manufacturing, tourism, transportation, banking, and trade in its economic story. The next chapter of this story will address how Ireland can continue to improve its infrastructure, further expand educational programming, protect the environment, raise the standard of living, adapt to cultural change, and enhance its economy.