IT helps to 'globalise' Ireland

09-01-2002

by Andrew McLindon

Ireland is the world's most global nation thanks in part to its success in attracting IT investments over the last number of years, according to a new report.

Ireland beat off competition from Switzerland and Singapore to take top spot in the second annual A.T. Kearney/Foreign Policy Magazine Globalization Index. The Republic's high ranking was due to a number of factors including the amount of foreign investment attracted, its favourable tax climate and proximity to the euro zone, and also its high ranking in "personal contact" (international travel and tourism, international telephone traffic and cross-border transfers).

Despite the fact that Ireland is now experiencing a reduction in IT investment from multi-nationals and in many cases a scaling-back in operations by such companies, its efforts in bringing in high-tech companies drew praise from the authors of the report.

"Ireland was among the world's largest beneficiaries of the global boom in high-tech and information technologies. Its success in attracting IT investments in earlier years gave it a first mover advantage when these industries began to experience truly global growth," said the report. "These high-tech investments help explain Ireland's steadily growing FDI (Foreign Direct Investment) inflows, which rose from an average of close to USD3 billion per year throughout the mid-1990s to USD20.5 billion in 2000."

The report does note though that the global downturn in the IT sector has "hit Ireland particularly hard" in the last year, which may affect its future ranking.

"Ireland's ability to attract IT investment was one of the reasons it came first in this list because such developments show how well connected Ireland is to the global economy," commented Paul A. Laudicina of A.T. Kearney.

Laudicina added that although Ireland, in common with many other economies, suffered recently from the technology downturn, he was optimistic that Ireland would score well on next year's index. "Ireland has been doing the right things for a number of years now and as long as it continues to do so it will continue to do well on the listing," he said.

Ireland failed to make the Index's technology top ten, which ranked countries on the number of Internet users, Internet hosts and secure servers they had. This was headed by the US followed by Australia and then Canada.

The report said that nearly 35 percent of the US population were on-line by January, 2001, and that it had one host for every three residents, which was more than triple the ratio in Sweden, Norway and Finland, and more than ten times the rate in the UK. America also maintains 77,000 of the world's 118,000 secure servers, according to the report.

The report also found that Oceania (Australia and New Zealand) is emerging as a regional technology centre and has higher levels of "connectedness" than the Scandinavian countries. "In Australia, the on-line population topped 35 percent in 2000 surpassing the US, while New Zealand ranked fourth in the number of Internet hosts per residents. Both countries also ranked within the world's top five in providing secure servers per capita," the report noted.

According to its promoters, the Globalization Index is a ranking of economic, political, technological, and social integration in 62 countries, representing four-fifths of the world population and more than 95 percent of the world's economic output.

The full report can be found at http://www.atkearney.com/pdf/eng/FP_article_2001_S.pdf