BUSINESS
Ireland drops in world competitiveness
14-05-2003
by
Ireland's competitiveness is declining due to problems like poor infrastructure, particularly Internet access, according to the World Competitiveness Yearbook.
Published by the International Institute for Management Development (IMD) in Switzerland, the report has tracked the competitiveness of nations annually since 1989. The 2003 report looks at the competitiveness of 59 nations using more than 300 criteria across the four categories of economic performance, government efficiency, business efficiency and infrastructure.
In order to make valid comparisons, the report separates countries into one group with populations of more than 20 million people, and a second group for populations of less than 20 million. In group one countries, the top five most competitive nations are the US, Australia, Canada, Malaysia and Germany.
In group two, Ireland ranked 11th out of 29 countries. This represents a fall of three full places over the last three years: Ireland ranked 8th in 2001 and 9th in 2002. Austria and Hong Kong, who were both behind Ireland two years ago, have pulled ahead. Hong Kong is in fourth place in group two; rounding out the top five are Finland (1), Singapore (2), Denmark (3) and Switzerland (5).
Ireland's worst marks were for the speed, cost and availability of Internet access, where it ranked dead last of all 29 countries.
The report's director, Professor Stephane Garelli, told ElectricNews.Net that part of the reason for Ireland's fall is the inconsistency in its infrastructure across the country. "One of the problems of Ireland is that is has pockets of very good infrastructure, but it does not cover the entire country -- that's infrastructure which is traditional as well as advanced, technological infrastructure," Prof. Garelli said. "There is no doubt this has had an impact on the ranking."
He said that while Ireland and the IDA had done a good job of using enticements like tax incentives to attract inward investment, competing nations in the Baltic States as well as places like Puerto Rico are now copying this strategy, and with more success, since their cost bases are lower.
"In Ireland, operating costs have been rising, wages have been rising. This is normal, this is the objective, to increase the prosperity of the people," he said. "But the strategy of Ireland, which used to be a low-cost base for operations like manufacturing, is eroding." The professor said that Ireland must add more value, more productivity and more intelligence, and it must do so as quickly as its operating costs are rising.
The report also notes, however, that small economies like Ireland are suffering not so much from their inadequate domestic structures but from their vulnerability to the international economic situation. This is especially true for Ireland, the report said, where the growth rate has been halved in two years to 5.1 percent, compared to 11.5 percent in 2000.
A full profile of Ireland's competitiveness is available from the IMD Web site.
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