If China is considered the main beneficiary of globalisation, Ireland must be – in per capita terms at least – a close second. The latest trade numbers from the Central Statistics Office (CSO) show goods exports hit a record €208 billion last year, up over €42 billion or 26 per cent on the previous year.
And remember this is just our merchandise trade. Exports of services driven by Apple, Google and Facebook, all of which have big bases here, are bigger in value terms (they were close to €300 billion in 2021). The goods exports figures show the main drivers were exports of chemicals and related products, which covers the pharmaceutical sector here and which accounted for two-thirds (€133.7 billion) of total merchandise exports last year.
So far, the tech crunch hasn’t leached into the pharma sector, which keeps producing bigger and better numbers. Predictions that we would see a mass exodus of firms after a series of patent cliffs in the early 2010s have proved ill-founded. Instead the sector has moved more high-end, manufacturing large-molecule drugs or biologics. Twenty-four of the top 25 pharmaceutical companies in the world now have operations here.
When Ireland joined the EU in 1973, it had a gross domestic product per capita that was 53 per cent of the EU average, the lowest of the then nine member states. By 2017, Irish GDP per capita had reached 184 per cent of the EU average. It has transformed us economically from one of the poorest European countries into one of the richest.
Of course, our new-found wealth doesn’t trickle down evenly. Much of it is also repatriated to the US. It also coincides with a chronic underprovision of public services. There is also the concentration risk that these multinationals bring to economic activity in general and to the State’s tax base.
The tech crunch is bound to play out in corporation tax receipts this year, delivering potentially the first reversal in more than a decade. Nonetheless, it’s not all about tax. Multinational activity makes Ireland a very dynamic economy in terms of employment and activity.