It’s a little outside of my comfort zone, but I am going to comment a little on the wider economy this morning.
The Irish Business and Employers Confederation (IBEC) has made a very bold prediction about growth for the Irish economy this year which has made me sit up and take notice.
After the reports where the Irish government was criticised by Europe for basing our most recent budget on what was regarded as an "optimistic" growth forecast of just 1.2%, IBEC has come out and said that it expects growth this year of 1.8%.
Now, why do you ask is a technology journalist writing about the growth forecasts for the country? Well, as we all know, there is a two stage economy here, with multi-nationals doing very well and indigenous companies doing not so well.
Domestic demand and consumer confidence is very poor and so any growth forecasts have been low and getting lower as the wider situation in Europe and beyond seems stubbornly without improvement, meaning that there is little likelihood of a home-grown recovery.
Within that situation, the technology companies here, all seem to be doing reasonably well, though there have been wobbles with HP having a few issues, Microsoft’s slow burning Windows 8 and Intel’s recent disappointing results. But on the whole, the technology companies have been responsible for a large part of what has been seen as the good side of the two speed economy here in Ireland.
So, where exactly does IBEC see this surge in growth from 1.2 to 1.8% coming from?
Well, there are a few comments in the statement from IBEC that give some indication. Inflation will remain a reasonable 2%, private sector employment will stabilise though the unemployment rate will remain high for a while and investment in machinery and equipment will increase by 8% as businesses invest to meet new needs and demand-so that all look positive then.
But is any of it likely to happen?
Well, the only thing that is different in this statement, apart from the specifics of the predictions, is that there is the stated expectation of a deal on banking debt.
"We are edging towards a deal on Irish bank debt, which could provide a much needed boost in consumer sentiment," said the statement.
It would appear as if the deal on debt would ease the mind of the average Irish consumer and allow confidence to return. That, I would contend, is a bit of a long shot.
Confidence will not return to the Irish consumer until money returns to the Irish consumer and that is unlikely as we still face years of austerity as, irrespective of what happens with the banking debt, we struggle to deal with the aftermath of the near farcical fiscal policies of successions of incompetent governments.
However, the technology sector here, led by people with real vision, may actually be a lifeline. While the likes of Google, eBay, EMC, Apple, Intel, HP, IBM, Microsoft, Oracle, VMware and more continue to base large operations here doing a lot more than administration, Irish people will continue to join these companies and learn the best of corporate culture and how to compete in global markets. That knowledge and experience then benefits the indigenous companies that partner with and work inside these ecosystems.
With organisations such as IT@Cork showing that partnerships between education and technology companies with government support can have significant benefits, there is cause for optimism. It is a genuine example of the benefits of the global economy manifesting itself in Ireland.
But I still can’t help feeling that the IBEC figures are a little optimistic, certainly based on the information in the statement. I doubt that every multinational sector represented here is doing as well as the tech sector.
Still, I’d dearly love the predictions to prove to be correct.
Subscribers 0
Fans 0
Followers 0
Followers