Having climbed back into the top 10 on IMD’s world competitiveness rankings in 2017, Ireland is now back to 12th position. The last time Ireland slipped down this highly prestigious chart it was a reflection of an overheating domestic economy. Should we be alarmed on this occasion?
According to KPMG Manging Partner Shaun Murphy “The slippage in the rankings is disappointing and a lot of hard work needs to be done to improve our position. Notwithstanding the fact that we are still placed third in the euro zone and fifth overall in the EU, there is no room for complacency. Importantly – indicators for scientific and technology infrastructure will play an increasingly important role in Ireland’s future rankings.”
Shaun Murphy also points out that government and business efficiency is a major factor in competitiveness studies and there is a clear role for technology in the delivery of state services. “Ireland’s ability to adopt digital technologies to transform government practices and access to state services for society and for business are essential factors in continued success.” However Murphy also believes that better planning is key to future success. “We need to be more demanding of ourselves in thinking about the medium term. What will our demographics be like? Where will there be demands on infrastructure? How will we house people? What role will technology play in education, in business and in society? What are the likely impacts of artificial intelligence in how society interacts and how our towns and cities work or don’t work? Are we fully up to date about the issues and implications of sustainability and environmental degradation? Our competitors are not just thinking about these issues but are actively implementing policies that will help future proof their countries and maintain competitiveness.”
Taking control of those factors that we can influence is also important. “Competitiveness is a function of many variables and we have to work harder at those which we have some influence over. Currency volatility for example is not something we can influence – but we do have control over matters such as infrastructure. Ensuring high quality digital connectivity to every home and business in the state isn’t just an aspiration – it’s a vital piece of 21st century infrastructure. Meanwhile, bottlenecks and supply shortages in areas such as housing have an economic price and the demographic and supply issues causing these challenges should not come as a surprise.”
The issue of transport is also fundamental to business and is vital for balanced regional development and Shaun Murphy believes that it is another area of opportunity. “The ability to move people and goods quickly around the island is a vital” says Murphy, “Yet our history in developing major infrastructure projects hasn’t always been as efficient as it needs to be. There is an obvious need for a more balanced approach to regional development - so projects such as the M20 Cork - Limerick motorway will enhance the business appeal of Munster and can play a role in taking the pressure off the Dublin region.”
“There are other transport examples to consider that would make a difference. Rail journey times between Dublin and Belfast are relatively unattractive versus going by road and don’t stand comparison with other European cities. Meanwhile, road and rail connectivity to the border regions of the North West from Dublin and Belfast remain poor and add to costs and inefficiencies both in human and business terms whilst reducing competitiveness.”
This is an abridged version of an article which appeared in The Irish Times and is reproduced here with their kind permission.