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Institute for International Integration Studies
IIIS Occasional Paper
No.01/March 2006
Globalisation and the Irish Economy
Philip R. Lane
Department of Economics and IIIS, Trinity College Dublin
and CEPR
Frances Ruane
Department of Economics and IIIS, Trinity College, Dublin
Institute for International Integration Studies
The Sutherland Centre, Trinity College Dublin, Dublin 2, Ireland
T. 353-1-608-3888 F. 353-1-608-3939 W. www.tcd.ie/iiis E. [email protected]
IIIS Occasional Paper No. 01 / March 2006
Globalisation and the Irish Economy
Philip R. Lane
Frances Ruane
The origins of this paper lie in discussions at the National Statistics Board (NSB). The
NSB noted that an increasing number of Central Statistics Office (CSO) series provided
valuable insights into the functioning of Ireland's economy in a globalised context. Some
members of the Board suggested that significant value added of a statistical nature would
be obtained through studying the impact of using CSO data in a more integrated manner.
In response, the Director General of CSO agreed to support, through facilitating access to
detailed CSO data and the provision of partial funding, a project on globalisation
proposed by Professors Phillip Lane and Frances Ruane of the Economics Department
and Institute for International Integration Studies (IIIS) at Trinity College Dublin. The
CSO will evaluate the output from the project with a view to incorporating relevant
analyses into its standard programme of statistical releases at a future date.
DISCLAIMER
Any opinions expressed here are those of the authors and not those of the IIIS, the NSB or the CSO.
1
Globalisation and the Irish Economy1
Philip R. Lane2
IIIS and Economics Department, Trinity College Dublin and CEPR
Frances Ruane2
IIIS and Economics Department, Trinity College Dublin
JEL Classification Numbers:F31, F32
Keywords: Globalisation, Ireland
Abstract
This paper combines information from a wide range of databases maintained by the
Central Statistics Office (CSO) to explore the pattern of Ireland’s economic globalisation.
It begins by considering geographical and sectoral patterns of trade in goods and services,
to discover the identities of Ireland’s main trading partners and what is traded. It then
examines Ireland’s international financial linkages across a number of categories (foreign
direct investment, portfolio investment, and other investment). It then considers the role
of foreign-owned firms in production and trade in both the manufacturing and services
sector, taking into account differences across sectors in the relative importance of
foreign-owned and Irish-owned firms. Finally, it looks at immigration patterns along
dimensions such as geography, education, employment status, and sector of employment.
The analysis shows that Ireland acts as a production and financial intermediary that has
enormous liabilities to foreign investors and imports large volumes of goods and services
but also holds very large foreign asset positions and has a spectacular export record. An
important feature is that the pattern of Ireland’s international economic linkages is highly
asymmetric – the United States is an important supplier of capital and intellectual
services, Asia is growing as a source of manufacturing imports, while intra-European
flows dominate in terms of trade in final products and migration flows. In addition, we
affirm the export-platform nature of direct investment into Ireland, while highlighting the
high degree of international integration of Irish-owned firms. An additional dimension in
recent years is the role played by large-scale immigration in relieving labour shortages in
the Irish economy, in both the traded and non-traded sectors.
1
The report is available at http://www.tcd.ie/iiis/pages/publications/occasionalpaper.php
Email: [email protected];[email protected]. We are grateful to members of the National Statistics Board for
helpful feedback in the process of preparing this report. We thank Michael Connolly and his colleagues at
the Central Statistics Office for extensive help with data requests, Vahagn Galstyan and Alan Reilly for
excellent research assistance, and Gerry Brady for editorial assistance in the production of the report. We
also thank Alan Barrett, Patrick Honohan, John O’Hagan and participants in the TCD Economics Lunch for
their suggestions. Lane also gratefully acknowledges the financial support of the Irish Research Council on
Humanities and Social Sciences (IRCHSS) and the HEA-PRTLI grant to the IIS. The views expressed here
are the authors’ only.
2
2
Table of Contents
I Introduction ..........................................................................................................................4
II
A
B
C
International Trade ............................................................................................................7
Aggregate Trade....................................................................................................................7
Trade in Goods ......................................................................................................................7
Trade in Services.................................................................................................................12
III International Financial Integration...............................................................................17
A Ireland’s International Balance Sheet .................................................................................17
B Broad Patterns in FDI..........................................................................................................18
C Patterns in International Portfolios......................................................................................21
D Other Debt Assets and Liabilities .......................................................................................26
IV Globalisation and Production.........................................................................................29
A Manufacturing.....................................................................................................................29
B Services ...............................................................................................................................40
C Summary .............................................................................................................................50
V
A
B
C
D
E
F
Globalisation and Migration ............................................................................................52
Population Stock .................................................................................................................53
Education.............................................................................................................................56
Economic Status..................................................................................................................57
Sectoral Status.....................................................................................................................60
Geographic Distribution ......................................................................................................63
Migration Flows ..................................................................................................................64
VI Conclusions ......................................................................................................................70
References...............................................................................................................................72
Appendix.................................................................................................................................74
3
I. INTRODUCTION
It is widely accepted that that international economic integration is a defining
characteristic of the Irish economy. Globalisation is perceived as both an opportunity (to
sell goods and services abroad) and a threat (if Ireland is uncompetitive, its domestic
industries will decline in the face of cheaper imports of goods and services). There is
also increasing awareness of the impact of globalisation on the labour market – having
experienced net emigration for decades, Ireland is now the recipient of significant
immigration in relative terms. Furthermore, Ireland is highly networked into global
capital markets, through significant flows of foreign direct investment and other forms of
financial capital, part of which results from the activities in the Irish Financial Services
Centre (IFSC).
While the term ‘globalisation’ is a contemporary one, and the present trend towards
increased international integration is relatively recent, it is important to recognise that
there have been high levels of economic globalisation in the past.3 Starting in the second
half of the nineteenth century, there was a very high level of economic globalisation
which continued until the Great Depression in the 1930s, when it came to an abrupt end
as countries raised tariffs and quotas in response to the economic downturn.4 That period
was associated with, inter alia, high levels of international trade (facilitated by lower
shipping and rail costs), labour migration from Europe to the New World (driven by both
economic and political factors), and capital and resources moving between Europe and
colonies in Asia and Africa. Contemporary globalisation has been triggered by declining
trade barriers, the liberalisation of financial markets, regional economic agreements,
reduced transport costs, transportable technologies, and the communications revolution
which have affected all markets.
Globalisation is not new to the Irish economy. It was centrally involved in the earlier
globalisation wave as part of the wider United Kingdom (UK), which was the hub of the
British Empire. In addition, in that period there were exceptional rates of emigration.
However, the nature of that economic globalisation was somewhat different since most of
trade and capital movements related to the UK sphere, as did a large amount of the
outward migration. By contrast, Ireland’s contemporary experience with globalisation ,
while being largely Euro-centric, involves a much greater degree of openness in many
more sectors of the economy and has been associated with increasing trade in services
and a wider variety of consumer and capital goods.5
For several decades, enterprises operating in Ireland were shielded by the very high
barriers to trade and foreign direct investment introduced in the 1930s. As these were
reduced from the 1950s onwards, Ireland has steadily become much more integrated into
the global economy. The extent of Ireland’s globalisation is in part due to its small size,
which both limits the extent to which it can meet domestic needs from domestic sources
3
The Oxford English Dictionary identifies its first use as being in The Spectator magazine in 1962; the
earliest reference to globalisation in book titles in the Journal of Economic Literature is in 1985!
4
See O’Rourke and Williamson (1999) for an analysis of this phase of globalisation.
5
For instance, niche products can now be acquired even from distant sources, as a result of improvements
in logistics and transport technologies. In general, intra-industry trade has been increasingly important
since the 1960s.
4
and the extent to which many enterprises can produce efficiently unless they can access
larger markets. In effect, by recognising itself as a prototypical small open economy, and
increasingly adopting policies appropriate to that context, Ireland was well set up to
engage more fully with the accelerated pace of globalisation as it emerged in the mid1980s.
It is widely agreed that Ireland is to the forefront of the economic globalisation process.
Indeed, standard trade and financial indicators show that the scale of international
economic transactions between Ireland and the rest of the world ranks near the top of any
group of comparator countries: see, for example, the globalisation indices produced by
Foreign Policy and the Centre for the Study of Globalisation and Regionalisation at
Warwick University. Globalisation is manifest in the extent to which we trade goods and
services, the extent to which we import and export capital in the form of foreign direct
investment (FDI) and other financial assets, the extent to which foreign companies
control domestic production, and the extent of immigration. While a cross-country
comparison of selected globalisation indicators can be very revealing, it is no substitute
for an in-depth analysis of the nature of economic globalisation for an individual
country.6 Accordingly, the primary objective of this study is to provide a comprehensive
empirical analysis of the international economic linkages between Ireland and its
international trading partners.7
To achieve this goal, we combine information from a wide range of databases maintained
by the Central Statistics Office (CSO). First, we consider geographical and sectoral
patterns in trade in goods and services, to discover the identities of Ireland’s main trading
partners and what is traded. Second, we examine Ireland’s international financial linkages
across a number of categories (FDI, portfolio investment, and other investment). Third,
we consider the role of foreign-owned firms in production and trade in both the
manufacturing and services sector, taking into account differences across sectors in the
relative importance of foreign-owned and Irish-owned firms. Finally, we consider
immigration patterns along dimensions such as geography, skill level and employment
status. For Ireland this is a new dimension to our globalisation, as a country that had
significant outward migration for most of the nineteenth and twentieth centuries.
Our methodological approach is to focus on volume-based measures of international
economic integration. This is also the approach underlying the international globalisation
indices mentioned above. However, it is important to keep in mind that a volume-based
approach understates the full impact of globalisation, since international economic
integration also operates through its influence on the structure of international relative
prices and the degree of market competition. For instance, the threat of import
competition in a particular industry may be sufficient to reduce domestic prices,
delivering gains to consumers even if no cross-border trade in that sector actually takes
place. Similarly, the wage distribution is affected by the international allocation of
capital, even in sectors not directly exposed to foreign competition.
6
For example, the range of our analysis goes considerably beyond the summary indicators outlined in
OECD (2005).
7
The term globalisation also encompasses social, political, legal and cultural dimensions of international
integration. However, we confine attention in this report to economic indicators.
5
An important theme throughout this report is that globalisation is not a uniform process:
the strength of Ireland’s international linkages varies across countries and sectors.
Moreover, the geography of Ireland’s international economic activity varies considerably
across the trade, financial, production and migration dimensions.
Understanding the bilateral patterns in the globalisation process is essential for several
key policy dimensions. To take FDI as an example, Ireland gains more in terms of
productivity growth by hosting FDI from technologically-innovative countries than from
less-advanced countries. The geography of cross-border economic linkages is also
important in assessing the vulnerability of Ireland to various international economic
shocks: clearly, a slowdown in the US, the UK or the euro area matter more for Ireland
than a recession in some other economic zone where the bilateral economic linkages are
weaker. Moreover, information on the sectoral composition of trade and FDI is helpful in
indicating which industries are most vulnerable to particular external shocks – for
instance, an external shock will differentially affect the foreign-owned and indigenous
sectors to the extent that they sell in different markets or produce different products. By
the same token, in benchmarking Ireland’s international competitiveness, it is more
important to monitor trends in “economically-close” countries than in “economicallyremote” territories. For these reasons, we place heavy emphasis on understanding the
geographical and sectoral patterns in Ireland’s external economic activity.
The structure of the rest of the report is as follows. Section II contains an analysis of trade
patterns in goods and services. We turn to the composition of Ireland’s international
financial balance sheet in Section III. The role of foreign-owned firms in the domestic
production sector is analysed in Section IV. The globalisation of the labour market is
addressed in Section V. Concluding remarks are offered in Section VI.
6
II. INTERNATIONAL TRADE
A. Aggregate Trade
We begin by presenting the aggregate data on Ireland’s exports and imports. Table II.1
shows the levels of aggregate trade in goods and services over 2001-2003. As is well
known, Ireland has very high levels of trade in both goods and services.8 The net trade
balances also show a striking pattern – a very large trade surplus in goods, which is
partially offset by trade deficit in services.
Table II.1 Scale of Aggregate Trade, 2001-2003
Exports/ Imports/
GDP
GDP
(%)
(%)
Trade Balance
/GDP
(%)
Goods
67.8
41.5
26.3
Services
23.7
34.4
-10.7
Total
91.5
75.9
15.6
Note: Data are averaged over 2001-2003. Source: Authors’ calculations based on IMF data.
B. Trade in Goods
We next analyse the geographical patterns in Ireland’s international trade in goods. The
cross-country distribution of Ireland’s goods trade (exports plus imports) is illustrated in
Figure II.1. Ireland reports total trade of less than €10 million with 159 of the 232
destinations in the CSO trade database, with trade exceeding €1 billion for only 21
countries (these collectively account for more than 90 percent of total trade). The ‘€1
billion’ club comprises the major advanced economies, plus the six most important
emerging Asian economies (China, Hong Kong, South Korea, Malaysia, Singapore and
Taiwan).
Table II.2 shows the geographical allocation of exports and imports of goods between
Ireland and the rest of the world, using data averaged over 2001-2003. The European
market accounts for broadly similar trade shares: 67.8 percent of exports and 63.1
percent of imports. On the export side, the euro area is the most important destination,
whereas the UK is the major source of imports. The United States is by far the most
important non-European export destination and its import share is broadly similar. The
8
The fact that total exports are equal to 91.5 percent of GDP does not mean that this fraction of GDP is
exported, since exports and imports are measured on a gross basis whereas GDP only measures the value
added in the Irish economy – if exports embodied a high import content, the ratios of exports and imports
to GDP could far exceed 100 percent.
7
US is very closely trailed by Asia as a source of imports, but that region accounts, as yet,
for a relatively proportion of Ireland’s exports.
Among the emerging market economies, the new member states of the European Union,
Asia and Latin America collectively represent only a minor proportion of aggregate Irish
trading activity. The only exception is that China now rivals Japan as the major Asian
supplier of imported goods to Ireland, with China the only nation with which Ireland runs
a significant bilateral deficit in goods trade.9
We turn next to the sectoral composition of goods trade. Table II.3 shows the distribution
of trade across five aggregated sectors. The chemicals and (broadly-defined)
machinery/electronics sectors are roughly similar in size in terms of export activity and
together account for 72.8 percent of total exports. It is noteworthy that the chemicals
sector is proportionately much less significant in terms of import activity, with the
sectoral trade surplus amounting to a staggering 20.7 percent of GDP.10 In contrast, the
machinery and agri-food sectors show considerable two-way trade, even if the disparity
between aggregate exports and imports means that these sectors also run sizeable sectoral
trade surpluses of 5.0 and 2.2 percent of GDP respectively.
We probe the sectoral composition of goods trade in more detail in Table II.4 by
analyzing the geographical distribution of trade on a sector-by-sector basis. The UK is
especially prominent as a trading partner in the agri-food sector, accounting for 46.4
percent of exports and 53.3 percent of imports (moreover, cross-border trade with
Northern Ireland is disproportionately important in this sector). However, the agri-food
sector shows a significant degree of export diversification, with 8.8 percent of exports
going to the Middle-East and North African and Sub-Saharan African regions and 4.4
percent to Asia. On the import side, the agri-food sector is particularly important in terms
of bilateral linkages with Latin America. The UK is also the most important trading
partner in the commodities sector, reflecting the importance of imports of North Sea Gas.
The commodities sector is also the largest sector in terms of imports from sub-Saharan
Africa.
Turning to the twin engines of Irish manufacturing activity - chemicals and
machinery/electronics - there are clear differences in the geographical pattern of trade
across the two sectors. For the chemicals sector, the euro area and the US are the major
export destinations, with the UK relatively unimportant. On the imports side, this sector
has significant linkages with Switzerland and Japan, with the UK taking a relatively
larger role as a source of imports compared to its lesser significance as an export
destination in this sector.
A noteworthy feature of the machinery/electronics sector is the prominence of Asia as an
export destination but especially as a source of imports. In this regard, China has
overtaken Japan as the single most important source of machinery imports. The UK and
9
This is slightly misleading since imports from China typically embody components produced in other
Asian economies that are exported to China for final processing.
10
Sectoral trade surpluses are only partially informative, since a given sector may import considerable
volumes of intermediate goods that are classified under other sectoral categories.
8
euro area are the most important export destinations, together accounting for 60 percent
of sectoral exports, with the US accounting for a share of less than 12 percent.
Figure II.1 Distribution of Goods Trade.
80
Number of countries
%Trade
70
60
50
40
30
20
10
0
1m>TRADE
10m>TRADE>1m
100m>TRADE>10m 1bn>TRADE>100m
10bn>TRADE>1bn
TRADE>10bn
Note: The columns show number of countries in each trade (exports plus imports) category, using average
values over 2001-2003. The %Trade line shows percentage of total trade attributable to each category.
9
Table II.2 Geographical Distribution of Goods Trade Aggregate Data
Europe
of which
UK
Euro Area
EU15
New Member States
North America
of which
US
Canada
Export
Shares
%
67.8
Import
Shares
%
63.1
21.9
38.3
62.2
0.9
35.0
21.2
58.5
1.3
19.1
17.0
18.5
0.6
16.0
1.0
Asia
of which
Japan
China
India
8.0
16.8
3.0
0.5
0.1
4.0
3.1
0.3
Latin America
Middle East/North Africa
Sub-Saharan Africa
Rest of World
1.1
1.4
0.7
2.0
1.3
0.6
0.6
0.7
100.0
100.0
Total
Note: Trade shares are based on average exports and imports over 2001-2003.
Source: Authors’ calculations based on CSO data.
10
Table II.3 Sectoral Composition of Aggregate Goods Trade
Exports Imports
Agri-Food
Commodities
Chemicals and Related Products
Machinery and Transport Equipment
Other
7.7
1.4
37.5
35.3
18.2
7.4
5.7
11.2
45.5
30.2
Note: Agri-Food combines the Food & Live Animals and the Beverages & Tobacco sectors. Commodities
combines: Crude Materials, inedible, except Fuels; Mineral Fuels, Lubricants and Related Materials; and
Animal & Vegetable Oils, Fats and Waxes. Other also includes: Manufactured Goods, classified chiefly by
material; and Miscellaneous Manufactured Articles.
Table II.4 Geographical Distribution of Goods Trade Sectoral Analysis
Exports
Other
Machinery
Chemicals
Commodities
AgriFood
Other
Machinery
North America
of which
US
Canada
Chemicals
Commodities
AgriFood
Europe
of which
UK
Euro Area
EU15
New Member States
Imports
78.9
90.6
64.8
68.2
66.6
84.8
85.1
71.3
53.7
66.3
46.4
27.7
75.7
0.7
41.5
34.1
77.8
1.5
10.5
46.4
57.7
0.4
27.6
32.7
63.3
1.6
22.3
37.3
62.3
1.0
53.3
29.4
83.8
0.5
51.2
10.4
63.7
2.2
30.0
24.2
62.1
0.5
32.9
16.8
51.0
1.6
32.5
28.3
62.7
1.1
4.8
5.0
28.6
11.9
20.4
6.2
4.8
21.5
17.4
19.6
3.9
0.9
4.5
0.5
27.8
0.8
11.6
0.3
19.8
0.5
5.7
0.5
4.1
0.7
19.8
1.6
16.5
0.9
18.6
1.0
Asia
of which
Japan
China
India
4.4
2.5
3.4
14.2
7.3
1.9
2.2
6.1
26.7
12.2
0.7
0.1
0.0
0.1
0.6
0.8
2.4
0.2
0.0
3.5
1.2
0.2
4.4
0.3
0.2
0.1
0.2
0.2
0.2
0.8
0.1
4.8
0.4
0.4
4.3
4.8
0.1
4.8
2.8
0.6
Latin America
Middle East/North Africa
Sub-Saharan Africa
Rest of World
1.8
5.4
3.4
1.2
0.3
0.5
0.3
0.8
1.5
0.5
0.2
0.9
0.6
1.6
0.9
2.6
0.9
1.1
0.4
3.4
5.2
0.7
1.9
-0.7
1.3
0.5
5.5
0.5
0.3
0.6
0.0
0.3
1.4
0.4
0.1
0.3
0.6
0.8
0.3
0.3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Total
Note: Export and Import shares are calculated as averages over 2001-2003.
11
C. Trade in Services
We turn next to an analysis of trade in services in Figure II.2 and Tables II.5-II.7.11
Although services exports are only one third of the value of goods exports, Table II.1
showed that the import of services is 80 percent the level of the import of goods. As such,
Ireland’s international trade in services is now a highly significant feature of the
economy. At a broad level, consistent with the pattern of trade balances in Table II.1, part
of Ireland’s role in the global production chain is to transform imported services inputs
(e.g. intellectual property) into exported manufactured goods.
Figure II.2 displays the cross-country distribution of Ireland’s services trade. The CSO
reports the bilateral levels of services trade only for 68 territories, compared to 232 for
goods trade. While this in part is the result of confidentiality issues, it also reflects the
much greater concentration of services trade. Bilateral services trade exceeds €1 billion
for just ten countries, which together account for 88 percent of services trade; there are a
further 21 countries with bilateral services trade exceeding €100m, so that in effect 99
percent of services trade is with these 31 countries.
With respect to the export of services, Table II.5 shows that, as with goods trade, Europe
is the major market for Irish service exports and, to a lesser extent, as a source of our
service imports. It also shows that the UK is a relatively more important destination and
the US and Asia are relatively less important destinations for services exports, as
compared to the geographical pattern in goods exports. On the import side, the striking
feature is that the US is the source of one third of services imports, which is twice its
share in goods imports. This is in line with the notion that the US-owned affiliates in
Ireland are intensive importers of intellectual-property services from their parent firms. In
contrast, the UK accounts for only 20 percent of the import of services, in contrast to its
35 percent share of goods imports.
The sectoral composition of services trade is displayed in Table II.6. On the exports side,
the three largest sectors are ICT, finance and communications/transport. On the imports
side, in line with the discussion above, business services and royalties account for the
largest shares. In terms of sectoral trade balances, these two sectors collectively run a
trade deficit of 21 percent of GDP; in contrast, the ICT sector generates net exports in
services equal to 8 percent of GDP.
11
See also the analysis in Barry (2005).
12
Figure II.2 Distribution of Services Trade
60
No.
%Trade
50
40
30
20
10
0
1m>TRADE
10m>TRADE>1m
100m>TRADE>10m
1bn>TRADE>100m
10bn>TRADE>1bn
10bn>TRADE
Note: The columns show number of countries in each trade (exports plus imports) category, using average
values over 2001-2003. The %Trade line shows percentage of total trade attributable to each category.
13
Table II.5 Geographical Distribution of Services Trade Aggregate Data
Europe
of which
UK
Euro Area
EU15
New Member States
North America
of which
US
Canada
Asia
of which
Japan
China
India
Latin America
Middle East/North Africa
Sub-Saharan Africa
Rest of World
Total
Export
Shares
%
68.94
Import
Shares
%
54.16
27.34
33.13
63.66
0.91
19.76
29.93
50.88
0.07
12.02
33.88
11.54
0.48
33.45
0.43
4.88
3.09
1.18
0.13
0.10
1.24
0.07
0.01
3.07
0.81
1.07
10.01
2.47
0.64
0.34
6.07
100.00
100.00
Note: Trade shares are based on average exports and imports over 2001-2003.
14
Table II.6 Sectoral Composition of Aggregate Services Trade
Export
Shares
%
21.5
Import
Shares
%
10.5
Communications & Transport
11.2
6.3
Business Services
18.2
45.1
0.8
28.1
ICT
37.5
1.2
Tourism
10.9
8.7
0.1
0.1
Finance & Insurance
Royalties
Other
Note: Trade shares are based on average exports and imports over 2001-2003.
Table II.7 Geographical Distribution of Services Trade Sectoral Analysis
Exports
Imports
OTHER
TOURISM
ICT
ROYALTIES
BUSINESS
COMM&TRAN
FIN&INSUR
OTHER
TOURISM
ICT
ROYALTIES
BUSINESS
COMM&TRAN
FIN&INSUR
Europe
of which
UK
Euro Area
EU15
New Member States
66.3
72.2
51.1
9.0
79.2
69.1
100.0
61.3
50.9
58.3
33.6
74.2
89.7
89.6
27.4
34.3
63.7
-0.2
46.2
23.0
71.1
0.1
22.2
21.9
47.6
0.3
6.0
2.2
8.9
0.0
19.1
45.0
69.2
2.4
45.9
21.6
67.5
0.0
92.3
7.7
100.0
0.0
30.7
26.7
58.4
0.1
34.5
13.1
48.0
0.1
17.4
33.6
53.3
0.5
8.7
23.0
31.8
1.4
43.0
27.1
71.4
1.5
39.9
49.8
89.7
0.0
72.0
15.3
87.3
0.0
North America
of which
US
Canada
18.0
11.5
12.8
65.2
4.3
22.4
0.0
23.1
19.9
30.6
54.8
9.9
10.3
0.0
17.1
0.9
11.1
0.4
12.6
0.1
65.2
0.0
4.3
0.0
20.5
1.9
0.0
0.0
22.1
1.0
18.9
1.0
30.0
0.5
54.8
0.0
9.5
0.3
10.3
0.0
0.0
0.0
Asia
of which
Japan
China
India
4.2
1.6
13.3
16.5
3.2
0.6
0.0
4.9
5.6
3.2
2.6
4.0
0.0
10.4
2.1
0.1
0.0
0.1
0.0
0.0
0.7
0.4
0.4
10.2
0.2
0.0
1.2
0.1
0.0
0.6
0.0
0.0
0.0
0.0
0.0
1.7
0.0
0.0
3.4
0.1
0.0
1.1
0.1
0.0
1.2
0.0
0.0
0.1
0.1
0.1
0.0
0.0
0.0
10.4
0.0
0.0
Latin America
Middle East/North Africa
Sub-Saharan Africa
Rest of World
3.8
0.2
1.7
5.8
0.2
0.2
0.1
14.1
11.7
0.7
0.8
9.6
8.0
0.2
0.0
1.1
0.1
1.7
1.5
10.1
0.0
0.0
0.0
7.9
0.0
0.0
0.0
0.0
5.1
0.1
1.2
4.2
2.6
0.2
0.1
20.8
0.9
1.1
0.5
5.5
4.8
0.2
0.0
4.0
0.6
3.7
0.1
7.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Total
Note: Trade shares are based on average exports and imports over 2001-2003.
15
Table II.7 shows how the geographical distribution of services trade varies across sectors.
A noteworthy feature is the importance of the euro area as a destination for exports in the
predominant ICT sector. The European focus is least evident in the business services
sector, with Asia and Latin America together accounting for 25 percent of exports in this
sector.
Services exports to the US are largely accounted for by the financial and tourism sectors.
However, it is also worth noting that the US is the major destination for the export of
royalties services, even if Table II.6 showed that this is a relatively minor export sector.
In terms of sectoral shares, the UK shows up most prominently in communications,
transport and tourism, but is important in all sectors except the tiny market for export of
royalties. This is consistent with the predominance of UK investment in the traditional
sectors of the economy.
On the imports side, the most striking feature in Table II.7 is the dominant role of the US
as a source of royalty imports, accounting for 55 percent of total imports in that sector.
Again, this is in line with the interpretation that American firms use Ireland as a location
to transform intellectual property that is created in the US into final products. The US is
also important in the business services sector, which is the single most important sector
for services imports. The euro area is the second most important source of services
imports in these two sectors, with the UK playing a relatively minor role.
In contrast, the UK is the most important source of services imports in the financial,
communications/transport, ICT and tourism sectors. In general, services imports are
highly concentrated in Europe and the US, with the rest of the world playing a less
important role than in goods trade.
Overall, the patterns in the services sector strongly highlight the importance of the ICT
and financial sectors as the engines of export growth, with business services and royalties
as the most important sectors for imports. The latter indicates the importance of
international trade in knowledge for the Irish economy, with high domestic productivity
enabled by the import of commercially-relevant knowledge, especially from the US.
16
III. INTERNATIONAL FINANCIAL INTEGRATION
The globalisation of financial trade has been accelerating in recent years.12 Ireland is to
the forefront of this trend, both in terms of the internationalisation of the financial
portfolios held by Irish households, firms and institutions but also through Ireland’s
increasing prominence as an international financial centre. In this section, we first present
aggregate data profiling Ireland’s international balance sheet. Next, we analyse the
patterns in foreign direct investment (FDI) from a macroeconomic-financial perspective.
We then examine the geographical distribution of Ireland’s portfolio assets and liabilities
(comprising equities and long- and short-term debt securities), before turning to other
forms of debt assets and liabilities (e.g. international deposits and loans intermediated
through the banking system).
A. Ireland’s International Balance Sheet
Table III.1 shows Ireland’s holdings of foreign assets and liabilities relative to its GDP,
using averaged data over 2001-2004.13 While Ireland has a negative net aggregate
position of -17.8 percent of GDP, the composition of the balance sheet is striking – a
large net negative position in FDI counterbalanced by a similarly large net positive
position in portfolio assets, with the overall net position roughly matching the negative
net position in the other debt category. In addition to this remarkable configuration is the
sheer scale of the gross levels of foreign assets and liabilities – the sum of foreign assets
and liabilities ranks near the top of the international rankings at over 1500 percent of
GDP.
Table III.1 Ireland’s International Balance Sheet, 2001-2004
Assets/
GDP
Liabilities/
GDP
Net
Position/
GDP
%
44.2
%
126.5
%
-82.3
Portfolio
460.4
379.1
81.2
Other
252.4
272.1
-19.7
FDI
Reserves
Total
3.3
760.3
3.3
777.8
-17.8
Note: Averages over 2001-2004. Source: Authors’ calculations based on CSO data.
Table III.2 underlines the central role played by the IFSC in driving Ireland’s
participation in international asset trade. The IFSC has a predominant share in both the
portfolio and other debt categories – but its 45.7 percent share in Ireland’s FDI liabilities
12
13
See Lane and Milesi-Ferretti (2006) for a comprehensive treatment of global financial trends.
See also Lane (2003) and Lane and Milesi-Ferretti (2006).
17
is also worth highlighting. The importance of inward FDI into the IFSC sector reflects
the large role played by foreign-owned entities in the IFSC.
Table III.3 highlights an important difference between the IFSC and non-IFSC sectors in
terms of their net positions. The IFSC sector has a large positive balance (its foreign
assets far exceeds its foreign liabilities), whereas the non-IFSC sector has net liabilities
equal to -55.6 percent of GDP.
Table III.2 Importance of IFSC in Ireland’s International Balance Sheet, 2001-2004
Assets
%
Liabilities
%
FDI
23.0
45.7
Portfolio
85.6
82.8
Other
77.6
69.8
Total
78.9
72.2
Note: Ratio of IFSC holdings to total holdings of foreign assets and liabilities in each category.
Table III.3 Net International Investment Position of IFSC and non-IFSC Sectors
Net Position
%
IFSC
non-IFSC
Total
38.2
-55.6
-17.5
Note: Net positions expressed as ratios to GDP.
B. Broad Patterns in FDI
FDI refers to international investment that, based on an equity ownership of at least 10
percent, reflects a lasting interest by a resident in one economy (the direct investor) in an
enterprise resident in another economy (the direct investment enterprise). As such, it
includes cross-border investment by firms in the manufacturing sector and the services
sectors (including financial services) but also the acquisition by individuals of residential
property overseas, with this last category increasingly important for Ireland in recent
years.
Once the direct investment relationship is established, all subsequent financial flows
between the related entities are recorded as direct investment transactions, regardless of
the type of financial instrument used in the financing arrangement (except for financial
18
intermediary affiliates among which direct investment transactions are limited to those
involving equity and permanent debt). For this reason, the accumulated value of FDI
assets and liabilities may include a substantial cash component, to the extent that retained
earnings are held in liquid form rather than invested in the production activities of the
FDI entity.
Table III.4 reports aggregate data on the broad patterns in Ireland’s FDI position during
2001-2003.14 Ireland’s FDI assets amounted on average to 37.5 percent of GDP, with
FDI liabilities at 127.8 percent. This generates a net liability position in this category in
excess of 90 percent of GDP.15
Table III.4 Geography of FDI Positions
Assets
Liabilities
EU
of which
UK
Euro Area
%
52.5
%
35.0
14.8
37.7
23.8
10.5
Switzerland
Japan
US
Canada
0.2
8.8
16.4
0.2
2.6
0.4
53.5
4.6
Offshore
Centres
Other
13.1
2.0
8.8
1.8
100.0
100.0
Total
Note: FDI liabilities allocated to country of “ultimate beneficial ownership”. Data averaged over 20012003 and based on equity component of FDI positions
Table III.4 also shows the geographical patterns in FDI, based on innovative work by the
CSO that establishes the bilateral patterns of ‘ultimate beneficial ownership’ of FDI
assets and liabilities. The standard presentation of FDI patterns looks only at the
geography of ‘proximate’ FDI flows. For instance, if a US firm invests in Ireland via a
Netherlands-based holding company, this is recorded as Dutch investment in Ireland.
While the data on proximate FDI flows is highly informative about the geography of
14
See also the analysis by Barry and O’Mahony (2004).
The recently-released data for 2004 show that Ireland’s FDI liabilities have subsequently declined – the
net liability position stood at 70 percent of GDP at the end of 2004.
15
19
international financial intermediation, exploring the identities of the ultimate beneficial
owners of FDI positions provides a much more accurate picture of FDI patterns.
In terms of FDI assets, the euro area is the single most important destination, followed by
the US and the UK. Offshore centres are also an important destination, taking 15 percent
of FDI assets. This reflects the important role of offshore centres in international financial
trade. On the liabilities side, the US is the source of the majority of FDI investment in
Ireland, with the UK much more important than the euro area in second place.
Table III.5 shows the geography of FDI income receipts and payments. Ireland has a
large net investment income deficit in this category, amounting to 20 percent of GDP.
Although this in part reflects the larger stock of FDI liabilities relative to FDI assets, it
also is the result of a large differential between the yield earned by Irish firms on FDI
assets and that paid to foreign investors on Ireland’s FDI liabilities. For instance, an
approximate estimate is that Irish FDI overseas earned a yield of 7.5 percent in 2003,
while international investors earned 17.5 percent on FDI positions in Ireland.
The high yields earned on FDI in Ireland may in part be attributable to an underestimation of the value of foreign-owned capital in Ireland or to an over-statement of the
profitability of these operations. The latter may be the result of the tax planning activities
of multinational corporations, in recognition of Ireland’s status as a low-tax regime.
Finally, we note that the foreign-owned multinational sector is a significant contributor to
aggregate tax revenues. During 2001-2002, this sector paid an average of €2.64 billion in
corporation tax - this corresponds to approximately 10 percent of total profits in this
sector. Taking the 2002 data, the corporation tax paid by this sector corresponded to 55.8
percent of total corporation tax revenue and 9.4 percent of total tax revenue in that year.
20
Table III.5 Geography of FDI Income
Income
Credit
%
50.7
Income
Debit
%
42.0
39.7
11.0
8.3
32.9
Switzerland
Japan
US
Canada
Offshore Centres
0.0
4.0
10.8
-0.1
26.1
8.2
-0.1
32.6
0.9
15.9
Total
100
100
EU
of which
UK
Euro Area
Note: Percentage share of each region in aggregate FDI income. Authors’ calculations based on CSO
data.
C. Patterns in International Portfolios
Table III.1 showed that Ireland has very large aggregate portfolio foreign assets and
liabilities, reflecting its status as a major financial services centre. Table III.6 shows that
Ireland has large net liabilities in the portfolio equity category that are more than offset
by a large net positive position in the portfolio debt category. This pattern reflects the
nature of much of the investment activity at the IFSC, with investment funds issuing
shares to global investors (comprising foreign portfolio equity liabilities) and investing
the proceeds in global bond and equity markets (comprising foreign portfolio debt and
equity assets).
Table III.7a shows the geographical spread for Irish portfolio assets (equity and debt
securities). On the assets side, the US is the most important destination for international
equity investment, followed by the UK and the euro area. A non-trivial proportion is also
allocated to Asia, with Japan the largest single destination.
21
Table III.6 Portfolio Foreign Assets and Liabilities, 2001-2003
Assets/ Liabilities/
GDP
GDP
Equity
120.59
266.34
Long-term Debt
193.85
42.70
Short-term Debt
120.23
31.07
Total
434.66
340.11
Note: Variables expressed as ratios to GDP. Authors’ calculations, based on CSO data.
However, Figure III.1 shows that these portfolio weights deviate substantially from a
benchmark in which geographical allocations reflect the each country’s share in world
equity market capitalisation.16 Indeed, the US and Japan are under-weighted relative to
this benchmark, with the UK and the euro area over-weighted. This ‘proximity bias’ in
Ireland’s outward equity portfolio may be attributed to several factors. First, much of
Ireland’s equity assets are held by companies operating in the Irish Financial Services
Centre (IFSC) that may have a mandate to focus on European stockmarkets. Second, Irish
households and institutions may have a preference for the shares issued by major trading
partners.
In terms of portfolio debt assets, Table III.7a shows that the euro area is the most
important destination for long-term debt securities and the US for short-term debt
securities. The former reflects the integration of the euro area’s bond market, with the
elimination of currency risk sharply eroding the distinctions between the bonds issued by
the governments and corporations of the various euro area member countries. The latter is
again attributable to the specialised activities of IFSC-affiliated financial institutions. It is
also noteworthy that trade in debt securities is highly concentrated with the other
advanced economies (plus the offshore financial centres), with relatively little interaction
with the developing world.
Table III.7b shows the geographical distribution of Ireland’s portfolio liabilities. The euro
area and the UK are the most important sources of portfolio liabilities but the US is also a
non-trivial investor in Irish-based portfolio investment products. The high share of the
“rest of the world” in portfolio equity liabilities primarily reflects the important role
played by offshore financial centres as financial intermediaries in the allocation of
portfolio investment.
16
See also Honohan and Lane (2000) and Lane and Milesi-Ferretti (2004).
22
Table III.8 shows the distribution of portfolio investment income payments and receipts.
In contrast to the FDI investment income balance, the net balance for portfolio
investment income is positive at 2.6 percent of GDP. This is driven by large positive net
balances with respect to the US and the euro area, reflecting the positive net positions
with these countries in yield-generating debt securities.
Table III.7a Geographical Allocation of Irish Portfolio Investment Assets
Equities
Europe
of which
UK
Euro Area
EU15
New Member States
North America
of which
US
Canada
Longterm
Debt
Shortterm
Debt
TOTAL
48.60
66.25
41.20
54.42
22.57
21.41
44.96
0.25
15.11
47.92
64.90
0.41
24.85
14.67
41.07
0.00
19.87
31.37
52.77
0.25
32.33
22.06
46.88
31.78
32.43
-0.10
19.24
2.82
46.67
0.21
30.49
1.29
Asia
of which
Japan
China
India
8.59
2.05
0.01
3.30
4.80
0.18
0.17
1.87
0.00
0.00
0.01
0.00
0.00
2.17
0.05
0.05
Latin America
Middle East/North America
Sub-Saharan Africa
Rest of World
1.15
0.06
0.20
9.08
2.48
0.01
0.00
7.15
0.89
0.00
0.00
11.03
1.67
0.02
0.06
8.76
100.00
100.00
100.00
100.00
Total
Note: Authors’ calculations based on CSO data. Average shares over 2001-2003.
23
Table III.7b Geographical Allocation of Irish Portfolio Investment Liabilities
Europe
of which
UK
Euro Area
EU15
New Member States
North America
of which
US
Canada
Equity
LongTerm
Debt
ShortTerm
Debt
Total
49.85
73.96
77.36
55.39
27.04
17.46
45.00
0.16
33.30
37.65
71.23
0.00
60.24
16.16
76.70
0.00
30.86
19.88
51.19
0.12
19.69
16.48
16.65
19.01
19.46
0.22
16.46
0.00
16.60
0.00
18.83
0.17
Asia
of which
Japan
China
India
4.86
0.89
0.47
3.96
3.02
0.18
0.04
0.55
0.00
0.00
0.00
0.00
0.00
2.43
0.14
0.03
Latin America
Middle East/North Africa
Sub-Saharan Africa
Rest of World
1.17
0.45
1.35
22.65
0.00
0.00
0.00
8.66
0.00
0.17
0.00
5.35
0.92
0.36
1.05
19.31
Total
100.00
100.00
100.00
100.00
Note: Authors’ calculations based on CSO data. Average shares over 2001-2003.
24
Figure III.1 Portfolio Equity Allocations Comparison to Market Shares
60.00
Share in Irish Portfolio
Share in Global Mkt Cap
50.00
40.00
30.00
20.00
10.00
0.00
US
Euro Area
Japan
UK
Note: Authors’ calculations based on CSO data for portfolio equity assets and FIBV data on global stock
market capitalisations.
25
Table III.8 Geographical Allocation of Portfolio Investment Income
Credit
Europe
of which
UK
Euro Area
EU15
New Member States
North America
of which
US
Canada
Debit
60.2
58.8
18.7
33.4
53.5
0.5
30.9
18.2
49.5
0.2
26.5
14.9
24.9
1.6
14.7
0.2
Asia
of which
Japan
China
India
3.7
4.7
1.9
0.0
0.0
2.3
0.1
0.0
Latin America
Middle East/North Africa
Sub-Saharan Africa
Rest of World
0.7
0.1
3.7
5.2
0.8
0.3
4.4
16.4
100.0
100.0
Total
Note: Author’s calculations based on CSO data.
D. Other Debt Assets and Liabilities
The “other debt” category covers cross-border bank loans and deposits, trade credits and
related instruments. Table III.9 shows that the euro area is the single largest trading
partner in this category, which reflects the importance of a common currency for many
debt-based transactions. However, the UK is a close second with cross-Atlantic debt
trade also important.
Despite Ireland having a negative net position in the other debt category (Table III.1), it
has a small average positive net income balance of 0.7 percent of GDP. Table III.10a
displays the geographical distribution of investment income flows in this category – by
and large, the investment income shares closely follow the proportions of debt holdings
across trading partners. This is consistent with the data on yields in Table III.10b – yields
26
are reasonably similar across countries. The low average yield reflects the global
environment of low interest rates. However, during this period, Ireland earned a higher
yield on its foreign assets than it paid out on its foreign liabilities, which reconciles the
negative holdings position with a positive net income balance.
Table III.9 Distribution of Stocks of Other Assets and Liabilities
Assets
Liabilities
EU
of which
UK
Euro Area
60.4
67.4
23.1
35.8
29.1
37.7
Switzerland
Japan
US
Canada
1.9
0.5
15.5
0.6
2.4
0.6
11.4
0.8
Other
21.1
17.3
Total
100.0
100.0
Note: Authors’ calculations based on CSO data averaged over 2001-2003.
Table III.10a Distribution of Other Investment Income
Income
Credit
Income
Debit
EU
of which
UK
Euro Area
62.9
66.4
22.9
37.7
32.8
33.0
Switzerland
Japan
US
Canada
1.4
0.7
17.0
1.1
1.5
1.3
15.2
0.3
Other
19.2
16.0
Total
100
100.0
Note: Authors’ calculations based on CSO data averaged over 2001-2003.
27
Table III.10b Yields on Other Assets and Liabilities
Assets
Liabilities
Total
3.7
3.0
UK
Euro Area
Switzerland
Japan
US
Canada
3.6
3.9
2.7
5.6
4.0
6.4
3.4
2.6
1.9
6.3
4.0
0.9
Note: Authors’ calculations based on CSO data averaged over 2001-2003.
28
IV. GLOBALISATION AND PRODUCTION
This section looks at the international linkages of enterprises operating in the
manufacturing and service sectors in Ireland, to explore how these entities relate to the
international economy. In each case, we consider four key dimensions:
•
•
•
•
ownership patterns by nationality and sector;
export propensities by ownership and sector;
geographic distributions of exports by destination and sector; and
import patterns of enterprises by ownership.
Data in this section relate to 2003, the latest year for full manufacturing and service data
are available; some additional data for 2001 and 2002 are included in the appendices. All
tables in this section are based on authors’ calculations from data collected by the CSO
Census of Industrial Production and the Annual Services Inquiry.
A. Manufacturing
The Irish manufacturing sector is unusual worldwide in the extent of foreign ownership
in this sector. For example, foreign companies employed over 47 percent of employees
in Irish manufacturing in 2003, while accounting for around 14 percent of manufacturing
firms. Consequently, in looking at the globalisation of the Irish economy, the existence
of a strong foreign-owned production sector enhances the exposure of the economy to
changes in the international environment. The data for manufacturing throughout this
section come from the Census of Industrial Production (CIP), collected annually by the
CSO.17 As far as possible, the nationality breakdown follows that used in earlier
sections. The manufacturing sector data presented are at 2-digit NACE sector levels.
Sectors are aggregated to ensure the confidentiality of the data, so that the 22 NACE 2digit sectors in Manufacturing are combined into the 13 sectors listed in Table IV.1.
Details on the full set of NACE 2-digit sectors are set out in the Appendix.
We begin by looking at key ownership characteristics in the Irish manufacturing sector,
focusing on output and export measures. We highlight differences in production and
export measures between Irish-owned and foreign-owned firms. We also address the
concentration of exports across firms within each sector. We then go on to examine the
distribution of export by destination and investigate differences in export intensity across
sectors. Finally, we look at the geographical patterns in the distribution of materials
imports.
17
The CIP, which is one of the longest established data sets in the CSO, covers all manufacturing
enterprises with three or more employees in Ireland at local unit level.
29
Table IV.1 List of Manufacturing Sectors
NACE
Rev. 1
Headings
Food, Beverages, Tobacco
Textiles
Leather, Rubber and Plastic
Wood Products
Paper and Printing
Chemicals
Non-Metallic Minerals
Basic Metals
Machinery
Electronic Products
Transport Equipment and
Miscellaneous
15 - 16
17 - 18
19, 25
20
21 - 22
24
26
27 - 28
29
30 - 33
34 – 37, 23
Description
food products, beverages and tobacco
textiles and textile products
leather and leather products, rubber and plastic products
wood and wood products
pulp, paper and paper products; publishing and printing
chemicals, chemical products and man-made fibres
other non-metallic mineral products
basic metals and fabricated metal products
machinery and equipment n.e.c.*
electrical and optical equipment
transport equipment, miscellaneous n.e.c., manufacture of refined
petroleum products
* Note n.e.c. = not elsewhere classified
Ownership and Export Behaviour
Table IV.2 Exporting Patterns of Irish and Foreign Manufacturing Firms, 2003
Nationality of
Ownership
Number
of Local
Units
Share of
Gross
Output
Overall
Export
Export % of Firms Intensity of
Intensity Exporting Exporters
Ireland
United Kingdom
Euro Area
Sweden
Denmark
Switzerland
United States
Canada
Japan
Off-shore Centres
Rest of World
4496
137
193
11
11
20
286
9
16
5
8
20.0
4.1
6.9
0.1
0.5
1.3
65.5
0.3
0.7
0.1
0.3
36.2
55.9
89.5
79.6
84.0
90.1
97.0
89.6
98.0
96.1
81.1
46.1
82.5
93.3
100.0
90.9
100.0
96.5
100.0
100.0
100.0
87.5
47.6
57.3
90.1
79.6
85.3
90.1
97.1
89.6
98.0
96.1
81.3
All
5192
100.0
82.4
52.3
86.7
Notes: Overall export intensity = Exports/ Gross output; % of Firms exporting = Number of local units
engaged in exporting/ Total number of local units; Export Intensity of Exporters = Exports/ Gross Output
of firms that are exporting.
Table IV.2 shows that there are over five thousand manufacturing units in Ireland and
that more than 85 percent of these are Irish-owned. The other three significant groups are
the United States (6 percent), the Euro Area (4 percent), and United Kingdom (3 percent).
Firms from the United States (US) account for over 40 percent of all foreign firms in Irish
manufacturing. Despite being small in number, US firms dominate Irish manufacturing
30
production, accounting for over 65 percent of its aggregate gross output, which is more
than three times the share of Irish-owned manufacturing. Firms from the European
Union (EU) account for around 11 percent of the gross output produced by the Irish
manufacturing sector.18
Table IV.2 also shows the openness of the Irish manufacturing sector to international
trade, with some 82 percent of all manufacturing output exported. This ratio of total
exports to gross output is defined as the export intensity of manufacturing. Some 52
percent of all firms are engaged in exporting, and the export intensity of those firms
engaged in exporting is 87 percent. This high export ratio reflects both the small size of
the Irish economy, which means that firms have to export to find markets large enough to
achieve efficient scale in many sectors, and it also reflect the pro-export policy adopted
by successive Irish governments since the late 1950s.
This overall export pattern is the combination of very different export patterns by
nationality of ownership (Figure IV.1 shows the different measures of export behaviour
by nationality). The local Irish market is significant only for UK and Irish-owned firms,
which sell over 40 percent and almost 65 percent of their respective production on the
Irish market. Foreign firms, other than those from the UK, have a dominant export focus,
with most firms engaged in exporting and with those that are exporting having export
intensity ratios over 80 percent. In 2003 there were only 54 foreign-owned firms
operating in Irish manufacturing that were not exporting, 21 of which were UK firms.
These foreign non-exporters account for less than 8 percent of the total number of
foreign-owned manufacturing firms operating in Ireland.
While US firms dominate total exports and are the key drivers of the high export intensity
ratios, it should be noted that large numbers of Irish firms are exporters, and these firms
export a large proportion of their output. Since Irish firms include lots of SMEs, while
foreign-owned firms are operating at a larger scale, it is to be expected that their export
ratios would be much lower. These export intensity measures are key indicators of the
extent to which Irish-owned industry is globally competitive.
18
While foreign firms account for just 15 percent of total firm numbers, they account for 47 percent of
employment in Irish manufacturing. As expected, the US firms dominate in employment terms accounting
for over 28 percent of total manufacturing employment in Ireland.
31
Figure IV.1 Export Propensities of the Irish Manufacturing Sector by Nationality
of Ownership
Ireland
United Kingdom
Euro Area
Sw eden
Denmark
Sw itzerland
United States
Canada
Japan
Off shore Centres
Rest of World
All
0%
10%
20%
Overall Export Intensity
30%
40%
% of Firms Exporting
32
50%
60%
70%
80%
Export Intensity of Exporters
90%
100%
Ownership and Export Markets
Table IV.3 Manufactured Exports by Nationality of Ownership and Market
Destination Shares, 2003
Nationality of
Ownership
Exports
€ million
Export
Share(%)
UK
Other EU
USA
Other
Ireland
United Kingdom
Euro Area
Sweden
Denmark
Switzerland
United States
Canada
Japan
Offshore Centres
Rest of World
6,868
2,184
5,875
78
417
1,126
60,277
272
690
88
219
8.8
2.8
7.5
0.1
0.5
1.4
77.2
0.3
0.9
0.1
0.3
47.5
33.8
9
24.8
20.5
11
13.5
23.5
12.1
9.4
30.8
30.8
15.5
56.8
56.4
56.2
33.3
53.9
56.8
65.1
87.4
44.8
9.5
40
29
9.1
14
30.7
12.1
14.1
9.1
1.9
0.2
12.2
10.7
5.1
9.7
9.2
25
20.5
5.6
13.7
1.4
24.2
All
78,095
100.0
16.8
50.8
14.2
18.2
US-owned enterprises dominate Irish manufacturing exports, accounting for more than
three quarters of total manufacturing exports. The large US export share reflects the
successful promotion of Ireland as a manufacturing base and export platform in the
European Union for many US firms.19 Irish-owned firms constitute the second largest
individual export group, contributing over 8 percent of manufactured exports, with firms
from all other EU countries accounting for close to 11 percent of manufactured exports
from Ireland.
Over two thirds of all Irish manufacturing exports go to EU markets, with the UK taking
over one quarter of these EU exports.20 In the case of US firms, over two thirds of
exports go to EU destinations, with just over 12 percent going to the US itself. For Irish
firms, the United Kingdom is the single largest destination, taking over 47 percent of the
output exported by Irish-owned manufacturing firms.21 Other EU markets are highly
significant for all exporters except UK-owned firms.22 This pattern is consistent with the
UK-owned firms servicing the mainland EU countries primarily from their home plants.
The sensitivity of the manufacturing sector in Ireland to the economic fortunes of US
manufacturing is clear from the table, as is the extent to which the geographic diversity of
manufacturing export patterns is driven by foreign-owned rather than Irish-owned
industry, which is still highly UK-market dependent. Combining Tables IV.2 and IV.3, it
is evident that close to half of the exports of Irish-owned industry go to the UK market.
19
See Ruane and Uğur (2004).
EU markets are UK and Other EU markets combined.
21
This is down from 49.7 in 2002.
22
The share of exports from Swiss firms going to Other EU is also relatively low - but much higher than in
2002, when it was less than 20 percent.
20
33
Hence, given that Irish manufacturers export 36 percent of their output, this implies that
the Irish-owned manufacturing sector is over eighty percent dependent on the markets in
these two islands.
Figure IV.2 summarises the export patterns of different nationalities of ownership by
export destination.
Figure IV.2 Manufacturing Export Patterns by Nationality of Ownership and
Export Destination
Ireland
United Kingdom
Other
USA
Other EU
UK
Euro Area
Sw eden
Denmark
Sw itzerland
United States
Canada
Japan
Off shore Centres
Rest of World
All
0
10
20
30
40
50
60
70
80
90
100
Ownership and Sectoral Patterns
A key part of Irish industrial policy over the past two decades has been to promote the
transition from traditional activities, which were increasingly vulnerable to competition
from lower-cost economies, into ‘high-tech’ sectors, which were seen as more sustainable
in the longer terms and where Ireland could expect to remain competitive. Foreign
investment was an important vehicle in this restructuring process, and in this section we
look at the sectoral distribution within manufacturing by foreign and Irish-owned
companies.
Tables IV.4A and IV.4B examine Irish-owned and foreign-owned manufacturing entities,
in terms of sectoral distributions and export propensities. Food, Beverages and Tobacco
is the largest sectoral group in Irish-owned manufacturing, in terms of both firm numbers
34
and export shares; these industries account for over 16 percent of Irish-owned firms and
over fifty percent of their total exports. Thus this sector of the Irish economy, linked very
much to its agricultural base, is still very much a key driver of the exports of its
indigenous companies.
The lower overall export intensity of Irish-owned manufacturing (36 percent) arises from
the low export intensity in the “traditional” sectors - Leather, Rubber and Plastics and
Wood Products; and Non-Metallic Mineral and Metal Products. In these sectors, the low
overall export intensity is a product both of the lower percentage of firms that are
exporting in those sectors and the low export intensity of those firms that export.
Looking at the “high tech” sectors, we see quite a different pattern for Chemicals and
Electronic Products, which together account for 14 percent of the exports of Irish-owned
manufacturing. The overall export intensity of Electronic Products is the highest for any
sector and is driven by both the large proportion of Irish-owned firms that are exporting
and their high export intensity. This reflects the international tradability of outputs in this
sector (high value added to volume/weight ratio) and the success of over 140 Irish firms
in establishing a presence in international markets. By contrast, the export intensity of
exporting firms in the Chemicals sector is much lower, so that while two thirds of these
firms are engaged in exporting, the share of output exported is only one third of total
output.
The contrast in economic structures between foreign- and Irish-owned manufacturing is
immediately apparent in the high proportion of total exports by foreign firms in Ireland
coming from high-tech sectors (75 percent), in contrast to 14 percent for domestic firms.
Some 94 percent of the firms in these two sectors are exporters and these export almost
all of their output. Less than five percent of output from foreign-owned firms in the
Electronics Products sectors is sold on the domestic market and a considerable portion of
these domestic sales involve trade among the foreign firms within Ireland.
Taken together with Tables IV.2 and IV.3, these data show that not only is the Irish
manufacturing sector dominated by US firms in terms of output and exports, it is
dominated by a relatively small number of sectors. Only two other sectoral groups have
any significant exports – Food, Beverage & Tobacco and Paper, Printing & Publishing,
with 75 percent and 95 percent of the output in these sectors respectively being exported.
Figure IV.3 summarises the contrasting patterns by sector and nationality.
35
Table IV.4A Exports of Irish-Owned Manufacturing – Sectoral Distribution
Sectors
Share of
Number of Exports by
Local Units
Sector
Overall
Export
Intensity
% of Firms Export Intensity
Exporting
of Exporters
Food, Beverages and Tobacco
746
54.1%
41.2%
57.0%
48.6%
Textiles
269
2.8%
57.3%
68.0%
65.8%
Leather, Rubber and Plastics
249
3.0%
29.5%
53.8%
42.2%
Wood products
302
2.5%
26.7%
33.4%
53.8%
Paper and printing
624
3.8%
15.4%
38.3%
28.8%
Chemicals
124
4.1%
36.7%
68.5%
54.2%
Non-Metallic Minerals
350
3.0%
17.1%
40.3%
30.6%
Basic Metals
654
4.3%
24.4%
36.4%
42.2%
Machinery
287
4.3%
42.8%
50.2%
55.8%
Electronic Products
266
9.9%
62.5%
61.7%
71.6%
Transport equipment and Misc
659
8.2%
32.5%
45.4%
43.4%
Total
4530
100.0%
36.0%
47.5%
47.9%
Table IV.4B Exports of Foreign-Owned Manufacturing – Sectoral Distribution
Sectors
Number Share of
of Local Exports
Units By Sector
Overall
Export % of Firms
Intensity Exporting
Export Intensity
of Exporters
Food, Beverages and Tobacco
80
8.1%
74.7%
67.5%
77.8%
Textiles
33
0.4%
87.0%
97.0%
87.6%
Leather, Rubber and Plastics
55
0.5%
73.8%
92.7%
76.5%
Wood products
9
0.2%
71.9%
88.9%
75.7%
Paper and printing
57
11.7%
95.0%
89.5%
95.4%
Chemicals
126
39.9%
97.8%
92.9%
98.4%
Non-Metallic Minerals
20
0.2%
52.8%
80.0%
57.4%
Basic Metals
46
0.7%
88.0%
97.8%
88.2%
Machinery
57
1.2%
92.0%
91.2%
93.8%
Electronic Products
193
35.4%
96.5%
95.3%
96.9%
Transport Equipment and Misc
50
1.6%
92.1%
94.0%
92.4%
Total
726
100.0%
94.0%
90.5%
94.9%
Notes: Overall export intensity = Exports/ Gross output; % of Firms exporting = Number of local units
engaged in exporting/ Total number of local units; Export Intensity of Exporters = Exports/ Gross Output
of firms that are exporting.
36
Figure IV.3 Overall Export Intensity (Ratio of Exports to Gross Output) by
Manufacturing Sector and Ownership Category
Food, Beverages and Tobacco
Textiles
Leather, Rubber & Plastic
Wood products
Paper & Printing
Chemicals
Non-Metallic Minerals
Basic Metals
Machinery
Electronic Products
Transport Equipment& Misc.
Total
0
0.2
0.4
0.6
Irish
0.8
1
Foreign
Ownership and Import Patterns
Table IV.5 shows the pattern of material imports in the Irish manufacturing sector. US
firms accounts for almost two thirds of all imported materials used in manufacturing,
with Irish-owned firms accounting for under one sixth. While the average ratio of
imported to total materials used is 63 percent, again reflecting the openness of the
economy, there is huge variation by nationality, ranging from a low of 28 percent for
Irish firms to above 80 percent for the Euro Area, US and Japan. These contrasting
figures reflect the different sectoral distributions across ownership groups. For instance,
the prevalence of Irish and UK firms in the Food, Beverages and Tobacco sector has a
positive impact on the extent to which these firms buy locally.
The sourcing of imported materials also varies by nationality. On average a third of
materials are sourced within the EU, but this ranges from a low of 14 percent for
Japanese to a high of 80 percent for Swedish and UK firms. Given the dominance of the
US in terms of imported materials, it is evident that a large share of the imported material
inputs comes from outside the EU. Thus while the EU is a major market for US exports
from Ireland, it is not a major source of material inputs used to produce those exports.
While firms from Euro Area countries account for only 11 percent of the imported
37
1.2
materials used, it is striking that these firms source almost 54 percent of these materials
from US sources.
Table IV.5 Imported Materials used in the Manufacturing sector by Nationality of
Ownership and Origin of Imports, 2003
% Distribution of Origins of Materials
Imported
Nationality of
Ownership
Ireland
United Kingdom
Euro Area
Sweden
Denmark
Switzerland
United States
Canada
Japan
Off shore Centres
Rest of World
All
Share of Total
Ratio of
Imported
Imported to
Materials Total Materials
15.2
28
3.1
52
11.4
87
0.1
64
0.7
91
1.3
70
65.4
82
0.4
57
1.4
90
0.3
90
0.7
87
100.0
63
UK
41.5
39.5
9.9
35.2
14.6
13.9
5.7
27.2
7.2
6.8
8.9
Other EU
23.4
40.3
22.1
45.3
62.1
39.1
18.9
25.3
7.4
18.6
37.9
USA
7.5
3.8
53.6
10
18.7
16.3
24
11.9
11
68.4
1.4
Other
27.6
16.4
14.5
9.5
4.6
30.7
51.4
35.6
74.4
6.2
51.8
13
21.2
23.8
42
While these data show the manufacturing sector to be internationalised in terms of
material inputs, the true extent of the internationalisation of the manufacturing sector in
terms of inputs is understated, as the data do not cover imported services (such as the
provision of intellectual property), which are particularly important in the high-tech
sectors.
Figure IV.4 shows the sources of origins for imported materials by nationality of
ownership.
38
Figure IV.4 Imported Materials for Manufacturing by Nationality of Ownership
and Origin.
Ireland
UK
United Kingdom
Other EU
Euro Area
USA
Other
Sw eden
Denmark
Sw itzerland
United States
Canada
Japan
Off shore Centres
Rest of World
All
0
10
20
30
40
50
60
70
80
Summary
Taking the various elements of the manufacturing sector together, we see that foreignowned firms, especially US-owned firms, predominantly drive the extent of
internationalization of the Irish manufacturing sector. Irish firms account for less than 10
percent of total manufactured exports. That said, over 45 percent of firms in the Irish
manufacturing sector are engaged in exporting – this figure reflects the small size of the
domestic market which requires firms to export if they are to achieve the economies of
scale and scope necessary to be competitive on local as well as global markets.
Furthermore, the export intensity of the exporting firms averages 48 percent, although
intra-sectoral analysis would reveal this average is a product of some highly exportfocused firms and other firms that are engaged only minimally in exporting.23
Turning to the pattern of internationalisation, we see that this is driven particularly by US
firms, for whom Ireland is a significant export platform within the EU. The extent to
which aggregate manufactured exports from Ireland have diversified geographically is
also driven by the US firms, which export heavily to the mainland EU market. While the
EU is now a major market (30 percent) for Irish-owned firms, they are still very heavily
23
See Ruane and Sutherland (2005)
39
dependent on the UK market, which takes close to half of the exports of Irish-owned
firms.
A further point of note is that the modernisation of the Irish manufacturing sector is
driven significantly by the foreign-owned firms. These firms are heavily concentrated in
the Electronic Products and Chemicals sectors (NACE 30-33 and 24) and, given their
scale of operation, they dominate the aggregate figures, creating an impression of a very
modern economy in terms of sectors. While these sectors account for over 75 percent of
the exports of foreign firms in Ireland, they account for just 14 percent of the exports of
Irish-owned firms.
This analysis has not dealt with two topics that are important reflections of the
significance of foreign direct investment in Irish manufacturing. The first is the extent of
employment in the foreign-owned sector in Irish manufacturing sector. In 2003, some 47
per cent of all manufacturing employment was in foreign-owned firms and some 60 per
cent of those employed in foreign companies were in US companies. Average earning in
these foreign firms were almost €35,000, compared with a little over €26,000 per head in
Irish-owned firms – given employment shares, wages and salaries in foreign firms
account for more than 53 per cent of total wages and salaries in Irish manufacturing.24
The analysis has also not dealt with the important role of foreign companies in terms of
Business Expenditure on Research and Development (BERD) in Ireland. While foreignowned companies would not be expected to undertake R&D in most host-country
locations, especially ones with low corporate tax rates, foreign-owned companies account
for the bulk of BERD in Ireland.25 According to OECD statistics, Ireland has a relatively
low rate of BERD (as measured by the ratio of Expenditure on Research and
Development to sales in manufacturing), despite its commitment to the Lisbon Strategy
and its aspiration to become a knowledge-based economy.26 In this context, the
continuing dependence on foreign companies for R&D is an important policy issue.27
B. Services
The data for the services sector used in this section come from the CSO’s Annual
Services Inquiry (ASI) of enterprises. The Inquiry covers all commercial services, with
the important exception of financial services sector. The sectors covered are shown in
Table IV.6:
24
Census of Industrial Production for 2003, published in 2005.
See Ruane and Uğur (2005)
26
The Irish data on R&D are collected by Forfás.
27
The new R&D tax credits are likely to increase the scale of foreign R&D undertaken in Ireland, and
should also impact on the R&D of Irish-owned companies.
25
40
Table IV.6 List of Services Sectors
Headings
NACE
Description
Cars
50
Wholesale
Retail and Hotels
51
52, 55
Land, Water and Air
Transport
Goods Transport
60 – 62
Sale, maintenance and repair of motor vehicles; retail sale of
automotive fuel
Wholesale trade and commission trade, except of motor vehicles
Retail trade, except of motor vehicles; repair of personal and
household goods; Hotels and restaurants
Land, water and air transport, including transport via pipelines
Communication
Real Estate and Rental
Activities
Software Services
R&D
Professional Services
Entertainment and Personal
Services
63
64
70 – 71
72
73
74
92 – 93
Supporting and auxiliary transport activities and activities of travel
agencies
Post and telecommunications
Real estate and renting of machinery and equipment, without
operator, and of household and personal goods
Computer and related activities
Research and development
Other business activities, such as legal, accounting, advertising, etc.
Recreational, cultural and sporting activities and other service
activities
* Note n.e.c. = not elsewhere classified
The data here relate to 2003, the latest date for which complete data are currently
available. This Inquiry, which was collected for the first time in 2001, is based on a
Census of all enterprises with greater than 20 employees. For enterprises of fewer than
20 employees, a sample is taken, which is then grossed up to generate the total figures for
the sector.
Firms with over 20 employees account for just 6 percent of total firms in services,
reflecting the vast bulk of service firms are very small indeed. However, these six
percent account for 58 percent of all people engaged in services, 66 percent of total sales,
and, most importantly from a globalisation perspective, 90 percent of total service
exports.
In this section, we follow the same pattern of analysis as for the manufacturing sector,
contrasting the patterns for foreign and Irish-owned sectors, and between manufacturing
and services where these differ. For confidentiality reasons, the nationality data are more
aggregated than for the analysis of manufacturing firms. Finally, following the pattern
for manufacturing, we also look at the export destination patterns for the service sector.
For this we use data for 2001, as this is the only year for which such data were collected.
41
Ownership and Export Behaviour
Table IV.7 Exporting Pattern of Irish and Foreign Services Firms, 2003
Country Group
Number of
Local Units
Share of
Total Sales
Overall % of Firms
Export
Exporting
Intensity
Export
Intensity of
Exporters
Ireland
United Kingdom
Euro Area
Switzerland
US and Canada
Japan
Rest of World
4082
195
150
16
186
13
26
64.9
11.3
10.5
0.6
9.8
0.3
2.7
6.8
3.5
46.7
12.5
52.8
25.9
29.8
17.8
34.4
36.2
56.0
55.3
57.8
43.9
15.4
11.3
80.8
16.9
72.9
58.4
69.9
All
4668
100.0
15.8
21.0
33.7
Notes: Overall export intensity = Exports/ Total Sales; % of Firms exporting = Number of local units
engaged in exporting/ Total number of local units; Export Intensity of Exporters = Exports/ Total Sales
Ratio of the firms which are exporting.
As in the case of manufacturing, Irish firms dominate the numbers of total service
establishments, accounting for 87 percent of total service sector establishments – virtually
the same percentage as for manufacturing. However, in contrast to manufacturing, Irish
firms account for a large portion of total service sales – 65 percent compared with 20
percent for manufacturing. We can distinguish three significant nationality groups in
terms of total sales – the UK, Euro Area and US/Canada, which together account for over
30 percent of total services sales in Ireland, and 11 percent of total service firms.
On average, 16 percent of services are exported – this contrasts with the export intensity
of manufacturing at 82 percent for 2003.28 The lowest export intensity rates are for UK
and Irish service firms, which sell over 90 percent of their output on the Irish market.
The two groups with significant shares of sales going to international markets are the
Euro Area and US/Canadian firms, suggesting a significant Irish export platform base for
these entities. The large gap between overall export intensity and the export intensity of
the exporting firms from the Euro Area is consistent with a majority of Euro Area firms
just servicing the domestic market, while the smaller number of those firms that export
have a high export intensity.
A majority of Swiss firms based in Ireland do export but those exporting have very low
export sales ratios, indicating that they are primarily here to service the domestic market.
In contrast, the exporting US and Canadian firms have higher export ratios, with Ireland a
base for European services operations. Overall, the contrast with manufacturing points to
the fact that many foreign firms locate in Ireland to service the local service market,
whereas the manufacturing firms predominantly have an export focus. The contrasting
28
Export intensity in the services sectors is calculated as the ratio of exports to total sales.
42
patterns by nationality are evident in Figure IV.5, and comparison with Figure IV.1
shows the contrast between the service and manufacturing sectors.
Figure IV.5 Export Propensities of the Irish Service Sector by Nationality of
Ownership
Ireland
United Kingdom
Euro Area
Sw itzerland
US and Canada
Japan
Rest of World
All
0%
Overall Export Intensity
20%
40%
% of Firms Exporting
60%
80%
100%
Export Intensity of Exporting Firms
Ownership and Export Markets
In the 2001 Inquiry, firms were also asked about export patterns, but these questions were
not asked for 2003. We report here details on the 2001 export patterns, which mirrors the
analysis for Table IV.3 above.
43
Table IV.8 Service Sector Exports by Nationality of Ownership and Market
Destination Shares, 2001
Nationality of
Ownership
Exports
€ millions
Export
Shares(%)
Exports by Destination (%)
UK
Other EU USA
Other
Ireland
UK
Euro Area
Switzerland
US and Canada
Japan
Rest of World
2,728
929
2,159
34
3,206
2
128
29.7
10.1
23.5
0.4
34.9
0.0
1.4
54.0
19.8
4.5
46.9
25.6
100.0
96.0
20.6
29.0
81.3
44.3
60.2
0.0
3.0
16.4
8.6
12.5
5.1
5.5
0.0
0.0
9.1
42.6
1.6
3.8
8.8
0.0
0.9
All
9,186
100.0
45.8
37.6
8.4
8.2
While Irish firms dominate in terms of total service sector sales, their share of service
sector exports is under 30 percent, which is over three times their share of manufactured
exports (8.8 percent). However this higher share for Irish firms is less than the combined
share of service exports of US and Canadian firms, which, at 35 percent is very much
lower than the export shares of US and Canadian manufacturing firms, which are over 77
percent. UK and Euro Area firms account for one third of export sales in services,
compared with just over 10 percent of manufactured exports.
The data for 2001 show that the UK market was the destination for nearly 46 percent of
total service exports, with the other EU countries accounting for almost 38 percent. This
geographic pattern contrasts with manufacturing, where non-EU export sales account for
one third of total export sales, compared with less than half that share for services. Once
again, the UK is the most significant market for Irish-owned firms, but much lower for
UK firms, in contrast to manufacturing. This is unsurprising, as there would be little
reason for UK firms to locate in Ireland to provide services for the UK market, and is
consistent with the low export intensity of UK-exporting firms in Table IV.7. Euro Area
firms export over 85 percent of their output to EU markets, with a relatively small
proportion going to the UK, while 85 percent of US/Canadian firms service exports are to
EU countries, in contrast with 67 percent for manufacturing exports. In 2001, Japanese
firms accounted for a negligible share of total service exports and all of these went to the
UK. Figure IV.6 shows the destination patterns by nationality grouping.
44
Figure IV.6 Service Export Patterns by Nationality of Ownership and Export
Destination
Ireland
United Kingdom
Euro Area
Sw itzerland
US and Canada
Japan
Rest of World
All
0.0
10.0
20.0
30.0
Other
40.0
USA
50.0
60.0
Other EU
70.0
80.0
90.0
100.0
UK
Ownership and Sectoral Patterns
Since the vast majority of firms in the services sector do not export, we concentrate in
Tables IV.9A and IV.9B only on the smaller group of exporting firms. (Consequently
these tables are not directly comparable with Tables IV.4A and IV.4B for the
manufacturing sector.) Tables IV.9A and IV.9B examine the sectoral distribution of the
exporters, as well as their overall export and import intensities. Sectoral export intensity
is defined as total exports in the sector to total sales of those firms that are exporting, and
likewise the import intensity is defined as total imports into the sector to total sales of the
exporting firms. We see from the two tables that there are 726 Irish-owned exporters in
the services sector, compared with some 252 foreign-owned enterprises.29
Turing first to the Irish-owned firms, we see that the exports are dominated by two
sectoral groups, Wholesale and Land; Water and Air Transport; these two sectors
combined account for close to two thirds of service exports. The dominance of these
sectors is unsurprising, since Ireland is an island economy and has very high merchandise
trade.
29
This compares with total firm numbers in the services sector of 4082 Irish-owned firms and 586 foreignowned firms.
45
Table IV.9A Irish-Owned Service Sector Exporting Firms by NACE Sector, 2003
Sector
Number of
Enterprises
Cars
Wholesale
Retail and Hotels
Land, Water and Air Transport
Goods Transport
Communications
Real Estate and Rental Activities
Software Services
R&D
Professional Services
Entertainment & Personal Services
103
255
67
57
14
9
10
77
14
103
17
Share of
Exports by
Sector
3.4
33.3
3.7
30.5
3.2
1.6
0.3
11.8
1.0
9.7
1.3
Total
726
100.0
Overall
Export
Intensity
3.3
10.0
12.0
64.1
55.5
2.5
7.3
75.7
67.7
27.6
22.3
Overall
Import
Intensity
28.5
26.3
17.5
13.1
10.1
3.3
4.2
4.4
18.9
8.7
4.9
15.4
21.0
Table IV.9B Foreign-Owned Service Sector Exporting Firms by NACE Sector, 2003
Sector
Number of
Enterprises
Cars
Wholesale
Retail and Hotels
Land, Water and Air Transport
Goods Transport
Communications
Real Estate and Rental Activities
Software Services
R&D
Professional Services
Entertainment & Personal Services
4
62
11
13
18
15
3
65
16
45
2
Share of
Exports by
Sector
0.1
8.4
0.2
2.0
2.0
36.9
0.1
41.6
1.7
6.9
0.0
Total
252
100.0
Overall
Export
Intensity
7.4
20.4
3.6
53.7
60.0
94.1
21.3
92.0
85.8
41.7
5.6
Overall
Import
Intensity
32.6
34.5
27.9
31.3
20.1
65.3
37.8
56.1
8.0
9.9
5.0
62.3
44.5
Notes: Overall export intensity = exports to total sales; overall import intensity = imports to total sales
46
Of particular interest is export performance in sectors that have high value-added, and are
being actively promoted by policy. Four sectors are highly relevant here – Software
Services, Professional Services (e.g. Engineering and Architectural services), R&D
Services and Communications. The first two sectors account for over 20 percent of
service exports by Irish firms, reflecting both competitive advantage and the support of
policy towards the development of these sectors over the past two decades. The high
export intensity of the software sector provides further evidence of the success of this
policy. The other technology-intensive service sector is R&D services, which is still
small in terms of export share (1 percent) but has a high export intensity (68 percent)
compared with a service sector average of 15 percent. The overall import intensity of
exporting firms averages 21 percent, a figure dominated by the wholesale sector.
Foreign firms in high tech sectors have, unsurprisingly, very high exports and they
account for 87 percent of the exports of foreign-owned firms. The overall export ratio for
the foreign firms in the service sector is 62 percent, but this figure is dominated by the
ratios in the Communications and Software Services sectors. This result is again
consistent with policy that has promoted foreign investment in these sectors for over 20
years. In contrast with the Irish-owned service sector, the export intensity ratio for the
foreign-owned firms exceeds the import intensity, but the latter ratio is more that twice
the import intensity ratio of the Irish-owned firms. This difference is driven primarily by
the very high import intensity of the Communications sector, which accounts for over one
third of exports by foreign-owned firms.
47
Figure IV.7 Overall Export Intensity (Exports to Sales) of Exporting Firms by
Service Sector Grouping and Ownership Category
Total
Entertainment and Personal Services
Professional Services
R&D
Softw are Services
Real Estate and Rental Activities
Communication
Goods Transport
Land, Water and Air Transport
Retail and Hotels
Wholesale
Foreign-Ow ned
Irish-Ow ned
Cars
0
10
20
30
40
50
60
70
80
90
Ownership and Import Patterns
As was previously indicated, data on the geographical distribution of service outputs and
inputs are only available for 2001 and these are presented in Table IV.10.
Irish firms account for over 50 percent of the imported materials used in the service
sector, while accounting for almost 65 percent of total service sector sales. The
comparable ratios for manufacturing are 15 percent and 20 percent respectively.
The US and Canada, which account for the largest share of exports (Table IV.8), account
for the second largest share of imported materials.
Most service sector imported materials are sourced within the EU. This pattern is
consistent across firms of different nationality groups and differs from the pattern for
manufacturing, where there are wide divergences between the patterns for EU and nonEU sourcing. Within the EU there are quite different patterns between UK and non-UK
sourcing, ranging from a UK-dominance in imports by Irish, UK and Japanese firms.
These patterns are very evident in Figure IV.8.
48
100
Table IV.10 Imported Material Inputs in Services, 2001
Nationality of
Ownership
Imported Inputs
Ireland
United Kingdom
Euro Area
Switzerland
US and Canada
Japan
Rest of World
All
Share of
Total
Imported
Materials
UK
Imported Input Origins
Other EU USA
Other
6,546,353.77
1,794,312.60
1,717,801.65
6,925.51
2,194,581.76
73,396.84
180,522.05
52.3
14.3
13.7
0.1
17.5
0.6
1.4
57.8
77.6
13.6
13.9
23.5
93.6
26.6
27.6
7.7
64.4
81.4
72.6
0.6
72.3
5.9
1.0
7.5
0.9
3.3
0.6
0.0
8.7
13.7
14.5
3.8
0.7
5.2
1.1
12,513,894.18
100.0
47.9
38.5
4.8
8.7
Figure IV.8 Imported Materials for Services by Nationality of Ownership and
Origin.
Ireland
United Kingdom
Euro Area
Sw itzerland
US and Canada
Japan
Rest of World
All
0%
10%
20%
30%
40%
49
50%
60%
70%
Other
USA
Other EU
UK
80%
90%
100%
C. Summary
Trade and financial flow data indicate that Ireland is an economy that is globalised. This
section has looked further at the nature of this globalisation, drawing on data on the
manufacturing and service sectors, and focusing in particular on the export patterns of
firms in these sectors and their ownership. There are different patterns in the two sectors
and these differences need to be set in context by noting the different values of
manufactured and service exports in 2003.
The overall impression of openness in manufacturing, with an export/gross output ratio of
82 percent, masks very different patterns across Irish-owned and foreign-owned
manufacturing firms. The export/gross output ratio for Irish firms in 2003 was 36.2
percent and they accounted for 20 percent of manufactured exports. These two figures
contrast starkly with US firms, which accounted for over 65 percent of exports and had
an overall export intensity of 97 percent in 2003. In effect, Ireland’s export performance
is heavily dependent on US firms, which accounted for 77 percent of total export sales,
while Irish-owned firms accounted for less than 10 percent.
Not only the extent but also the pattern of exports by market destination is influenced by
ownership. Whereas the UK is still the largest foreign market for Irish manufacturing
firms, foreign-owned firms export more than half of their output to Other EU countries.
Consequently, the apparent low dependence on the UK market masks the high
dependence of Irish-owned and UK firms on this market and a much lower dependence
for other firms. In terms of export markets, Ireland is still predominately Europeanised
rather than globalised, with US firms located in Ireland being the main drivers of the
measured export globalisation. (A comparison of Table IV.2 and the corresponding data
for 2002 in the appendix indicates that patterns of market destination, even at this fourgroup market level, vary significantly from year to year.)
The extent of concentration in the value of gross output within US firms is reinforced by
the concentration of these firms in a relatively small number of manufacturing sectors.
Foreign firms are predominately located in Electronic Products and Chemicals, which
together account for 44 percent of foreign firm numbers and over 75 percent of total
exports generated by foreign firms. In effect, a large component of the measured
modernisation of the Irish manufacturing sector is attributable to the presence of foreign
firms, with fewer than 9 percent of firm numbers and just 14 percent of total exports of
Irish firms being in these two “high-tech” sectors.
The dominance of foreign ownership is less strong in the marketed service sector, but is
nonetheless present, particularly in the more internationally-tradable sectors. Irish firms
account for almost two thirds of total sales, in contrast to just one fifth of gross output in
manufacturing. However, whereas the export intensity of Irish firms in manufacturing is
over 36 percent, the corresponding ratio for Irish firms in the service sector is less than 7
percent. In effect Irish firms have a low output share in manufacturing combined with a
relatively high export ratio, while in services, Irish firms have a high output share
50
combined with a relatively low export share. Consequently Irish firms account for less
than 30 percent of total service exports, but this is far higher than the 8.8 percent export
share in manufacturing.
Whereas US firms dominate in the exports of the manufacturing sector, there is a more
even spread by nationality of foreign ownership in the service sector, with US and
Canadian firms accounting for a similar portion of exports as EU (including UK) firms;
the shares in the case of both groups are slightly larger than the Irish portions. Service
sector exports from Ireland by all nationality groups are more focused on European
markets than are manufacturing exports – in effect more Europeanised than globalised.
The foreign-owned service sector firms that are exporting are concentrated in the highertech end of the service sector, paralleling their concentration in the higher tech end of the
manufacturing sector. Thus in services, as in manufacturing, a large part of the
restructuring of the service sector towards higher-tech activities is attributable to the
presence of foreign firms.
In summary, the strong foreign ownership in the manufacturing and service sectors is
contributing disproportionately to gross output/sales, exports and high-tech concentration.
51
V. GLOBALISATION AND MIGRATION
Globalisation is also manifest in the patterns of global migration, which are taking place
both within and across continental boundaries. As migration is facilitated by lower
personal dislocation costs and changes in international regulations, countries are
experiencing increased volumes of both emigration and immigration. While some of this
migration is driven by political factors, increasing numbers of those moving are
economic migrants. Where such migrants have high levels of human capital, they deplete
the human capital of the countries they leave, reducing potential productivity in the home
country. In the recipient/host country, they add to productivity and may reduce relative
wages of highly skilled workers. Where the migrants have low levels of human capital,
they are likely to depress wages of low-skilled workers in the recipient country.
Ireland’s historic pattern of outward migration has been replaced in recent decades by net
inward migration, the product of a larger inflow than outflow.30 The scale of growth in
net inward migration reflects (a) policy to encourage migration of high skilled workers in
areas where there are domestic deficits, and (b) migrants from the ten new EU member
states who are now free to move to Ireland in response to differentials in the wages in the
native countries and expected wages in Ireland.31
In Europe generally, the impact of European integration on migration is becoming
increasingly evident as migrants from the ten EU new member states move into those of
the existing fifteen EU countries whose national boundaries are already open to them.32
The main source of data on the stock of migrants in Ireland is the CSO’s Census of
Population, which is collected every five years; the most recent year is 2002.33 Where
possible from CSO sources, the data presented are disaggregated by the key geographic
areas: the current EU (other than Ireland) referred to as EU-25, which is further
subdivided into EU countries which were member states in 2002, referred to as EU-15,
and the new member states who joined in 2004, referred to as the EU-NMS group. From
time to time, the EU-15 is further subdivided into UK and Other, to reflect the
particularly close economic and social relations between the UK and Irish markets.
Remaining countries are defined generally as Non-EU, reflecting the fact that EU
residents can now work in Ireland without any specific work permits and are in effects
potential Irish residents at any point in time. In some instances non-EU are further
divided by large geographic areas (Rest of Europe, Africa, Asia, USA, etc), with residual
categories labeled as the “Rest of the World”.
The second source of data on immigrants is the CSO’s Quarterly National Household
Survey (QNHS). This large household survey allows estimates to be made of the migrant
population between the Census dates, and recently the CSO has begun to publish these
30
See Minns (2005)
The expected wages reflect actual wages net of the costs of mobility and of search.
32
Ireland, UK and Sweden.
33
The Irish censuses are usually taken at five-yearly intervals in the first and sixth year of each decade, i.e.,
1991/1996. However, because of the Foot and Mouth Disease threats in 2001, the census was deferred
until 2002.
31
52
data to provide a picture of the changing significance of immigrants in the Irish labour
force and adult population.
Data from the Census 2002 are used as the base stock data for analysis here, adding data
from the most recent QNHS, where these are available. Where the data come from the
QHNS, this is noted in the text; otherwise, the Census of Population is the source.
The focus here is on differences in migration by source country and thus the data
presented draw attention to the differences between migrants from different countries
rather than focusing on differences between migrants and the resident population.
A. Population Stock
Table V.1 shows that foreign nationals represented just under 6 percent of the total
population in 2002.34 Over sixty percent of the immigrants are from other EU-25
countries and UK nationals represent over 70 percent of this group. Other EU-25 (EU-25
less Ireland and the UK) nationals accounted for just 1 percent of the population resident
in Ireland on the night of the 2002 Census, compared with just fewer than 2 percent of
residents coming from the “Rest of the World”.
On that date the number of nationals from EU-NMS in Ireland was less than the number
of US nationals. This figure is likely to have changed substantially, in both relative and
absolute terms, since that date, in the light of the removal of constraints on the mobility
of migrants from the new member states into Ireland in the past year.
This changing pattern is further explored by looking at where the population was in
residence one year previously. Over 99 percent of Irish-born people (and those who did
not indicate nationality) were resident in Ireland one year earlier – those who were not in
Ireland were predominantly resident in the UK and the “Rest of the World”. Some 90
percent of UK nationals resident in Ireland on the Census night were here one year
previously, while the proportion for EU-15 was significantly lower at 78 percent. The
percentage for EU-NMS, at 59 percent, is the lowest of any group, reflecting new
migration patterns associated with European integration, as the expected per capita
incomes of residents in those countries that recently joined the Union are much lower
than those of Irish residents. The percentage for “Rest of the World” who were outside
Ireland one year previously is also relatively low (70 percent), and this percentage is
likely to have increased significantly since the census date, with new immigrants from
Asia and Africa.
34
This calculation assumes that all of those who do not indicate their nationality (some 48,000) are all Irish
nationals.
53
Table V.1 Population in Ireland 2002 – Proportions of Residents who were in
Ireland on the Census night and their whereabouts (Ireland or elsewhere) one year
earlier
Nationality/
Usual
residence 1
year
previously:
Population
Share of
Population
Total
Irish
Of Which:
EU 25 (ex.
Ireland)
3,804,355 3,532,457 141,619
USA
Rest of Not Stated
World
(incl. no
nationality)
UK
EU 15
EU
NMS
103,278
29,907
8,434
11,319
70,726
48,234
100.0
92.9%
3.7%
2.7%
0.8%
0.2%
0.3%
1.9%
1.3%
Ireland
98.0%
99.1%
85.6%
90.0%
78.1%
58.6%
82.9%
70.3%
99.0%
EU 25 (ex.
Ireland)
Of Which:
1.0%
0.5%
13.5%
9.2%
20.6%
40.8%
1.3%
2.5%
0.5%
UK
EU 15 (ex. UK)
EU NMS
0.7%
0.3%
0.1%
0.4%
0.1%
0.0%
6.8%
4.3%
2.4%
9.0%
0.2%
0.0%
1.2%
19.4%
0.0%
0.8%
0.7%
39.3%
0.7%
0.5%
0.1%
1.4%
0.5%
0.5%
0.3%
0.1%
0.1%
USA
0.2%
0.1%
0.1%
0.1%
0.2%
0.2%
15.0%
0.2%
0.1%
Rest of
world
0.8%
0.3%
0.7%
0.6%
1.1%
0.4%
0.8%
27.1%
0.4%
Total
100%
100%
100%
100%
100%
100%
100%
100%
100%
54
Finally, Table V.1 shows evidence of the increased international mobility of populations,
as many individuals resident in Ireland declared themselves to have been in countries
other than their home countries in the year previous to the census. Thus some of our EU
immigrants had been in non-EU countries immediately prior to coming to Ireland, and
over 2.5 percent of the Rest of the World immigrants had been resident in other EU
countries in the year prior to the Census.
Age and Nationality
In the 1980s, an issue of concern was that the emigrants at that time represented the
younger age cohorts disproportionately. Of issue in this decade is the impact of
immigration on the population’s age structure.
Figure V.1 Usual residents by age and nationality, 2002
Irish
Rest of Europe
Asia
Other EU 15
Africa
Rest of World
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
75+
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
0-4
0.0%
Figure V.1 shows the distribution of population by age and nationality for 2002. The age
distribution of Irish nationals is very flat, with higher numbers in the 5-24 age group; this
reflects the baby boom of the early 1980s and the greater mobility of young people. By
contrast, the immigrant population is much more concentrated in the 20-44 age bracket,
with the Other EU (primarily UK) category most like the Irish nationals in terms of age
distribution. A key issue for policy is the extent to which the various non-Irish groups
remain permanently in Ireland. If migration results in permanent residence in Ireland, the
age profile of the immigrants will become more similar to that of the Irish nationals. If
Ireland is a temporary destination for migrants, then the non-nationals will remain
concentrated in the 22-44 age group. The relative importance of permanent versus
temporary migration will have important implications for Ireland – in terms of its
infrastructure requirements and the evolution of social policies across a range of domains.
55
B. Education
An important economic issue is the impact of migration on the average level of human
capital in the population. In the 1980s, emigrants were disproportionately drawn from
the most educated cohort in the population, damaging the domestic skill base. The
current policy focus is on how the educational attainment levels of immigrants affect the
skill distribution in the domestic labour force.
Figures V.2A and V.2B respectively show the educational profile of non-nationals
compared with Irish nationals in the population over 15 years and in the key working
population age group of 20-44. On average, resident migrants are more educated than the
Irish nationals, in the sense that they have generally a smaller proportion of the
population with education completed at primary level and a higher proportion with third
level qualifications. This contrast in Figure V.2A must be seen in the context of the age
distribution data in Figure V.2B, which showed that a larger proportion of the Irish
nationals are in the older age groups; in those older generations, there was a lower
participation rate in higher levels of education. Furthermore, since many economic
migrants have come in response to skills shortages in Ireland, it is not too surprising that
they have above average levels of education.
While the difference between the migrant population and Irish residents is what is crucial,
it is also noteworthy also that this difference is much less for those in the 20-44 age
group, as evident in Figure V.2B. In this age group, the proportion of those with primary
level as the highest completed level of education is lowest for Irish nationals. The
proportion with completed third level education is relatively low – similar to the “Rest of
Europe” group, reflecting the late date at which third level participation rates rose in
Ireland and the pattern of migrants to Ireland coming with higher levels of educational
attainment. Taken together, these figures taken indicate that Ireland is receiving
immigrants from both ends of the skill distribution, relative to the average skill level of
the native population.
Figure V.2A Usual residents aged 15+ by highest level of education completed and
nationality (including students), 2002
60.0%
50.0%
40.0%
30.0%
c
20.0%
10.0%
0.0%
Irish
Other EU 15
Rest of Europe
Primary
Secondary
56
Africa
Third level
Asia
Rest of World
Figure V.2B Usual residents aged 20-44 years by highest level of education
completed and nationality (including students), 2002
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Irish
Other EU 15
Rest of Europe
Primary
Secondary
Africa
Asia
Rest of World
Third level
C. Economic Status
In terms of the economic impact of immigration, a key indicator is the economic status of
those who have immigrated relative to Irish nationals. At a time where the economy is
close to full employment, the participation rate of immigrants in the labour force is of
particular interest. To look at this we consider the population over the age of 15 years.
Figure V.3A shows the economic status of non-Irish residents relative to native-born Irish
in 2002, in terms of three categories: employed, unemployed and not in the labour force.
The proportions in employment and in unemployment are higher for EU-15 than for the
Irish, with a corresponding smaller proportion of people “not in the labour force”. By
contrast, the employment rate is much higher (75 percent) and the unemployment rate is
much lower for residents from the EU- NMS group than for EU-15 residents, reflecting
the very strong economic basis to this migration and the fact that work permits were still
required for admission to Ireland at the time of the Census. The proportion of non-EU
immigrants in employment is the lowest of all groups, and together with an
unemployment rate which lies between that of EU-15 and EU-NMS immigrants, means
that the proportion not in the labour force in EU-25 is the highest for all groups (except
the Not Stated/No Nationality group).35
Figure V.3B shows estimates for the economic status of non-Irish residents relative to
native-born Irish in 2005 from the QNHS.36 The comparison between Figures V.3 A and
B is not direct as the Census allows a distinction between migrants classified as Non-EU
and the Rest of the World, whereas the QNHS does not. However the result is very clear
– while the share of the labour force in employment has remained broadly unchanged at
35
Further details are set out in the Appendix.
This was the first occasion on which the CSO released estimates on the migrant composition of the
labour force. It seems likely that these data somewhat understate the extent of migration.
36
57
60 percent for Irish workers and EU-15 workers, it is estimated to have risen for those
from the New Member States – from below 80 percent to well over 80 percent.
Figure V.3A Number of Persons aged 15+ by ILO Economic Status and Nationality,
2002
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Irish
EU 15
EU NMS
In employment
Non-EU 25
Unemployed
Rest of World
Total
Not in labour force
Figure V.3B Number of Persons aged 15+ by ILO Economic Status and Nationality,
2005 (estimated)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Irish
EU 15
EU NMS
In Employment
Unemployed
Rest of World
Not in Labour Force
Source for Figure V.3B: QNHS for September-November of 2005 (estimated).
58
Total
The changes noted in Figures V.3A and V.3B reflect the very considerable changes in the
numbers of migrants between 2002 and 2005. Using CSO data from the QNHS, it is
possible to compare the actual population of individuals over 15 years for 2002 (from the
Census) with the estimates for 2005 by different nationality groups. Table V.2 shows the
different patterns of growth in numbers of immigrants over 15 years. The numbers of
EU-NMS migrants rose by over 800 percent, albeit from a low base, while the numbers
of migrants from the EU-15 and the Other category actually fell over the period. The
increased significance of EU-NMS workers in the Irish workforce has been described by
Beggs and Pollock (2006) and analysed in considerable depth by Barrett, Bergin and
Duffy (2006).
Table V.2 Number of persons aged 15+ by Nationality, 2002 and 2005 (estimated)
Nationality
2002
2005
Irish
2,809,372
3,078,600
269,228
9.6%
114,178
99,400
-14,778
-12.9%
7,716
72,700
64,984
842.2%
Other
103,350
81,400
-21,950
-21.2%
Total
3,034,616
3,332,100
297,484
9.8%
EU 15
EU NMS
Change
% Change
Source for 2002 data: Census of Population. Source for2005 estimated data: QNHS for SeptemberNovember of 2005.
The historically different rates of labour force participation for males and females and the
economic focus especially of recent immigration means that it is helpful to look at the
labour force participation rates by nationality group and gender. These data are only
available for 2002.
Figure V.4 below shows the labour force participation rates (LFPR) of Irish nationals and
non-nationals by gender for 2002. Overall these figures indicate broadly similar patterns
of labour force participation among nationals and non-nationals, though there are some
variations.
Male participation rates are highest among workers from Other EU states and the Rest of
Europe (primarily EU-NMS). Lower participation rates are found amongst male workers
from Africa and Asia, but even these lower rates exceed 65 percent. The female
participation rates are highest amongst migrants from the Rest of Europe and the category
of “Rest of the World”. The lowest level of female participation is found among African
woman and it is just under 50 percent.
59
Figure V.4 Labour Force Participation Rates by Gender
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Irish
Other EU 15
Male LFPR
Rest of
Europe
Female LFPR
Africa
Male UR
Asia
Rest of World
Female UR
Figure V.4 also shows unemployment rates by gender and nationality, and these differ
more by nationality group. Irish, Other EU, “Rest of the World” males and females had
unemployment rates in the region of 8-10 percent, with Asian rates being slightly higher.
The rates for both males and female from Rest of Europe were twice that rate and in the
case of Africa, they are more than 10 times the Irish rates.
D. Sectoral Status
Having established that immigrants are actively participating in the Irish labour force, at a
time when the economy is restructuring in response to globalisation challenges, it is
fruitful to look at just where in the economy migrants are being employed.
Table V.3 shows the distribution of workforce participants by sectoral occupation and
nationality in 2002. Columns (1) and (2) show the contrasting employment patterns of
Irish and non-Irish. Relative to the Irish, the non-Irish are heavily concentrated in the
bottom three service categories: Professional, technical and health workers, Services
workers, and Other workers; in all other sectors there is a lower concentration of nonIrish workers. The Professional, technical and health workers sector comprises highskills service occupations, while the other two sectors of concentration are service
activities where workers required lower skill levels. Looking at the nationality
decomposition of non-Irish, we find that employment by sector differs markedly across
nationalities. The sectoral pattern of EU-15 workers is most similar to that of the Irish
workforce. There is a relatively higher concentration of Professional, technical and
health workers amongst all nationality groups with the exception of the Rest of Europe
category, which is exceptionally highly concentrated in Farming, fishing and forestry and
in Manufacturing, where its shares of total employment are higher than for Irish workers.
Apart from Professional, technical and health workers, the activities of largest
concentration of African migrants is in the Other workers occupations, of Asian migrants
60
is in the Services workers sector, while migrants from the Americas are more widely
sectorally distributed, and more similar to the EU-15, with a strong presence in Clerical,
managing and government workers and in the Other Workers category.
The overall importance of migrants across different sectors is shown in column (8). This
indicates that, with the exception of Farming, fishing and forestry, non-nationals account
for more than 5 percent of employment in all sectors of the economy. In the case of three
sectors – Professional, technical and health workers, Service workers and Other workers,
non-nationals account for well above 10 percent of employment.
Table V.3 Distribution of Nationality Groups by Sectoral Occupation, 2002
Total
Irish
NonIrish
EU
15
Rest of
Europe
Africa
Asia
Americas
(1)
Farming, fishing and forestry workers 5.7
Manufacturing workers
12.9
Building and construction workers
7.9
Clerical, managing and government
workers
18.3
Communication and transport
workers
6.0
Sales and commerce workers
13.7
Professional, technical and health
workers
16.2
Services workers
9.3
Other workers (incl. not stated)
10.0
(2)
2.1
10.5
5.6
(3)
1.6
9.9
6.7
(4)
6.9
20.3
6.2
(5)
0.6
7.2
2.7
(6)
0.6
5.3
1.3
(7)
0.9
10.2
3.5
Share
of NonIrish
(8)
3.4
7.4
6.5
14.8
18.1
5.1
8.7
4.5
18.6
7.4
3.9
12.1
4.6
13.9
3.8
7.4
2.5
9.3
2.2
6.7
2.5
13.7
5.9
8.1
21.0
13.1
16.9
20.4
11.9
12.9
9.2
14.5
26.5
20.2
11.5
37.2
36.2
25.7
17.6
26.0
8.5
16.2
11.8
12.8
15.4
All Occupations
100
100
100
100
100
100
9.1
Sector
100
Using the Census data in Table V.3, we look in more detail in Figure V.5 at some of the
key sub-sectors where there is a strong foreign presence in terms of absolute numbers.
The largest concentration of foreign workers is in the Financial and other business
services sector, which is increasingly a globalised service sector. There are over 18,000
foreign workers in the sector, over 12,000 of which are EU-15 nationals. These jobs
would tend to be relatively highly skilled. There are over 16,000 foreign workers in
Other production activities – and workers from the EU-NMS countries have a relatively
strong presence in this sector. In 2002 there were over 12,000 workers in the Hotels and
restaurants sector – historically a sector with negligible foreign workers and one that
faces increasingly strong international competition from the global tourism industry.
Compared with the other sectors with a strong foreign employment presence, a higher
proportion of workers in this sector come from Non-EU 25 countries. Finally, there are
now close to 12,000 non-nationals employed in the Wholesale and retail trade. Again,
the share of EU-15 nationals here is broadly similar to that in the Financial and Other
production sectors.
61
Figure V.5 Nationality of Foreign Workers in Selected Sectors, 2002
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
Financial and other
business services
Other production
industries
EU 15
Hotels and restaurants
EU NMS
Wholesale and retail
trade
Non-EU 25
Finally, it is possible to look (albeit with a less degree of detail) at the changes that have
taken place between 2002 and 2005 in sectoral patterns by nationality, using data from
the QNHS in Table V.4. These data are on a sector of employment basis and thus not
directly comparable with Table V.3. These data show that the share of non-Irish in
employment overall has risen from 8.0 to 8.6 percent over the period. The pattern of
change differs by sector, with increases in a majority of sectors outweighing decreases in
the remainder. However, the key change that has taken place lies in the composition of
non-Irish over that period. EU-NMS nationals now account for over one third of
migrants in employment, having increased their share of the non-Irish in employment
five fold in the period, from 7 to 36 percent in the period. These immigrants are heavily
concentrated in the top four sectoral groups in Table V.4. Looking at the top four sectors
in Figure V.6, we note that EU NMS employment share among non-nationals has risen
since the Census date, according to the QNHS estimates.
62
Table V.4 Distribution of persons aged 15 years+ by Nationality Group and NACE
Sector of Employment, 2002 and 2005 (estimated)
2002
2005
% NonIrish Share
EU NMS
% Share of
Non-Irish
% NonIrish Share
EU NMS
% Share of
Non-Irish
Agriculture, forestry and fishing
4.1
23.3
3.5
55.0
Other production industries
8.0
10.2
10.5
52.5
Construction
6.1
4.6
10.0
60.1
Wholesale and retail trade
6.7
7.4
7.4
38.1
18.3
9.4
21.0
35.4
7.0
3.1
6.3
25.7
10.5
3.0
8.6
19.9
Public administration and defence
3.4
2.0
1.3
0.0
Education
6.0
1.2
5.4
0.0
Health and social work
9.5
1.4
8.8
7.7
Other Services
9.2
3.0
8.9
33.0
Total
8.0
7.0
8.6
36.0
NACE Economic Sector
Hotels and restaurants
Transport, storage and
communications
Financial and other business
services
Source for 2002 data: Census of Population. Source for2005 data (estimated): QNHS for Sept-Nov of
2005.
E. Geographic Distribution
The uneven spatial distribution of economic activity within Ireland means that an obvious
question of interest is the geographical distribution of immigrants across the country. To
what extent do migrant contribute to the increased concentration of population within the
Dublin area, or do they offset the distribution patterns of Irish residents? Table V.5
shows the distribution of Irish and non-Irish aged 15+ at national level and in Dublin in
2002, classified by their working status.
63
Table V.5 Working Status by Nationality and Location, 2002
ILO Economic Status
Irish
EU 15
EU
NMS
Non-EU 25
Not stated Total
(incl. no
nationality)
NATIONAL
Total
In employment
Unemployed
92.4
92.5
89.6
4.2
4.1
6.2
0.3
0.3
0.2
2.2
2.1
3.4
0.9
0.9
0.6
100
100
100
DUBLIN
Total
In employment
Unemployed
89.9
89.9
88.9
4.6
4.6
4.0
0.4
0.4
0.2
3.8
3.6
6.2
1.5
1.5
0.7
100
100
100
Total in Dublin accounted for by
29%
33%
33%
52%
48%
30%
The final row of Table V.5 shows the share of the labour force by nationality accounted
for by Dublin in 2002. Overall, some 30 percent of the total labour force is resident in
the Dublin area. This comprises a slightly lower rate for Irish (29 percent) and higher
rates for all non-nationals, with the exception of the Non-EU 25 migrants, over half of
whom are based in Dublin. Non-nationals accounted for 7.6 percent of the labour force
in Ireland in 2002, compared with 10.1 percent of the labour force in the Dublin area.
The higher presence of non-nationals in Dublin compared with the country as a whole
differs by nationality groups, in that Dublin has relatively more non EU-25 workers. This
labour force pattern repeats itself for the shares of non-nationals in the workforce. Nonnationals account for a slightly higher share of the unemployed in Ireland overall – 10.4
percent – and this share of unemployment is higher still in the Dublin area – 11.1 percent.
In the country overall, EU-15 accounts for 60 percent of unemployment among nonnationals, whereas in the Dublin area, EU-15 nationals account for just over one third of
the unemployed. The major concentration of unemployment among non-nationals in
Dublin is in the Non-EU 25 group, which accounts for over 55 percent of unemployment
among non-nationals. 37
F. Migration flows
Using data from the QNHS, the CSO produces estimates of annual migration flows, and
we look at these for the period 2000-2004. The amount of information on immigrants is
obviously modest compared with what is available in the Census, but in the dynamic
context in which the Irish economy now operates, it is valuable to have information on
37
Further details by region are set out in the Appendix.
64
the nature of flows since the Census data in 2002. Since we are dealing with flows, the
five-year span is used to give a clearer picture.
Table V.6 Estimated Immigration Classified by Gender and Nationality, 2000-2004
Gender and
Nationality
2000
2001
Thousands
2002
2003
2004
2000
Percentages
2001
2002
2003
2004
Irish
UK
EU 15
EU NMS
USA
Rest of World
24.8
8.4
8.2
N/A
2.5
8.6
26.3
9
6.5
N/A
3.7
13.6
27
7.4
8.1
N/A
2.7
21.7
17.5
6.9
6.9
N/A
1.6
17.7
16.9
5.9
10.6
N/A
1.8
14.9
47.2
16
15.6
44.5
15.2
11
40.4
11.1
12.1
34.6
13.6
13.6
33.7
11.8
21.2
4.8
16.4
6.3
23
4
32.4
3.2
35
3.6
29.7
Total
52.5
59.1
66.9
50.6
50.1
100
100
100
100
100
Irish
UK
EU 15
EU NMS
USA
Rest of World
11.8
4.1
3.9
N/A
1.2
5.2
13.2
4.5
3.1
N/A
1.2
8.1
12.4
4.1
3.1
N/A
0.7
11
9.4
3.7
3.2
N/A
0.7
8.8
8.6
3.6
5.5
N/A
0.6
7.8
45
15.6
14.9
43.9
15
10.3
39.6
13.1
9.9
36.4
14.3
12.4
33
13.8
21.1
4.6
19.8
4
26.9
2.2
35.1
2.7
34.1
2.3
29.9
Total
26.2
30.1
31.3
25.8
26.1
100
100
100
100
100
Irish
UK
EU 15
EU NMS
USA
Rest of World
13
4.3
4.4
N/A
1.4
3.4
13.1
4.5
3.5
N/A
2.5
5.4
14.6
3.3
4.9
N/A
2
10.8
8.1
3.1
3.7
N/A
0.9
8.8
8.3
2.3
5.1
N/A
1.1
7.1
49.1
16.2
16.6
45.2
15.5
12.1
41
9.3
13.8
32.9
12.6
15
34.7
9.6
21.3
5.3
12.8
8.6
18.6
5.6
30.3
3.7
35.8
4.6
29.7
Total
26.5
29
35.6
24.6
23.9
100
100
100
100
100
Persons
Males
Females
Source: Authors’ calculations based on QNHS data.
Table V.6 shows estimates of net immigration classified by gender and nationality.
Looking first at the total picture, one of the most striking features over the period is the
year-to-year variation in migration numbers, with the peak of 67,000 in 2002 (the Census
year) compared with around 50,000 in the past two years. The second striking feature is
the declining absolute and proportionate number of migrants who are returning Irish
nationals – from 47 percent to 34 percent of migrant flows over the period. Migrant
inflows from the UK and EU–15 countries together accounted for 14,000 - 16,000
migrants annually, with the downward trend in UK immigrants being offset by increases
in EU-15 immigrants. These groups are unique in that they do not face any migration
65
restrictions, and hence are free to move in response to relative differences in economic
and social opportunities across the EU.
The largest degree of variability in the flows is driven by the migratory inflows from the
“Rest of the World”, with immigrant numbers peaking in 2002. These migrants included
those from what are now EU-NMS countries, so this category is likely to show smaller
numbers in coming years as these individuals will be classified as EU residents.
In gender terms, overall migrants are more or less equally spread, although with year-toyear variations. For both groups, 2002 was the peak year for immigration. In most years
a higher proportion of female migrants were returned emigrants and immigrants from the
EU, while a higher proportion of male migrants were from the “Rest of the World”. In
effect, immigration flows into Ireland in the past five years have been broadly genderbalanced, with relatively more males coming from outside the EU. To the extent that
these migrants were from the EU-NMS group, these numbers may change significantly in
the coming years, as these migrants are classified as EU.
In considering the gender implications of migration for demography, it is crucial to
distinguish between the inward and outward flows of migrants. This is shown in Figure
V.6, which presents the data for net migration by gender.
Figure V.6 Net Migration by Gender, 2000-2004 – Thousands
25
22.7
Males
Females
20
18.6
17.5
17
15.3
15
14.8 15
14.6
13.1 12.9
10
5
0
2000
2001
2002
Source: QNHS
66
2003
2004
This figure shows that Ireland is a net recipient of migrants, both male and female – the
absolute numbers in thousands are indicated on each of the bars in the figure. Combined
with Table V.6, we can see that emigration numbers average around 12,500 for males and
12,000 for females per annum, compared with an average of close to 28,000 per annum
for both male and female immigrants. There is less volatility in the numbers emigrating,
so that fluctuations in net migration figures are driven more by changes in the pattern of
inward rather than outward migration. Overall migration has added on average 25,000
net persons per annum to Ireland’s population, and the distribution on average has been
evenly spread between males and females.
We next examine the distribution of emigrants and immigrants by age in 2000-2004,
focusing on two key groups – those in the 15-24 and 25-44 age groups. Figure V.7
shows that there is significant out-migration of individuals in the 15-24 age group, with
emigration in excess of 20,000 per annum in 2000 and 2001, and still running at 10,000
or more in later years. Immigrants in this age cohort peaked in 2002 at around 20,000.
The pattern in the 25-44 age cohort in Figure V.8 is strikingly different. In this age
group, likely to be the peak age for mobile individuals, emigration numbers were much
lower (less than 8,000 at the peak in 2004), while immigrant numbers exceeded 20,000
per annum and reached close to 35,000 in 2002, the peak year. This pattern confirms the
stock figures for 2002, with net migration flows adding significantly to the potential
labour force.
Figure V.7 Migration in the 15-24 Age Group, 2000-2004
25.0
Emigrants
Immigrants
20.0
15.0
10.0
5.0
0.0
-5.0
2000
2001
2002
-10.0
-15.0
-20.0
-25.0
Source: QNHS
67
2003
2004
Figure V.8 Migration in the 25-44 Age Group, 2000-2004
40.0
Emigrants
Immigrants
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
-5.0
-10.0
2000
2001
2002
2003
2004
Source: QNHS
Overall globalisation, as manifest through increased mobility of people, is contributing
positively to Ireland’s population and potential workforce. The extension of the EU and
EU-NMS as a potential for new additions to the Irish labour force is considerable, as
noted in the recent Forfás Report (2005). As Irish young people continue to travel ahead
of taking up permanent employment, the pattern exhibited in Figure V.7 is likely to
continue. The extent of this voluntary outward migration could be influenced by the Irish
unemployment rate but the impact is unclear: outward migration could rise if the
unemployment rate rose (people staying would have a reduced opportunity of getting
employment) or it could fall as the unemployment rate fell (individuals would have less
confidence in gaining employment in the future and thus would take up available jobs
immediately).
Finally, Table V.7 reports some fragmentary data on the cross-border financial flows
associated with migration. For the 2002-2003 period, it shows that Ireland had a net
deficit in the compensation of non-resident employees, remittances sent by resident nonnationals and in migrant transfers. While the levels of these flows are small relative to
GDP, the net deficit may be expected to increase over the near term with the increase in
the numbers of non-resident and immigrant workers.
68
Table V.7 Cross-Border Labour Payments
Compensation
of
Employees
credit
debit
Africa
Asia
EU 25
Rest of Europe
Lat. America & Carrib.
North America
Oceania
Rest of World
Total
Total as Percent of
GDP
net
Workers'
Remittances
credit
debit net
Migrant
Transfers
net
0
0
188
1
0
42.1
0
48
0
106
323
2.5
0
7.1
0
20
0
-106
-135
-1.5
0
35.0
0
28
0
0
9.8
0
0
11.5
0
0
7
28
39.5
25
4.5
2.5
3.5
9
-7
-28
-30
-25
-5
9
-4
-9
0
0
-56
0
0
0
0
-20
279.1
458.6
-179.5
21.3
119
-98
-76
0.21
0.35
-0.14
0.02
0.09 -0.07
-0.06
Note: Data are in millions of euro. Authors’ calculations based on CSO data.
69
VI. CONCLUSIONS
This study has explored Ireland’s globalisation in terms of the economic linkages
between Ireland and the rest of the world. It has emphasised that globalisation is not a
symmetric process – Ireland has much stronger links with some trading partners than
with others. For this reason, a reduction in US investment into Ireland, say because of
changes in global tax arrangements or a downturn in the US economy would have a
disproportionately negative impact on the Irish economy. Similarly, a global slowdown
in the high-tech or financial services sectors would also disproportionately affect Ireland,
since such a large fraction of its trading activity is concentrated in these sectors. Beyond
the direct impact on employment and output in those sectors, such a contraction would
also reduce tax revenues, in view of the substantial corporation tax payments from the
foreign-owned sector (in addition to the taxes paid by those employed in those sectors
and associated activities).
Taken together, the trade, financial and production data have highlighted that
international economic integration generates a complex web of cross-border economic
linkages. In effect, Ireland acts as a production and financial intermediary that has
enormous liabilities to foreign investors and imports large volumes of goods and services
but also holds very large foreign asset positions and has a spectacular export record. An
additional dimension in recent years is the role played by large-scale immigration in
relieving labour shortages in the Irish economy, in both the traded and non-traded sectors.
While Ireland has successfully embraced economic globalisation, it is also vulnerable to
increased international competition for footloose capital, knowledge and skilled labour.
For instance, Ireland has benefited hugely from being a welcoming English-speaking and
low-tax destination for foreign direct investment into Europe. As the English language
becomes the lingua franca and countries in Central and Eastern Europe and elsewhere
adopt lower-tax regimes and pro-FDI strategies, the economic policy priority is to ensure
that Ireland retains its status as an investment- and employment-friendly destination and
establishes new sources of international competitiveness. The all-embracing nature of this
objective means that the globalisation challenge is centrally important to the general
social partnership process, in addition to the efforts of more specialised agencies such as
the IDA, Enterprise Ireland and Forfás.
Looking to the future, it will be important to update this type of study at regular intervals
to track changes over time in the geography of Ireland’s external trade and financial
linkages. The collection of statistics needs to evolve in order to capture these changes –
for example, to measure outsourcing and the nature of new trade with India and China. In
this context, new data will be needed on the foreign activities of Irish-owned firms. In
terms of global trends, we may expect a decline in the relative importance in
manufacturing in Ireland’s trade profile and the emerging market economies to increase
in prominence as trade partners. The successful development of an internationally-traded
Irish-owned services sector will be crucial to Ireland maintaining high growth rates, as
manufacturing production at the lower end of the value-added spectrum slows down.
This underlines the importance of the growth of R&D-based activities, which can be
70
expected to be competitive in the medium term. At a European level, increasing trade in
services and migration flows within the EU (especially as other member countries relax
restrictions on immigration from the new member states) may be the most prominent
dimensions of the integration process in the near term.
71
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Barry, Frank (2005), “Services Offshoring into Ireland”, mimeo, University College
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Lane, Philip R. and Gian Maria Milesi-Ferretti (2006), “The External Wealth of Nations
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Ruane, Frances and Ali Uğur (2004) “Export Platform FDI and Dualistic Development,
IIIS Discussion Paper No. 28 (Forthcoming in Transnational Corporations, 2006).
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73
Appendices
74
Appendix 1
Table A.1 Census of Industrial Production, Ireland: NACE Rev. 1 Codes and
Corresponding Industrial Sectors – Full Descriptions
NACE Rev. 1
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Description
Manufacture of food products and beverages
Manufacture of tobacco products
Manufacture of textiles
Manufacture of wearing apparel; dressing and dyeing of fur
Manufacture of leather and leather products
Manufacture of wood and wood products
Manufacture of pulp, paper and paper products
Publishing, printing and reproduction of recorded media
Manufacture of coke, refined petroleum products and nuclear fuel
Manufacture of chemicals and chemical products
Manufacture of rubber and plastic products
Manufacture of other non-metallic mineral products
Manufacture of basic metals
Manufacture of fabricated metal products, except machinery and equipment
Manufacture of machinery and equipment n.e.c.
Manufacture of office machinery and computers
Manufacture of electrical machinery and apparatus n.e.c.
Manufacture of radio, television and communication equipment and apparatus
Manufacture of medical, precision and optical instruments, watches and clocks
Manufacture of motor vehicles, trailers, and semi-trailers
Manufacture of other transport equipment
Manufacture of furniture; manufacturing n.e.c
Recycling
Source: CSO (2001a). Census of Industrial Production, Government Publications: Dublin.
75
Table A.2 Annual Services Inquiry: NACE Rev. 1 Codes and Corresponding
Services Sectors – Full Descriptions
NACE Rev.
1
50
51
52
55
60
61
62
63
64
70
71
72
73
74
92
93
Description
Sale, maintenance and repair of motor vehicles; retail sale of automotive fuel
Wholesale trade and commission trade, except of motor vehicles
Retail trade, except of motor vehicles; repair of personal and household goods
Hotels and restaurants
Land transport; transport via pipelines
Water transport
Air transport
Supporting and auxiliary transport activities and activities of travel agencies
Post and telecommunnications
Real estate activities
Renting of machinery and equipment, without operator, and of household and
personal goods
Computer and related activities
Research and development
Other business activities, such as legal, accounting, advertising, etc.
Recreational, cultural and sporting activities
Other service activities
Source: CSO (2005). Annual Services Inquiry 2003, Government Publications: Dublin.
76
Table A.3 Exporting Patterns of Irish and Foreign Manufacturing Firms, 2002
Country Group
Number
of local
units
Share of
Gross
Output
Overall
export
intensity
% of Firms
Exporting
Ireland
United Kingdom
Euro Area
Sweden
Denmark
Switzerland
United States
Canada
Japan
Off shore Centres
Rest of World
4530
118
200
11
12
17
317
12
18
7
13
15.6
4.1
6.1
0.1
0.5
0.8
71.2
0.5
0.6
0.1
0.4
36
53
87
82
83
83
97
93
98
82
85
48
75
91
91
75
94
96
100
100
71
92
Export
intensity
of
exporters
48
57
59
83
87
94
98
93
98
96
86
All
5255
100
83
53
88
Notes: Overall export intensity = Exports/ Gross output; % of Firms exporting = Number of local units
engaged in exporting/ Total number of local units; Export Intensity of Exporters = Exporters/ Gross Output
produced by Firms which are exporting.
Table A.4 Manufactured Exports by Nationality of Ownership and Market
Destination Shares, 2002
Ireland
United Kingdom
Euro Area
Sweden
Denmark
Switzerland
United States
Canada
Japan
Off-shore Centres
Rest of World
Exports Export
€000s Shares
6,741,546
8.5
2,093,612
2.7
4,871,185
6.2
85,790
0.1
407,255
0.5
698,241
0.9
62,676,375
79.4
404,289
0.5
500,535
0.6
105,536
0.1
334,050
0.4
All
78,918,414
100
77
UK
USA
Other
49.2
44.3
10.9
32.3
21.4
14.0
13.5
32.1
13.5
6.9
22.1
Other
EU
28.2
19.5
48.8
49.8
56.1
18.3
53.7
36.6
49.3
89.5
62.6
10.6
27.6
34.0
7.9
13.9
12.6
13.5
21.5
10.9
1.9
1.3
12.0
8.6
6.3
10.1
8.6
55.1
19.3
9.8
26.2
1.7
14.0
17.4
50.0
14.9
17.8
Table A.5 Imported Materials used in the Manufacturing sector by Nationality of
Ownership and Origin of Imports, 2002
Share of Ratio of
% Distribution of Materials Imported
Total
Imported to UK
Other EU USA
Elsewhere % Imports
Imported Total
from
Materials Materials
Affiliates
16.8
32.4
49.2
36.3
4.9
9.6
25
Ireland
2.7
49.5
47.3
44.2
3.4
5.1
15
United Kingdom
10.4
83.5
11.1
31.3
54.6
3.0
60
Euro Area
0.2
74.9
46.2
47.8
3.6
2.3
21
Sweden
0.7
90.8
10.4
48.2
13.7
27.8
45
Denmark
0.8
66.5
15.9
35.9
23.4
24.8
20
Switzerland
65.2
79.2
6.3
21.0
29.4
43.4
10
United States
0.8
71.7
35.7
28.1
24.8
11.4
5
Canada
0.9
89.2
7.5
8.1
9.6
74.8
82
Japan
0.4
91.7
5.2
13.2
77.4
4.3
31
Off shore Centres
1.1
84.4
4.0
26.8
0.0
69.2
76
Rest of World
Nationality
All
100.0
63.3
15.5
25.6
26.6
32.3
Note: The final column in Table 4 shows the extent to which material imports come from affiliates. While
on average one-fifth of all imported inputs come from affiliates, the patterns once again differ strongly by
nationality. The contrast between Japan and US/Canada is striking – whereas over 80 percent of material
imports into Ireland come from Japanese affiliates, the ratio for US and Canada are 10 and 5 percent
respectively. The low percentages for the US and Switzerland are consistent with the importance of
chemical and pharmaceutical firms from those areas where the value of the material inputs is very low.
(There are no data on the purchases of goods and services from affiliates; it is via these links that the strong
interrelationships between manufacturing entities in those sectors might be expected.)
78
20
Table A.6 Exporting Pattern of Irish and Foreign Service Firms, 2002
Country Group
Number of
Share of
Local Units Total Sales
Ireland
United Kingdom
Euro Area
Switzerland
US and Canada
Japan
Rest of World
4080
201
132
14
155
9
34
60.6
13.2
9.7
0.4
12.9
0.3
3.0
Overall
Export
Intensity
4.5
7.8
44.8
20.0
65.0
15.4
20.0
All
4625
100.0
17.2
% of Firms
Exporting
15.3
41.7
40.3
48.5
53.2
43.6
49.1
Export
Intensity of
Exporters
11.6
24.2
68.0
33.5
80.4
39.8
53.2
18.8
37.3
Table A.7 Exporting Pattern of Irish and Foreign Service Firms, 2001
Country Group
Number of
Share of
Local Units Total Sales
Ireland
United Kingdom
Euro Area
Switzerland
US and Canada
Japan
Rest of World
3,543
181
110
10
123
4
20
64.8
11.3
8.9
0.4
12.7
0.2
1.7
Overall
Export
Intensity
6.2
12.1
35.9
11.2
37.5
1.2
11.5
All
3,992
100.0
13.6
79
% of Firms
Exporting
16.3
39.7
36.6
25.8
56.8
49.9
43.8
Export
Intensity of
Exporters
15.0
43.3
53.4
57.4
66.9
2.6
45.3
19.4
31.0
Table A.8 Educational Attainment by Nationality, 2002
Nationality
Level of education
Total
Irish
Other Rest of
Africa Asia
EU
Europe
Persons
Total
Primary*
Lower Secondary
Upper Secondary
Third level (non-degree)
Third level (degree or higher)
3,034,616 2,809,372 114,178 20,332 16,676 19,891
760,384 706,357 15,960 4,870 3,199 3,398
711,128 673,334 26,052 2,005 1,913 1,551
850,017 795,016 30,358 7,188 4,419 4,271
285,218 263,654 12,715 1,366 2,175 1,956
427,869 371,011 29,093 4,903 4,970 8,715
Males
Total
Primary
Lower Secondary
Upper Secondary
Third level (non-degree)
Third level (degree or higher)
1,494,017 1,380,798
387,437 359,312
363,651 345,461
408,676 380,947
129,137 118,628
205,116 176,450
54,903 11,418
7,776 2,770
11,914 1,214
14,423 4,299
6,136
697
14,654 2,438
Females
Total
Primary
Lower Secondary
Upper Secondary
Third level (non-degree)
Third level (degree or higher)
1,540,599 1,428,574
372,947 347,045
347,477 327,873
441,341 414,069
156,081 145,026
222,753 194,561
59,275
8,184
14,138
15,935
6,579
14,439
*(incl. no formal ed. and not stated)
80
8,914
2,100
791
2,889
669
2,465
Other Not
None
stated stated
19,053
2,512
1,832
4,759
2,205
7,745
34,496
23,793
4,352
3,892
1,098
1,361
618
295
89
114
49
71
8,922
1,585
899
2,283
1,175
2,980
11,082 9,028 17,495
1,988 1,443 12,383
933
975 2,208
2,616 2,223 1,819
1,087
904
479
4,458 3,483
606
371
180
47
66
31
47
7,754
1,614
1,014
2,136
1,000
1,990
8,809 10,025 17,001
1,410 1,069 11,410
618
857 2,144
1,655 2,536 2,073
869 1,301
619
4,257 4,262
755
247
115
42
48
18
24
Table A.9 Labour Force by Nationality and Region, 2002
Nationality
NUTS2 Region / ILO
Economic Status
EU 15
Irish
EU NMS
Non-EU 25
Not stated
(incl. no
nationality)
Total
Ireland
Total
1,719,398
77,815
6,170
40,671
17,220
1,861,274
In employment
1,623,468
71,131
5,995
37,047
16,529
1,754,170
95,930
6,684
175
3,624
691
107,104
Unemployed
Border, Midland and Western
Total
437,953
19,077
1,685
6,511
3,368
468,594
In employment
409,640
16,582
1,641
5,807
3,167
436,837
28,313
2,495
44
704
201
31,757
Unemployed
Southern and Eastern
Total
1,281,445
58,738
4,485
34,160
13,852
1,392,680
In employment
1,213,828
54,549
4,354
31,240
13,362
1,317,333
67,617
4,189
131
2,920
490
75,347
Unemployed
Dublin
Total
509,299
25,978
2,019
21,260
8,241
566,797
In employment
482,557
24,788
1,950
19,392
8,026
536,713
26,742
1,190
69
1,868
215
30,084
Unemployed
Mid-East
Total
189,407
7,710
752
4,065
1,271
203,205
In employment
180,752
7,264
739
3,750
1,209
193,714
8,655
446
13
315
62
9,491
Unemployed
81