The Irish economy is in a very bad condition at the moment, and significant numbers of job losses are being announced every day. Indeed, January was the worst month for job losses in the last 40 years according to Jobless rate could hit 400,000 – Cowen. In a frighteningly short time Ireland has gone from having one of the best economies in the EU to having one of the worst economies in the EU.
Initially the job losses were mainly in the property sector, and the associated sectors. This was mainly due to the Government inflated property bubble bursting. Job losses then quickly spread to associated sectors such as banking, construction supply, and household goods.
Next some of the companies involved in the information communication technology sector started announcing job losses. One of the main reasons behind these job losses was the loss of competitiveness due to the high cost of doing business in Ireland. The failure to adopt the Lisbon Treaty has also been quietly mentioned by some multinationals as a reason for losing confidence in the Irish economy. For example, Dell is moving 1,900 jobs to Poland (see 1,900 jobs lost at Dell in Limerick), and IBM is moving 120 jobs to Singapore (see IBM seeking 120 voluntary redundancies). Although these job losses are unfortunate, they are not surprising given that they appear to be very labour intensive.
Today Ericsson announced 300 job losses in Ireland. The truly shocking thing about this is that these jobs are all very skilled Research and Development jobs. Furthermore, Ericsson is moving these jobs to a country with a lower cost of business. For more details about this see 300 jobs to go at Ericsson.
This raises some very important questions. Why did this happen? How does this reflect on the Irish knowledge economy? How secure is the Irish knowledge economy?
Contrary to all of this bad news, I also read today that Irish companies raised more venture capital in 2008 than they did in any other year since 2002. The total amount raised was over 240€ million by 93 companies, and the most successful sectors were:
- Drug delivery and medical device sector (16 companies raised 46€ million)
- Telecoms sector (9 companies raised 38€ million)
- Pharmaceutical and biotech sector (23 companies raised 42€ million)
For more details about this see Private funding for tech firms on the rise in 2008, survey shows.
Tags: Dell, Ericsson, IBM, Ireland, Poland
