Irish Business Development PDF

MG4031 Wk.03 Lec.01 The Development of Irish Business: Census of Production (1907): At the time, only 20% were industrially employed, while 50% were agriculturally employed. Companies in markets such as linen, ship building, brewing and distilling were successful. The Irish Free State: After 1922...

MG4031 Wk.03 Lec.01 The Development of Irish Business: Census of Production (1907): At the time, only 20% were industrially employed, while 50% were agriculturally employed. Companies in markets such as linen, ship building, brewing and distilling were successful. The Irish Free State: After 1922, Ireland lost a lot of industrial activity from the North-East region, particularly Belfast. While being almost economically independent, the country still used British currency. At the time, over 50% of employment was in agriculture, and the government kept a very conservative approach, keeping State Intervention to a minimum. However, many advancements were made, such as the establishment of the ESB and the Shannon Scheme (Ardnacrusha). There was little entrepreneurial activity because of the ex. colonial status, so many opted for safe employment in the Civil Service. Self-Sufficiency and Protectionism: When Fianna Fáil gained power in 1932, they adopted a policy of self-sufficiency, placing high tariffs on imported goods. New industries like car assembly were allowed to prosper behind the tariffs. The Control of Manufactures Act (1932) required that more than half of the equity in new companies be Irish owned. An Economic War occurred in the 30’s between Ireland and Britain when Ireland stopped paying them land annuities. The economy was hit hard by this, increasing unemployment, emigration and lowering farmer’s incomes. As part of the protectionist policy, semi-state bodies such as Aer Lingus, CIÉ, Industrial Credit Association and bord na Móna were established to boost the economy. During WWII, the North benefited from an economic boom from things like ship building, which the South didn’t ever see. As a result of increasing problems, the IDA (Industrial Development Authority) was established in 1949 to advise government on industrial development and to promote greater investment in Irish industry. The passing of the Underdeveloped Areas Act 1952 saw industrial activity spread to the West and South. Free Trade and Foreign Direct Investment: Ireland continued to see an economic slump until the late 50s when free trade and FDI were explored by the government. The government began to promote foreign export-based companies setting up in Ireland. The Export Profits Tax Relief was introduced in the Finance Act 1956. The First Programme for Economic Expansion (1959-64) focused on: Increasing state expenditure on productive investment areas An export drive in agriculture and industry FDI  The adaptation of Irish Industry to modern markets and methods of production Protectionism was replaced by Free Trade, and the country joined the EEC in 1973. The Anglo-Irish Free Trade Area Agreement (AIFTAA) (encouraged by T.K. Whitaker) had the following terms: Irish industrial goods were guaranteed tariff-free access to British markets Irish store cattle were given a guaranteed market and butter import quotas to Britain were increased Ireland reduced tariffs on British imports annually by 10% for 10 years In 1958, the Control of Manufactures Act was eased. The IDA changed from civil service to a state sponsored body, which allowed it to have stakes in companies and achieve its goals more easily. In the 1960s, the education system was reformed to promote second and third level, with the HEA (Higher Education Authority) being established in 1969. In the early 1970s, the IDA began establishing its own industrial estates. References: Notes based on MG4031 Lecture Slides and Modern Management: Theory and Practice for Students in Ireland (5th Ed.) - Tiernan S. and Morley, M.J. Chapter 2.