Case Study:The Impact of Globalisation on a Developed Economy…

Ireland

The Globalisation of the Irish Economy• As a colony of the British Empire, Ireland gained new

trade links as part of the Empire’s worldwide trade networks.

• With independence some trading partners were lost. In addition, tax barriers were introduced for all imports in the 1930s. These barriers prevented Ireland’s trade with other countries.

• These trade barriers were reduced from the 1950s on and Ireland became part of the global economy.

Impact of Globalisation on the Irish Economy1. Change in Products

• The Irish government has promoted the pharmaceutical and technology sectors and service industries such as finance and software services. This has been a big change from traditional activities such as agriculture and clothing.

Impact of Globalisation on the Irish Economy:2. New Markets Developed

Before Ireland’s economy became so globalised it traded mainly with the UK. Today our main trading partners are the US, Asia and Europe.Today globalisation is perceived as both an opportunity and a threat for Ireland.

Globalisation provides the chance to sell goods and services abroad. However, if Ireland becomes uncompetitive in labour costs, Irish-based industries will decline due to competition from imports of cheaper goods and services.

Impact of Globalisation on the Irish Economy:3. Dependence on foreign-owned companies for our

exports and employment

• Ireland’s ability to export goods is largely dependent on the US firms located here, e.g. Intel. 91% of Irish exports in 2012 were produced by foreign-owned companies.

• The Irish financial services sector has grown rapidly since the 1980s. The sales of financial services to the world is worth over €13.2 billion to the Irish economy each year. Exports from the services sector in Ireland are more focused on European markets.

Impact of Globalisation on the Irish Economy:4. Increased dependence on other economies

• Any reduction in US investment into Ireland would have a serious impact on the Irish economy. Similarly, a global slowdown in the high-tech or financial services sectors would also greatly affect Ireland, since such a large amount of Irish trade is concentrated in these sectors.

Impact of Globalisation on Irish Economy5. Dependence on knowledge industries rather

than labour-intensive manufacturing• Investment in Irish education is important to

Ireland’s future economic growth. Ireland needs to focus on attracting businesses that supply knowledge and ideas for companies (e.g. film animation and pharmaceutical development).