27.11.09

West cannot afford another major ‘brain drain’

 

Ireland’s future depends on business – it’s that plain and simple. Enterprises provide the jobs needed by our society.  If they are not supported to start-up, to expand, and particularly in the current circumstances, to survive, then how can Ireland ever emerge from its current crisis? And how will badly needed jobs be created? 

If we accept the importance of enterprises to our economy and society, then doesn’t it also follow that enterprises right across the country should be facilitated to contribute to building a more competitive and sustainable national economy?

Western-based businesses currently make a substantial contribution to national output.  In 2006 the West and Border regions contributed a sixth of the country’s total GDP, a contribution which the State cannot afford to jeopardise.  And make no mistake, companies operating in the Western Region are in jeopardy. The challenges they face, from transport to broadband access, are numerous and in many cases greater than those faced by companies in other areas.    

In the year to August, 34,000 extra people have signed on the live register in the Western Region, while our unemployment rate has more than doubled.  Obviously all regions are suffering; the real issue is a region’s capacity to turn itself around.  Given the Western Region’s higher dependence on weaker economic sectors, this can only be done by making it more attractive to future entrepreneurs and investors; and by safeguarding the competitiveness of existing businesses.    

While the fundamental challenges facing western-based enterprises are common to businesses across the country, there are particularities in the region which present additional obstacles.  The most obvious involve access and the ability to get people, goods and data into and out of the region. Infrastructural inadequacies undermine competitiveness and companies’ ability to enter and service international markets. 

It is quite amazing, after the unprecedented growth and expansion which Ireland has undergone in recent years, that basic infrastructure deficits remain a top priority for businesses based in the region.  And these deficits are real. 

While the major inter-urban routes to Belfast, Waterford, Cork, Limerick and Galway are all due to be completed by 2010, the poor condition of the N5 linking Mayo and Roscommon to Dublin costs a leading Mayo-based multinational an additional €500,000 each year.  This is because stronger packaging is needed to protect their product from breakages during transport.  In addition, the poor condition of the N5 costs Mayo industries an estimated €2.5m annually in lost time. 

The condition of the roads in the region, particularly those north of Galway, has led companies to look at alternative ways to move their goods.  County Mayo has one of the largest rail freight volumes in the country, mainly forestry products transported from Ballina to Waterford.  While a new rail freight service to Dublin Port was just launched this August. 

The expansion of rail freight services from Ballina during a time of recession, combined with it being a more sustainable and safer form of transport which reduces the number of trucks travelling on our roads, is testament to its value.  Regardless of this, the report of An Bord Snip Nua has recommended that the section of rail line to Ballina be closed. 

If this were to happen, combined with the recommended reduction in expenditure on road maintenance and the postponement of new national road projects, companies located in this area would be further constrained in their exporting activities and their competitive position damaged. 

The region’s infrastructure deficits are not limited to roads and rail lines.  In today’s world, telecommunications infrastructure is as important, if not more so. How can the West hope to become the Smart Economy envisaged by Government if large areas of the region have none or totally inadequate broadband connections?  For example a global IT services company based in Ballina faced significant growth challenges in the early part of the decade because the existing data network infrastructure was not adequate to meet its business needs. Private investment was required to upgrade the existing infrastructure to allow the business manage information and data volumes to its international customer base.

This situation is unheard of in developed and developing nations who are working aggressively to attract similar companies – the IT infrastructure is treated as another “utility” such as water or electricity.  Investment to maintain world class infrastructure to meet 21st century needs will be a determining competitive factor in any decision to locate or retain businesses of this type in the Western Region. 

Natural gas is one of the cheapest and cleanest fuels for industry, yet there is no transmission network in most of the north-west area.  Companies who cannot access the natural gas network pay higher prices for energy now, and if a carbon tax is introduced they will be hit even harder in future.

So far, I have focused on the problems facing western businesses, but it would be remiss of me if I ignored the progress that was made in the boom years.  In the first quarter of 2009, despite the fact that we finally had to accept we were in a recession, there were still 8% more people at work in the Western Region than five years earlier.  And they were more qualified – 28% of the workforce had a third level qualification.  While the region still lags the rest of the country in education terms; the gap is closing. 

The expansion of the region’s human resources, through returned emigrants, movements from other parts of Ireland and inward migration, is probably one of the most important legacies of the Celtic Tiger for the Western Region.  The region is now younger, smarter and more dynamic than ten years ago, epitomised by the vibrancy of the WDC’s LookWest.ie initiative.  For the region as a whole, a return to the large scale ‘brain drain’ which blighted the West for decades is one of the biggest threats we face.

The Western Region still needs intervention to ensure that it grows and forms an integral component of the national economy.  A return to the dark days of the 1980s when emigration or long-term unemployment were the two most likely options for the region’s young people, and its economic potential was left untapped, is simply not an option.  We have come too far to go back.   

 

Note to Editors:

The Council for the West is a voluntary, independent, non-political body which monitors and reports on the socio-economic state of the West and acts as a lobby group promoting the development of the West. The Council for the West was set up by the Western Bishops and has successfully campaigned for retention of Objective 1 Status for the region.  It continues to campaign for balanced regional development and highlights issues of major concern for the region.

Seán Hannick is Managing Director of Killala Precision Components Ltd, Chairman of the Council for the West and Vice-Chairperson of the Mayo Industries Group

Contact Points:

Spokesperson:                            Sean Hannick: 087 2564824

Administrator:                                Caroline Wilson, Tel: 096 32975 / email: cftwest@iol.ie