Ireland: Celtic Tiger Burning Bright

Design Management Review, Fall 2004 by Dunne, Jim

In an article written nearly 10 years ago, Jim Dunne analyzed Ireland's dilemmas as it attempted to build a robust and strong identity for its products and services. Here, he gives a progress report on the Brand Ireland initiative, a program renewed in 2002 to establish a sustainable international reputation for Ireland as an innovative, value-added center for design talent.

After a decade of sustained economic growth, Ireland boasts higher numbers in employment than at any time since the birth of the state, and enjoys living standards exceeding the European Union average, as measured by gross domestic product (GDP) and gross national product (GNP) per capita (figure 1). Government debt has been reduced from the highs of the 1980s and is now the second lowest in the Euro zone. And this economic success seems to be set to continue, if at a slower and more manageable pace; the Economic and Social Research Institute (ESRI) predicts growth rates of 5.4 percent for the Irish economy in the second half of this decade. Although there have been many individual claims to ownership of this success and many factors in it, it has come about as the result of good planning, good timing, and good providence over nearly three decades. EU aid and access to substantial export markets, social partnership on wages and taxation, growth in global trade-particularly in life sciences and information and communications technology (ICT)-and the demographic profile of Ireland all played a part in this success.

Does this mean we can relax now and enjoy the ride? Not according to a recent report on national development strategy by the Enterprise Strategy Group (ESG), a government-established think tank.1 Ireland has succeeded mainly as a result of its manufacturing expertise, not its branding, and as successful businesses know, only the permanently low-cost or the most efficient can create a long-term success from this formula. The ESG analysis tells us that Ireland's cost base has increased dramatically; that China, India, and the Eastern European countries are adopting our low manufacturing costs, expertise, and other secrets of success; and that Ireland's low tax rates are being copied by competitor countries.

Ireland's success to date has been achieved mostly in the operational aspects of manufacturing and services rather than in knowledge of customers, markets, and product development. It is foreign-owned businesses in Ireland that account for most of our exports and that, for the most part, produce goods and services that were researched and designed elsewhere, to satisfy market requirements that were specified elsewhere, and that are sold by other people to customers with whom the Irish operation has little contact and over whom it has little influence.

Ireland's indigenous businesses have only rarely achieved strong growth in exports over the last decade. Even the food sector, which accounts for more than 55 percent of Ireland's indigenous exports growth, has been led by production rather than market. Few, if any, really successful new brands have been developed; in real terms, growth is low.

Furthermore, the ESG study points out that the very economic success Ireland is enjoying will mean new restrictions on state aid for enterprise after 2006, when Ireland will become a net contributor to EU budgets and will no longer be able to avail itself of EU development funds.

Ireland has achieved the financial resources and the confidence to move to the next level of national success, where it must research, develop, and design new products and services from its own capabilities and market them on a global stage (figure 2).

In a word, to succeed in the future Ireland needs to become a world-class innovator!

Repositioning Ireland for the future

For success in the next decade, Ireland needs a new focus. The ingredients are there and the recent history of economic success and achievement has greatly influenced a national psyche that had grown comfortable with struggle and failure rather than success.

The Ireland national brand has been broadened and made more visible on the world stage as a result of the country's economic success. Other nations watch, learn, adapt, and adopt Ireland's strategy. This is a celebration of our success and a source of national pride, but it's also a challenge to our future.

The Irish people have become familiar with economic success and have higher expectations of the future. They have come to believe that if we make the right decisions, we can be the authors of our own future. Of course, economic success is only one element of national success and does not itself guarantee social equality or a fair and just society, but without it everything else is more difficult to achieve.

A focus toward innovation is not an easy repositioning to achieve in a single business, never mind a whole country. It will demand fundamental changes in almost all areas of national endeavor and activity. It will demand changes and new levels of partnership from education, government, business, and the design and creative communities (figures 3 and 4). Ireland has already made a start on this.