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Sales & Growth


Countries in focus: How the Irish economy took a hit but came out the other side fighting fit

Irish economy
Dublin has an increasingly vibrant business scene driven by high-growth companies

It’s weathered crippling recessions and struggled with an uncompetitive currency, but now the Irish economy is booming and producing highly-productive small and medium-sized businesses.

Be the Business is championing productivity improvements in the UK – looking to change management behaviours and get leaders thinking differently about growth. However, part of getting British enterprise to act differently involves learning from the best.

That’s where our new country focus fits in. Each month we’ll be looking at a nation leading the way on the productivity front, and first up is the Irish economy – or Celtic Tiger for those who remember the rapid economic growth that took place over the turn of the millennium.

Let’s start things off with a look at the key numbers associated with the Irish economy. These will be a staple in our country focus features, allowing you to draw comparisons between leading nations.

Vital statistics

  • GDP per hour worked (OECD): £25.44 – 2017 (8th)
  • GDP real growth rate: 4.1 per cent – 2017 (61st)
  • GDP per capita: $72,600 – 2017 (11th)
  • Exports: $225.1bn – 2017 (24th)
  • Average work week: 33.5 hours

To get below the surface numbers and find out what might be behind Ireland’s positive productivity positioning, Be the Business spoke with three business leaders spanning the hospitality, technology and human resources sectors.

Rollercoaster ride

Originally born in Belfast, and having spent most of his life in Canada, Karl Purdy has a pretty good idea of how business is done outside of the Emerald Isle. After living his formative years in North America, Purdy returned to Northern Ireland as a freelance photographer when the IRA called a ceasefire in the early 1990s. However, after being grabbed by a loyalist paramilitary group on the street, Purdy did some serious soul searching and realised his future lay in entrepreneurship.

“I asked a girl out for coffee in Belfast in the mid-1990s and she looked at me like I was insane. Going for a pint was the normal social protocol – and that set off a lightbulb in my head,” he remembered.

With a little help from a sceptical, but ultimately supportive, bank manager Purdy set his coffee shop up in Belfast and it was growing from day one. “It was like a freight train of success that didn’t stop,” he added. “We had the right timing end enjoyed a bit of serendipity. Sex and the City was on TV [showcasing the coffee drinking culture] and Ireland, in my experience, had a massive inferiority complex that meant it looked to the US and thought ‘why don’t we have this, or that?’.”

Fast-forward through the years and Purdy sold his booming Belfast business to set up a high-end restaurant in Dublin – a gamble that backfired when he lost most of the money he made from selling a successful company.

“The German economy tanked, and there was a little bubble, but I chalk it up to a lack of experience and know how. Within a span of two years I went from hero to zero,” he added.

Despite the Celtic Tiger roaring and, as Purdy remembered it, holiday homes were being bought everywhere and champagne corks popped frequently, Purdy had no money to start again. With the little capital he did cobble together, the entrepreneur bought a three-wheeled Piaggio van and Coffeeangel was born.

Coffeeangel now has locations throughout Dublin

Ironically, it was the recession in 2009 that provided an opportunity for Purdy to scale up his small but promising enterprise. “All of a sudden ‘to let’ signs started popping up, and the opportunity presented itself for premises. I called up estate agents and said I only needed a property for three months and explained what my budget was – a fraction of what they were looking for.

“They came back to me a few hours later and said the landlord had accepted my offer. We’ve grown over the last few years by adding shops, we’re just about to open our fifth.”

Purdy is an example of someone who has thrived setting up a business in the Republic of Ireland, a location he believes benefits from an inferiority complex developed in the 1990s. “Ryanair and easyJet emerged and suddenly the world becomes a smaller place,” he explained. “You can experience these different cultures and services and go home being open to new ideas.”

Having been “kicked in the teeth by the IMF” (International Monetary Fund), the Irish economy and the businesses within it took that on the chin and adopted a “can do” attitude that combined well with the country’s natural sense of humour, he explained.

Going above and beyond

Dean Forbes has only been CEO at CoreHR for 18 months, but it is his experience outside of Ireland that makes his thoughts particularly interesting. He arrived at CoreHR after spending time at a Paris-headquartered software company.

Core HR has employees who are heavily bought into the business strategy

In France, he explained, there is a very strong social structure. The strength of that is based on France not really having an economic downturn of note. “I found that leaked into the attitude of employees when it comes to work. They are very smart people.”

The contrast, he noted, was finding a segment of talent that was committed, dynamic and will go above and beyond. “That was possible, but more difficult than it is in Ireland.

“There is an extreme sense of community in Ireland that looks a lot like family cultures and values. Our employees feel as though they are part of the business – an outsized interest in the company and an outsized responsibility.”

The sense of shared responsibility is much harder to breed in UK companies, he added.

Google in Dublin
Google first arrived in Ireland back in 2003

Another interesting chapter in the growth story of the Irish economy is the recent influx of international multinationals. While his previous corporate home, France, has a long history of domestic goliaths such as Orange and Airbus. It’s only in the last decade, partly driven by the Ireland’s competition corporate tax structure, that market leaders such as Facebook, Google and Airbnb set up shop in the country – mainly in Dublin as part of “Silicon Docks”.

Forbes believes countries like the UK and France largely take their strong economic standing for granted, not something the Irish have ever been able to do. “There is an undertone that our staff believe they need our organisation to thrive – it’s better for all of us. We see that in the way we and our peers behave. It is much harder to breed in UK companies – that sense of shared responsibility.

This sense of pride is a sentiment echoed by Purdy, alongside an ability to make the most of their situation. “Using recession as analogy, when the Celtic Tiger was roaring fillet steaks was on all the menus and ridiculous dishes were being produced,” he recalled. “Then came the recession and it was beef cheek and other cheap cuts. The Irish have a sense that we don’t need bells and whistles. That has allowed businesses to create their own momentum – seeking out value and making sure that translates to bottom line.”

Returning home

If the recession saw Irish nationals leave in search of better job opportunities, Aine Denn believes recent growth is bringing them home – with new skills and experiences to enrich the job market. It’s such a trend that the Irish Times has an entire section online dedicated to returning home.

“The rate that people left the country was phenomenal in lots of different sectors. Those people are being actively encouraged to come home,” the software business co-founder added. “They are being encouraged to set up or acquire a business.”

While the Irish return to prosperity might seem a quick climb to the outside world, Denn believes the country has always had an entrepreneurial flair to it. “The first recession in the 1990s was what drove this behaviour.

“People had lost jobs so they either had to come up with new industries, and set themselves up in employment, or emigrate. We’re a small island and there didn’t used to be big corporate employers that there are now. Through necessity family companies have been set up and there is a huge support network in Ireland.”

Despite being so economically, socially and politically tied to the UK, and the European Union in the last 15-20 years, the Republic of Ireland has created a diverse economy driven by pride, hard work and a realisation that the good times often only have a finite lifetime.

Pride is bringing Irish nationals back to their home nation, topped up with best practice from around the world and helping local small and medium-sized businesses operate at a level less competitive countries can only dream of.

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