Why Ireland’s economy may not be sc*wed but its newspapers may be…

On Wednesday night, I took part in an experiment the results of which may indicate that the Irish economy is not entirely screwed, but the Irish newspaper industry just might be. McConnells advertising company invited an irregular bunch of Irish bloggers (to declare an interest, in my case they paid for my flight) to the offices of the IDA to meet and be briefed by their polymath CEO, Barry O’Leary on the IDA Ireland’s new US ad campaign in the States.

The IDA in Dublin have been running smart campaigns for years now. Back in the 1980s they ran an ad across the US which ran “The Irish: Hire them, before they hire you…” Now the emphasis is on human capital, and innovation. Despite Mairtin’s understandable frustration at Northern Ireland being left out of the big Diaspora do at Farmleigh House on Friday and Saturday, one of the reasons the Republic can pull in such fire-power is the way organisations like the IDA continue to track down anyone in a senior corporate position that’s even remotely smells Irish, and keep in contact in a fairly relentless manner. Over the years a certain dynamic has grown around rounds of Foreign Direct Investment; with local talent rising through the ranks in Ireland, hitting senior management in the states and with some returning to set up their companies back home. On Thursday when they launched their latest €2 million ad campaign, it seemed the pre-occupation of the press with the wider distress of the country meant that Mary Coughlan’s Einstein gaffe the official press launch on the following day was all that got through to the papers…

Not terribly surprising since the only people in the audience who asked any questions, myself and the guy from PA, so I suspect Senan Moloney’s Coughlan riff (which made the Irish Independent’s front page splash) was written off the back of the PA reporter’s sharp-eared account of the proceedings. I stopped asking after my third question, since it was getting a little embarrassing.

The crisis, the Nama debate, the government deficit and the consequent McCarthy Committee Report, the Tax Commissioners, and the fear amongst political and media insiders that a comparatively impoverished No camp are going to run Lisbon very close this time is creating a bad news aura around Ireland in the States. Some IDA officials say that in some cases the first 20 to 25 minutes of any conversation with a senior industrial player in the US is taken up with ‘bad news from home type”.

It’s hardly surprising. An excellent report prepared by the Ireland Fund for the Farmleigh forum does not pull its punches:

* There has been a steep rise in unemployment rates: June 2008 – 5.9 per cent, June 2009 – 11.9 per cent. In 2008 youth unemployment increased by 87 per cent. The number of persons on the live register rose to 418,592 in June 2009

* Unemployment may exceed 17 per cent by the end of 2009 house prices are back to levels last seen five years ago with average national prices falling by 10.9 per cent in the year to May 2009
In 2009, our national deficit of €14.7 billion was the highest ever

* The national debt was €65 billion at end of the second quarter of 2009

* The Irish Government has taken €45 billion off its estimate for economic activity for the next 3 years Ireland has the fastest growth of personal debt in the industrialised world. In the mid-1990s the
average debt as a proportion of household disposable income was 48 per cent. This has risen to over 180 per cent

* Irish exports fell by €6 billion in 2008

* Overseas tourists were down 3 per cent in 2008 – the first drop in 7 years. Up to 25,000 tourism jobs were lost in 2008.

And, to boot, there has been a drop of 30% in FDI globally in the last year. Grim stuff.

But both the Ireland Funds’ report and the IDA argue that these are the primary conditioning factors for the short term. An IDA spokesman told Slugger that in the last two quarters of 08/09, no senior businessman was prepared to put his head above the parapet, but that in first quarter of this year they were starting to take calls and talk cautiously about development plans going forward. The glacier may be just be beginning to move.

FDI still accounts for 60% of Ireland’s total exports. There are 150,000 people employed by the companies that are on the agency’s books… And it provides a huge draw for overseas talent in companies like Facebook and Google, where there are estimated to be 48 native languages spoken by its employee.

And there is some evidence that incoming firms are starting to move up the food chain: or in the jargon from technology transfer to knowledge transfer. It’s understood Merck is currently spending €300 million on vaccines development facility in Carlow. That’s high end R&D, rather than manufacturing.

It strikes me that the IDA do simple things well. With just 34 employees in the US, much of what they do is look for Irish names in senior executive roles corporate America and cold call them, then set up communications channels and then crucially keep them open (76% of their business is with existing clients).

Time will tell if the Farmleigh event is a Diaspora world shaker, or a one off media stunt. Mairtin’s frustration is understandable. Not least since some of the good will shown by corporate America towards Ireland generally, has its basis in the success of Northern Ireland’s Peace Process.

But the success of that process has been replaced by the serial failure of the local political process, and more importantly the failure of Northern Ireland’s politicians to strategise with the instruments and resources they already have (think InvestNI and SIB).

So why do I think newspapers are screwed; especially since my colleague from PA spotted Coughlan’s gaffe when I didn’t?

Well, the gaffe was a good catch, but by no means all of the story. The bylined journalist from the front page story does not appear to have even been in the room. His ‘account’ was a good blog riff, on the basis of someone else’s (albeit paid for) legwork. Catching the Deputy PM blagging on a smart economy, is one thing, but informing citizen’s about that what’s actually being done is quite another.

I understand the economic reasons why newspapers adopt this ‘apparition strategy’ in such fuzzy, messy and difficult-to-manage world. But it seems to me that with the exception of some high end financial journalism, companies, political parties, and civil society organisations might be better off heading down the citizen journalism route, rather than taking a risk on trying to catch the attention of the pre-occupied, overworked, overstressed generalists of the mass media.

It will inevitably lead to some bumpy rides, but we already know that the ‘dodgy’ Wikipedia has developed a seemingly endless capacity to get into areas that the ‘respectable’ Encyclopaedia Britannica just can’t…

In a world where the Sun Newspaper has made its showbiz columnist it’s new editor, the newspaper is becoming so intent on entertaining it has no time (or space) to get serious about what actually affects a nation’s citizens… Fair play to the IDA for adopting an innovative comms strategy to launch an ad campaign about, er, innovation…

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  • Greagoir O Frainclin

    I think they might be playing up the whole dilemma of the Irish economy being totally screwed so as to get a Yes vote in the Lisbon Treaty. I bet when we all vote Yes on October 2nd things will become rosey again in the garden of EIRE.

  • I wonder if anyone in Ireland has given any thought to this aspect of the Lisbon story.

  • Itwas SammyMcNally whatdoneit

    Mick,

    Mary’s earlier green party gaffe is a cracker – and talking of outrageous mistakes you are missing and asterisk from your title.

    I wonder have the brains trust considered setting up an investement ‘bond’ for inidividuals with a guaranteed long term (low) return – it could net them a few euro and also generate good publicity.

    A sort of vouluntary overseas tax.

  • Ireland Funds seem to be a bit confused about their ‘Irelands’

    The mission of The Ireland Funds is to be the largest worldwide network of people of Irish ancestry and friends of Ireland dedicated to raising funds to support programs of peace and reconciliation, arts and culture, education and community development throughout the island of Ireland

    Their report mainly focuses on Ireland-26 presumably because some of the funding came from Dublin’s DFA yet the Diaspora statistics relate to Ireland-32.

  • Greenflag

    Nevin ,

    People/investors outside Ireland don’t care about 26 counties or 6 counties . They do care about ROI (return on investment) which is one of the reasons that almost 100% of FDI on this island in the past 30 years has been in the 26 counties .
    The Ireland Fund is a short and snappy title . Calling it the 26 county Ireland Fund does not sound like a catchy marketing title 😉

    Anyway there won’t be much FDI coming from those areas where the Scotch Irish diasporans are found in numbers -i.e places like the Carolinas , the Appalachians and Tennessee. Those states need all the FDI they can get and I believe they have offices similar to the IDA located overseas in places like Germany and Japan where they offer ‘tax ‘ advantages , sunshine and other assorted benefits to those who are willing to locate in places like Harlan , Kentucky etc .

  • Greenflag, I’d have thought that the Diaspora imagined that Ireland was the island and that their money would be going to it, not just the 26. You can also see why Northern Nats might feel short-changed. Ireland Funds stick Peace Process on their begging bowl but forget about it when it comes to participation at Farmleigh.

  • Greenflag

    Nevin,

    ‘I’d have thought that the Diaspora imagined that Ireland was the island and that their money would be going to it, not just the 26’

    Most of the so called diaspora apart from recent arrivals would not imagine anything other than Ireland is an island and investment in any part of it would be a benefit to the whole . Ireland is about the size of South Carolina or less than half the size of Florida .

    Anyway the fruits of the FDI ‘bonanza ‘ have found some of their way North via the recent penchant for people from the 26 to travel north for shopping and property speculation .

    Crumbs perhaps but half a loaf etc ;

    As for Northern Nats being short changed ? What’s new ? Probably a good deal less short changed that they were 1920 to quite recently I’d say.

    The system of government in NI is designed to keep it in more or less permanent public sector dependency . It’s very difficult to see NI coming unstuck from it’s present economic predicament without major change in it’s political and or economic orientation . And as such is nowhere on the horizon the outlook for the near and medium term future will be ‘crumbs’ and that largely courtesy of HMG’s annual subvention.

    The Republic should not be looked at as being capable of delivering anything more than partial financial relief to HMG’s off shore half province in the next few years .

    The critical issue now is whether economic malaise in NI will lead to another round of sectarian conflict ? All parties need to work to ensure that the wheel is not rewound to the late 1960’s I don’t believe it will but with the Tories on the verge of power in the UK and with their traditional penchant for getting Ireland wrong -anything is possible .

  • “Irish exports fell by €6 billion in 2008”

    But they rose 5% in the year up to June. See link on my name. Industrial production also rose by 8.9% in the year up to July. I think there’s an agenda to exaggerate the recession to bamboozle us into accepting Lisbon. Having said that, there is an urgent need for this incomptent, dithering government to tackle barriers to entry in the electricity, gas, and public-transport sectors, as well as in the professions – notably the medical and legal professions. Shame on Mary Coughlan for kicking the latter into the long grass by outsouring the issue to yet another govt “committee”. God save Ireland if we have to wait six months for these committees to tell us what we already know before the govt will do somethinh about it.

  • Dave

    “Greenflag, I’d have thought that the Diaspora imagined that Ireland was the island and that their money would be going to it, not just the 26.”

    Nope, FDI investors are investing in Ireland, and not the United Kingdom. One of the main reasons is Ireland’s lower corporation tax rates.

    I think you could try claiming that you are Irish (when it suits you) and you want their money, but they might point out that your state isn’t Irish and that, ergo, it doesn’t have said lower tax rates.

    See, investors are contrary bastards like that. They really don’t care about ‘let’s pretend we’re part of Ireland’ games when the pretence means they pay higher taxes (and to Her Majesty’s government).

    Ireland is bankrupt. It just doesn’t know it yet. The external debt is 1.67 trillion, and more than half the borrowing has disappeared in bubbles of one form or another. It still has to pay all of that money back within the timeframe of the loans, and it has to do it by generating new wealth to replace the wealth that disappeared in said bubbles. Good luck with that.

  • OC

    “[M]uch of what they [IDA] do is look for Irish names…”

    I went to their web site, but couldn’t find the list of “Irish” surnames that apparently drives the search.

    Does it include names like Jackson, or Adams? Does MacAlpin, or Wallace make the cut?

  • “economic malaise in NI will lead to another round of sectarian conflict ?”

    Greenflag, the last round was essentially generated by those who fancied a Cuban-style Ireland-32. The Irish government of the time acted to ‘decapitate’ the IRA socialist leadership – leaving us with the Provos.

  • jake

    just because you declare an interest (in your case allowing an advertising agency to pay your airfare to a conference they were sponsoring and out of which it is possible they would get business) doesn’t make it all right. the fact is, you have been tainted with their money, no matter how you dress it up. you have taken their money, their job is to place advertising, you have a site that wants to show adverts so as to make money and who knows what you might be tempted to do or influences you could be exposed to, especially in the area of editorial content, to get their business. this relationship is exactly the same one which surely led in major part to the current crisis in the newspaper industry. the blogosphere is whacking the print media because newspapers have become boring and timid, unwilling to challenge the power centres in society and more concerned about making big profits than creating good journalism. the print media is ailing not just because people are switching to the internet but because what they see and read on the internet is more lively, challenging, iconoclastic snd interesting than what is available in newspapers. however from what you have written here, it looks as if you and the other bloggers who went with you to this conference, are at the start of the same path the print media took and if you continue it will not be difficult to predict where you will end up. why am i not surprised?

  • Greagoir O Frainclin

    Tony Blair for Taoiseach!

  • Greagoir O Frainclin

    ah sure his kids have Irish passports!

  • Mick Fealty

    Jake,

    We’ve not heard from you for a while. Welcome back!

    That’s a fair amount of futuring. But I take your point. The road ahead is full of danger for a project like Slugger.

    If I hadn’t declared the interest you wouldn’t have known. Just as you might not have known about how the Coughlan story got to the front page of the Indo.

    As I have said to you before, I’ll have to take my chances. I cannot say that Mr O’Leary got the grilling he might have expected from a group of quizzical analysts.

    But the point is that if professional journos don’t ave the time nor the inclination to cover your business then engaging the irregulars has to be a good fall back.

    You cannot do it on your own. Those parties, to be political for a moment, who think that by setting up a blog they can side step interviews on tv or a big journalism title, are sorely mistaken.

    Organisations which seek to serve a public need also need to subject themselves to a rigorous validation/falsification process. Otherwise they run the risk of drifting far from their moorings.

    The problem is not that the MSM has got boring, but rather they are losing capacity in comparison with their readers. Whatever bias is contained in my post above (and to be fair you only allude to the supposition that it must be there, since I’ve admitted the interest), it is more valuable to any observer since it contains original detail about the project.

    I don’t suggest it is original, but there is little to compare it too in the MSM’s coverage.

  • The fact that the IDA trawl for Irish names is clever but I hear that Eddie Murphy is really pissed that he keeps getting cold calls from business people with Irish accents yakking about his Irish ancestry.

    I hope they just don’t restrict their research to Irish names. Many Irish Americans trace their lineage through their maternal side but may have a non-Irish last name. And need we mention the millions of Americans who are 1/24th Irish but regard themselves as fully fledged Irish?

    OC,

    I’m sure Scots-Irish names are on their call lists. Maybe they came to an agreement with their Scottish counterparts to split that list?

  • jake

    to mick fealty: i don’t think i understood a word of that self-rationalising gobbledegook. the point remains: you took an advertising agency’s hospitality/money; your independence has thus been compromised and you are on the same road towards corruption and falling standards as the more rotten print media. the best newspapers have ethics rules and you can bet that high up on their lists of ‘don’t do’s’ when performing your job is to take money or its kind from anyone except your employer. admitting it doesn’t excuse it. it merely excites speculation that there is much that you haven’t admitted. the only solution is to devise an ethics policy as described above, refuse hospitality from outside parties and keep to it. remember the old maxim, which applies to bloggers as much as reporters:

    you cannot hope to bribe or twist,
    thank god, the honest journalist.
    but much the same effect can be
    achieved with hospitality.