Ireland is one of the leading nations in globalisation.
Yes, you read that correctly.
Since 2009 Ireland has ranked in the top 2 nations for globalisation according to the KOF Index of Globalisation.The KOF Index measures the degree of globalisation across 122 countries. It was created by Axel Dreher at the Konjunkturforschungsstelle of ETH Zurich, in Switzerland in 2002.
The Index is calculated across three main areas:
1. Economic GlobaliSation (36%)
This shows how the nation ranks for Economic Trade, Foreign Direct Investment and taxes on International Revenue amongst other data points.
2. Social Globalisation (37%)
This measure captures the access to information and freedom of movement people have within the economy. Things like International Tourism, Foreign Population, Internet Users, Television Sets (per 1000 people), Number of Ikea stores (per capita) are used to calculate this.
3. Political GlobaliSation (27%)
As the name suggests, this is a measure of things like Number of Embassies in the Country, Membership in International Organizations, International Treaties and other similar political standings.
While Ireland has always been strong in the Economic Globalisation element (consistently in the top 5 nations since 1980), significant improvement has been made in Social Globalisation since 2009, propelling us into the top spots.
While this may come as a surprise to some readers, there are lots of good reasons why this lofty position on the globalisation league table has been achieved.
Let’s look at the three sections of the KOF Index.
Economic GlobaliSation
Trade
Ireland has had the fastest economic growth in the Eurozone for the past 4 years. This impressive trend is set to continue with growth forecast at 4.1% for 2017, 3.4% for 2018 and 3.0% for 2019. These growth rates for Ireland are almost double the EU average for those years.
Credit rating
There are high levels of confidence around the Irish economy with our sovereign debt receiving an ‘A’ grade from credit rating agencies.
Foreign Direct Investment
Multinationals now…
- Hire 10% (approximately 220,000 people) of the Irish workforce
- Spend €17.9 billion in annual wages for employees and directors
- Invest €4.9 billion in capital projects
Corporation tax rate
Ireland has an extremely competitive corporation tax rate of 12.5%.
Tax treaties
It also has tax treaties with 72 countries.
Social GlobaliSation
Transport and Tourism
Ireland has extensive transport links to Europe and the rest of the world. The weekly flight schedule from Dublin, Cork and Shannon regularly has over 400 flights a week.
Dublin and Shannon Airports have US Pre-Clearance facilities making them the only airports in Europe to offer this service.
International workforce
There are more than 535,000 non-Irish nationals living in Ireland, accounting for just over 17% of the country’s population. Over 70% of the non-Irish national population came from 12 nations – Brazil, France, Germany, India, Italy, Latvia, Lithuania, Poland, Romania, Spain, the U.K. and the U.S.
Highly educated workforce
Ireland has one of the most educated workforces in the world. The share of 25-34-year olds in Ireland with a third level qualification is 52%, compared to an OECD average of 43%.
Ireland’s education system is amongst the best in the world. In 2015/2016 over 220,000 students enrolled in third level courses across Ireland’s universities and colleges. Almost 30% of students enrolled in Science, Technology, Engineering and Maths (STEM) courses.
Political GlobaliSation
Due to factors like size, neutrality and limited resources, it’s probably fair to say that Ireland will never be a major global political force. That hasn’t hindered our economic development and stature as a leading force in globalisation. Though Ireland has never scored well in this element of the KOF Index, Ireland is still one of the world’s leading locations for Global Business Services.
Are You Considering Business Expansion?
If you would like some further reading on what Ireland has to offer your business, the IDA Ireland website has a treasure trove of information.
If you’d like to discuss anything with us in Smart MBS, you’ll find all our information here.
We understand the challenges involved when setting up a business overseas and can provide a turnkey solution at a pre-arranged price.
