How Ireland Played A Role In The 5 Biggest Brands’ Global Growth
Technology and the stock market have served up quite the roller coaster ride over the last twenty years.
As you can see from the graph below, the 2000s were a particularly volatile period in stock market history. Investors were pounded with one crisis after the next.
The Dotcom Bomb
Around 1998 the Tech sector in the S&P 500 began an unsustainable growth spurt that lasted almost three years. The sector peaked in March 2000 as internet companies ran out of money and customers ran out of patience.
The Sub-Prime Mortgage Crisis
With property markets booming and generating returns more than equities, financial companies were enjoying a buoyant period. Little did we know that the property market crash in 2007 and financial crisis in 2008 would make the Dotcom Bomb look like child’s play.
As oil price began to recover from the lows of $10 per barrel in the late 1990s the likes of Exxon and Royal Dutch Petroleum (Shell) dominated US and global stock market indices. After oil prices had climbed towards $150 per barrel, mainly fuelled by speculators, the energy price corrected.
By the end of the 2000s global stock markets were at similar levels to those at the beginning of the decade. After three significant stock market sector corrections, investors needed something they could really believe in.
Don’t Call It A Comeback: Tech Returns
For decades, IBM had been the token technology company in the stock market. For a brief period in the early 1990s they sat atop the US stock market index, the S&P 500, as the largest company. But it wasn’t until 1995 when Microsoft cracked the top ten that they were joined by another technology company. Then in 1996, semiconductor company, Intel made it three tech companies in the top 10.
1996 was the first time the top 10 companies in the S&P 500 had a combined value greater than $1 trillion. The three tech bellwethers accounted for about 28% of the valuation.
Fast forward 20 years to 2016 and the stock market is an entirely different place.
New World Order
In 2016 the five largest companies in the world by market capitalisation were all technology companies.
The combined worth of these five companies was $2.3 trillion, more than double the value of the top ten S&P 500 in 1996.
Their dominance has been built around making innovative products that match consumers’ needs. The major difference between the tech giants today and those in the late 1990’s is earnings and profits.
While the Dotcom companies asked you to buy the future, the tech giants today are selling the ‘Now’.
- Apple, due to their exceptional marketing and ability induce fanatical support from their customer base, has long been a profitable company. However, in 2007 the company did what they said they’d never do and started selling phones. The creation of the iPhone began the smartphone revolution and propelled Apple into stock market stardom.
- In August 2015, Google announced they were creating a new public holding company, Alphabet Inc. The restructure would see Google join some of its subsidiaries under the new umbrella company, Alphabet. Google has monetised its dominance as the world’s leading search engine by creating the advertising platforms Google AdWords, Google Display Network and Google AdSense among others. These ad platforms have proved a reliable marketing engine for businesses, resulting in a lucrative income stream for Alphabet.
- Microsoft have survived numerous attempts at anti-trust lawsuits to remain the most dominant software company in the world.
- Amazon has transformed from an online book store to a retail powerhouse and made founder Jeff Bezos the richest person on the world. As they begin their assault on the online ads market, commentators are keen to see who wins out in the battle for online supremacy between Alphabet and Amazon.
- Completing the top 5 is Facebook. The social media giant through continuous updates of the interface, acquisition of other social networks and developing a highly sophisticated ad platform is dominating the social media landscape.
The Irish Angle
While these companies have some similarities in how they achieved their success, one we are particularly proud of at Smart MBS, is they all have a meaningful presence in Ireland.
This may not have been the biggest contributor to their success, but it undoubtedly played a role in their stories.
- Apple first landed in Cork, the South of Ireland, over 35 years ago and now directly employs approximately 6,000 people throughout Ireland. In addition to this, the technology giant has worked with 386 Irish suppliers and spent over €550m with companies in the last two years, supporting more than 25,000 jobs. Since 2012, they have invested a further €220 million in the Hollyhill campus that was opened by CEO Tim Cook in June 2018. The new building provides space for 1,400 employees making Apple Cork’s largest private employer.
- In 2003 when Google set up its European HQ in Ireland, they planned to hire 200 people over the following three years. This year, fifteen years later, Google signed a lease to rent an office complex in South County Dublin with 52,000 sq. ft of space. Google now employs 7,000 people in Ireland, across its seven locations.
- Probably the tech company most synonymous with Ireland, Microsoft first opened a small manufacturing facility in Ireland in 1985 with a staff of just over one hundred people. Today, the software giant employs 2,000 people in Ireland. The company recently invested €134 million in a new campus close to their old base in Sandyford.
- Amazon first opened its Irish operations in 2006 and has over 1,000 employees in Cork and around 1,500 in Dublin, where it focuses on cloud services. The online retailer recently announced it will add another 1,000 tech jobs for Ireland over the next two years. The roles to be filled include software engineers, network engineers, big data and machine learning specialists.
- In a similar storyline to the others, Facebook first set up an Irish office in 2009 and hired a few hundred people. The workforce now stands at 2,000 and they have a luxurious 120,000 sq. ft. office space in Grand Canal Square in Dublin’s Docklands. Earlier this year rumours were circulating that the social media giant was looking to secure 700,000 sq. ft of office space for its new Ballsbridge campus.
These companies’ success continues today, and such has been their growth that the tech giants now dwarf some of the much older, established stock market stalwarts.
Can Ireland Play A Role In Your Expansion Story?
We certainly believe so.
Smart MBS can help you get your business established in Ireland as a springboard to global expansion.
If would like to hear more about how Ireland can play a role in your company’s expansion story, please also get in touch.
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