Ireland has regained its position as the fastest-growing economy in Europe, and its industry clusters have played a major role in the Irish recovery story.
Ireland’s economy expanded by 5.2 percent last year, and is on target to grow 6.5 percent this year. That’s the best performance since the 2008 financial crisis.
Much of the fuel for that growth has come from business clusters of high-tech industries, including world-leading life-sciences companies like Amgen, Gilead, Alexion, Biomarin and Regeneron. They’ve created hubs of innovation in Ireland’s leading centres – Dublin, Cork, Waterford, Limerick and Galway.
These same centres are attracting the “who’s who” of global brands, including fast-growth companies such as Zendesk, Arista, Dropbox, Hubspot and Slack. They’re joining a roster of well-established business giants, such as Google, Facebook, Twitter and LinkedIn.
Dynamics behind clusters
In economic parlance, business clusters are defined as geographic regions where related firms and industries locate in close proximity. The reasons are many: the existence of a specialized pool of workers, the need for common suppliers and services, and the concentration of industry knowledge that can spark innovation.
Clusters help companies gain critical mass and economies of scale faster than if they were isolated.
In America, these dynamics created Hollywood as an entertainment hub in the mid-20th century, and Silicon Valley as a high-tech hub at the end of the millennium. Silicon Wadi in Israel also is known for its concentration of technology companies, though business clusters don’t necessarily have to be technology based, as evidenced by London’s financial cluster and Munich’s automotive cluster.
Factors favouring Ireland
Ireland is geographically small and arguably one region from an economic perspective, essentially making the country a cluster. The key university and technological institutes are within a couple of hours drive from one another. Major road investments have connected the leading hubs of Dublin, Cork, Waterford, Limerick, Galway, and Belfast with uninterrupted motorways.
Perhaps more importantly, the leading research centres are now operating under one umbrella called the Centres of Excellence. For example, the Insight Centre for Data Analytics brings five colleges together to collaborate on research and innovation.
From an industry viewpoint, the country has concentrated on a number of high growth sectors as its national pillars. These include Life Sciences & Food, Information Technology, Financial Services, and the Content & Consumer Services industries. As the economy recovered, these clustering sectors have played prime roles in fortifying the country’s resurgence.
The lure of a well-educated workforce also has helped attract more businesses to the Emerald Island. Consider: Ireland holds the top spot in Europe for third-level education completion. Language is another draw: Ireland boasts a large English-speaking workforce, as well as multilingual talent from other European countries
These unique characteristics have contributed to the robust revival in the Irish economy, and have sustained global confidence in Ireland as a place where business can settle and succeed.