Sunday 23 July 2017

Our island nation isn't capitalising on the asset around us

Cliffs of Moher (Stock picture)
Cliffs of Moher (Stock picture)
Dan O'Brien

Dan O'Brien

Ireland's entrepreneurial roots are short and shallow. Contrary to the story that we usually tell ourselves, and one that officialdom loves to spout, the history of Irish business successes is a slim volume. Things are certainly improving, but there are still too few home-grown, internationally competitive companies. An acknowledgement that too many young people aspire to the professions, rather than business, and that too many choose immigration over entrepreneurialism, would be a useful starting point in focusing more on the problem.

This column has made the same point on occasion in the past. It came up again in relation to how we have taken advantage of one of our greatest resources: the sea.

Ireland is the only island nation anywhere in the world in which seafood does not have a long and central position in the country's cuisine. That is but one example of how we have not used and developed the resource that surrounds us.

While the latest research* from the Socio-Economic Marine Research Institute (SEMRI) at NUI Galway shows that Ireland's 'blue economy' has grown more rapidly than the wider economy in recent years, it is still small.

When compared to our two north Atlantic island neighbours, it is very small, whether measured by the share of employment it generates or of GDP. The figures are charted in the accompanying graphic, but the starkest figure is that Iceland generates 11 times more of its economic activity from the ocean-related activity than does Ireland. (The argument that joining the EEC/EU is the reason for this is such utter twaddle that is not worth wasting time on here).

Rather, it reflects a very long history of turning our backs on the sea, in contrast to all other peoples on the western seaboard of Europe, who have made the most of their oceanic opportunities. That goes without saying for Britain, France and Spain, all of which acquired salt water empires hundreds of years ago.

But consider two smaller countries which are better comparisons. In the 1500s, when the age of exploration was in full swing, Portugal and the Netherlands had populations similar to that of Ireland at the time (around a million people).

Both also had problems with larger powers muscling in on their territory: the Dutch fought the 80-years war with the Spanish from the 1560s and the Portuguese were, on the point of a pike, absorbed into the kingdom of their Iberian neighbour for 60 years from 1580.

None of this prevented either country from taking to the high seas and trading their way to riches. Portugal's influence can be seen today, from Macau to Malacca and Goa to Rio de Janeiro, while traces of Dutch heritage are still to be found across the Indonesian archipelago and around the Caribbean.

These small nations were at the forefront of the age of exploration because they developed cutting-edge boat-building and navigation technologies which got them both to the Spice Islands and beyond. By contrast, Ireland's biggest contribution to European maritime technology was the currach, which got us as far as the Aran Islands.

If we have not traditionally been an innovative and entrepreneurial people, fortunately there are plenty of signs of change. Three aspects of the ocean economy would appear to offer good opportunities for those who want to build businesses - aquaculture, tourism and products and services in the advanced marine technologies space.

1) Aquaculture

Over the past 30 years, the world's fisherfolk have been catching roughly the same amount of fish. That is despite the planet's population almost doubling over that period. The reason more fish are not being caught is because stocks are increasingly strained. Put simply, the world's oceans are being over-fished. Our waters are no exception.

But that's not to say that the world is not consuming more fish. It is. But all of the increase in the supply of fish has come from aquaculture. Farmed fish now account for half of all the seafood consumed globally.

Despite the growth in fish consumption, both at home and abroad, fish farming is still a cottage industry. According to SEMRI, around 1,000 people were employed in the sector last year, down on pre-crisis times. Turnover has risen, but at €160m, many multiples of this figure could surely be generated, given that Ireland has thousands of kilometres of coastline.

2) Tourism

The hospitality sector accounts for a big chunk of the economy. Ireland has more visitors per capita then many higher-profile countries which are synonymous with tourism, including France and Spain.

Getting visitors to spend more and getting them to go to places that are less frequented are two imperatives.

Places like Galway, Westport and Dingle may be approaching tourism-saturation point. Anti-tourism backlashes could be in store. Fewer, but higher-spending visitors must be the objective in order to avoid this.

Diffusing visitors is another objective. The Wild Atlantic Way has been wildly successful. But more could still be done for the most peripheral places. This columnist has family roots in north-west Mayo. You can still drive a long way in that part of the world without encountering a single visitor.

3) Advanced marine technologies

Products, such as marine robots, and services, including geo-informatics and yacht design, offer lots of potential.

High value-to-volume ratios, which make shipping costs relatively insignificant, and services, which make it entirely irrelevant, are the sort of niches in which a small, island economy should be specialising.

The latest SEMRI report shows turnover in the advanced marine technologies sector surged by three-quarters in the two years to 2016. Employment expanded by a quarter.

These are pretty spectacular growth rates. But they are from a very low base. Just 700 people were employed as of last year and turnover stood at €140m. If we turn and face the sea, there is an ocean of opportunities that could do a lot to strengthen an economy which is too dependent on foreign enterprise.

* http://www.nuigalway.ie/semru/documents/semru__irelands_ocean_economy_2017_online.pdf

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