Sunday 20 October 2019

'Ireland needs to prepare for future and give US firms reasons to stay'

Warning: Gary Gensler with Minister of State at the Department of Education Mary Mitchell O’Connor. Photo: Jason Clarke
Warning: Gary Gensler with Minister of State at the Department of Education Mary Mitchell O’Connor. Photo: Jason Clarke
Katherine Donnelly

Katherine Donnelly

Ireland's use of low corporate tax rates to retain US multi-nationals is at risk and we need to give them other reasons to stay, according to a leading US financial and academic figure, who looked after the finances on Hilary Clinton's 2016 presidential campaign.

Gary Gensler told a conference in Dublin on the future of work that every US presidential campaign looked at how profits from US firms were sitting offshore.

US President Donald Trump has changed tax rules in the hope of bringing companies back, and Mr Gensler said while Ireland had not seen that much less activity as a result, the country was "at risk".

Predicting that "it won't last for another 20 years", he said Ireland needed to create "more value added" and give the multi-nationals "another reason to stay".

Mr Gensler said apart from being considered a low-tax economy, advantages enjoyed by Ireland included being an English-speaking country, with a highly educated workforce and a trusted legal system.

He was among the speakers at a conference jointly organised by the Higher Education Authority and the prestigious Massachusetts Institute of Technology (MIT) Sloan School of Management, a new initiative expected to lead to further collaboration, including research projects, between MIT and higher education in Ireland. The focus of the event was the impact of technological advances, such as artificial intelligence (AI), and how changes in management practice and in the global political and financial worlds will effect change.

MIT is one of the world's leading universities, particularly in the area of future technologies, and Mr Gensler is senior adviser to the MIT Media Lab's Digital Currency Initiative and the Ethics and Governance of AI project.

John Van Reenan, a professor of economics and management at MIT Sloan, said that digital technologies did not cut jobs, but created new tasks.

However, he cited data showing that since 1979 in the US, while technology created more higher and lower skills jobs, the "middle skills" share of the market shrank from 61pc to 43pc.

He also pointed to the challenge for Ireland in building capacity at management level.

Irish companies rate average in the World Management Survey. He said good management was critical to exploiting new technologies to raise a firm's performance.

Danny McCoy, CEO of the employers' organisation Ibec, said a lot of home-grown management talent was sucked out of the country by the multi-nationals.

Alan Barrett, director of the ESRI, suggested tax breaks similar to those allowed for pension AVCs, to encourage employees to continue learning throughout their career.

Irish Independent

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