Opinion Analysis

Thursday 21 November 2019

We have the intelligence and skill to turn country around

Return of entrepreneurial spirit is vital if the Irish manufacturing sector is to become competitive again, writes Sean Quinn

Having grown up and lived all of my life on the Ferma-nagh/Cavan border, I have always been acutely aware of the role that local sustainable businesses play in maintaining the social fabric of Irish society. There are a number of local family businesses, such as Kingspan and ourselves (Quinn Group), which I feel have been able to make a positive contribution by keeping our operations local, while at the same time developing a strong national and international presence.

While multinationals have played an important role in our economic development in recent decades, some have also demonstrated a willingness to move operations to lower-cost economies suddenly and without warning -- with devastating consequences for their Irish employees and local economies. One has only to recall the closure of the Dell plant in Limerick last year and there are many other examples.

The level of unemployment now, particularly in the under-25 age bracket, is deeply worrying. Having experienced this first-hand in the Seventies and Eighties I am very conscious of the extreme negative impact that youth unemployment and forced emigration has on family life, the local communities left behind and the country as a whole; an impact that can take a generation to arrest. It should be a priority at national level to develop plans and initiatives that can stem this draining of the future lifeblood of our economy and our society.

I am a firm believer, however, that this situation can and must be reversed as it was before. The success of our own group over the years has been based on the quality and motivation of our Irish staff, many of whom are under 30 years of age, along with continuous investment in efficient technology.

Our 5,500-strong Irish workforce, employed in a diverse range of sectors, competes and succeeds on a daily basis in terms of efficiency and productivity with some of the best operators in the world. This has required innovation and determination at all levels, as well as a willingness to consider new ways of working and new thinking on a continuing basis.

Many of Ireland's original attractions still remain. The main catalyst for the growth in our economy in the past was our ability to attract multinational investment on the back of a well-educated, English-speaking workforce, as well as the attraction of a lower corporation tax rate.

Although our cost base has increased recently and emerging economies are now competing strongly for this type of investment, many of the original attractions still remain. Indeed the one positive element of our economic performance, which has not been heavily publicised, has been the steadily increasing level of exports that the country has achieved.

The effort necessary for indigenous organisations to be part of that success should not be underestimated -- but it can be done.

For example, we at Quinn Group have had to transform some of our key businesses to an export-based model as the construction downturn in Ireland impacted demand for some of our traditional products. While we have been active in the UK market for some time we have really focused on it recently and have doubled our exports of construction industry products over the past three years.

The UK market has 60 million people, relatively inexpensive transport costs and an economy which is starting to grow again. This clearly represents a significant opportunity for Irish businesses.

While wages are an obvious factor for any manufacturing organisation, and high wage costs are prohibitive in sectors with a large labour component, we have found that they need not be a critical factor. Germany, which has a very high wage and social service cost, has a core economy built on small to medium-sized manufacturing companies, with niche engineering expertise.

Many of these small, often family-owned enterprises, remain major players in the provision of high-end engineering equipment demanded by the developing economies of Asia and elsewhere. It is our challenge in Ireland to look at a model such as this and see if we can identify relevant examples to learn from. I know the German government are focused on exploiting that sector. With our strong work ethic and education system there is no reason why we cannot do that here just as well.

We must, however, become more successful in encouraging home-grown entrepreneurs to develop local manufacturing businesses and support local employment. In the last decade this was not seen as a priority and indeed availability of staff was a major concern.

As a country we now need to focus on a new situation, whereby we all need to work much harder to be competitive in an increasingly competitive world. Policymakers should focus on investment for the creation of sustainable jobs and mechanisms need to be found to provide capital and support to budding entrepreneurs.

It is often difficult for a smaller business to exploit opportunities, particularly for exports. Indeed we have assisted some of our Irish customers in establishing the necessary contacts in the UK in order to allow them to develop this market. Once they gain the necessary confidence then their business tends to flourish, but the first step is often the most difficult.

In relation to bringing new thinking into play, our own investment plans are firmly focused on the renewable sector, not just because it is politically correct but because it makes economic sense. Currently Ireland exports the majority of its waste plastic to China where it is recycled and sent back to us. Why can't we do it here, reduce our own costs of raw material and create sustainable businesses in the process?

A lot of high-profile work has been done in terms of the green economy and positioning our country to benefit from this. It is important, though, not to lose sight of traditional business.

We are a small country on the fringe of a large market; we have a very capable, motivated and willing workforce. There is every reason, therefore, that we should have the flexibility, intelligence and hunger to make this country work again. We need to move fast, though, to ensure that another generation is not lost to emigration. I may well be a born optimist but I have every confidence that we as a country can move forward positively.

Sean Quinn is chairman and managing director of the Quinn Group

Sunday Independent

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