Thursday, July 15, 2021

The Irish as Young Europeans: "Hire them before they hire you"

IDA Ireland 1984: Engineering graduates of University College Dublin (UCD). "It's a fact that Ireland produces more computer science graduates per capita than the US; spends more (as a percentage of GDP) on education than Britain or Japan. So it's no surprise to find Irish managers among senior executives in top international companies. However, the best way to get your share of Irish talent is to locate in Ireland. You'll be in good company. Over 300 US manufacturing and service industry companies already have done so. Ireland, home of the Irish and the young Europeans. "

In 2020 Luxembourg and Ireland had the highest percentage of university graduates in the 25-34-year-old group. The EU27 was at 40.5%, Luxembourg 60.6%; Ireland 58.4%; Germany 35.1% and Austria 41.4%.

In the OECD's Education at a Glance 2020, Korea and Ireland are at 70% in 2019; followed by Canada 63%; Russia 62%; US is at 50% and Germany 33%.

While IDA Ireland, the Irish inward direct investment agency, bragged in 1984 that "Ireland produces more computer science graduates per capita than the US," this year the Irish Higher Education Authority (HEA) reported on its tracking of the progress of thousands of students who started third-level courses over a 10-year period (see image below).

The HEA reported that computing had the highest drop-out rate overall, with completion rates nationally at about 55%.

The OECD area (currently 31 advanced and 7 emerging economies) in 2019 reported that graduates with qualifications in information and communication technologies (ICT) account for a small percentage of workforces.

On average, only 4% of tertiary-educated adults (25-64 years) hold a qualification in this field (bachelor's degrees), and the proportion across countries varies much less than for many other fields of study. "Among OECD and partner countries, the share reaches about 6% in Finland, Hungary, Mexico and Spain, while Costa Rica and Luxembourg have the highest proportion overall of adults with ICT qualification, at 7%. Conversely, just 1% or less of adults with a tertiary qualification in the Russian Federation and Turkey studied ICT."

The US, Germany, France, Netherlands, Denmark were at 4%. Ireland supplied no data.

On average across OECD countries, about 25% of tertiary-educated 25-64 year-olds have qualifications in business administration or law.

In most countries, the fields of science, technology, engineering, and mathematics (also known as STEM) are less popular. In 2016, 24% of tertiary graduates completed their degree from these fields on average across OECD countries, though this ranges from 16% in the Netherlands to 36% in Germany.

The US Census Bureau reported in 2014 that 74% of those who have a bachelor's degree in STEM  were not employed in STEM occupations.

Finfacts 2018: Shortage of STEM graduates a myth in Europe and US

UK: "Relatively high proportions of STEM graduates are employed in the teaching profession and this is the most common occupational destination for maths (26%), biology (19%) and physics (17%) graduates. But only a relatively small proportion of STEM graduates work in roles likely to involve substantial amounts of laboratory work."

In the US college typically involves building up big debts but in tech skills, and experience can be what counts.

Education and evolution of inward FDI

In September 1966 — just over 3 years since the beginning of the dismantling of the protectionist tariffs — Donogh O'Malley (1921-1968), the Fianna Fáil education minister, made a stunning announcement on education, in a speech in Dublin. He said, "I am glad to be able to announce that I am drawing up a scheme under which, in future, no boy or girl in this State will be deprived of full educational opportunity – from primary to university level – by reason of the fact that the parents cannot afford to pay for it."

About "one-third of our people have been condemned – the great majority through no fault of their own – to be part-educated unskilled labour, always the weaker who go to the all of unemployment or emigration" while less than 50% were still in full-time education by the age of 15.

The minister outlined a scheme for free secondary education, state subsidies for books and access for poor families to universities by providing a grants scheme.

TK Whitaker, the secretary of the Department of Finance, was outraged by O'Malley's announcement and in a memorandum to Seán Lemass, the taoiseach/ prime minister, Whitaker wrote “It is astonishing that a major change in education policy should be announced by the minister for education at a week-end seminar of the National Union of Journalists. This 'free schooling' policy has not been the subject of any submission to the Department of Finance, has not been approved by the Government, has certainly not been examined from the financial [whatever about the educational] aspect and, therefore, should have received no advance publicity, particularly of the specific and definite type involved in Mr O’Malley’s statement...The proper course would be to defer these proposals, however desirable they may be in themselves until funds sufficient to pay for them become available at present taxation levels.”

Whitaker later said in an interview that when he met Lemass to discuss the issue, he recognised from the smile on the taoiseach’s face that he had personally authorised O’Malley to make the announcement.

The Department of Finance recommended that the education reforms be shelved as they would cost up to £3m annually– adding substantially to public expenditure.

In a decade participation rates in second-level schools doubled. Third level students grew from 27,100 in 1973/1974 to 60,750 in 1988/1989 and 108,500 in 1998/1999 according to the Central Statistics Office (CSO).

World Bank

The number of births in Ireland peaked in 1980, about 15 years or so later than in many other European countries. The Irish births recorded reached a 20th-century peak of 74,000 in 1980 and fell to an all-time low of 48,200 in 1994. The number was 72,100 in 2010 and 59,300 in 2020 as the overall population rose.

Census 1979 recorded a population of 3.37m; 1996 was at 3.63m; 2011 was at 4.59m and 2020 5.04m.

In 2020 non-national mothers accounted for 23% of births.

Jack Lynch, taoiseach, and Patrick Hillary, foreign minister, sign the EEC Treaty of Accession 1972

The entry of Ireland to the European Economic Community (known as the European Union from 1993) on January 1, 1973, was a seminal event for Ireland in over 50 years of independence.

Ireland was the poorest country in Western Europe (the non-communist region: see chart above).

IDA Ireland (Industrial Development Authority) – which had been founded in 1950 – recognised the opportunity to sell Ireland to large American firms as a gateway to the EEC with English used as the lingua franca.

The value of American manufacturing investment in Ireland rose by an average 33% a year between 1974 and 1978. Adjusted annual earnings data averaged over 29% according to US government data.

For example in 1974 the rate for Ireland was 25% while the overall rate in Western Europe was 12.3%

In the last years of the seventies, there was domestic turmoil. In 1978 Ireland reported a budget deficit of 17.6% which was the largest for an advanced country in 1970-2008 according to the International Monetary Fund (IMF). 1979 was an all-time record for industrial strikes, shutting down postal and banking services. Following the scrapping of the first tax levy on farmers, there were huge worker protests. In 1977-1982, the combination of tax cuts and huge spending increases (in the single year 1979, the public service pay bill rose by 34%), resulting in a trebling of the National Debt.

The 1980s began with severe recessions in the industrial economies.

Following net immigration in the 1970s net Irish emigration returned at 75,000 people in 1981-1986.

Job losses in 1979-1986 were at 69,500 and the unemployment rate rose from 7% in 1979 to 17% in 1986, when two-thirds of the unemployed had been out of work for six months or more, almost half for over a year.

In 1982 IDA Ireland commissioned independent research which suggested that investors still saw Ireland as a source of low-cost, low-skilled labour. The agency decided that Ireland should be sold as a source of a high-quality young labour force.

This was a basis for the advertising theme of "We're the Young Europeans."

It had a spectacular success when Intel, the US chip giant, in 1989 decided to build a large facility in Ireland. The decision triggered other big US firms to choose Ireland.

The O'Malley reforms of the 1960s were working.

About a third of the emigrants had a third level education in the late 1980s compared to under 20% in the 1960s and many of them would return.

The proportion of children and young adults less than 25 was 33.2% in Census 2016 and 47.9% in the late 1970s according to the CSO.

A world-class Irish education?

In September 2013 Ruairí Quinn, the Irish education minister, avoided typical ministerial spin, and said Ireland has a long way to go to have the kind of “world-class education system that we need to have.”

He said before this goal was achieved it had to be recognised that “the assertion that was so frequently trotted out in the past, but which blatantly wasn’t true, was that we had one of the best education systems in the world.”

Quinn said this was an “assertion based on no evidence whatsoever other than something of a feelgood factor that was communicated to us at home by the greater Irish diaspora who felt, for whatever reason, that it was better than what their children were experiencing in other parts of the world.”

It's also important to recognise that Ruairí Quinn didn't say the education system was bad. It compared well with several countries. What he said is that in general, it is far from the best.


While Ireland's advances in education are impressive, the university doesn't suit every school leaver. The drop-out rates in Institutes of Technology, in particular, are high.

Germany and Austria have low tertiary education rates as they have dual school-work systems that are much broader than traditional apprenticeships. Denmark and Switzerland also have important apprenticeship systems.

The Nordic countries are leaders in adult education and training.

In Ireland, in 2017 a paper from the Department of Public Expenditure and Reform (PER) showed that the cost of public outlays on training and further education was €1.7bn in 2016.

The PER "acknowledged that there are legacy data and systems issues, arising from the fundamental reforms of the sector, which severely limits the level of analysis in the FET (Further Education and Training) sector, particularly for trend, outcomes and individual-level analysis."

Simply put the PER said it could not evaluate how much of the spending is wasted.


Ireland's FDI over-dependence and surging population

Retooling Ireland's economic engine - look to Denmark & Netherlands

US FDI into Ireland and Irish investment in America — facts and myths (2019)

Ireland most profitable foreign country for US multinationals in 2018