Is the Tiger Eating Its Children? The Two Sides Of The Irish Employment Model

EMPLOYMENT RESEARCH CENTRE Dr Christian Schweiger & Professor James Wickham Department of Sociology Trinity College Dublin 2 College Green Dublin 2 Ireland Email: schweigc@tcd.ie jwickham@tcd.ie Dynamics of National Employment Models (DYNAMO) 1 st Project Conference and 26th Conference of the International Working Party on Labour Market Segmentation (IWPLMS) Berlin, 8-11 September 2005 Is the Tiger Eating Its Children? The Two Sides Of The Irish Employment Model First draft August 2005

2 1. Introduction The Republic of Ireland has experienced an unprecedented economic success story since the late 1990s. As a result, it is widely regarded as a role model in terms of the two main priorities of the relaunched Lisbon Strategy, economic growth and job creation. The employment boom Ireland has experienced since the early 1990s is based on a period of stable economic growth, way beyond the EU average of two per cent annual real GDP growth. Ireland s annual rate of real GDP growth peaked at 11.1 per cent in 1999, almost six times the amount of Germany s rate at the time. 1 In spite of a slowdown in the Irish economic development, the forecasts for Irish GDP growth in 2005 (4.9 per cent) and 2006 (5.1 per cent) still see the country between two and three per cent above the forecasted average growth rate in the EU of twenty-five 2. Because of this period of unprecedented sustained growth the Irish economy is frequently referred to as the Celtic Tiger, following the example of the East Asian economies. This brand name for the Irish economy has however also been criticised as descriptive and superficial, due to the major differences between the Irish and the Asian economies. 3 Ireland s Celtic Tiger economy has boosted the total employment rate from 51.4 per cent in 1985 to 66.3 per cent in 2004 4 and dramatically reduced unemployment, with less than 100,000 people out of work in 2004. 5 1 Source: EUROSTAT, Real GDP growth rate in the EU at constant prices (1995), percentage change on previous year, http://epp.eurostat.cec.eu.int/portal/page?_pageid=1996,39140985&_dad=portal&_schema=portal &screen=detailref&language=en&product=strind_ecobac&root=strind_ecobac/ecobac/eb 012 2 Ibid. 3 O Hearn, 1998, pp. 3-4. 4 Sources: O Connell, 2000, p. 63 and Eurostat, Total Employment Rate in the EU, http://epp.eurostat.cec.eu.int/portal/page?_pageid=1996,39140985&_dad=portal&_schema=portal &screen=detailref&language=en&product=strind_emploi&root=strind_emploi/emploi/em0 11 5 Source: Central Statistics Office Ireland, http://www.cso.ie/statistics/empandunempilo.htm

3 The success of the Irish economic development is all the more remarkable since the Irish Republic started from a position at the bottom end of the European league in the late 1980s. Before the concerted domestic efforts to turn around the country s economic fortunes as part of the Programme for National Recovery in 1987, the Irish Republic faced an appalling balance sheet of negative economic growth, spiralling public debt, rising unemployment and consequently mass emigration. The Irish economy had experienced repeated episodes of slow growth since the Second World War. It struggled to shake off the remainders of pre-1960s protectionism and continued to rely heavily on the equally faltering British economy. Ireland experienced two periods of rapid economic growth. The first one occurred during the 1960s and was the direct result of increased efforts to attract Foreign Direct Investment and to open up Ireland s formerly protected economy. This allowed an increasing number of exports, especially to the booming continental European market. In spite of the negative impact of the two oil crises in 1973 and 1979, the Irish economy continued to grow throughout the 1970s, mainly due to high public spending, which supported the supply side of the economy but deepened the budget deficit. 6 Nevertheless, with annual average GDP growth of 4 per cent 7, the Irish economy grew on a low level in comparison with the rest of Europe at the time. 8 The economic situation deteriorated between 1980 and 1985, where the GDP grew by an average of 1.5 per cent per year 9. Unemployment, which had already been rising throughout the 1970s, consequently exploded as a result of the increasing uncompetitiveness of the Irish economy. In 1987 the unemployment rate stood at 16.9 per cent 10 and it is estimated that around 200,000 people emigrated from the Irish Republic throughout the decade of the 1980s. 11 6 Boylan, 2002, p. 14. 7 Fitz Gerald, 2000, pp. 43-44. 8 Sweeney, 1999, p. 40. 9 Boylan, 2002, p.15. 10 O Connell, 2000, p. 62. 11 Sweeney, 1999, p. 37.

4 As a consequence of the post-1979 Keynesian attempts to kick-start the economy through public investment, the Irish budget deficit had risen to 7.9 per cent of the annual GNP in 1986, with the ratio of total government debt in terms of the GNP standing at 125 per cent in 1987. 12 Based on this desolate performance, a consensus on the need to tackle the weaknesses of the Irish economy emerged amongst the Irish political elite, the trade unions and major interest groups. The resulting national social partnership agreements between the state, employers, the trade unions and various interest groups provided a stable framework for Ireland s economic recovery. The general acceptance of the need to consolidate public finances and to show moderation on wage demands and the stability of Irish industrial relations enabled the country to get back on its feet in the course of the 1990s. The post-1987 recovery in the Irish Republic was hence achieved by maintaining an attractive low-tax environment for foreign investors and (through targeted investment in education and training) an increasingly skilled workforce in technical areas, all situated in a consensus-orientated industrial relations climate. Such conditions were rare in the EU in the late 1980s/early 1990s, which is a major reason for the rapid success of Ireland to attract a massive influx of Foreign Direct Investment (FDI), mainly from US multinational companies. Ireland managed to get a large share (37 per cent) of the total American FDI into the Single European Market since 1992 13. In 2002, Ireland was the leading recipient of FDI in the European Union (see Table 1). 12 Boylan, 2002, pp. 15-16. 13 Sweeney, 1999, p. 89.

5 TABLE 1: FOREIGN DIRECT INVESTMENT IN THE EU 2002 Source: EUROSTAT Statistical Yearbook 2004, p. 158, http://epp.eurostat.cec.eu.int/cache/ity_offpub/ks-cd-04-001-8/en/ks-cd-04-001-8-en.pdf While the total of US investment into the EU fell dramatically by 80 per cent in 2003, Ireland still received one of the larger shares within the EU of 25 in 2004. It was in fourth place with 1.7 billion behind Luxembourg ( 5.7 billion), France ( 4.8 billion) and Belgium ( 3.1 billion) (see Appendix 1). The large number of jobs created by US multinationals in crucial economic sectors such as high technology, healthcare, pharmaceuticals and also in the accompanying service sectors enable Ireland to present a completely different balance sheet at the beginning of the 21 st century than the one it had during the 1980s. In the 2004 Kok Report by the European Commission High Level Group on the performance of the EU member states with regard to the Lisbon targets, Ireland received good performance ratings in the area of sustainable economic growth and job creation.

6 In terms of GDP per capita, Ireland received the highest rating amongst all the old 15 member states, with 121.7 against the average of the EU-15 at 100 and the EU-25 even lower at 91.2. 14 Although it has fallen slightly behind in terms of its employment rate, where it was just ahead of Germany in 2003 (65.4 per cent against 65.0 in Germany), the Irish Republic has an extremely good record on the reduction of longterm unemployment, with the long-term unemployment rate in 2003 standing at 1.5 per cent, while it was 4.6 per cent in Germany, 3.5 per cent in France and 4.9 per cent in Italy. As things stand at present, Ireland therefore indeed seems to be on course to become the type of competitive economy, based on long-term stable economic growth, which the Lisbon Strategy aspires to create within the Single European Market. The country nevertheless faces a number of profound challenges in the future, which is has to start addressing now if it wants to maintain its success. In the economic area this includes the challenge to be able to maintain the jobs created by MNCs in the Republic by fending off the increasing competition from the new member states in Central and Eastern Europe. With US foreign direct investment into the EU in general decline, Ireland will also have to reconsider the lack of development of its indigenous industry base, which makes it more dependent on US investment than, say Costa Rica and Honduras, which are often described as an American backyard. 15 An even greater challenge will be to achieve the Lisbon goal of aspiring to combine stable economic growth with socially cohesive outcomes. In this respect, the effects of the Celtic tiger boom have been unsatisfactory, with an increasingly obvious gap between the winners and the losers of the positive economic development emerging. The Irish National Economic and Social Development Office (NESC) emphasised in a recently published extensive report on the Irish welfare state that it currently fails to achieve comprehensive social cohesion. The report criticises the failure to develop adequate welfare strategies to ensure that those who have not been able to gain from the economic boom are not being pushed to the margins of society: 14 Report from the High Level Group chaired by Wim Kok, November 2004, p. 51, http://europa.eu.int/growthandjobs/pdf/2004-1866-en-complet.pdf 15 Allen, 2000, p. 27.

7 Significant minorities in Ireland s population are currently experiencing one or multiple forms of social disadvantage, and present strategies and policies are not proving adequate in helping them. 16 The challenge for the Irish Republic is therefore to show that the vision which is at the core of the relaunched Lisbon Strategy, developed by the Barroso Commission, can indeed be put into practice. This would mean, in Barroso s own words, to combine sustainable development with real improvements in the standards of living and our quality of life. 17 To achieve this, Ireland will have to prove that, based on the economic achievements since 1992, it can build up its own foundations of indigenous industrial development and hence maintain its competitiveness even when the level of FDI decreases and when the financial support from the EU s structural funds is increasingly diverted towards the new member states. Moreover, Irish policy-makers will have to find ways to tackle the growing social imbalances in the Republic in order to counter the accusations from critics of the Celtic Tiger boom, who portray it as a model being devoted to those that favour the private corporations and the rich. 18 2. Drivers for change in the national employment models: political and economic organisation 2.1. Changes in political conditions and the roles of major actors The post-war macroeconomic policy changes in Ireland have been substantially influenced by three major factors: 1. The gradual transfer from a protectionist economy and a mainly agricultural society to a liberal modern industrialised economy. 16 Report by the Irish National Economic Social Council (NESC), The Developmental Welfare State, p. 2 No. 113, May 2005, http://www.nesc.ie/dynamic/docs/nesc%20dws_rz%20text+cover.pdf 17 The Lisbon Strategy A Key Priority of the European Commission, Speech by President José Manuel Barroso at the ETUC Conference, Brussels, 1 March 2005, http://europa.eu.int/rapid/pressreleasesaction.do?reference=speech/05/125&format=html&aged= 0&language=EN&guiLanguage=en 18 O Hearn, 2003, p. 45.

8 2. Ireland s attempt to step out of the shadows of dependence from its former colonial ruler Britain by introducing a nationalist element in its economic policy. 3. The impact of EU membership on the socio-economic model of modern Ireland. All these factors are closely interlinked and explain why Ireland struggled to achieve stable economic success and employment growth before the 1990s. The reasons for the delay in the post-ww2 liberalisation of the Irish economy and the lack of attempts to develop a competitive domestic industrial base, lay in a nationalist ethic which has been described as possession ethic. 19 This refers to the acceptance of poor economic performance and a lack of substantial efforts to encourage indigenous industrial growth. After having gained independence from Britain, the domestic debate about Ireland s political, economic and social development was, at least until 1956, dominated by a desire to protect what had been gained from the independence, even if this meant maintaining low economic and social standards. This explains a political system, in which the Catholic church had enormous influence on the social policies of the country and Fianna Fail, representing working-class and rural Catholic Ireland, became the main governing party, promising to restore Irish national culture. The dominance of Fianna Fail in Ireland in all walks of life for decades throughout the 20 th century led to the characterisation of Ireland by some as almost as a one-party state. 20 The economic nationalism encouraged by Fianna Fail guided the country into a balancing act between economic liberalisation and the economic necessity to deepen its dependence on the British economy. The protectionist character of the Irish economy before the 1950s was a result of the attempt to sever links with the former colonial oppressor. 19 Allen (2000), p. 17 quoting Joseph Lee. 20 Ibid, p. 152.

9 Fianna Fail believed that the protection of Ireland s economy against British competition, which was mainly based on agricultural exports and only a fractious domestic industry, would assist the country s economic development. In reality, Ireland was still strongly dependent on the UK market, which became obvious in the desire to sign the Anglo-Irish Free Trade agreement in 1965. At the same time, Ireland joined the UK in applying to become a member of the EEC in 1961 and 1967 and was equally as unsuccessful. This showed both a desire to escape the reality of deepening trade links with the UK by gaining access to a wider European market, but was also an attempt to defend Irish access to United Kingdom markets. 21 On a wider scale the development of the Industrial Development Authority (IDA) already in 1949 showed that a realisation amongst Irish policy-makers had emerged that future economic success for the Republic could lie in the attraction of wider foreign investment other than from the UK. The turning point was the Whitaker plan for economic development, initiated in 1957 by T.K. Whitaker, the Secretary of the Department of Finance in the Fianna Fail government led by the Taoiseach (Irish Prime Minister) Eamon De Valera. The plan for economic development emphasised the need to renounce the traditional protectionist and short-termist economic policies of the Irish Republic. Instead it called for an outward-looking economic strategy, based on long-term strategic economic planning and the attraction of FDI: Whitaker bluntly recommended abolishing protection, and the encouragement of foreign industrialists, who would not only bring capital to the country, but also much-need expertise. 22 The Whitaker plan managed to free the country from its previous stalemate of protectionism and initiated a new climate of economic dynamism. The resulting increase in exports and the increasing influx of foreign investors by the end of the 1960s showed that the Republic was beginning to change from a mainly agricultural towards an increasingly industrialised society. 21 Fitzgerald and Girvin, 2000, p. 273. 22 Coogan, 2003, p. 392.

10 The economic crisis of the 1950s had led the country to abandon the protectionist experiment in economic nationalism 23, which had been promoted by the political elite and the Catholic Church for decades since Irish independence. The new consensus between Fianna Fail and the Catholic church on the need to adopt a new energetic approach towards Ireland s economic development 24 did not only set the country on a more promising economic footing. It also initiated the end of Ireland s position as an out-garden of Britain 25, with almost 100 per cent of exports going to the UK between 1924 and 1950. 26 The 1965 Anglo-Irish free trade agreement confirmed the new trend towards greater openness in Irish economic policy. On the other hand, it showed that the Republic remained strongly dependent on the British market as a target for its exports. With Ireland not yet being a member of the EEC, it did not have the benefit of access to the Common Market and instead remained economically tied to the non-eec member Britain. Ireland s economic growth before its entry into the Common Market in 1973 was therefore bound to be on a lower level than in the majority of other European countries. With GDP per head of population around 60 per cent throughout the 1960s up until the late 1980s, Ireland was consistently situated amongst the group of poorer European countries like Greece, Spain and Portugal with comparatively low economic development. 27 In the aftermath of the Whitaker plan, Ireland nevertheless managed to gradually diminish its former total dependence on the British market. The strong focus on the attraction of FDI, especially from American companies, allowed the Republic to pursue what some have called dependent industrialisation. 28 Between 1959 and 1971, 261 foreign companies opened branches in Ireland, 92 amongst them non-british. 23 Boylan, 2002, p. 12. 24 Coogan, 2003, p. 391. 25 Allen, 2000, p. 153. 26 The almost total dependence of the Irish economy on the UK market decreased only slightly to 92.7 per cent in 1950 (Bradley, 2000, p. 9). 27 Ibid, p. 12. 28 Wickham, 1983, p. 172.

11 The dependence on the UK was hence weakening, with the total number of workers in Ireland being employed in non-british-owned foreign manufacturing companies (46,9000 already exceeding those who were employed in companies that originated in the UK (32,500) (see table 3). TABLE 3: Foreign Companies in Ireland, 1 January 1979 35000 30000 25000 20000 15000 10000 5000 0 Country of Origin USA Germany UK Japan Italy France Netherlands All Others Source: Wickham, 1983, p. 168. The opening up of the Irish economy to foreign investment became without a doubt indispensable basis for the sustained economic growth that was to follow in the 1990s. 29 The constant economic growth led to the reverse of Ireland s constant stream of emigrants. After decades of decline, the Irish population finally started to grow again from the mid-1960s onwards, with the return of 25,000 Irish workers from abroad (100,000 including their family members) throughout the 1970s 30 (see table 4). Entry into the European Community in 1973 strengthened Ireland s foreign investment-based economic strategy. Access to the Common Market facilitated the attraction of FDI and also allowed the Republic access to the generous Community funds as part of the Common Agricultural Policy and the structural funds. 29 Sweeney, 1999, p. 43. 30 FitzGerald, 2004, p. 72.

12 TABLE 4: Average Annual Change in Population 20 15 10 5 0-5 -10 1956 1961 1966 1971 1979 1981 1986 1991 1996 2002 Source: Central Statistics Office Ireland. Ireland received a total of between 5 and 6 per cent of its annual economic output in agricultural payments and structural funds from the European Community until the early 1990s. The substantial EC flows hence contributed substantially to the financial capacity of the Irish state to invest in infrastructure and education. This allowed the Irish Republic to concentrate on the promotion of economic growth through building a competitive base for foreign FDI: Whilst these funds did not directly promote economic growth, they removed many bottlenecks that would otherwise have inhibited growth generated by private and public enterprise. 31 The creation of state bodies to supervise the long-term socio-economic development of the Republic, the National Industrial Economic Council in 1963 and the National Economic and Social Council (NESC) in 1973 showed the desire to remain on a stable long-term course of economic development. The NIEC was mainly in charge of developing a strategy for a stable long-term economic development, based on the realisation and maintenance of full employment at adequate wages and reasonable price stability, and reasonable long term equilibrium in the balance of external payments. 32 31 Ibid, p. 74. 32 Coogan, 2003, p. 443.

13 This was seen as a prerequisite for a successful entry into the Common Market of the EEC. The NESC was a sign of an emerging strategy to integrate the trade unions in a broader consensus on economic and social policy, aimed at providing a stable industrial relations environment for foreign investors. Although the NESC has no binding legal status, it provides a framework for national negotiations 33 between the government and the social partners. Its reports and recommendations on Ireland s economic and social challenges have facilitated the establishment of the national consensus which became the basis for the boom in the late 1980s. Although in the long term membership of the European Community contributed to the stabilisation of Ireland s economic and social environment in the long run, the immediate effects of entry were rather disappointing. Like the UK, Ireland entered at a time when the Common Market was rattled by the effects of the first oil crisis. It was therefore too late to benefit from the post-war economic boom in continental Europe, which had lasted for over two decades. Boosted by the prospect of continuing financial support from the EC, successive Irish governments pursued a strategy of Keynesian fiscal investment into the economy to boost growth rates. The post-1979 government-spending programme led to higher economic growth but at the same time to a deepening fiscal crisis, which culminated in the mid-1980s (see Table 5). TABLE 5: Central Government Debt in Ireland (In Euro Thousands) 25000000 20000000 15000000 10000000 5000000 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 Source: Central Statistics Office Ireland. 33 Turner, 2002, p. 284

14 It showed that the Ireland was relying on a strong corporatist element, with the state having adopted an almost authoritarian role in economic policy. 34 The negative macroeconomic effects of the second oil crisis in 1979 however clearly showed that the policy of massive state intervention had turned out to be a failure. The artificial economic growth sustained by state intervention could simply not be maintained. Between 1979 and 1987 economic growth in the Republic slowed down dramatically to an average of 1.5 per cent, the unemployment rose from 10 per cent to 17 per cent, while the budget deficit spiralled to 7.9 per cent of the country s GNP in 1986. 35 By the late 1980s, the worsening problems led to a realisation both on the part of the political elite and the trade unions that the country would have to embark on a consolidation course if it wanted to maintain the prospect of economic stability in the long term. The new consensus on the need to maintain fiscal discipline between the government and the social partners was manifested in the 1987 Programme for National Recovery. It showed that a Social Democratic style consensus on economic and social policy had emerged between the major political parties, employers and trade unions. The drastic cuts in public spending introduced by the Fianna Fail government (with the support of the other political parties) amounted to cuts in the public sector and also a strict limitation to wages. Although this new policy definitely has neo-liberal elements, it would be wrong to characterise the post-1987 policy consensus as a move towards Thatcherite neo-liberalism. Due to the strong emphasis on consensus between government, employers and trade unions, it makes more sense to position the policy change in the Republic as a move from state-orientated Keynesian interventionism towards a consensus-orientated neo-liberalism with strong social democratic elements. Some call it a social democratic policy mix, due to the continuing commitment to welfare provision and the corporatist inclusion of trade unions and an ever growing set of other interest groups. 36 Others, who are more critical of the new deflationary policy direction prefer to call it a pragmatic form of neo-liberalism. 37 34 Sweeney, 1999, p. 125. 35 Boylan, 2002, p. 15 and O Connell, 2000, p. 61. 36 Fitzgerald and Girvin, 2000, p. 280. 37 Allen, 2000, p. 15.

15 This is because it avoided the Thatcherite rush towards privatisation and, while it generally weakened the power of unions to disrupt industrial relations through strikes and excessive wage demands, it strengthened the influence of union executives on the general economic and social policy direction. From the late 1980s onwards, Ireland has therefore developed its own individual mix of neo-liberalism and social democratic corporatism. In contrast to the confrontational roll back -mentality of Thatcherite policies in the UK, the Irish way adopted a consensual approach, based on a give and take policy. Trade unions became major partners in the process of economic and fiscal consolidation. In return for a privileged position in terms of influence on government policies, union leaders showed restraint regarding wage moderation and accepted a reduction of union power as a result of the 1990 Industrial Relations Act. Based on a desire to provide a stable industrial relations environment for foreign investors, it limited union power to initiate strike action through limits on secondary action and picketing and the need to incorporate secret ballots on strike action into union statutory rules. In this respect, the contents of the act clearly mirror some of the provisions of the early Thatcher Government legislation in the UK Employment Acts 1980 and 1982 38 The contrast with Thatcherism is nevertheless striking. The six national social partnership agreements since 1987 (1988 Programme for National Recovery (PNR), 1991 Programme for Economic and Social Progress (PESP), 1994 Programme for Competitiveness and Work (PCW), 1997 Partnership 2000 (P2000), 2000 Programme for Prosperity and Fairness (PPF) and 2003 Sustaining Progress (SP)) have given trade unions, employers and an ever wider set of interest groups (including representatives of women s and environmentalist groups) a strong influence on economic and social policy-making in the Republic. Due to increasing inclusiveness of the national partnership agreements, the social partners have been divided into four pillars since the Partnership 2000 agreement: Trade Union, Employer and Business, Farming, Community and Voluntary Pillar. 38 Wallace and O Sullivan, 2002, p. 172.

16 The agreements deal with a variety of issues, including wages, fiscal, social and economic policy priorities and competition policy. 39 Ireland has therefore not moved towards Thatcherite neo-liberalism but to its own form of semi-corporatism. As Teague (2005) points out, the social partnership agreements represent a move away from the traditional centralised and binding corporatist bargaining arrangements between employers and trade unions. The post- 1987 approach in the Republic instead is based on a mutual understanding between the government and the social partners on the fundamental economic and social priorities. Due to the non-binding character of the contents of the partnership agreements, however, the traditionally privileged status of trade unions in corporatist systems has been substantially weakened in the Irish system of semi-corporatism: By reconciling the competing demands and needs of economic and social actors in a series of interconnected policies, Irish social partnership has fostered a shared national understanding of the key opportunities and constraints shaping the country s prosperity ( ) The result has been the weakening of the special public status conferred on organised labour and employer groups and a change in the style of economic and social policy-making. 40 The basis for the post-1987 national consensus in Ireland was a shared belief in the need to remain competitive in the race for the attraction of FDI, especially from the United States. In this respect, the impact of Ireland s membership must not be underestimated. The post-maastricht creation of the Single European Market in 1993 and the prospect of Economic and Monetary Union reinforced the perception amongst Ireland s political, economic and social elite that a consolidation course based on long-term economic planning would be indispensable. This was partly due to the desire to meet the Maastricht stability criteria to secure the prospect of swift entry into the Single European Currency. 39 See website of the Irish Prime Minister, Department of the Taoiseach, http://www.taoiseach.gov.ie/index.asp?locid=228 40 Teague, 2005a, p. 9.

17 The vision of the Delors Commission to create a socially cohesive policy framework for the Single European Market inspired Irish policy-makers to develop the social partnership approach at home. 41 Even more important for Ireland s economic development throughout the 1990s, was the impact the creation of the Single European Market had on the Republic in terms of the attraction of FDI. The Single Market came just at the right time to provide the booming US high-tech industry with an economic platform. US high-tech companies in the area of computer and electronics consequently took over 38 per cent of the market for computers and office equipment in Europe. 42 Ireland s successful focus on competitiveness with regard to FDI through the strategies developed by the Industrial Development Authority (IDA) and the stable industrial relations framework established by the social partnership agreements enabled the country to become the main base for American high-tech companies in Europe. The massive influx of (especially US-based) FDI into Ireland throughout the 1990s (see Appendix 2) emerged as a result of the fact that Ireland s pro-investment policy since 1957 and EC membership in 1973 had already provided the basis for foreign direct investment. As Fitzgerald points out, if such industries had not initially been sited here in order to access the EC market, Ireland would not now be such a significant base for multinationals exporting to the rest of the world, including the United States itself. 43 As a result of the influx of American high-tech companies, Ireland s export market expanded substantially beyond the Single European Market. The global focus of the US high-tech industries based in Ireland boosted Irish exports to non-european countries dramatically (see Table 7). 41 Begg, 2004, p. 47. 42 Allen, 2000, p. 23. 43 FitzGerald, 2004, p. 78

18 TABLE 7: Irish Value of Exports to countries outside Europe 1985-2003 (Euro Thousand) 18000000 16000000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0 1985 1988 1991 1994 1997 2000 2003 Value of Exports (Euro Thousand) U.S.A. and Canada Value of Exports (Euro Thousand) Other Countries other than U.S.A. and Canada, Other Industrialised Countries and Members of OPEC Source: Central Statistics Office Ireland. Through the massive US FDI in Ireland, American high-tech MNCs have become the biggest employers in Ireland, with one quarter of manufacturing jobs in US firms 44 in the area of electronics, software, healthcare and pharmaceuticals and a growing number in financial services, telesales and computer-related services (see Table 8) 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 1998 1999 2000 2001 Total Number of Employees in Service Enterprises (Number) Computer Services Research and Development Services Accounting, Book-keeping and Auditing Activities; Tax Consultancy Technical Services Source: Central Statistics Office Ireland. 44 Sweeney, 1999, p. 89.

19 The post-1987 policy consensus is therefore orientated towards providing MNCs with a flexible and deregulatory environment, which ensures that Ireland maintains its competitive advantage as an investment-friendly base. The strong reliance on American MNCs is the backbone for the continuing Irish economic success since the late 1980s, with Ireland leading all OECD countries with an average annual GDP growth since 1991 of over 6 per cent (see table 9). TABLE 9: Average annual GDP growth in the OECD 1991-2003 Real GDP growth Source: OECD Statistical Profile of Ireland 2005, http://stats.oecd.org/wbos/viewhtml.aspx?queryname=13&querytype=view&lang=en The downside to this development is that the post-1987 policy consensus is in danger of undermining the supposed pluralist policy consensus by increasingly introducing an US-style shutting out of trade unions in individual MNCs. The voluntary, nonbinding character of the social partnership agreements has failed to prevent a situation, where MNCS can undermine pluralist industrial relations traditions, most commonly through opposing trade union recognition and refusing to engage in collective bargaining through a strategy of threats to close plants or reduce production in negotiations with trade unions. 45 45 Gunnigle, O Sullivan and Kinsella, 2002, p. 225-226.

20 The open method of co-ordination adopted by the Irish consensus model prefers soft consensus-style encouragement of workplace partnership at enterprise level 46 rather than the development of a hard binding framework for industrial relations. It is therefore a clear move away from the traditional social democratic model of labour co-ordination, which relies heavily on constraining laws and procedures. 47 Ireland s post-1987 economic and social strategy can therefore be characterised as a unique balancing act between European neo-corporatism and Anglo-American-style neo-liberalism. As Boucher and Collins (2003) have pointed out, the Irish consensus of the late 1980s is an attempt to make the best of the strengths and weaknesses of a small country in the face of increasing competition on the global markets: The elite community s decision to move towards the Anglo-American and European models at the same time can be seen as a rational choice for a small country given this history and location, reflecting the contemporary comparative balance of economic, political, social and cultural power between the U.S.A., the EU and the U.K. 48 The unique characteristics of Ireland s socio-economic path consist of its mixture between economic liberalism and social democratic-style consensus and the dependence on strong reliance on FDI. The latter makes the country s economy more reliable on external global changes (e.g. changes in the US economy) than any other economy in Europe. The strong focus on competitiveness and attraction of foreign capital also presents foreign MNCs with an unusually strong influence on Irish domestic policy priorities. The national consensus rhetoric should therefore not distract from the fact that the Irish tiger boom has initiated a profound shift of influence away from trade unions towards the multinational employers. At the same time, the state has moved from the interventionist, authoritarian role of the 1970s to a mainly supervisory role as a promoter of the national consensus. 46 This can be seen in the establishment of the National Centre for Partnership, which was established as part of the Partnership 2000 agreement with the aim of encouraging partnership at individual enterprise level. 47 Teague, 2005a, p. 27. 48 Boucher and Collins, 2003, p. 314.

21 It is however important to emphasise that this development occurred only gradually as part of the boom and was not a precondition for the strong post-1987 economic development. 2.2. Changes in the production model The strong focus on the attraction of mainly US-based foreign FDI since the late 1950s has lead to a dependent form of industrialisation described in section 2.1 which consequently created what some describe as two economies. 49 One is the largely foreign-owned high-tech and capital-intensive sector which has been the main pillar of Ireland s strong economic performance since the late 1980s. The second one is a smaller indigenous sector of Irish-owned companies, which lags behind the foreign MNCs in terms of productivity. This explains why Ireland s GNP has consistently been lower than its GDP (see table 10). The profits obtained by the small domestic industrial sector cannot keep up with the profits of the dominating foreignowned MNCs, which tend to transfer their capital to their country of origin. 50 Table 10: Irish Gross Domestic Product and Gross National Product at 1995 Prices ( Million) 25000 20000 15000 10000 5000 GDP at Constant Factor Cost (1995 Prices) (Euro Million) GNP at Constant (1995) Market Prices (Euro Million) 0 1997Q4 1999Q4 2001Q4 2003Q4 Source: Central Statistics Office Ireland. 49 Collings, Gunnigle and Morley, 2005, p.2. 50 Allen, 2000, p. 10.

22 The Irish Republic was traditionally based on a strong agricultural sector which has been diminishing ever since the move towards industrialisation in the late 1950s. While in 1981 189,000 people were still employed in the agricultural sector by 2004 51 the number had dwindled to 117,000 (see Appendix 2). At the same time, employment in the manufacturing and service sector has risen substantially, with both sectors now providing almost 90 per cent of employment in Ireland (see Table 11). Table 11: Employment in Economic Sectors 2004 Source: Irish Development Agency Ireland, Vital Statistics May 2005. Ireland also maintained a relatively large share of employment in the public sector, which has been rising steadily as part of the economic boom since the late 1980s. Total employment in the public sector has risen by almost 80,000 between 1988 and 2004, from 270,300 to 345,000 (see Table 12 and Appendix 3). 51 O Connell, 2000, p. 67

23 Table 12: Number of people employed in the public sector in Ireland 1988-2004 (thousands) 400 350 300 250 200 150 100 50 0 Series1 1988Q4 1989Q4 1990Q4 1991Q4 1992Q4 1993Q4 1994Q4 1995Q4 1996Q4 1997Q4 1998Q4 1999Q4 2000Q4 2001Q4 2002Q4 2003Q4 2004Q4 Source: Central Statistics Office Ireland. It shows that, at least up to now, successive Irish governments have not used the political consensus on the need to pursue fiscal austerity to substantially cut down the public sector. A purely neo-liberal public policy strategy was hence avoided. The greatest significance for the Irish economy lies nevertheless in the FDI sector. The Irish Development Agency (IDA) was very successful in attracting a new wave of American FDI which emerged as part of the high-tech boom in the United States in the 1990s. The inflow of US-owned FDI into the Irish Republic consequently tripled between 1990 and 1999, when it reached $7.4 billion 52 and led to the emergence of centralised clusters of American MNCs in the area of IT, pharmaceuticals and healthcare and electrical engineering. As part of this development, an enormous growth in the international and financial service sector has occurred. Almost 50 per cent of the total workforce in Ireland is currently employed in the foreign-owned manufacturing sector and over 15 per cent work in the complementary service industries (Table 13). 52 Collings, Gunnigle and Morley, 2005, p. 4.

24 Table 13: Share of employment in manufacturing and services of affiliates under foreign control (as percentage of total employment) in 2002 Source: OECD Factbook 2005. Between 1995 and 2004, almost 150,000 new jobs were created in the named sectors and they exported goods in the value of 68.02 in 2003 to countries outside Ireland. 53 As table 14 shows, American multinationals still hold the biggest share in these new sectors which have become the backbone of the Irish economy, with over 90,000 people employed in US-owned companies. 53 Source: IDA Annual Report 2004, http://www.idaireland.com/uploads/documents/ida_publications/ida_annual_report_2004.pdf

25 Table 14: Origin of IDA supported companies 2004 Source: IDA Annual Report 2004, It is hence not surprising that the dominance of the American high-tech MNCs within the Irish tiger economy have had a profound impact on industrial relations and the organisation of work. The multinational investment boom is characterised by strong centralisation around the capital Dublin, where clusters of high-tech IT companies on greenfield sites have emerged throughout the 1980s. In the early 1990s, the location of computer chip producer Intel near Dublin led to the attraction of a number of large international IT multinationals, but also to the opening subsidiaries of already existing companies as part of the new influx of FDI. in the 1990s. This resulted in a huge expansion of telesales (especially in the form of call centres) electrical supply manufacturers and other computer-related services. 54 Employment in the Dublin region in foreign-owned MNCs is hence substantially higher than elsewhere in Ireland (Table 15). 54 O Hearn, 2003, p. 38.

26 Table 15: Total Employment by region in IDA supported companies 2000-2004 Source: IDA Annual Report 2004. The strong reliance of the Irish economy and, in particular, the labour market on foreign FDI explains why the Irish state and the social partners have been granting the MNCs a relatively large amount of flexibility with regard to work organisation, wage setting and employee representation. Although the boom has also led to an expansion of the indigenous manufacturing industry, especially in the software sector, this has occurred on a noticeable lower level than in the FDI sector. Due to the high share of US investment, the Irish Republic is extremely dependent on the US market and has no Irish Nokia to come to Ireland Inc. s rescue. 55 The Irish state s focus was initially on the continuing attraction of a growing number of foreign FDI, especially from the United States. 55 Boucher and Wickham, 2002, p.5

27 Since the post-september 11 th slowdown in the US economy and the resulting decrease in US FDI into the EU by 80 per cent between 2003 and 2004 56, the Irish Industrial Development Authority (IDA) has switched towards defending the existing FDI in Ireland against increasing international competition, rather than to attempt to attract new MNCs. 57 The dominating new economy of high-tech MNCs in Ireland is therefore characterised by a flexible model of industrial organisation with non-mandatory union recognition and US-style managerial human resource organisation. The trend towards the internalisation of HR organisation at the expense of collective union representation is part of an Irish industrial policy strategy which has been characterised as attempting to portray Ireland as a union neutral environment to remain attractive for FDI. 58 The non-existence of binding legislation with regard to union recognition has led to a trend in the Irish economy, where in spite of a general increase in union membership by almost 900,000 59, the density of union representation in private companies has fallen from over 60 per cent in 1980 to below 45 per cent in 1999 (Table 16). The main reason for this development can be found in the tendency of the American-owned MNCs to prefer direct partnership approaches between employees and management on the individual enterprise level to union representation. 60 As Gunnigle, Turner and D Art (2002) point out in their case study on industrial relations in high-tech greenfield sites, the tendency towards the exclusion of trade unions and the adoption of a more individualist orientation towards industrial relations management has become an explicit challenge to collectivism in industrial relations. 61 56 Source: Eurostat News Release, Decrease in FDI flows with extra-eu countries and in intra-eu 25 flows in 2004, 8 July 2005. 57 Gunnigle, Collings, Morley, McAvinue, O Callaghan and Shore, 2003, p. 13. 58 Gunnigle, O Sullivan and Kinsella, 2002, p. 250. 59 As Wickham notes, Ireland has traditionally had a large number of trade union members because of the high number of jobs in the state sector, where unionisation is more common. (Wickham, 1986, p. 83). 60 Teague, 2005b, p.3 61 Gunnigle, Turner and D Art, 2002, p. 99 and 102.

28 Table 16: Levels of unionisation in Ireland 1925-99 Year Membership Employment density (%) Workforce density (%) 1925 123,000 21.2 18.7 1935 130,230 22.6 18.6 1945 172,340 27.7 25.3 1955 305,620 45.7 41.6 1965 358,050 52.4 48.8 1975 449,520 60 53.2 1980 527,960 61.9 55.3 1985 485,050 61.3 55.3 1990 474,590 57.1 45 1995 504,450 53.1 41.1 1999 561,800 44.5 38.5 Source: University College Dublin DUES data series on trade unions in Ireland 1925-99. The trend towards high performance work organisation, team work and functional flexibility in the dominant high-tech manufacturing and service sectors in the Irish economy has created a culture of corporate individualism. US-style management practices like performance-related pay and delegative employee participation within dedicated work teams 62 have substantially shifted the balance of power from the trade unions towards the top management. The dependent industrialisation strategy of the Irish new economy is based on the social partnership consensus between the government and the social partners to maintain global competitiveness through employee flexibility, non-collective employee representation and the acceptance of managerial priorities. Trade unions accept their loss of influence over human resources management on the individual enterprise level because they have gained influence on the wider strategic economic and social policy direction as part of the national social partnership agreements. For the individual employee in the booming sectors of the Irish economy this represents a double-edged sword. The ability of Irish employers to literally choose from a number of employment practices can especially be beneficial to workers in higher-skilled jobs, who are often able to benefit from performance-related pay systems. For the lower skilled the increasingly personalised relationship between employer and management and the shutting out of unions poses the threat of increasing job insecurity through hire and fire practices. 62 Roche and Geary, 2002, p. 67.

29 It can also lead to what Sennet has described as the new form of managerial control over employees as part of a the tendency towards flexible work organisation in the global economy. As he points out, the increasingly flexible specialisation of production more frequently tends to result in the concentration of power in the hand of the top management. 63 The Irish economy is without a doubt a prime example of this tendency towards managerial control and towards a hierarchical organisation of industrial relations. The non-existence of institutions for direct worker representation (like work councils in Germany) makes workers extremely dependent on concessions from the top management in non-unionised companies regarding human resources conditions. In practice this individualisation of IR has not led to the often claimed improvement in working conditions and employee participation which can be seen in Scandinavian countries. 64 At the same time the centralisation of union representation under the umbrella of the Irish Trade Union Congress (ICTU) and the institutionalised collective bargaining within the social partnership agreements on the national level, whose outcomes remain non-compulsory for employers, have weakened the voice of the individual employee. The resulting sub-polity system of industrial relations negotiations between high-ranking union executives and senior civil servants has led to a situation where the national consensus rhetoric of the top levels of the trade union hierarchy frequently contrasts with the interests of ordinary workers. 65 Another problematic aspect of the Irish model is the lack of employer investment in staff training. Here Ireland is positioned at the bottom league, just in front of Italy and Spain, Poland and Hungary (Table 17). 63 Sennet, 1998, p. 59. 64 Roche and Geary, 2002, p.74. 65 Teague, 1995.

30 Table 17: Lifelong learning 2003/04 data The Republic also does not rate much better in terms of spending on R&D, where both the state and the employers seem to fail to deliver. The latest statistics indicate that Ireland only has on average 5.1 researchers per 1000 employees, which is an exceptionally poor rating in comparison with the Scandinavian economies Finland (15.8) and Sweden (10.6) and even Germany (6.7). It is also below the EU average of 5.8. 66 On general research and development spending, both the Irish state and the employers seem to fail to deliver. With regard to gross domestic expenditure on R&D as a percentage of its annual GDP Ireland is again positioned at the bottom league, below the EU average (Table 18). Between 1980 and 2002, spending in relation to the GDP has only risen slightly from 0.68 to 1.17. 67 The spending in relation to the annual GNP was not much higher, standing at 1.38 in 2002. 66 Source: National Competitiveness Council Ireland, http://204.142.85.221/ncc/chart.asp?series=30 67 Source: OECD Statistical Profile Ireland 2005.

31 Table 18: Research and Development, 2002 figures Ireland has consequently moved from a labour-intensive, relatively unproductive and uncompetitive model based on indigenous and British-owned industry in the clothing, textile and engineering sector and a strong agricultural sector towards a high-tech globalist production model which is strongly dependent on transnational capital. While the nature of the Irish industrialisation process has always been a dependent one, since the liberalisation of the Irish economy in the late 1950s it has gradually shifted its dependence from British towards US FDI. The deliberate decision of Irish elites as part of the post-1987 national consensus to strengthen the Republic s capacity as the main base for American FDI has shifted the Irish production model noticeably towards the direction of US-style work organisation. The dominating American-owned foreign MNC sector of high-tech manufacturing industries therefore concentrates mainly on the competitiveness of its products in terms of quality, innovation and price. Employee participation and training tends to be granted only as long as it contributes to the enhancement of the general productivity of the companies. This explains the tendency towards an individualist top-down approach towards human resources management in the US MNCs, with direct interaction between employees and top management and the increasing shutting out of trade unions, if necessary by threatening closure or relocation. 68 68 Roche and Geary, 2002, p. 88.

32 The fact that the Irish state initiated the national social partnership agreements with employers, trade unions and a variety of interest groups shows that the Irish model has a continental European corporatist element. On the other hand, the non-binding character of the social partnership for employers and the non-interventionist stance of the state with regard to the organisation of HR and union recognition in individual companies paints a different picture. It shows that the Irish model is miles away from the continental form of collaborative corporatism. The orientation towards the competitive postures adopted by firms and associated employment practices 69 at the expense of the working conditions of individual employees clearly shows that the Anglo-Saxon influence dominates. In terms of convergence, one could therefore argue that a continuing focus on the interests of transnational FDI is likely to shift the Irish production model even further towards a laissez-faire model of union substitution and managerial performance-driven work organisation. So far this model has without a doubt allowed Ireland to present good performance indicators in terms of the Lisbon goals of sustainable economic growth and job creation, especially in the crucial services sector. The latter illustrates that it is clearly on course towards the development of a modern competitive service sector, especially in the growing financial services area. This again shows greater convergence with more liberal economies with strong services sectors, like the United Kingdom. For a small country at the periphery of Europe and with a cultural affiliation towards the United States, the focus on US investment is probably the most reasonable choice. The success on the economic development and employment front should however not distract from the challenges facing Ireland with regard to the Lisbon goals. So far the reliance on the IDA mantra that private enterprise is public policy 70 has not led to satisfactory outcomes concerning the development of a competitive advantage as a modern knowledge economy. As the figures show, employers have been reluctant to use the freedom granted by the Irish state to voluntarily reinvest a substantial amount of their profit into staff training and R&D. 69 Roche and Geary, 2002, p.88. 70 Quoted in Murray and Wickham, 1982, p. 204.

33 As a result, Ireland only received a relatively low rating in the Kok report on comparative research and development expenditure as percentage of the annual GDP (1.2 against an EU-15 average of 2.0 and an EU-25 average of 1.9). 71 The Irish state faces the challenge to boost investment in this sector, either by more compulsory regulations on business reinvestment in training and R&D or through higher state expenditure. In the end this will boil down to attempting to balance the trade off between the economic efficiency outcomes of courting further FDI investment while at the same time balancing social equity outcomes for Irish employees. 72 The even bigger challenge for the Irish production model yet boils down to the sustainability of its dependent growth in the manufacturing and service industries. The growing reliance on the US not only as an investor but also as an export market for high-tech products manufactured in the Irish Republic (see Table 19) makes the Celtic Tiger economy more dependent than any other country in the EU on the stability of the US economy. It remains to be seen if such a foreign capitaldependent production model can indeed provide the sustainable competitive growth and sustainable job creation for the long term, which Lisbon aspires. Table 19: Value of Irish Exports ( Thousand) 1980-2004 40000000 35000000 Great Britain 30000000 25000000 20000000 15000000 10000000 Other Member States other than Great Britain and Northern Ireland U.S.A. and Canada 5000000 0 1980 1983 1986 1989 1992 1995 1998 2001 2004 Source: Central Statistics Office Ireland. 71 Facing the challenge: The Lisbon strategy for growth and employment, Report from the High Level Group chaired by Wim Kok, November 2004. 72 Collings, Gunnigle and Morley, 2005 (forthcoming), p. 12.

34 2.3. Changes in the employment system The changes in the production model that laid that foundations for Ireland s Celtic tiger boom in the 1990s have naturally also led to profound changes in the Irish employment system. The flexible structure of the production model has also led to an increasingly diverse and flexible Irish labour market. Ireland has without a doubt had something of an employment miracle as a result of the economic boom of the 1990s. Between 1991 and 2001, almost an additional million jobs were created in the Irish economy 73. Ireland is therefore the most successful country with regard to job creation in the OECD. The average annual employment growth rate of 1.7 percent in the Irish Republic is the highest amongst all OECD countries (Table 20). Table 20: Average annual growth in employment rates in OECD countries (%) 1990-2003 Source: OECD Factbook 2005. 73 Boyle, 2005, p.8.

35 Ireland has managed to work itself from the bottom of the league in Europe to the top of the league. With 4.5 per cent, it had the second lowest unemployment rate in the EU of 25, just behind Luxembourg with 4.2. 74 Throughout the 1980s up until the early 1990s, Ireland persistently had one of the highest unemployment rates in Europe. In 1993, the Irish unemployment rate still stood at 15.6 per cent and since then has been consistently lowered as a result of the economic success of the employment boom based on FDI influx in the 1990s. Ireland has improved its employment figures amongst men to above the average EU level. The male employment rate grew from 64.8 per cent in 1993 to 75.9 per cent in 2004, which is both above the EU-15 average of 72.7 per cent and the EU-25 average of 70.9 per cent 75 (Table 21). Table 21: Employment rates men 1990-2004 76.0 74.0 72.0 70.0 68.0 66.0 64.0 62.0 60.0 58.0 56.0 1990 1992 1994 1996 1998 2000 2002 Ireland EU15 Source: OECD Statistical Profile of Ireland, 2005. Women have also benefited from the Irish employment boom. The female employment rate has increased from the relatively low level of 36.6 per cent in 1990 to almost EU-average. 74 Source: Eurostat, Total unemployment rate, http://epp.eurostat.cec.eu.int/portal/page?_pageid=1996,39140985&_dad=portal&_schema=portal &screen=detailref&language=en&product=strind_emploi&root=strind_emploi/emploi/em0 71 75 Source: Eurostat.

36 In 2004, 56.5 per cent of women in Ireland were in employment in comparison with an EU-15 average of 56.8 per cent and an EU-25 average of 55.7 per cent 76 (Table 22). Table 22: Employment rates women 1990-2004 60.0 50.0 40.0 30.0 20.0 Ireland EU15 10.0 0.0 1990 1992 1994 1996 1998 2000 2002 Source: OECD Statistical Profile of Ireland, 2005. Ireland also has good ratings on the sustainability of employment. The Republic not only had the lowest unemployment rate in the whole of the EU-25 in 2004 (4.5 per cent against an average of 9.0 in the EU-25 and 8.0 in the EU-15). Its total long-term unemployment rate has declined from 9.5 per cent in 1990 to 1.6 per cent in 2004. 77 Although Ireland is still slightly above OECD average when it comes to long-term unemployment (Table 23), its ratings in this category have improved remarkably. 76 Source: Eurostat 77 Ibid.

37 Table 23: Long-term unemployment (as percentage of total unemployed), 2003 Source: OECD Factbook 2005. This shows that Ireland has managed to create relatively sustainable employment. As part of the flexibilisation of the Irish labour market, part-time work has been on the increase but the main employment boom occurred in full-time jobs (Table 24). Table 24: Persons aged 15 years and over in full-time and part-time employment in Ireland, 1997-2004 (thousand) 1800 1600 1400 1200 1000 800 600 400 200 0 In Employment, Full- Time In Employment, Part- Time 1997Q4 1998Q3 1999Q2 2000Q1 2000Q4 2001Q3 2002Q2 2003Q1 2003Q4 2004Q3 Source: Central Statistics Office Ireland.

38 The biggest share in part-time work can be found amongst the female workforce. Although women have had an exceptionally high share in full-time work (Table 25), which is even above the EU level (47 per cent in 2002 against an EU25-average of 29.1 per cent and 46.8 per cent in the EU-15) 78, part-time work amongst the female labour force has also been rising substantially (Table 26). Table 25: Male and female full-time employment in Ireland, persons aged 15 or over 1997-2004 (thousands) 1200 1000 800 600 400 200 0 1997Q4 1998Q3 Source: Central Statistics Office. 1999Q2 2000Q1 2000Q4 2001Q3 2002Q2 2003Q1 2003Q4 2004Q3 Male In Employment, Full-Time Female In Employment, Full-Time Table 26: Male and female persons aged 15 years and over in part-time employment in Ireland, 1997-2004 (thousands) 300 250 200 150 100 Male In Employment, Part-Time Female In Employment, Part-Time 50 0 1997Q4 1999Q1 2000Q2 2001Q3 2002Q4 2004Q1 Source: Central Statistics Office Ireland. 78 Source: European Commission, Employment in Europe 2004 report, Statistical annex.

39 These positive employment figures nevertheless have to be treated with caution. In spite of the good employment record in the area of full-time and part-time work and low long-term unemployment, the total Irish employment rate has been relatively low for a country which experienced the economic persistently high GDP growth (between 8 and 11 per cent) throughout the 1990s. Ireland has only in recent managed to catch up with the employment rate of other EU countries who have had substantially lower economic growth. As table 27 shows, the total Irish employment rate was below 60 per cent until 1998 and has only recently increased to 65 per cent. At the same time Germany has constantly had a higher employment rate than Ireland, although it experienced an increasing employment problem since reunification in 1990. Table 27: Total employment rates in Germany and Ireland, 1990-2003 70.0 60.0 50.0 40.0 30.0 20.0 Germany Ireland 10.0 0.0 1990 1992 1994 1996 1998 2000 2002 Source: OECD Factbook 2005. For a booming country, Ireland hence has a relatively low employment rate. The reasons for this can be found in a more detailed examination of the below the positive overall figures of the Irish labour market. It shows that the Irish employment system does not guarantee adequate participation for certain groups within society, especially older women and low-skilled young people. The geographical centralisation of work in the Eastern region of the country around Dublin also seems to play a major role. The activity rate of women aged 55-64 in Ireland is substantially lower (33.9 per cent in 2003) than in the rest of the EU-25, where 74.5 per cent of women over 55 are actively participating in the labour market.

40 This compares unfavourably with men of the same age group, where the participation rate stood at 66.4 per cent. At the same time, the number of younger women (15-24) participating in the labour market has now just about reached the EU average with 58.4 per cent in 2003 against the EU-25 average of 61.2 per cent. 79 Two flaws in the Irish employment system seem to take effect here. Firstly, younger Irish women are still affected by the lack of availability of institutional childcare in Ireland. As Collins and Wickham (2004) point out, women have been relatively successful in using family networks and friends to make sure that they can participate in the labour market. Nevertheless, they are still constrained by the Catholic state ideology of a male breadwinner model: This ideology is manifested not only in the lack of institutional childcare but also in the tax system where a premium has traditionally been paid to women in the home. 80 Secondly, the move towards a production model based on high-tech manufacturing and services seems to pose a problem for women in rural areas and older women. The number of women working in services has risen substantially since 1997, from 471,000 to 700,500 in 2005. 81 This employment boom has however been very concentrated in urban areas, especially around the Dublin region in the East, where 236,000 of the total women employed in the service sector are situated. 82 Equally, it has left out older women over 55, who have not been able to participate in the employment boom in the same way as the younger age groups, neither in the industry nor in the service sector (Table 28). 79 Sources: European Commission, Employment in Europe 2004 report, Statistical annex. 80 Collins and Wickham, 2004, p. 21. 81 Source: Central Statistics Office Ireland. 82 Ibid.

41 Table 28: Female employees in the industry and services sector (thousand), 2005 250 200 150 Industry Sector Female 100 50 0 Aged 15-20- 25-35- 45-55- 55-60- 65 Other Services Sector Female Other Services Sector Female 2005Q1 Source: Central Statistics Office Ireland The drive towards medium- to high-skill work in the high-tech manufacturing and services multinational industry of the new Irish economy has also negatively affected the chances of young people with low skills. Unemployment amongst people aged 15-24 in Ireland is significantly lower in Ireland than the EU average (4.1 per cent against the EU-25 average of 8.6 per cent and the EU-15 average of 7.7 per cent). It has nevertheless been increasing slightly in recent years, up from 3.4 per cent in 2000 to 4.1 in 2003. 83 The annual average of unemployed people under 25 has risen from 6.7 per cent in 2000 to 8.3 in 2004. 84 The relatively high unemployment amongst unskilled workers in Ireland (6.7 per cent in 2005) in comparison with people with upper secondary (3.2 per cent) and tertiary education (2.1 per cent) 85 shows that the Irish education system fails to prepare a substantial group of especially younger people for the demands of the labour market. 83 Sources: European Commission, Employment in Europe 2004 report, Statistical annex. 84 Source: Eurostat, Unemployment rate of population aged less than 25 years, http://epp.eurostat.cec.eu.int/portal/page?_pageid=1996,39140985&_dad=portal&_schema=portal &screen=detailref&language=en&product=yearlies_new_population&root=yearlies_new_population/ C/C4/C42/ccb30992 85 Source: Eurostat, Unemployment rates of the total population by level of education, http://epp.eurostat.cec.eu.int/portal/page?_pageid=1996,39140985&_dad=portal&_schema=portal &screen=detailref&language=en&product=yearlies_new_population&root=yearlies_new_population/ C/C3/C31/cca23824

42 In 2004, 12.9 per cent of the population were still leaving school early secondary qualification or less and any further training 86. Moreover, less than 40 per cent of the Irish population aged 25-34 actually manage to gain tertiary educational qualification (Table 29). Table 29: Tertiary attainment for age group 25-34, as percentage of the population of that age group, 2002 Source: OECD Factbook 2005. This is not surprising, given that the Irish Republic spends less than the EU average on public and private education. The annual spending in Ireland on all levels of education compared to GDP per capita decreased from 18 per cent in 2001 to 17.3 per cent in 2002, way below the EU-25 average of 25.1 per cent. Spending is particularly low in the primary and secondary levels of education, where Ireland has one of the lowest rating in the OECD (see Table 30). 86 Source: Eurostat, Early school leavers total aged 18-24 as a percentage of the population with at most lower secondary education and not in further education or training

43 Table 30: Expenditure on education by level, US dollars, current prices, PPPs Source: OECD Factbook 2005. In spite of relatively high spending on active labour market policies in recent years, which was boosted by support from the EU structural funds and has amounted to double the OECD average in recent years 87, Ireland has a poor record on vocational education and training. Wickham and Boucher point out that vocational training has traditionally had a tendency to be associated with manual labour, the poorer classes and the less intelligent 88. The post-1987 economic focus on attracting new forms of high-tech transnational FDI in the relatively middle- to high-skill employment sectors has consequently led to a neglect of low-skill education and training. This is shown in the widespread practice of recruiting graduates in the call-centre dominated Irish service industry, who possess good telephone manners and foreign language skills 89 87 Boyle, 2005, p. 11. 88 Wickham and Boucher, 2004, p. 388. 89 Ibid, p. 382. For a an account of the structural organisation of work in Irish call centres see Wickham and Collins, 2004.

44 and the demand for high-skill managerial positions in the high-tech manufacturing MNCs. The Irish state has responded to the lack of willingness on the side of the employers to provide adequate vocational training with the establishment of the FÁS, an institutional merger of between the National Manpower Service (NMS) and the Youth Employment Authority (YEA) under the 1987 Labour Services Act. FÁS was part of the desire to overcome the increasing problem in the area of youth unemployment due to a lack of adequate training. It was strongly encouraged by the EU s strategy to encourage structurally weak regions in Europe to develop active labour market policies through financial support from the structural funds. FÁS hence developed into a single, multifunctional labour market agency with a strong decentralised regional focus and the capacity to respond very precisely to the demands of its funders, the Department of Finance and the EU. 90 With increasing financial and structural support from employers and community organisations FÁS managed to develop a community employment scheme which employs over 40,000 people annually and includes around 27,000 in an apprenticeship scheme. 91 It has however still not been able to change a development, where unskilled Irish workers are actually able to fill the vacancies which definitely exist in the low-skill sector. Ruhs (2005) underlines that FÁS failed to ensure that the more interventionist government policy orientation towards migrant workers introduced in 2003 benefited lower-skilled workers who are unemployed. The introduction of the Labour Market Test in 2003 was supposed to bring an end to a system, where it was relatively easy for employers to gain work permits for migrant workers from outside the EU. Immigration into Ireland from inside and outside the EU has been consistently rising since the early 1990s (Table 29), with net immigration rising from 17.3 per cent in 1999 to 31.6 per cent in 2004. 92 90 Boyle, 2005, p. 43. 91 Ibid, p. 88. 92 IDA Ireland, Vital Statistics May 2005, p. 8.

45 This was the result of an increasing demand in labour as part of the Celtic tiger boom of the 1990s, which could not be filled by the domestic supply in labour. 93 While migrant workers have been employed in all sectors of the Irish economy, the number of work permits granted have been highest in low-skilled jobs. 94 Table 31 also shows the impact of the 2003 Labour Market Test, which requires employers to look for available Irish or EU nationals before applying for a work permit for non-eu residents. Table 31: Estimated population migration (Thousand) by migration flow, year, country and sex 1987-2004 35 30 25 20 15 10 5 0 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Inward Migration European Union excluding United Kingdom and Ireland All Persons Rest of the World All Persons Rest of the World All Persons Source: Central Statistics Office. Ruhs emphasises that while this has led to a decrease in non-eu citizens coming to Ireland in late 2002, the majority of work permits were issued for employment in unskilled occupations for which there appeared to be a sizeable supply of local labour 95. Moreover, the Irish government has adopted a strategy which allows lowskilled workers from the ten new member states which joined the EU in 2004 easy access to the Irish labour market. Ireland was one of the few countries who did not demand any transitional periods regarding the free movement of labour from the new member states. 93 Ruhs, 2005, p.3 94 Ibid, p.28.. 95 Ibid, p. 34.

46 This gives employers the freedom to choose from the growing number of migrant workers from Central and Eastern Europe rather than amongst the native low-skilled unemployed, which often show a better work orientation. In terms of the overall quality of working life in Ireland, the changes towards a more performance-driven and competitive economy has without a doubt had negative impacts for the working conditions and the quality of life of the individual employee. Overall working time in Ireland has decreased in recent years (Table 32), but this does not necessarily imply that workers in Ireland were able to attain a better work-life balance. Table 32: Actual hours worked in Ireland per employee per year in Ireland 1990-2002 1 950 1 900 1 850 1 800 1 750 1 700 1 650 1 600 1 550 1 500 1 450 Source: OECD Statistical Profile Ireland. Ireland 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Ireland Wickham (2000) stresses that especially male high-skilled workers like managers now work long and irregular hours 96 and that generally the working time of both men and especially women has become more fragmented. In Ireland s modern economy it is therefore very difficult to define a normal working week. 97 As table 33 shows, the average working weekly working hours in industry has only slightly fallen from 40.9 in 1996 to 40 in 2004. 96 Wickham, 2000, p.8 97 Ibid, p. 10.

47 Table 33: Average working hours in industries in Ireland Average Hours Worked Per Week (Number) All Persons All Industries (NACE 1-4) 41 40.5 40 39.5 39 Average Hours Worked Per Week (Number) All Persons All Industries (NACE 1-4) 38.5 1996 1998 2000 2002 2004 Source: Central Statistics Office Ireland. On working hours, Ireland is hence only slightly behind the UK and at the top end of the league of those countries who work longest in Europe (table 34). Table 34: Actual hours worked, hours per year, per person in employment, 2003 Source: OECD Factbook 2005.

48 The economic boom in Ireland has also not improved Ireland s status as a relatively low-wage economy in relation to its GDP growth. The wage moderation policy exercised by trade unions as part of the national partnership agreements have led to a rise of average earnings per hour in industry from 8.81 in 1996 to 14.02 in 2004 (Table 35). Table 35: Average Earnings per hour in industries in Ireland 1996-2004 Average Earnings Per Hour (Euro) All Persons All Industries (NACE 1-4) 16 14 12 10 8 6 4 2 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average Earnings Per Hour (Euro) All Persons All Industries (NACE 1-4) Source: Central Statistics Office. Ireland is consequently now positioned in the middle ground in terms of compensation per employee. According to the Irish National Competitiveness Council (NCC), employees in the Republic now receive higher nominal compensation than in the UK and Germany (Table 36). Table 36: Wages, Nominal Compensation 2003 Source: Irish National Competitiveness Council (NCC).

49 If one looks at the rate of inflation in Ireland, this improvement is nevertheless only moderate. Ireland amongst those countries in the EU with the highest cost of living. The rate of consumer price inflation stood at 4.0 in Ireland in 2003, the second highest rating behind Hungary with 4.67 (Table 37). Table 37: Prices and Costs 2003 The consumer price index in the Republic has risen from 77.8 in 1996 to 113.6 in 2003, which is both above the EU-15 average of 106.9 and the OECD average of 108.9. 98 In the 2004 Kok Report on the performance of member states on the Lisbon targets, Ireland received the third highest rating for comparative price levels in the EU (118), way above the EU-25 average of 96 and the EU-15 average of 100 and even the US-average of 113. Only Denmark (131) and Finland (123) are more expensive countries to live in than Ireland. This has to be seen in the context of the relatively low social spending of the Republic. Ireland is at the bottom end of all OECD countries with regard to total social expenditure as percentage of GDP (Table 38). 98 Source: OECD Statistical Profile Ireland 2005.

50 Table 38: Total public social expenditure, as percentage of GDP, 2001. Source: OECD Factbook 2005. The deliberate choice of successive Irish governments to keep public spending low in spite of a strong performance of the annual GDP has profound impacts on social cohesion in the Republic. The strong focus on international competiveness regarding the attraction of FDI in Ireland has led to a neglect of the Irish welfare state, which fails to adequately support those who have not been able to successfully integrate into the tiger economy. As a result, the risk of poverty in Ireland is amongst the highest in Europe. EU statistics show that in 2003, 21 per cent of Irish citizens were only receiving an income below the risk-of poverty line after they had received social transfers from the state. According to the data available, only Greece and Slovenia received an equally dismal performance rating for their welfare state. 99 99 Source: Eurostat, Total percentage of the population at risk of poverty after social transfers, http://epp.eurostat.cec.eu.int/portal/page?_pageid=1996,39140985&_dad=portal&_schema=portal &screen=detailref&language=en&product=strind_socohe&root=strind_socohe/socohe/sc0 22

51 The low public spending naturally also affects the country s healthcare and pension systems. The Irish state still spends less on health than the United Kingdom and the Scandinavian countries (Table 39) and its health system is fundamentally under resourced, with hospitals in permanent crisis. The state-funded medical card system, which entitles holders to free treatment at GP surgeries, dentists and a range of other medical services only covers those on incomes below 200 for married couples and 138 for those who are single. Persons who are not insured in private health schemes have to pay GP charges up to 50 for a single consultation, for which annual tax relief can however be obtained. The dominant private component of the health system stands in stark contrast with the British NHS. Table 39: Public health expenditure, US dollars per capita, 2002 figures Source: OECD Factbook 2005. Irish pension levels are equally low in European comparison, with Irish public expenditure on pensions having fallen from 5.8 per cent of the GDP in 1991 to 3.6 per cent in 2002.

52 This is remarkably low for a country which experienced exceptional economic growth during that period. It is the lowest public spending figure on pensions in the whole of the EU with an EU-15 average of 12.6 (2002 figures). 100 Overall, the Irish employment system definitely contains elements of both the British voluntarist tradition of limited direct legislative or state regulation 101 and a new form of Irish semi-corporatism, which resembles continental European models. As table 40 shows, it is positioned in the mid-range regarding the level of labour market regulation. Table 40: Level of labour market regulation The uniqueness of the Irish model is not just this mix but the fact that the corporatism it developed is essentially voluntarist in nature and based on a generally interfering, but nevertheless restrained and, in terms of public spending, lean state. This stems from the strong orientation of the Irish employment system towards the need of employers. The relatively large amount of freedom granted to companies in terms of recruitment of their labour force from international sources, which has only been recently more restricted towards EU nationals, and in terms of staff training and 100 Source: Eurostat, Expenditure on pensions, Current Prices (%GDP), http://epp.eurostat.cec.eu.int/portal/page?_pageid=1996,39140985&_dad=portal&_schema=portal &screen=detailref&language=en&product=yearlies_new_population&root=yearlies_new_population/ C/C5/C54/dae12304 101 Boucher and Wickham, 2002, p.10.

53 R&D within companies, boils down to a generally more voluntarist and flexible orientation. In this respect, the Irish employment systems resembles more those of liberal economies, where the state traditionally remains restricted. On the other hand, the semi-corporatist inclusion of employers, trade unions and other interest groups in the national social partnership agreements which deal with an increasingly wideranging number of issues (including recruitment, education and training) shows a proximity to continental and Scandinavian models. The Irish state is hence not a night porter but has taken active measures to shape the Irish labour market towards a globalist direction, focused on the attraction of FDI. The ability to produce one of the highest numbers of technical graduates in the world 102 shows that the Irish state successfully moved the Irish employment system towards the recruitment needs of the US high-tech multinational companies in the high-tech sector. As a result, Ireland has produced one of the highest employment rates in Europe in the last decade and is hence considered by many as an example of a modern flexible employment system, which has successfully adapted to the demands of the globalised market. Although the employment record of the 1990s is striking in comparison with previous decades, Ireland still has to prove that it can indeed live up to the Lisbon goals of sustainable employment of high quality, which is most of all inclusive. The described underlying problems of the Irish employment system show that below the surface of the high employment figures, a number of problems persist. The high-skill orientation of the labour market, which is dominated by foreign employers who are able to introduce their own HR practices and recruitment preferences is in danger of leaving out an increasing number of low-skilled young people and older women. The focus on competitiveness has so far neglected the development of adequate means of inclusion for those who have been left behind by the Celtic tiger employment boom. This is most obvious in the lack of investment in primary and secondary education and the failure to develop adequate childcare facilities to facilitate labour market participation for women. If Ireland wants to meet the goal of continuing high employment based on a knowledge economy and a socially cohesive society it will need to deal with these issues on the basis of increasing employer responsibility. 102 Wickham and Boucher, 2004, p. 389.

54 The non-binding character of the outcomes of the social partnership agreements, which was introduced to limit interference in the internal HR organisation of MNCs have not produce satisfactory outcomes with regard to education, skills, R&D investment and job quality. The transformation of the institutional setting of the Irish employment system will consequently have to shift their orientation towards greater efficiency in terms of inclusive outcomes. This could mean moving from a lowroad 103 industrial strategy towards a real, binding partnership between employers, trade unions and the state, even if this would shift the Irish semi-corporatism more towards continental the European tradition. 3. Evaluation The Irish model has undergone a number of changes in the last 25 years but these have largely followed a path specific course of incremental change, which has been individual to Ireland. The opening up of the Irish economy towards international trade in the late 1950s initiated the gradual transformation from a protectionist agricultural economy towards a modern industrialised economy. Since then, Ireland has followed a persistent path of development towards becoming an attractive base for FDI with an increasing shift away from the its former colonial ruler Britain towards a global orientation. The United States and the EU became the pillars for Irish economic development, with membership of the EEC in 1973 providing Ireland access to the Common Market and a growing influx of US FDI since the 1960s. Ireland s economy was hence fundamentally shaped by the need to integrate into the EU s internal market structures and the desire to become the main base for US FDI in Europe. In order to achieve the latter, it adopted an essentially globalist approach, focused on competitiveness and high skill-employment. The initiation of the Single Market in 1992 and the boom in US high-tech computer industries in the 1990s led to an unprecedented influx of US FDI and a massive expansion of high-tech manufacturing industries and services clustered around greenfield sites in urban areas, mainly around the capital Dublin. The resulting employment boom in the mid-1990s confirmed the post-1987 national consensus perception that a combination of wage moderation, fiscal austerity and semi-corporatism would the right way forward for Ireland. 103 O Hagan, 2002, p. 94.

55 The shift towards a system, which has been described as competitive corporatism 104 has therefore not preceded the Celtic tiger boom but occurred as a result of it. It positions Ireland in between the continental social corporatism which exists in countries like France and Germany and the liberal corporatism of the Anglo-Saxon economies. While the former is strongly orientated towards social cohesion and egalitarian outcomes, the latter accepts that the orientation towards market interests will inevitably lead to a degree of inequality within society. The competitive corporatism Ireland has adopted according to Turner (2002), has elements from both but is ultimately closer to the liberal model, because it shares the absence or weak commitment to egalitarianism. 105 On the other hand, Ireland has shown greater closeness to the continental model in its focus on coordination between the social partners: On a number of the indices used centralisation, scope of political agenda, political linkages, horizontal and vertical institutional dimensions it is a plausible argument that the framework of partnership in Ireland is developing towards the strong type of corporatism associated with the Nordic or Austrian model of corporatism. 106 Since the late 1950s, Ireland has hence developed its own model of development based on a pick-and mix choice between liberal and corporatist elements. The Boston versus Berlin 107 debate in Ireland still remains unresolved and while the influence of the EU has persistently made sure that the closeness to the corporatist continental model remains, the new from of US investment in the 1990s has strengthened the neo-liberal influence within the Irish economy. The exceptionally strong focus on the interests of American MNCs has given them a substantial say on the development of industrial relations, labour market policy and social conditions within the Republic. 104 Turner, 2002, p.280. 105 Ibid, p. 280. 106 Ibid, p. 284. 107 Boyle, 2005, p. 8.

56 Ireland s mantra has become globalisation will determine policy choices 108, which has turned the Republic into one of the most globalised countries in Europe. The continuing focus on FDI as the main pillar of continuing Irish economic growth and high employment has introduced a strongly managerial and employer-orientated orientation into the Irish model and created a knowledge economy which relies predominantly on high skills and neo-taylorist production. The resulting weakness in the area of social cohesion has so far been neglected by a national consensus, which included the major political parties and the trade unions. The increasingly obvious shortcomings of the Irish economic model in terms of deliverance on non-tertiary qualifications, female participation in the labour force, reduction of youth unemployment and an socially cohesive and efficient welfare system has already led to indications that the national political consensus on future development might come to an end. The formation of a coalition in opposition between between Fine Gael and the Labour Party, who accuse the Fianna Fail government of neglecting the social balance in Ireland could shift the national consensus towards a more socially cohesive orientation after the next general election. 109 At the same time, estimates of slower GDP growth in the first half of 2005 (less than 2.5 per cent) 110 questions the sustainability of Irish economic growth, especially in the light of decreasing US FDI into Ireland, which shrunk by 4003 million in 2003. Ireland is therefore unlikely to develop into a role model for the whole of the EU. The FDI-dependent economic growth and job creation worked in the Republic due to a number of beneficial factors, like ideal location as an American base for exports into continental Europe, common language and a relatively small geographic size. 108 National Competitiveness Council slogan in 1998, quoted in Hay and Smith, 2005, p. 137. 109 See Fine Gael website, http://www.finegael.ie//index.cfm/level/page/aid/213/content_key/620/type/category/catname/press _Office.html 110 Irish Times, Slow GDP growth may upset economic forecasts, 19 August 2005.

57 Larger European countries could not risk to base their industrial model on FDI to the extent Ireland has done, because the influx of foreign investment would have to be substantially higher to have the same effect. The Celtic tiger model is therefore uniquely shaped towards Ireland s particular circumstances and could at best become a role model for other smaller European states. They have however shown a greater affiliation towards egalitarian social outcomes than Ireland. Total convergence with any other model in the EU is very unlikely for Ireland, it is much more likely that it will continue to go down its own individual path between neoliberal globalism and continental corporatism. The danger for the future of the Irish model lies in the strong dependence on maintaining the foreign MNCs which are the pillars of its employment model. As Wickham and Boucher point out, within Europe, other countries success in attracting FDI will be Ireland s loss. 111 The smaller new EU member states in Central and Eastern Europe, like Hungary, have a much better record in attracting a diversity of non-american FDI than Ireland. 112 If Ireland finds a way to maintain a successful middle way between the different socio-economic models in the EU and continues its success on the economic and employment front, it will have the capacities to improve the current flaws within the system. If on the other hand the tiger has its essential nourishment in the form of FDI taken away from, it will no doubt sooner or later swallow its children. 111 Wickham and Boucher, 2004, p. 392. 112 O Hagan, 2002, p. 90.

58 References Allen, K., The Celtic Tiger: The Myth of Social Partnership (Manchester: University Press, 2000). Barroso, Manuel José, The Lisbon Strategy A Key Priority of the European Commission, Speech at the ETUC Conference, Brussels, 1 March 2005, http://europa.eu.int/rapid/pressreleasesaction.do?reference=speech/05/125&forma t=html&aged=0&language=en&guilanguage=en Begg, D., People, Work and Social Change in J. Hourihane (ed), Ireland and the European Union: The First Thirty Years, 1973-2002 (Dublin: Liliput Press, 2004), pp. 40-53. Boylan, T.A., From Stabilisation to Economic Growth The Contribution of Macroeconomic Policy in G. Taylor in G. Taylor (ed), Issues in Irish Public Policy (Dublin: Irish Academic Press, 2002), pp. 9.27. Boyle, N., FÁS and Active Labour Market Policy (Dublin: The Policy Institute Blue Paper, 2005). Boucher, G. and Collins, G., Having One s Cake and Being Eaten too: Irish Neoliberal Corporatism, Review of Social Economy, 61, 3 (1999), 295-316. Boucher, G. and Wickham J., Flexibility and Competitiveness: Labour Market Flexibility, Innovation and Organisational Performance, Flex.com Irish National Report, Employment Research Centre, Trinity College Dublin, http://www.tcd.ie/erc/old%20projects/flexcom%20downloads/flexcom%20national %20Report.pdf Bradley, J. The Story of Ireland s Failure and Belated Success in B. Nolan, P.J. O Connell and C.T. Whelan (eds), Bust to Boom? The Irish Experience of Growth and Inequality (Dublin: Institute of Public Administration, 2000), pp. 27-57. Collins, G. and Wickham J., Irish Women enter the Labour Force, Gender, Work and Organisation, 11, 1 (2004), 26-46 Collings, D.G., Gunnigle, P. and Morley, M.J., American Multinational Subsidiaries in Ireland: Changing the Nature of Employment Relations in G. Boucher and G. Collins (eds), Working in Contemporary Ireland (Dublin: Liffey Press, 2005, forthcoming). Coogan, T.P., Ireland in the Twentieth Century (London: Arrow Books, 2003). European Commission, Employment in Europe 2004 (Brussels: European Commission), http://europa.eu.int/comm/employment_social/news/2004/sep/eie2004_en.html

59 European Commission, Report from the High Level Group Chaired by Wim Kok, November 2004, http:europa.eu.int/growthandjobs/pdf/2004-1866-en-complet.pdf Eurostat News Release, Decrease in FDI Flows with extra-eu countries and in intra- EU 25 flows in 2004, 8 July 2005. Fitzgerald, G., The Economics of EU Membership in J. Hourihane (ed), Ireland and the European Union: The First Thirty Years, 1973-2002 (Dublin: Liliput Press, 2004), pp. 67-80. Fitz Gerald, J., The Story of Ireland s Failure and Belated Success in B. Nolan, P.J. O Connell and C.T. Whelan (eds), Bust to Boom? The Irish Experience of Growth and Inequality (Dublin: Institute of Public Administration, 2000), pp. 27-58. Fitzgerald, R. and Girvin, B., Political Culture, Growth and the Condition for success in the Irish Economy in B. Nolan, P.J. O Connell and C.T. Whelan (eds), Bust to Boom? The Irish Experience of Growth and Inequality (Dublin: Institute of Public Administration, 2000), pp. 268-285. Gunnigle, P., Collings, D., Morley M., McAvinue, C., O Callaghan, A. and Shore D., US Multinationals and Human Resource Management in Ireland: Towards a Qualitative Research Agenda, Irish Journal of Management, 24, 1 (2003), 7-25. Gunnigle, P., O Sullivan M. and Kinsella M., Organised Labour in the New Economoy: Trade Unions and Public Policy in the Republic of Ireland in D. D Art and T. Turner (eds), Irish Employment Relations in the New Economy (Dublin: Blackhall, 2002), pp. 222-258. Gunnigle, P., Turner, T. and D Art D., Counterpoising Collectivism: Performance- Related Pay and Industrial Relations in Greenfield Sites in D. D Art and T. Turner (eds), Irish Employment Relations in the New Economy (Dublin: Blackhall, 2002), pp. 93-107. Hay, C. and Smith N.C. Horses for Courses? The Political Discourse of Globalisation and European Integration in the UK and Ireland, West European Politics, 28, 1 (2005), 124-158. Irish Development Agency (IDA), Vital Statistics May 2005 (IDA: 2005), http://www.idaireland.com/home/index.aspx?id=239 Irish Industrial Development Authority (IDA), Annual Report 2004, http://www.idaireland.com/uploads/documents/ida_publications/ida_annual_repo rt_2004.pdf Irish National Economic Social Council (NESC), The Developmental Welfare State, Report May 2005, http://www.nesc.ie/dynamic/docs/nesc%20dws_rz%20text+cover.pdf

60 Murray, P. and Wickham, J., Technocratic Ideology and the Reproduction of Inequality: the Case of the Electronics Industry in the Republic of Ireland in G. Day (ed), Diversity and Decomposition in the Labour Market (Hampshire: Gower, 1982), pp. 179-210. O Connell, P. The Dynamics of the Irish Labour Market in Comparative Perspective in B. Nolan, P.J. O Connell and C.T. Whelan (eds), Bust to Boom? The Irish Experience of Growth and Inequality (Dublin: Institute of Public Administration, 2000), pp. 58-89. O Hagan, E., Employee Relations in the Periphery of Europe: The Unfolding Story of the European Social Model (Basingstoke: PalgraveMacmillan, 2002). OECD, Factbook 2005 (OECD:2005). OECD, Statistical Profile Ireland (OECD: 2005). O Hearn, D., Inside the Celtic Tiger: The Irish Economy and the Asian Model (London: Pluto, 1998). O Hearn, D., Macroeconomic Policy in the Celtic Tiger: a Critical Reassessment in C. Coulter and S. Coleman (eds), The End of Irish History? Critical Reflections on the Celtic Tiger. (Manchester: University Press, 2003), p. 34-55. Roche, W.K. and Geary, J.F., Collaborative Production and the Irish Boom: Work Organisation, Partnership and Direct Involvement in Irish Workplaces in D. D Art and T. Turner (eds), Irish Employment Relations in the New Economy (Dublin: Blackhall, 2002), pp. 58-92. Ruhs, M., Managing the Immigration and Employment of Non-EU Nationals in Ireland (Dublin: The Policy Institute Blue Paper, 2005). Sennet, R., The Corrosion of Character (New York: W.W. Norton, 1998). Sweeney, P., The Celtic Tiger: Ireland s Continuing Economic Miracle (Dublin: Oak Tree Press, 1999). Teague, P. Pay Determination in the Republic of Ireland: Towards Social Corporatism, British Journal of Industrial Relations, 33, 2 (1995), 253-268 Teague, P., Social Partnership and the Enterprise Lessons from the Irish Experience (Dublin: The Policy Insitute Working Paper, 2005a). Teague, P., Towards Flexible Workplace Governance: Employment Rights, Dispute Resolution and Social Partnership in the Irish Republic (Dublin: The Policy Institute Blue Paper, 2005b). Turner, T., Corporatism in Ireland: A Comparative Perspective in D. D Art and T. Turner (eds), Irish Employment Relations in the New Economy (Dublin: Blackhall, 2002), pp. 275-300.

61 Wallace, J. and O Sullivan, M. The Industrial Relations Act 1990: A Critical Review in D. D Art and T. Turner (eds), Irish Employment Relations in the New Economy (Dublin: Blackhall, 2002), pp. 169-195. Wickham, J., Independence and State Structure: Foreign Firms and Industrial Policy in the Republic of Ireland in O. Höll (ed), Small States in Europe and Dependence (Vienna: Wilhelm Braumüller, 1983), pp. 165-183. Wickham, J., Industrialisation, Work and Unemployment in P. Clancy, S. Drudy, K Lynch and L. O Dowd (eds), Ireland: A Sociological Profile (Dublin: Institute of Public Administration, 1986), pp. 70-96. Wickham, J., Changing Times: Working Time in Ireland 1983-2000. Report for the ERC Labour Market Observatory, Trinity College Dublin, http://www.tcd.ie/erc/observatorydownloads/changing%20times.pdf Wickham, J. and Boucher, G., Training Cubs for the Celtic Tiger: the volume production of technical graduates in the Irish educational system, Journal of Education and Work, 17, 4 (2004), 377-395. Wickham, J. and Collins, G. The Call Centre: A Nursery for New Forms of Work Organisation, Services Industries Journal, 24, 1 (2004), 1-18.

APPENDIX 62

63 APPENDIX 1: EU 25 FDI FLOWS 2004 Source: EUROSTAT, News Release 8 July 2005, Decrease in FDI flows with extra-eu countries and in intra-eu25 flows in 2004, http://epp.eurostat.cec.eu.int/pls/portal/docs/page/pgp_prd_cat_prerel/pge_cat_prerel_ YEAR_2005/PGE_CAT_PREREL_YEAR_2005_MONTH_07/2-08072005-EN-AP.PDF