Ireland after NAMA

The annual conference of the Regional Studies Association (RSA) Irish Branch was organised at NUI Maynooth last Monday. Conference speakers included representatives of the OECD, IDA Ireland, Enterprise Ireland, Forfás and Shannon Development, the ESRI, Teagasc and Irish Universities.

The conference aimed to enhance our understanding of, and stimulate debate about, the role of the regions in Ireland’s smart economy. In Ireland, a key policy response to the current economic crisis has been the Smart Economy action plan. This sets out a vision of structural reform – one that envisages the Irish economy focusing on export-led growth, innovation, R&D and high skilled jobs. However, little attention has been given to the regional aspects of this strategy and the effects on balanced regional development. Prior, during and after the conference, the RSA has received several valuable submissions. I hope you can restate these by way of commenting on this post so that they can serve to stimulate further discussion.

As a background I summarize some of the contributions below.

• According to the two top-level OECD officials speaking at the event, regional areas internationally are very important contributors to national aggregate economic growth, in particular intermediate regions hosting medium size cities.
• The OECD emphasised that magical ‘one size fits all’ solutions do not exist. Good infrastructure, investment in human capital and promoting innovation are all key elements. To achieve this, Ireland should ensure that it efficiently links all levels of Government.
• Other speakers argued that local Government structures in Ireland need to be overhauled, and that the Government should now revisit the National Spatial Strategy.

Two speakers from the OECD addressed the conference. Jose Enrique Garcilazo, Head of Unit in the OECD, emphasised that regions can play a very important role in driving national economic growth, in particular intermediate regions hosting medium size cities. In fact, he argued, they are roughly as important as the contribution from the most developed regions.

According to Joaquim Oliveira Martins, Head of the Regional Development Division at the OECD, there is no magical ‘one size fits all’ formula that can be applied to all regions for promoting growth. He said that the OECD finds that the most important growth drivers are infrastructure, human capital, innovation and agglomeration. Given the range of inputs needed, Ireland should ensure that all levels of Government work effectively together in order to build a sound and sustainable regional economy.

According to the OECD, in order to build a sound and sustainable regional economy, Ireland should design regional polices that combine bottom-up with top-down approaches designed to unlock the regional potential of all Irish regions whereas past growth has been rather unevenly distributed. This requires close collaboration among actors across all levels of government, as well as the private sector and civil society. The policy design should be in line with the new paradigm shift observed in many OECD countries from redistributive subsidies to investment in regional competitive advantages and from a narrowly sectoral approach to integrated cross-sectoral projects.

Echoing the OECD emphasis on the role of Governance, Vincent Cunnane, CEO of Shannon Development called for more collaboration at regional level to drive Ireland’s economic recovery: “Current structures need to be overhauled to make regions more effective sources of economic growth and more attractive locations for inward investment.” Another speaker, Professor Jim Walsh of NUI Maynooth, said that it is now time to redraw the National Spatial Strategy, as it is no longer appropriate for Ireland for the next 20 years.

Also speaking at the conference, John O’Brien of IDA Ireland said that the IDA had had successes in attracting foreign firms to invest in the regions, and that their medium term plan would continue with this aim. However he also said that there were very real challenges to attract some companies to invest outside of Dublin. He emphasised the importance of ensuring the firms which were already employers here to reinvest in Ireland.

 Chris van Egeraat

Baby I’ve been here before, I know this room and I walked this floor…

The Irish Examiner reports today claims made by Marian Finnegan of property auctioneer Sherry Fitzgerald, who suggests that “The latest census figures show that Ireland’s population has risen to 4.58 million and it is expected to increase to 5.1 million people by 2026,”, and therefore Ireland will need 30,000 new homes per year.  This story seems familiar.  The narrative goes something like this:  Ireland had a property boom. It went bust. However, the extent of this bust has been greatly exaggerated.  Ireland still has a growing population.  This new population will need new houses. The current stock of empty properties will not be sufficient.  If we do not build now we will be in trouble later. This ‘property resurrection’ genre is being pumped out every couple months, the basic storyline being augmented by this or that piece of data.  But with much of genre fiction the plot is wafer thin.  In this instance, two glaring plot holes are; Firstly, given that the majority of the population increases cited by Finnegan are new births (363,500 over the period 2006-2011 according to the CSO), and there generally isn’t a huge demand for houses amongst toddlers, it will probably be some time before this rise in population is felt in terms of the property market. Secondly, with a national unemployment rate of around 14.5% and a string of banks up to their necks in debt who have done a u-turn in their lending practices, who will be in a position to buy these houses? This particular genre is sounding a bit desperate. I think we need some new kinds of stories.

Cian O’Callaghan

In the context of yesterday’s announcement of job losses at TalkTalk there has been a lot of discussion about the high unemployment levels in Waterford. Unfortunately we have few data to investigate such claims. Official unemployment figures based on the Quarterly National Household Survey are only available at the regional and national level. The CSO provides figures at sub-regional level, but only absolute numbers (no rates). Between December 2007 and August 2011, the number of people on the Waterford Live Register rose by 124% (from 5633 to 12,604) In an earlier post on this blog (“sub-regional variation in unemployment in Ireland”) I attempted to analyse sub-regional variations of unemployment rates based on live register figures. Again, the methodology does not allow us to calculate actual unemployment rates, but they do serve to establish relative positions of live register office areas. Using the same methodology, I took a look at the relative position of the Waterford Live Register Office area. In August 2011, Waterford had the 23^rd highest “unemployment rate” of over 120 Live Register areas, with a rate well above the national average. The top ten areas included Cavan, Dungloe, Dunfanaghy, Gorey, Bullybofey, Finglas, Belmullet, Letterkenny, Longford and Tralee. The 575 TalkTalk redundancies would bring Waterford up to position 14, ceteris paribus (and assuming that all employees would sign on at the Waterford office).

 Chris van Egeraat

The Live Register figures for August 2011 published by the CSO yesterday shows that the number of people on the Live Register is now at its highest ever level in decades, amounting to close to half a million people (469,713). A perhaps more consoling statistic shows that the percentage increase in numbers on the Live Register over the past year amounts to 0.6%, a significantly lower level of increase than that experienced over the three previous years of the Crisis era, with percentage increases of 41.9% between August 2007 and August 2008, 76.9% between August 2008 and August 2009 and 6.8% between August 2009 and August 2010.  Looking across the past four years, numbers on the Live Register (based on August figures for the last four years as published by the CSO) have increased from 174,206 in August 2007 to 469,713 in August 2011, a percentage increase 169.6% over those four years.

In terms of gender trends, one interesting dimension of the August 2011 figures, when contrasted with the previous year’s figures, shows that the number of males on the Live Register fell over the past year (by 3,098, or 1.0%) while the number of females, by contrast, increased by 5,888 (3.5%). These trends were more evident in the Border-Midlands-West region, where the number of females on the Live Register increased by 5.0% (5,888 increase) while the number of males fell by 1.4% (fell by 1,255). Looking at the individual regions, gender difference in Live Register trends were most evident in the Midlands region, where the number of females on the Live Register increased by 6.7% while the number of males fell by 0.6%. The pattern of larger increases in female Live Register numbers was established over the previous year, wherein the number of females on the Live Register increased by 9.1% between August 2009 and August 2010 against a 5.6% increase in male numbers. These figures need to be put in the context of trends over the first two years of the Crisis however, which show massive increases in the number of males on the Live Register and shows the increase in male Live Register numbers between August 2007 and August 2009 to be significantly higher than female levels. The numbers of males on the Live Register increased by 182,580 (179.7%) over those two years, against an increase of 80,439 (110.8%) in female numbers. This could suggest that losses in terms of full-time employment were most keenly felt in male-dominated activities (such as construction) in the first two years of the Crisis, but that (full-time) employment losses over the past two years have been more notable within female-dominated employment sectors, such as Sales and Personal Services. Relatively higher levels of outmigration amongst males, as suggested by the recent release of Census 2011 provisional population figures, may also be a factor in terms of explaining gender differences over the past two years.

The other interesting difference that emerges relates to age and differences in Live Register numbers between the Under 25 and over 25 age cohorts. While the percentage increase in mumber on the Live Register was relatively similar for both the Under 25 (74.0%) and Over 25 (79.0%) age cohorts over the August 2008-9 period, in the past few years there has been a steady decline in numbers amongst the Under 25 age cohort  (falling by 1.2% over August 2009-10 period and 6.1% over August 2010-11 period) while the numbers of Over 25s on the Live Register continues to increase (up by 8.2% over August 2009-10 period and 2.3% over August 2010-11 period). On the one hand this suggests that out-migration may be acting as a means of reducing numbers of younger people on the Live Register, on the other hand it suggests that seriously high numbers of people in the Over 25 age category remain on the Live Register, with many now being unemployed or in low-paid casual/short-term employment on a long-term basis. As the breadwinners for families will tend to come from the Over 25 age cohort, a significantly higher number of people than 380,943 over 25s currently on the Live Register remain to be effected as a result.  

At the regional level, it is the regions that have experienced the greatest increases in population over the past five years (based on the 2011 Census provisional population figures) that have also experienced the greatest increases in Live Register numbers.

Table: Live Register figures comparison by region and gender between August 2007 and August 2011, based on figures published by the CSO

Table 1a: Live Register figures comparison by region between August 2007 and August 2011, based on figures published by the CSO

The region that has experienced the greatest increase in Live Register numbers over the past four years is the Mid-East region, where there is now more than three times as many people on the Live Register than there was four years ago.  The next highest increase was observed for the Midlands region. Both those regions experienced significant increases in population levels over the past five years, with a 22.9 per thousand annual increase in population numbers in the Midlands and a 21.9 per thousand annual increase in population numbers in the Mid-East between 2006 and 2011, as compared with a state average of 15.5 based on the provisional 2011 Census figures published by the CSO. The combined population and Live Register figures suggests these may be the regions that need to be especially targeted in terms of future employment initiatives.

NB: The Live Register figures do not only include the numbers of unemployed, but also include part-time, seasonal and casual workers entitled to Jobseekers Benefit or Allowance.

Adrian Kavanagh