Transcript Document 7828736

What doesn’t kill
you makes you stronger
Friedrich Nietzsche
OVERVIEW
• Ireland: 3 Steps forward. 1 step back.
• Perspective: The antidote to recessions
• Business and the Demographic Dividend
• Government and the Density Dividend
• Economic Unity: Ireland’s ace card.
Ireland: 4 steps forward, 1 step
back
Irelands relative growth performance 1997 to 2006
Ireland
Euro area
OECD
Year; average; performance factor
12
10
8
6
4
2
0
1997
1998
1999
2000
2001
2002
2003
2004
Year on year percentage change
2005
2006
Average
But the Irish economy has gone
from this…..
2005-2007: FROM TIGER TO GARFIELD
1
4
%
1
2
%
1
0
%
8
%
6
%
4
%
2
%
0
%
-2
%
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
D
o
m
e
sticD
e
m
a
n
d E
xte
rn
a
lD
e
m
a
n
d
2
0
0
5
2
0
0
6
2
0
0
7
….to this…..
SO JUST WHAT HAPPENED?
• 1994 April: ESRI Medium Term Forecast
for economy:
• “Growth avge 7% 94-04, slowing
thereafter to around 3%”
• But damage to cost competitiveness over
94-04 lowered trend growth to 2.5% p.a.
• So growth should have been 2.5% 05-09
• On average, by this year’s end, that’s what
we’ll get
2005-2009; A GAME OF TWO HALVES
• 2005 – 2007 inclusive: Average
growth just over 6 per cent.
• 2008 – 2009 inclusive: Average
growth -3 per cent.
• Entire period: Average growth:
2.5%
• Question: What divides these
two periods???
2005-2009; A GAME OF TWO HALVES
Real level of output in economy
Economic output: Electorally massaged
Economic output: Properly managed
210000
190000
Millions euro
170000
150000
130000
110000
90000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year
MARKETING: THE ANTIDOTE TO
RECESSION
If the economy as a whole isn’t growing, find
out what is…….
Like:
• Population + 150,000 in last two years (CSO)
• Half a million people between 16 and 24 (CSO)
• World population to grow from 6 bn to 9 bn by 2050 (UN)
• Number of people over 65 to double between 2005 and 2025
• % of world’s population in urban areas to grow from 37% in
2005 to 60% in 2025. This trend happening in Ireland also
…AND BY 2026
…There will be at least a half million more people in
the country and possibly one and a half million more
people
CSO Population projections, Dec. 4th 2008:
•Current Population is 4.3 million
•Lowest 2026 pop. will be 4.9 million
•Highest 2026 pop. will be 5.7 million
EU Commission, Dec 2008: 6.7 million in
Republic by 2058 and 9 million on island of
Ireland
ECONOMIC UNITY: IRELAND’S ACE
CARD
What if island of Ireland had population density of…?
IRELAND AND ENGLAND:
POPULATION'S COMPARED
Ireland
England
45.0
50
35.0
Millions of people
30.0
25.0
20.0
15.0
40
England
30
20
10.0
5.0
10
Ireland
2006
0
1841
England
Israel
Denmark
Ireland 1841
0.0
Ireland 2006
Millions of people
40.0
BUSINESS AND THE
DEMOGRAPHIC DIVIDEND
Back to the Future:
Ireland's Historic Population U-Turn
Republic of Ireland*
Northern Ireland*
Island of Ireland
9000
8000
Persons (000s)
7000
6000
5000
4000
3000
2000
1000
0
1841
1871
1901
1966
1936
1981
Censal year
*Before 1922 the geographical equivalent of
2006
2021
2041
GOVERNMENT AND THE DENSITY DIVIDEND
Distorted approach to space & density is holding us back from further
growth
- Inflated land prices behind huge loans to property sector
- Feudal attitudes to land & Failure to price properly:
- As monopoly good even Thatcher accepted it’s price needed to
be controlled
Failure to achieve “Density Dividend” meaning
- Population sprawled out instead of rising up.
- Over concentration in commuter belt rather than clustered towns,
resulting in:
1. long commutes and high prices
2. Small communities where provision of public transport,
centres of health excellence, broadband not feasible
3. Lower quality of life due to distance from work, families
4. Weaker economic potential, FDI & growth of local
business
5. Rip-off Ireland as residents in smaller towns more likely
to be exposed to local monopolies
GOVERNMENT AND THE DENSITY DIVIDEND
• Good news: With half a million pop growth by 2020, there is
plenty of potential to reverse in relative terms the spatial sprawl
of the last decade
• We need to build up and in rather than out and across. We
need fewer local authorities and national transport and planning
agencies to plan city areas as drivers of regional growth. This will
benefit rural Ireland far more than current sprawl.
• We should channel that growth into urban areas rather than
commuter belts to achieve these population levels in our key cities
by 2020:
–
–
–
–
–
Cork 250,000
Galway 150,000
Waterford 100,000
Limerick 200,000
Sligo 100,000
The real cause of the banking
crisis: Land.
• Planning
– Growth is not clustered
– Blanchardstown, Swords, Skerries, Rush, Lusk & other
areas all saw substantial population growth
– Growth spread like butter
– Stamullen: 2002; 729 people 2006; 2,487!
•
High land and house prices that caused the boom and
subsequent bust
• Militates against provision of public transport
• Militates against provision of quality public services
• Implications also for
– Cost of Living
– Quality of Life & access to amenities
– Carbon footprint of sprawled housing…heating & car reliance
ECONOMIC UNITY: IRELAND’S
ACE CARD
• Republic of Ireland
– High cost
– Dynamic private sector & entrepreneurial
– But poor public sector, bad public governance,
broadband
• Northern Ireland
– Low cost
– High state sector, needs entrepreneurial drive
– But good broadband & attitudes to getting
things done in terms of infrastructure.
• If these were 2 companies, you’d merge
them immediately.
CONCLUSIONS
• Message 1: Don’t panic: After a phenomenal economic
performance since mid-1990s, we can survive a two-year
recession. We are blowing froth off a protracted boom.
• Message 2: Demographic dividend Growth is out there but its
just not aggregate economic growth. Demographic segments
are providing huge marketing growth opportunities, globally
and nationally, for marketers willing to exploit them.
• Message 3: Density dividend: Government needs to change
spatial strategy, town planning, land use and
transport/broadband to cluster our population more
effectively. Crucial to support NDP roll out.
• Message 4: The Best is Yet to Come On an island whose
population is set to grow from 6 to 8 million in the coming
half century, we shouldn’t worry about the future. Instead
we need to start planning for it. Politics aside, a United Irish
economy will benefit all inhabitants, north and south.