Impact of Globalisation on a Developed Country (Ireland)

Like all other developed countries, Ireland has been subjected to at least some form of globalisation

However, this is not as recent an occurrence as many believe; it began as far back as the 16th century when Ireland became a colony of the British Empire. Even at that time, it was forced to establish new trade links with a variety of different countries as part of its mother country’s global trade network.

After independence. the Irish gov introduced extortionate taxes and tariffs on imports in an attempt to both protect and promote Irish businesses. However, this had as many negative effects as it did positive, most notably the fact that it prevented trade with other countries and discouraged Foreign Direct Investment (FDI). It was not until the 1950s that Ireland finally relaxed its trade barriers, allowing and enabling Ireland to become part of the ever expanding worldwide economy once again; the difference this town was that it was doing so on its own.

Since then, a key element of government policy has been to promote the transition from the traditional reliance on primary economic activities towards both secondary and even more so, tertiary economic activities.

New markets have also been developed. Until Ireland became globalised, it traded primarily with the UK, a common consequence of colonialism (neo-colonialism). Today, its partners are not so restricted and now incorporate the rest of the EU, North America and even parts of Asia. Europe is now an important destination for some of our manufactured goods, Asia is one of our key sources for imported manufactured goods, while North America is a pivotal supplier of both capital and intellectual services.

In the past decade, the destinations of Irish exports were roughly as follows; UK (11.4%), EU (40.6%), USA (27%), Switzerland (2%), China (7.1%), Japan (2%) and the rest of the world (9.9%)

Globalisation can be perceived as both an opportunity and a threat for Ireland. In recent years, the total number of people employed in manufacturing was approximately 442,000. Of this, 235,000 were employed by foreign owned companies alone.

Up to 90% of Irish exports were produced by foreign owned companies and were worth €150 billion to the Irish economy. In comparison, only €32 billion worth of exports were produced by actual Irish firms. The presence and dominance of so many foreign owned companies can be cause for great concern as they expose Ireland to all sorts of fluctuations, both positive and negative, in the global economy. Similarly, Ireland’s increased dependence on other economies particularly North America, for our won economic growth can also be risky, even at the best of times. Any changes in their economies, again be they good or bad, can have massive implications for Ireland.

Finally, Ireland is highly comparable with most other developed countries insofar as we have now shifted the majority of our attention towards knowledge industries and away from the more traditional labour-intensive sectors.