The Transition to Internationally Traded Services and Ireland's Emergence as a ‘Successful’ European Region

Abstract

In this paper we explore how Ireland's recent inward investment in internationally traded services allows for deeper integration into the world economy. Although academic researchers have long debated the economic development consequences of foreign direct investment (FDI) (for example, Dicken et al, 1994;Turok, 1993;Young et al, 1994), these debates focus overwhelmingly on FDI associated with large-scale manufacturing and until recently overlooked service-based FDI (Gripaios et al, 1997). Given the growing prominence of services, this represents a significant oversight (Daniels, 2000; Miozzo and Miles, 2003). As corporate organisational forms become more complex and diverse, there is a greater need to understand both the growing array of activities and the ways in which regional economies become entwined within the organisational structures of global firms. The multiscalar perspective of global production networks (GPNs) contributes to this understanding not only by conceptualising better the relationships between corporate networks and territorial economies but also by its considering the service activities that mediate the entire production process (Henderson et al, 2002).These issues are particularly relevant to Ireland, which for the past forty years has implemented FDI-led regional development policies. Rural, low-value-added manufacturing once dominated Ireland's inward investment profile (O'Malley, 1994), but internationally traded services now assume a much more prominent position (Grimes, 2003). The shift to services is evident through the many information and communication technology (ICT) companies such as IBM, Hewlett Packard (HP), Microsoft, and Dell that elected to locate important service functions in Ireland. This enhanced role places Irish affiliates in more advantageous positions from which to seek more extensive and sophisticated corporate mandates. As a result, Ireland remains better equipped to manage the changing demands of the world economy than during the period dominated by branch-plant manufacturing.Internationally traded services are by no means restricted to the technology sector in Ireland, as, for example, Dublin's International Financial Services Centre accounts

Revisiting the ‘Informational City’: Space of Flows, Polycentricity and the Geography of Knowledge-Intensive Business Services in the Emerging Global City-Region of Dublin

“…Certainly, the existing literature provides useful insights into the growth of internationally traded services in Ireland (BREATHNACH, 2000;GRIMES, 2003;GRIMES and WHITE, 2005), some of which may be part of larger manufacturing or software-producing corporations. However, the present study represents the first attempt to examine service-specific KIBS firms while focusing on their locational pattern within the Greater Dublin region.…”

“…international financial services within banking/finance/insurance) could be labelled as 'internationally traded services ' (cf. BREATHNACH, 2000;GRIMES, 2003;GRIMES and WHITE, 2005), while others are predominantly oriented to domestic markets (e.g. domestic banking, domestic insurance, law and accountancy firms, management consultancies, architecture firms, etc.)…”

“…The increasing linkages with the global economy have recently led researchers from the Globalization and World Cities Study Group and Network (GaWC) to label Dublin an 'emerging global city ' (TAYLOR et al, 2002, p. 100). Secondly, it could be argued that hand-in-hand with its globalization, Dublin experienced unprecedented economic growth, part of which was a significant expansion of internationally traded services (BREATHNACH, 2000;GRIMES, 2003;GRIMES and WHITE, 2005) and knowledge-intensive business services (KIBS). Importantly, CASTELLS (1989) and HALL and PAIN (2006) alike see KIBS as the major driving force behind the emergence of the 'multinuclear' or 'polycentric' spatial structures.…”

Foreign Direct Investment and Institutional Co-Evolution in Ireland

“…The Single Market programme may also have allowed Ireland to achieve a critical mass of US firms in certain sectors, allowing agglomeration and demonstration effects to come into play (Barry, Görg and Strobl, 2003). Combined with this increase in manufacturing FDI, Ireland also began to attract increasing services-sector FDI inflows (Grimes and White, 2005). Starting from a base close to zero in the late 1980s, by the new millennium foreign-firm employment in each of Ireland's FDI-intensive manufacturing sectors was matched by equivalent employment levels in several foreign-owned offshore services sectors: the international financial services segment now matches pharmaceuticals, other business-process offshored (BPO) activities match instrument engineering, and computer software employment is now close to that in hardware.…”

The role of ‘hard’ and ‘soft’ factors for accommodating creative knowledge: insights from Dublin's ‘creative class’

“…The regional economy has been transformed into one currently dominated by internationally traded services (particularly information and communication technology [ICT] and financial services), aided by foreign direct investment (FDI)-led regional development policies (Grimes and White 2005). In fact, Beaverstock et al (1999) have characterised Dublin as a city that shows relatively strong evidence of world city formation, quite a transition for a city with unemployment rates in excess of 40% in some areas in the 1980s (MacLaran 1993).…”