chapter  4
Industrialization by invitation
Pages 14

The objective of this chapter is to build on the central conclusion of Chapter 3, which was that the Celtic Tiger boom was primarily driven by increasing exports. This conclusion was reached by reviewing standard explanations for the boom. This chapter takes a more disaggregated approach by applying Porter’s (1990a) competitiveness framework, which was outlined in Chapter 1. The first step is to investigate Ireland’s internationally competitive industries and how these have changed since 1970. This is based on a detailed analysis of Ireland’s export base in terms of the products and services and their associated industries that have been successful on international markets and how these have changed before, during and after the Celtic Tiger. Five industries are identified, namely: food processing, pharmaceuticals, information and communication technology (ICT), finance and tourism. Given that three of these are predominantly foreignassisted – namely pharmaceuticals, ICT and finance – the chapter then outlines the evolution of the dominant policy of industrialization by invitation since the late 1950s with its emphasis on the attraction of large foreign-assisted businesses, and its role in shaping Ireland’s economic development since 1970. This sets the scene for Chapter 5, which provides a snapshot of these industries in 2011 and an analysis of their micro-foundations.