This final chapter turns to the future. It charts the way ahead by considering policy opportunities and threats, both internal and external, that may influence Irish prosperity over the next decades. The factors considered stem from the narrative developed in preceding chapters. Based on the theoretical framework that stipulates that economic development is driven by business development, the preceding nine chapters have highlighted a number of internal and external policy challenges that are worthy of consideration. Clearly, there are a myriad of factors, or as economists refer to them, exogenous shocks, that might affect Irish-based businesses over the next number of decades. Indeed, the small size of the economy and its high level of openness imply that Ireland will continue to be buffeted by international shocks into the future. However, given that it is not possible to foresee the future, the focus here is on particular areas on which policymakers may exercise some control. This is therefore not an exercise in forecasting. It is more a way of thinking about how the future may be influenced based on an understanding of the key drivers of Irish economic development since 1970. A key conclusion of the book has been that history matters for Irish economic development as the prevailing policy mind-set and more generally held attitudes of Irish citizens to business development that have evolved over time will condition responses to future opportunities and threats. As a consequence, the reference in the book’s title to Ireland as a high-performing EU state or as a serial under-achiever aims to capture this connection of the future with the past. During the Celtic Tiger growth phase from 1993 to 2002, Ireland may be described, based on its trend growth of per capita GNP being 5.7 per cent per annum, as a high-performing EU state. A central message of the book is that in order to register growth rates of this magnitude in future decades it will not be possible to repeat the past. This follows from the perspective that economic development depends on business development. Thus, the business development challenges of the future are likely to be substantially different from the past. Due to the relentless process of structural change, Ireland’s stock of businesses in the next number of decades will be fundamentally different from that which existed during the 1990s. This is not only due to the failure of some businesses and the birth or arrival of others, but also to existing businesses producing different
products and services or producing similar products and services in different ways than heretofore. The reference in the book’s title to serial under-achievement captures the recurring self-inflicted crises that have characterized Irish economic development since 1970. This refers to prolonged underperformance dominated by policy mistakes both in the 1970s and 1980s, prior to the Celtic Tiger, and in the recent recession starting in 2008. While it may be convenient for some to attribute this recession to adverse exogenous shocks affecting the world’s financial markets, it would be extremely unwise to ignore the extent to which the Irish recession was self-inflicted. One of the chief causes of Ireland’s most recent recession was the domestically driven boom beginning in 2002, which ultimately contributed to the property crash and the ignominious bailout. As such, ‘high-performing EU state’ and ‘serial under-achiever’ stand for contrasting scenarios for future Irish economic development. The former depicts Ireland, after recovering from the most recent recession, registering relatively high rates of per capita GNP growth for the next number of decades. In this scenario Ireland achieves its development potential by policymakers building on strengths to capitalize on opportunities and addressing weaknesses with a view to overcoming future challenges. The latter scenario represents a continuation of past policies that have witnessed Ireland failing to reach potential. These scenarios are not derived from a calibrated quantitative model but rather encapsulate different kinds of outcomes. The key to determining which scenario materializes is how policymakers deal with future opportunities and threats. These arise in three general areas. The first relates to how business development policy will shape the future evolution of Ireland’s foreign-assisted and indigenous dominated sectors. The second concerns the need for Irish policymakers to avoid the destructive effects of special interest groups and the associated importance of institutional reform. The final area relates to the possible erosion of the advantages Ireland has enjoyed for many decades from its favourable taxation regime which has particularly benefited foreign-assisted businesses. The remaining sections of this chapter consider these opportunities and threats under each scenario respectively. This is followed by a concluding section in which a future research agenda based on the arguments presented in the book is presented.