ABSTRACT

Ireland is a small open economy and is heavily dependent on the international economy in terms of trade and foreign direct investment. Over the past decade it has been one of the fastest growing economies in the OECD. At its peak, in 1999, output alone in the economy increased by 9.8 per cent in real GDP terms and 7.8 per cent in real GNP terms (CSO 2000). In addition, employment increased by over 40 per cent between 1990 and 2000, again the fastest growth rate in the OECD. During its remarkable expansion the Irish economy has been transformed from a predominantly agrarian and traditional manufacturing based economy to one increasingly based on the hi-tech and internationally traded sectors such as information and communications technology, software services, pharmaceuticals and medical technologies. The growth of the economy has increasingly come from these sectors. In 2002, the services sector accounted for 65 per cent of employment, industry for 28 per cent and agriculture for 7 per cent (ESRI 2004). In 1970 the comparable fi gures for services, industry and agriculture were 43 per cent, 30 per cent and 27 per cent, respectively, with an employment share of agriculture almost twice as high as on OECD average (i.e. 14 per cent) (OECD 1992).