Ireland is one of the most amazing nations in the 21st Century. In spite of being such a small country with a population that is 4 times lesser than Mumbai, it is one of the fastest growing nations in the world with a rich per capita income of 76,000 dollars. And considering its rapid growth and development in the 21st Century it's quite unbelievable that just 40 years ago, in the 1980s the same Ireland was one of the worst performing nations in the world.
It had a severe unemployment rate of more than 20% and inflation was soaring at about 18.2%. In fact, the condition of Ireland was so bad that a major chunk of the population started leaving the country because they lost faith in the government.
From the 1980s onwards, in spite of the political instability, the Irish government started making a very important investment and this investment started paying off 25 years later because of which, today, it contributes more than 10 billion dollars towards the Irish economy. And this turned Ireland into the tech hub of the world.
The question is- What is this investment?
This is a story that dates back to 1979 when the second oil crisis shook the world and sent a wave of inflation throughout Asia and Europe. In 1979 due to the Iranian revolution the oil production declined, the demand skyrocketed and the cost of oil doubled in just 12 months and touched $40 per barrel. This spike in price caused massive fuel shortages all across the world resulting in a worldwide economic crisis. And during this time, one of the worst hit countries was the Republic of Ireland. And back then it had a population of only 3.3 million. And amongst those 3.3 million also thousands of people started to leave the country because the country was not just suffering from political instability but also from recession. In fact, in the 1980s alone, more than 200,000 people left Ireland. This is when the politicians of Ireland realized that if the citizens start leaving the country at the same rate the country would be in ruins in no time and there would be no scope of development whatsoever.
So, they started to invest in the most underrated asset that is human capital. Starting from the 1980s, Ireland started investing heavily and strategically in higher education. The government started doing market research to try and understand what kind of skills will be in high demand in the international market and this is when companies like Apple were in the baby stages. In accordance with the research they did, they started building something called the RTCs or the Regional Technical Colleges. Along with that they also started building universities to train the youth in specific programs like electrical engineering and information technology. And they built these universities after making sure that there is a pipeline of employment that is built just so that after the students graduate they can go on to get jobs in companies like Apple, Microsoft and other silicon valley computer firms.
Fast forward to 1993, because of their universities the share of science and technical graduates in the labour force in Ireland was the highest among the 25 OECD countries which included Finland, Germany and even the United States. On top of that, they also made sure that the children are made to become proficient in at least 2 foreign languages. This was done so that students could be prepared for a wider scope of opportunities in the international markets.
Slowly and steadily over the period of 1991-1996 people of Ireland from all across the world started coming back to their country as the nation strategically started providing the youth with more and more opportunities. And by 1996, nearly 20% of the people in Ireland between the age group of 30-34 were returned emigrants, as in they are the people who returned to the country after leaving. And these people became active contributors to the economy of the country.
And here's where the government decided to take it one step further. In the 1990s, the government spotted another booming opportunity in the form of the Internet revolution. And just like the electronics wave based on the insights that they gained from the Internet companies the Irish government launched new programs to train the next generation to get a job in the upcoming Internet companies. And this time they did not just prepare the students but also made a major move to turn Ireland into the business hub of the world.
In the 1999 Finance Act, the Minister of Finance Charlie McCreevy reduced the Irish corporate taxes from 32% to just 12.5%. And along with this they also offered 25% R&D tax credits to foster new businesses. Now, this was a revolutionary move that came at the perfect time. Because during this time, Internet companies from around the world were desperately looking out for avenues to save taxes and an avenue to get a pool of talent. In this case, during this time Ireland had both of them.
This turned Ireland into the tech hub of the world because of which, today 9 out of the 10 world's top medical technology companies and the top 10 Internet companies including Google and Facebook are operating at scale from Ireland. Now that Ireland had both- the best companies and great universities. Ireland started to see a rapid influx of talent from all across the world. And today, Ireland is not just a major tech hub but also one of the best education hubs of the world which provides best in class education at an extremely affordable price. And today, Irish universities contribute about 10.5 billion dollars to the Irish economy every single year.
And this is how using extensive market research and strategic investment in education, Ireland went from being a failing country to becoming a booming tech and education hub of the world. In fact, more than 60% of the international students get a job in Ireland and become active contributors to the economy of the country.
And even today while most governments are questioning the concepts of crypto and the relevance of blockchain. Ireland has already started preparing its workforce and its business ecosystem to embrace the fintech wave. This is being done with the vision that when the opportunities arrive due to the blockchain revolution the workforce of Ireland must be fully prepared to embrace it with open arms.
This is how a small country like Ireland was able to transform its economy by investing heavily and strategically in its education. This is what we call an International educational strategy.
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