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News : Irish Economy Last Updated: Jul 12, 2012 - 9:35 AM


Irish Economy 2012: Exports body names Google, Ireland's top exporter -- for believers in fairytales?
By Finfacts Team
Jul 12, 2012 - 7:03 AM

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Swirling clouds of blue and green lit the Atlantic Ocean west of Ireland on June 2, 2006, when the Moderate Resolution Imaging Spectroradiometer (MODIS) on NASA’s Aqua satellite captured this image. The ocean is normally black in true-color, photo-like satellite images such as this one, but a large phytoplankton bloom lent the water its brilliant blue and green hues. Phytoplankton are microscopic plants that grow in the sunlit surface waters of the ocean. When enough of the plants grow in one place, the bloom can be seen from space.

Irish Economy 2012: The Irish Exporters Association (IEA) today launched its annual publication, the 'Top 250 Exporting Companies in Ireland.'  Internet giant Google has been named as Ireland's largest exporter with export turnover having increased by 55% from €6.5bn in last year’s listing to €10.1bn in the current year (from the 2010 accounts).  The IEA says the Irish operation is now Google’s largest outside of the US, and employs staff from 40 different countries. However, the UK is Google's biggest overseas market and advertising generated there, as well as in other countries, is booked in Ireland for tax purposes. Google UK has a payroll of about 1,000 servicing customers in its market and it reported a loss in 2010. The IEA says: 'Ireland’s position as a global services export hub is boosted by internet companies,' but this is the realm of fairytales. The outsize data dictated by tax strategies of companies such as Microsoft, Facebook and so on, does not even provide an additional  tax benefit for Ireland.

The Tánaiste and Minister for Foreign Affairs and Trade, Eamon Gilmore, TD, speaking at the launch said: “Today’s event acknowledges the top exporting companies in Ireland, north and south of the border, and provides an excellent indication of how Ireland’s export firms are reacting to the current challenging international economic environment. I would like to extend my congratulations to all the companies who feature in the list of Ireland’s Top 250 exporters.”

John Whelan, chief executive of the IEA said, “The continued success in attracting to Ireland the ‘born on the Internet’ companies is clearly evident in the Top 250 report, with Google expanding its sales by over 50% and Facebook entering the Top 250 for the first time with export sales of €229m. PayPal Services Europe also features for the first time with exports of €92m. The internet companies are one of the drivers of the fast growing services export sector which last year accounted for €79bn in exports, and 46% of total Irish exports”.

The Top 250 publication also brings into focus the continued shift from dependence on the domestic market to international markets by indigenous Irish companies, with the top five indigenous companies Smurfit, Kerry Group, Glanbia, Glen Dimplex and Irish Dairy Board Ltd showing international sales of €17.3bn but with less than 50% of the sales being directly generated in Ireland.

Outward direct investment has developed as the key route for Irish companies to internationalise and grow their business, with Outward Direct Investment (ODI) from Irish companies now exceeding Foreign Direct Investment (FDI). In 2010, Irish ODI was €261bn and FDI held in Ireland was €185bn, stated the IEA.

This claim again should not be taken at face value. A company such as CRH has very little valued added in Ireland.

“Outward direct investment is now commonplace amongst a wide range of large and medium sized Irish owned companies and is seen as a complimentary process to traditional exporting. It can be a more suitable means to gain market share in other countries for some products and services. Also in-country presence through ODI can help overcome trade barriers where market access is limited, particularly in emerging economies. Continued trade finance, capital market access and banking  support for such ODI is essential to enable firms develop scale and have the capacity to compete internationally,” said Whelan . 

Whelan says the 'services export sector...last year was valued at €79bn,' and accounted for '46% of total Irish exports,' but we have shown that at least a third of Irish services exports are overstated.

Johnson & Johnson feature as the third largest exporter with export sales of €9.8bn, Pfizer in 5th position with €6.8bn in export sales, Stryker the medical devices manufacturer in 7th position with exports sales of €5.5bn, then Boston Scientific, Forest Laboratories, Gilead Sciences and Astellas all part of Ireland's largest top 20 exporters.

In 2011 the export trade of Pharmaceuticals and the Medical Devices was over €56bn.

It is striking to see that our largest exporter is now Google with exports from Ireland of €10.1bn, just ahead of the exceptional Microsoft export performance. But also there are a new breed of fast growing ICT now operating from Ireland all adding to the sectors export growth, such as Facebook, EA Games, LinkedIn, Gilt Groupe, Big Fish Games, Quest Software, Marketo and ZeniMax. These companies alongside investments from existing companies based in Ireland, such as Dell, EMC, HP and Microsoft in the cloud computing area have secured the long term stability of the sector.  This glittering assemblage of ICT companies in the Top 250 has earned Ireland the title ‘Internet Capital of Europe,” said Whelan.

The Irish workers at Google and Microsoft are the most productive on the planet!

Microsoft had a global revenue per employee of $777,140 in fiscal 2011 and $27m in Ireland; Google had a global revenue per employee in 2010 of $1.33m and $8.52m in Ireland.

There is a significant market in Ireland for spin and delusion. So, why worry about challenges when Facebook can sell advertising in Germany and book it in Ireland?

However, what's good for Google or Facebook is not necessarily much good for Ireland.

Irish Economy 2012: At least a third of value of Irish services exports is overstated

Check out our new subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service.

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