Pied Piper for Industry

Executive View

Jobs. Increasingly through the Western world echoes the poignant cry: we need more jobs.

Jobs for all the baby-boom kids leaving the schools, for the women deserting the kitchens, for the unemployed clogging the dole rolls. And more and more, people realize that jobs, if they are to be permanent and fulfilling, must not be government make-work but the product of private investment.

It is an instructive irony that the country that was for so long at the bottom of the heap in job creation is now so close to the top. The country is Ireland; its method of generating employment is to lure private investment, mostly from the U.S.; and its Pied Piper for industry is a former Gaelic football and hurling player, Michael Killeen. He is a man of Donegal, that scenic but tragic county in Ireland's west that sent so many of its youth to America (including four of Killeen's uncles and aunts) because they could not find work. Today, at 50, he heads Ireland's Industrial Development Authority, which has transformed the economy of that long-tormented country.

In the nine years that Killeen has been the cajoling chief of IDA, more than 175 U.S. companies have started manufacturing in Ireland. Industrial investment, primarily from the FORTUNE 500 but also from Australia, Japan and Ireland's Common Market partners, is doubling every four years. The foreign companies' exports are rising even more rapidly.

Largely as a result, economic growth in Ireland this year will be Western Europe's highest: 6.5%. Unemployment is also a high 9% but bucks Europe's rising trend and is generally expected to fall to 4% in the early 1980s.

Surely other societies cannot--or would not want to--emulate the example of a compact, English-speaking nation of 3 million that has relatively low wages and remains backward in many respects. Still, this Cinderella country can offer the rest of the world some lessons.

First, advises Killeen, make industrial development a national commitment, a cause that will attract the society's brightest minds. Every country has its high-spirited elite. In some it is the marines, in others the entrepreneurs or professors or civil servants. In Ireland it is the IDA, which gets its pick of the university graduates. After a few years they can parachute into richer jobs in business, but most stay because it is a calling.

Second, Killeen continues, give companies plenty of incentive to expand and export. Those settling in Ireland get government cash grants for building, training, research. Export profits are taxfree. Taxes on domestic profits are reduced from the normal 54% to 25% for companies that expand and create jobs. Says Killeen in his light brogue: "Corporate taxes in Ireland have been insignificant because, until recently, we didn't have much to tax."

Third, create conditions for companies to earn, and guarantee them freedom from government intervention or expropriation. As Killeen puts it: "We don't have a class-struggle mentality or a soak-the-rich attitude because we haven't had many rich. But we're very much an ownership country. The vast majority of people own their own homes or farms." Ireland claims to be one of the few countries that guarantee the right to private property in their constitutions and really mean it.

But not the right to protection against failure. Unlike many nations, Ireland does not bail out inefficient, failing companies. Of course, most succeed. For U.S. branches, the return on capital in Ireland is 28.5%, which is half again as much as American firms earn in West Germany, and almost four times as much as in Britain.

Because they put such a priority on enterprise, the Irish people will enjoy some unusual gifts this Christmas. Jobs are being created so fast that the 150-year-old hemorrhage of forced emigration has been stopped; no longer can it be said that Ireland's greatest export is men. The population is rising for the first time in modern history. Irishmen are returning home from distant lands. And a most remarkable development is occurring: at current growth rates, the Irish standard of living--based on production per capita--in 1980 will surpass that of once mighty Britain.

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