The Republic ranks third in the world in a new United Nations report rating the ability of 87 countries to produce and export competitive manufactured goods. Only Singapore and Switzerland are ahead of the Republic in the competitiveness league table, drawn up by the UN Industrial Development Organisation (UNIDO).
The State also showed one of the biggest improvements in the league table since the last time data were collected in 1985, with a jump of 12 places. The UNIDO Industrial Development Report 2002/2003 attributes the Republic's strong showing to a massive increase in high-tech exports. As the report is based on data gathered in 1998, the State's position has probably improved further since then. Japan, Germany and the US occupy the places immediately behind the Republic. Britain ranks 10th, while Canada ranks only 16th and Australia 29th.
UNIDO says the Republic's success is driven mainly by foreign direct investment combined with a "massive upgrading" of human capital.
Almost 70 per cent of R&D in the State is carried out by multinationals based here, a higher proportion than in any other country. Payment of "royalties" and licensing fees to foreign firms is higher than in any other country, reaching $6 billion (€6.17 billion) in 1998.
The low level of native R&D is reflected in the State's modest 23rd place in a table of patents taken out internationally per head of population. For example, Americans register 16 times as many patents as Irish people.
The report says the Republic is a "global leader" in educational enrolment, with more students in technical subjects than the US or Britain. The State's strong performance shows that industrial latecomers can achieve a strong performance by relying heavily on foreign direct investment.
The Competitiveness Industrial Performance index drawn up by UNIDO takes account of the industrialisation level in a country, and the extent to which the population is at work in industrial activity.
It also takes account of a country's innovation level, by measuring the level of technology included in a country's exports. According to UNIDO, high-tech activities provide the "only road" for a country to improve its productivity and to improve the contribution of industry to sustainable development.
The report finds that major improvements in competitiveness have been made since 1985 in several middle-income developing countries, including China, Costa Rica, Malaysia, Mexico, the Philippines and Thailand. It also warns that "most developing countries continue to languish at the bottom of the performance and capability ladder". These nations face a difficult challenge in meeting intense competitive pressure while avoiding the "low road" of reduced wages, depreciated exchange rates, and low labour and environmental standards, the report says.
According to UNIDO director-general Mr Carlos Magarinos, "The real per capita income of 30 developing countries is lower today than it was 35 years ago."
In 1950, the richest 20 per cent of the world's population earned 30 times as much per head as the poorest 20 per cent. By 1990, that gap had widened to 90 times as much per head, Mr Magarinos said at the introduction of the report.
