May 5, 2008

Ireland must make sure it's at the races - and the party

Posted in International Economy · 21 comments ·
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Ireland can learn a lot from the state of Kentucky, which is aiming to place itself back at the crossroads of America’s great trade routes.

According to Hunter S Thompson, who was one of Kentucky’s finest writers and definitely its most outrageous, the Kentucky Derby is ‘‘decadent and depraved’’. Here in Louisville, on the eve of the big day, it’s hard to argue with the Prince of Gonzo.

The old city, home to Muhammad Ali, closes down from Thursday to Sunday as the whole racing world seems to descend on this spot on the Ohio river. It’s a weekend of gambling, horses, southern belles, good ol’ southern boys and, of course, bourbon. Loads of bourbon.

After falling behind for decades, Louisville, which was once the ninth largest city in the US, is re-emerging as a city of economic significance. Most impressive in this renaissance are the strong links between government and the city’s business leaders. One of the most refreshing aspects of Louisville is the willingness of business leaders here, unlike in Dublin, to speak out and offer a vision for the city. As one said tome: ‘‘The ambition of the city is far too important to be left to planners alone.”

The aim here in Kentucky is to put this city back where it used to be: at the crossroads of the great trade routes between the United States and Canada and the south.

Equally impressive is the appreciation that the world has changed and that the state of Kentucky is in competition, not just with the states around it, but with countries such as Ireland for the attentions of investors, for corporate headquarters, and for capital and labour.

The business community – actively through philanthropic donations and passively behind the scenes – are at the vanguard of this initiative.

There is a long way to go. Kentucky still lags behind in educational attainment, but the way the city elders have invested in reclaiming and landscaping the parks close to the great river, which separates Kentucky from Indiana, redeveloping the downtown and trying to attract investment based on ‘quality of life’ is notable.

Kentucky rose to prominence on abundant natural resources and minimal taxation and this is what the business community is hoping will see them through again. The famed ‘bluegrass’ state sits on a huge limestone plateau. The limestone is just under the soil and the roots of the grass suck in calcium from the rock giving it its famous ‘bluish’ tinge in the spring and summer.

This calcium also made Kentucky perfect for raising horses as it strengthened their bones. The state, particularly the rolling hills between Louisville and Lexington, is dotted with some of the best stud farms in the world.

The Ashford Stud, owned by Coolmore, is particularly impressive and is home to former Derby winners Thunder Gulch and Pegasus.

The other thing Kentucky is famous for is, of course, bourbon whiskey. According to local lore, after the American War of Independence, which was financed largely by France, the new republic had enormous war debts to the French crown.

Many of the patriots — who were drawn in huge numbers from Ulster Scots settlers – fought the English on the very premise of unfair taxes. They were hardly going to accept new taxes from the new government in Washington, so they headed west.

Given that they were trying to escape taxes which were in part going to pay France, it is ironic that they settled in a huge tract of land called Bourbon County, which was owned by the then disintegrating French royal family. Here they started making ‘Bourbon’ and shipping it down the Ohio river to the Mississippi and out to the Caribbean at New Orleans.

Ever since, horses and bourbon have become synonymous with Kentucky. When you are out on the rolling plains of western Kentucky, you notice the same mortarless stone walls we have in Connemara. These are testament to the massive immigration of Irish Catholics in the years after the famine.

They are called ‘slave walls’, but they weren’t built by black slaves. They were built by our ancestors who mixed with black slaves at the bottom of the pile, leading to significant levels of intermarriage.

One product of this was the great Cassius Clay, whose great grandfather Abe Grady left Ennis, Co Clare, during the Famine and married Ali’s great grandmother in Kentucky.

Connections like these – the long familial ties between Ireland and America – were exactly what Bertie Ahern underlined in his Congress and Senate address this week. In Kentucky, it didn’t quite make the headlines, as Barack Obama’s travails with Pastor Wright dominated. However, Bertie’s speech – particularly the sentiments on the Irish diaspora -was widely reported.

These days, the business community of Kentucky has identified countries like Ireland as potential competitors and partners. While both places are now totally different and Ireland is considerably richer, the redevelopment of Louisville is driven by economics.

People here realise that capital is mobile and, more importantly, that people are mobile. They are looking at us and asking whether they can emulate our record in attracting foreign investment. If they don’t have the people, they can import them from the hugely populated states around Kentucky. They have learned from places like Denver, which has reinvented itself over the past few years, that cities are the locomotive for innovation and that they can be reinvented.

Most fundamentally, they realise that, in the future, great cities will determine the standard of living of the inhabitants and that the first thing to do is not to tolerate mediocrity.

Are we in Ireland addressing this challenge? Have we decided that collectively we will make Dublin one of the great cities of the world? And, crucially, why have many of our business leaders been silent on the issue?

Dublin has so much going for it: history, a young population and a tolerance of foreigners. This energy could be galvanised to create a most creative city. Such a city would be a magnet for capital and people because both would be bashing down the doors to come to here.

Think about cities as competing parties. People want to go to the best party. In Kentucky over the Derby weekend, all the talk is not so much about horses as parties – who has an invitation to what party and where everyone is going next.

The people with the reputation for the best parties get the best guests, the tickets for these are most expensive and therefore, these are the parties that can afford the finest food, drink, views of the track and entertainment.

People want to be seen there. It’s a self-reinforcing mechanism. We should think of our capital in the same way. If we can create a vibe in the city where people and capital queue to get in, then we will ride out this slowdown and emerge in better shape at the far side. We’ve all got to do our bit. In the words of Hunter S Thompson: let’s party!


  1. Johnny Dunne

    Good point David about Irish business leaders being ‘silent’ about their vision for the future of the economy. Are senior managers / executives in multinationals, plcs and construction companies afraid to speak out against the ‘status quo’ ? Ulick Mc Evaddy should be complimented for being an independent voice. The best ideas from politicians being implemented are the likes of Mr. Cowan betting on spending billions with a NDP focused on ‘19th century solutions’ – trains — is this the bests use of scare resources ? Surely there are many entrepreneurs with ideas, ambition and ability to implement policies which could make a difference today ? Where are they ?

  2. Malcolm McClure

    Enjoy the party David. You work hard and have earned the break.
    I’d like to learn more about how the idea of business leaders getting together with planners to generate growth actually works out in practice. There would need to be fairly severe checks and balances for this to work in an Irish context.
    Regarding your proposal to make Dublin one of the great cities of the world: if it isn’t already one of the great cities, then it never will be, as to tear it apart sufficiently to provide good communications would just turn it into an Irish version of Los Angeles.
    Far better to create a new city (á la Brazilia) between Moate and Athlone. Its time for the Grand Vision, man!

  3. Hubert Conroy

    A related story / interview which your readers may find interesting was aired on radio 1′s farmweek week recently. Pod cast available on the RTE website.

    Kentucky is to hold the World Equeatrian Games in 2010. It’s promotors some of who are Irish insist that Ireland should look to be the event holders in 2014. Huge related spin offs

    The programme is worth a listen.

  4. Roche

    Quality of life is a key success factor in attracting & retaining a talented workforce. As you argued in your article about Amsterdam, the cities of the future are those with a clear long-term vision. Over the past few years we have not taken full advantage of investing in Irish infrastructure and for those in the burbs with an over valued home and ever increasing commute the quality of life continues to deteriorate. The LUAS has been a great start in Dublin although connecting the line & making it under or over ground would have been a true investment. Our greatest architectural achievment this milennieum has been an oversized Welsh spike. We have neglected the congruence of culture, common sense, & forward thinking. The idea of living a stressed out over-priced and potentially dangerous existence in the capital is becoming increasingly unattractive to all concerned. You talk about a young population, history, and the tolerance of foreigners. As the false economy comes to light the younger population will prioritize and choose quality of life in the regional towns throughout Ireland. The tolerence of foreigners? – let’s be honest about the hypocricay we have shown many of our immigrants. We should not tolerate but welcome. As for culture:

    “What need you, being come to sense,
    But fumble in a greasy till
    And add the halfpence to the pence
    And prayer to shivering prayer, until
    You have dried the marrow from the bone?
    For men were born to pray and save:
    Romantic Ireland’s dead and gone,
    It’s with O’Leary in the grave.”

  5. Observer

    Roche,

    I agree we should Welcome Foreign nationals to Ireland but only as Tourists……. Residency/Living here for them is a no no.

    Irish Eyes do smile but they turn blood red when we get mad….. quite easily as a matter of fact, we are one of the most passionate peoples of the world and territorial about our traditions and identity.

    Ireland and elsewhere should live by the ethos “Welcome to our Land, enjoy the scenery and we’ll bend our backs to please you on your visit, but don’t forget to leave”.

    The World was “One World, Many Cultures” and should stay that way to deserve the unique identities we have everywhere.

    Whoever thought “One Nation, Many Cultures” was a bright Idea probably fell and hit their head….. losing all sense of rationale and practicality.

    On another subject, Horses here are the best in the world so we should approach Kentuckians as to keep up with them.

  6. John Q. Public

    Roche, I agree. David wants to tap into the diaspora but instead we should tap into Ballymun and all the other disadvantaged areas that got left behind in the boom times. They could have been our labourers, factory workers etc. Instead of pumping 900,000,000 euros of tax-payer’s money into Africa every year we could put some of it into education/training in these areas.
    An overhaul of the education system is needed, especially in these areas and the money is there to do it, we just need vision. Given the chance, a lot of things could bloom out of the poorer, less educated areas of our country.

  7. Look what the cat dragged in

    John Q Public & Roche,

    Couldn’t agree more. If Ireland has any change of moving up the value chain, it needs to invest heavily in education to become a knowledge based economy. This means targeting ALL areas of the country, giving every child/teenager the chance to expand their skills to give them the best opportunity of winning in a now globalised market. I’m personally all for helping the poorer countries, however, perhaps we should look closer to home before we attempt to solve world poverty! Investing in disadvantaged areas such as Ballymun may help give theses people the dignity to rise above the past and who knows what may be uncovered in such areas.

  8. Rob

    The problem with some of the last posts is that some Irish did either not want to work during the boom or didn’t bother applying. Why did thousands of Latvians, Lithuanians and Polish come here to get jobs? Because there were jobs and they were willing to work. Lets face it how many times how you heard Irish people assert that they ‘were better off on the dole’? There is an ingrained mentality in a certain segment of Irish society that values take, take, take from the State and actually has no interest in working. Lets not fool ourselves over this. I am all in favour of hard-working Eastern European coming to live and settle here and they might help to improve the stagnant genetic pool that we have here. Many Eastern Europeans I talk to are amazed at the general sloppiness, bad timekeeping and laziness of some of their Irish co-workers. There have been many posts on this site about scams committed by foreigners, atm scams etc. Nobody is mentioning the hundreds of millions being scammed by Irish people over the years from the dole which the Dept of Social Welfare uncovered over the years. I am all for investing money in poorer disadvantaged areas but you better had be prepared to change people’s mindset while you are at it.

  9. Roche

    Rob,
    Many of generation Y feel they deserve the best & only the best of everything and have allowed themselves to be priced out of the market. There will always be slackers & takers, this is inevitable. I agree, Ireland is far too soft on those who take advantage, but those who let them are accountable. This attitude is a direct result of of our false economy and an addiction to credit & shopping trips to NY. The “boom” lined the pockets of contractors, speculators, financiers, & landlords. It bypassed many young honest workers & families trying to start out in life. “Boom” – what did the Irish People truly gain from the Celtic Tiger? 2,000 people took to the streets last month in Sligo to SAVE local CANCER services. The Government and the Health Service Executive (HSE) should be ashamed of themselves. Yet another example of a horrific paradigm shift. An opportunity squandered.

  10. John Q. Public

    Rob and Roche, you make fair enough points. The problem as I see it in poorer areas is that the youngest generation are never exposed to the outside world. They never meet accountants or lawers or anybody with a leaving cert for that matter. They never develop a real taste for any sort of activity other than what they inherit from their parents and are caught in an unending cycle.
    These are the youngsters that need inclusion and the education system has to change to address this issue.
    You never know, if we try and solve their problems, they might solve some of ours in the future but we have to catch them young before they copy their predecessor’s habits. I think I am ‘at the races’ with this idea, after all not too long ago people used to say that there would never be peace or prosperity on this island.

  11. GOM

    Many “business leaders” are too busy trying to put their businesses together in a country that is quite difficult to get things done. It is true we have low corporate tax rates and also a tax break on royalties from patents (though be careful to read the small print on that one!) but the work of building up a business from scratch is made much more difficult by cultural barriers such as an unwillingness to work, mediocrity in service provisions from utilities and telecoms providers not to even talk about obsolescent tenant laws and the cost of renting premises. We, in short, are our own worst enemy – we are stealing from ourselves and either don’t see it or don’t care so we force ourselves out of the country to seek the “real” price of a good or service.

    Any “business leader” who has time to work with planners – is, de facto, a retired business leader who has already made their business to a comfortable level so much so that many of the issues that affect them at this particular point may not be relevant to a generation of entrepreneurs in the process of business creation at this point in time. What then happens is we get MDs and CEOs of MNCs (with the time to particpate in planning) pushing the agenda and projecting their framework and experience on the issues and quoshing the voice of the indigenous companies and SMEs (including innovative companies, service providers and other retailers that make up an ecosystem of indigenous business).

    Maybe I’ll just buy some horses or start a band, they are tax free activities, then on what little tax I have to pay, go live in Switzerland to avoid paying that – this is another simple answer to your quesiton “And, crucially, why have many of our business leaders been silent on the issue?” They are not silent (unless they shamelessly want to turn the City Centre into a manifestation of their own ego or insert themselves into the process of selecting a new soccer coach) they just don’t care once they have their money and live in a country where they don’t have to pay tax to the State that gave them their break.

    As we have said before in response to your articles, we don’t have planners in this country, we have people with the title “Planner” who are either frustrated that they can’t do their job or don’t care because they know their ideas, good as they may be, are not listened to, by the “don’t rock the boat” types who are 5-10 years from retirement or the fact that all our Public servants are too busy focussing on tactical issues than to be concerned with the strategic or “joined up” thinking that is required to implement a coherent vision for a great city.

  12. John

    Many Irish “business leaders” are no example to anyone unless you consider lessons in corruption, laziness and whinging are worthwhile.

  13. Stephen Kenny

    The trouble bubbles like the 2 we’ve had over the past 10-12 years is that the general view of the economy has moved, slowly and silently, towards the idea that to get rich all you need to do is something quick, wait a little, then sell it at vast profit.
    We’ve all heard the stories, and the media just loves them: “Dave down the pub says that his mate used to work with a guy who’s brother started a dotcom with 2k from his redundancy, and 12 months later sold it for 14m to an an American outfit”, or “You know that shack that Kylie and Duanne bought last year for 55k, well, they just sold it for half a mill’ “.
    This is the world in which generation Y live, at least they believe they do, which is probably the most important thing. It’s the world in which they grew up. A 35k a year job is, at best, no more than a holding pattern, to many. So why be keen?
    The one saving grace should be that they are intelligent and well educated and so should be able to see that by definition, this sort of spectacular success can only be achieved by a few. Unfortunately, they are also incredibly confident and optimistic, so even that simple, plain, truth, is swept away because all 1 million of them absolutely ‘know’ that they will be one of the 10 that achieves it.
    In many ways, Generation Y will be seen as the some of collateral damage of these years of irrational exuberance.

  14. Trex

    Nice article , but i find it too fanciful for ireland with the current climate for investment in this country and the attitude of the new generation towards working in general . This generation is ruined by the idea of getting rich quick through property schemes and they do not value anything else . education is not a priority for them , god forbid studying subjects like science ,maths and engineering. Governments push towards creating a knowledge economy will not fly at all , considering the fact that there are not enough graduates in these areas in this country ,(not to mention 25% illiteracy rate unbelievable stuff!!) so we still need foreigners to do this work , so why would you invest in the ultra expensive ireland instead of india or singapore. yes low tax , grants etc could be attractive if you do not have massive gaps in cost of doing business between ireland and other countries competing for these kinds of investments. Unfortunately ireland shot itself in the foot , by a false property boom and greed , getting everybody in massive debt , creating wage pressures in every sector and rampant inflation in return. I interview many young graduates every week , all they are interested is the salary , no enthusiasm about the work at all , if a new business grad asking for 50k starting salary with no experience what so ever , this country has a very long way to go down before it goes up again.

  15. David
    I really enjoyed reading your article about Louisville and the Kentucky Derby.
    Eddie and I really enjoyed meeting you. We had such a great Oaks and Derby with the GLI staff and all their guest.
    Glad you made it home safely and look forward to your return visit when you bring your family.

    Sincerely,

    Velma Givan
    Business Development for
    The Handy Kapper (our son’s invention)
    givanvel@insightbb.com

  16. Philip

    Late comment on this. There is a co-location addiction here :) . We need to loose this addiction. We are a physical island which no one can swim to. Colocation is expensive and needs to be outmoded particularly if you want to be a global influencer. Ireland currently cannot be green and a centre of the party in the physical or traditional sense.

    Just been back from the US. We were always wondering how we’d get teams working together more effectively while getting a good level of trust going. It simply is not on for people to fly and meet. Solution?

    7x24hr always on Video Conferencing in the canteens or coffee breakout areas. It’s free with an internet connection.

    Ireland could do worse than get good at leading and managing virtual teams. We speak english, we have no axe to grind with anyone and as virtual facilitators we become virtual influencers. We have a wealth of talent in the media and telecoms industry to make this innovation work and maybe get yer diaspora online and working for the country without chucking tonnes of CO2 into the atmosphere…and you dont need passports.

    Beó a dó?

  17. Ian

    Did anyone watch the RTE reporting of our new Taoiseach meeting the party faithful down in Offaly? I must say I was much impressed with the attempts to re-enact episodes of Father Ted!
    The Che Guevara T-shirt send-up was especially amusing ;-)

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