July 30, 2008

Robbie shoots into the premier fiscal league

Posted in Irish Economy · 31 comments ·

What do Robbie Keane and the knowledge economy have in common? While much is made of how Ireland has benefited from globalisation and how we should build a knowledge economy, we could do worse than look at the unique talent of Robbie and see how his career sheds light on the trends likely to dominate professional life in the future.

Robbie is ahead of his time and is the exemplar of the type of professional who has capitalised enormously from the free movement of goods, cash and people as well as the media revolution of the past 10 years.

Robbie is now at the club he loved as a boy, and best of luck to him. He is a winner, in the ‘winner-takes-all’ market that defines professional football. To get to the top it takes more than just talent, it takes courage and smarts.

Anyone who has ever heard the stories of Irish teenagers going across the water to play football will know just how difficult the ascent is from local hero to global mega-star. Recently, one former professional told of his harrowing time as a youngster at one of the more celebrated English clubs. Among the hopefuls, everyone knew that it was dog eat dog.

You made it because the lad beside you didn’t. As a result, you’d do anything that might undermine your neighbour’s performance at training — you’d entertain anything that might give you just a little bit extra to impress the selectors.

The ex-pro told me that every night for his first two weeks at his ‘digs’, the English lads used to urinate in his bed so that the ‘f … king Paddy’ wouldn’t get any kip and would be knackered for training in the morning. Imagine being on your own in a foreign country, at 15, experiencing this type of intimidation. Now imagine coming through it and getting to the top the way Keane did.

It is possible Robbie experienced similar bullying when he was rejected by Liverpool at the age of 17. Stories from his childhood reveal a boy that simply could not stop scoring. You can picture him, Liverpool kitbag over his shoulder, on the bus in Tallaght going to games where he played against lads three or four years older than him, dreaming of playing at Anfield.

At last, he is there. When Keane is at his best, he’s like a precocious kid — all nods, winks, little runs, smiles and an ebullient self-confidence which is infectious.

He has also learned to be diplomatic and mature. His leaving letter to the Spurs management and fans, where he emerged as an unlikely club captain, was a master-class in restraint, generosity and self-awareness. Let’s hope he wears the number 7 — the shirt of Keegan and Dalglish — both with pride and with success.

What makes Robbie Keane interesting from an economic and commercial perspective is that the trends in football are being seen in other fields. The most significant change in football in the past five years has been the astronomical difference in pay between the best and the second best. It is common to hear many football snobs (yes there is such a thing) complain that because the players are paid €80,000 a week, there is little point watching them. But it’s not the footballers’ fault that they are well paid. They are simply the main beneficiaries of the globalisation of football.

Go to any league around the world, including the League of Ireland, and you will see players from all over doing their stuff. Go to Karpaty in the Ukraine and there are Cameroonians leading the line. In Dynamo Zagreb, a Brazilian was the home fans’ favourite.

Indeed, this year Brazilian kids have been signed for clubs in the Faroes, Israel and Korea. Years ago, sitting in a sheebeen in a South African township, the only common factor between three of us and the local lads was Roy Keane.

As we sat on beer crates, watching Ricky Lake on a grainy TV screen, the chat revolved around the antipathy between Roy and Patrick Vieira — himself a poor African whose footballing journey from the Ivory Coast to the World Cup final is a fascinating tale of how globalisation has changed the lives of millions.

The globalisation of football is not always a savoury tale. For example, there is a Brazilian company, appropriately called Traffic, which is buying up the rights to young talented Brazilian footballers. According to a piece last week in the ‘New York Times’, this company has around $20m to spend on young players and because one big sale can net a million, it is estimated that it will earn on average a 30pc return for shareholders. Quite how the players buy their way out of such a system is anyone’s guess, but thousands are so desperate to play on the big stage that they are prepared to sell their talents early.

But if, like Robbie Keane, they get to the top of the tree, the rewards are enormous. Of course, this winner-takes-all system is not limited to football. We are seeing the same trends in most professions, where the economics of the entertainment business are changing the way people get paid in a variety of industries.

We’ve always had actors who get paid millions more than others because of their box- office pulling power. Similarly musicians and comedians. But now we can see this model everywhere.

For example, the world now has a new breed of ‘Staritechts’ — architects who are in such demand that they can name their price. They give projects certain kudos and to a degree their brilliance rubs off on the people who employ them. In Dublin recently, two of these Staritechts — Norman Foster and Daniel Leibeskind– are plying their trade. These lads are the Robbie Keanes of the building trade, as are the star hairdressers and stylists.

In the legal profession, the same divergences are emerging, where the best barristers get paid multiples of the next best one. This is how the creative economy is likely to work in the future. Those with unique talents will be rewarded enormously. In fact, more to the point, those who realise how to sell, market and promote those talents will be rewarded.

This new dispensation should be an economic fact that we teach in our education system. If we are going to be a knowledge economy, where creativity and uniqueness rather than conformity and repetition are rewarded, shouldn’t we be telling our kids about it?

Robbie Keane’s transfer to Liverpool may well be laced with the romanticism of a schoolboy’s love for a football team, but its implication for how the creative economy of the future will work shouldn’t be lost to anyone.

  1. Nono

    David, you’re repeating yourself, I remember you wrote about the same subject a couple of years ago…

    That aside, the comment about schools rewarding creativity/uniqueness over conformity is spot on. Years in the education system do kill people’s creativity. The ones that can’t conform to the mould leave school early.

  2. Fantastic for Robbie Keane and we all wish him well but he is not going to be able to help the Irish economy.. he might bring some entertainment while we are waiting on things to improve !!! But we need someone with courage foresight and balls to make brave decisions to control our destiny .. Cowen & Co have adopted a “lets do nothing for 2 years approach” and hope external factors will lift the Irish economy what we really need is some who will take some initiative now and get things moving. A prime example is the property market, if we let it run its natural course we know it will fall for 2 possibly 3 years and alot of people will end up “negative equity” and alot of sleepless nights. If the government was to act now and slash stamp duty to 1% for a period of 12 months this would create some positive movement in the market place… lets face it stamp duty is going nowhere at the moment anyway so this would be a proactive step highlighting the fact we still have some control over our own destiny !!!.

  3. John H

    David missed the real soccer analogy that happened last night.

    Drogheda were playing Dynamo Kiev in 2nd qual. round of the UEFA Champions League. The Drogs are one of the full time teams in the country yet there is big gulf between the Kiev team and the Drogs.

    The Champions League is fought not with a ball but with cheque books.

    Most League of Ireland clubs are strapped financially and some clubs could go under this season. Yet thousands go and support British Clubs every week end and would not consider going to Dalymount or even Belfield bowl.

    Irish industries are the in the same position.

    The Irish Government supporting the Microsoft Google etc without supporting the local companies to the same extent is a feeling that League of Ireland followers can relate to.

    Would you not agree that it would be great to have an Irish team in the group stages of the Champions League. The league would need more supporters of the lrish sugar daddies that funneled money into Sunderland who won’t be playing European Football this season or the next yet Bohs will.

    These are the same type people who poured money in Berlin apartments or a holiday complex in Bulgaria to the extent of €80 billion in the past few years yet VC investment in Irish software industries received less than €250 million in the same period.

    As a society we will all benefit from an Irish Google rather than an apartment in Berlin. We can say the same of a Bohs or Drogheda in the Champions League rather than Celtic or Liverpool.

    Like property, the Premiership “bubble” does very little for Irish football and ends in tears

    The Globalisation of Premiership is not only felt in Ireland http://news.bbc.co.uk/1/hi/world/africa/7526005.stm

    via foot.ie http://foot.ie/forums/showthread.php?t=97570

    fair play to Robbie though

  4. mmc

    Patrick Viera is from senegal

  5. Philip

    I think if every business were to adopt this strategy as a core attitude in their business dealings, the first thing that would happen is they’d up sticks and get out of Ireland – becasue you’ll get ground down (have the guys weeing in your bed sheets).

    Lets have more of this attitude and start loosening our ties with this country and tightening ties with “real” people who want to live, work and play together.

    Great article.

  6. b

    I agree about being ground down. I really want to believe the opposite is true but i have got such a kicking in Ireland keeping yuor head down and the politicians paid is the only way.

  7. Mihai

    Every development contains within it the seeds of its own destruction (Hegel? Marx? I don’t remember).
    The “winner takes it all” is currently a fact in some economic areas; emphasis on “currently”.
    However: it has the potential to skew people’s economic aspirations so badly that the social solidarity (required for the “rule of law” that underpins capitalism) is degraded to a dangerous extent.
    What’s the profession / career most desired by early teens? Being a celebrity! Is this a good thing? Guess not.
    As in the case of natural or network-effect monopolies there comes a time when a winner that took it all distorts the surrounding economy in such ways that the overall economic and social welfare is reduced rather than increased.
    We do need to educate creativity and uniqueness through schools, but we also need to keep teaching the values that should be served by the economic applications of same.

  8. Johnny Dunne

    “What do Robbie Keane and the knowledge economy have in common?

    He has been bought for over €75 million in his short career including €25 million this week while the ‘posterboy’ of the Irish software industry, Iona, sells to a MNC for less than €75 million – says alot !

    “those who realise how to sell, market and promote those talents will be rewarded”. Should this be the focus of the “knowledge economy” instead of R&D, Irish businesses are often creative but not ‘unique’….

  9. What do Robbie Keane and the Knowledge Economy have in Common ?….. I thought this was a joke you were about to tell us , to cheer us all up !. How you can even put Mr Robbie and knowledge in the same sentence has me baffled , While the actual game of football is global you should be looking at our own Irish Eircom league and giving an annalist of it’s current state with it’s major sponsor pulling out this year , poorly attended games and lack of interest shown in it due to the saturation, of our neighbors league an irony I do enjoy as to how fickle we are here , drunk Paddies on Saturdays when the English league is on, wearing their ‘team shirts’ and singing Irish rebel songs at closing time , just makes me laugh.
    We have on these shores the fastest ball sport on the planet , where the men who play it when they get a slap don’t fall down in agony ( unless their hit on the head with the hurl !) and don’t need stretchers to take them off the field when they are tackled.
    With the Olympics coming shortly to our screens from smog filled Beijing, which no doubt our own sports minister and a plane load of special advisers will be attending, Shouldn’t they take over a few DVD’s of our Hurlers , the little Chinese would love this sport , Our Celtic Marshal Arts .
    We could then set up Hurling Academy’s and bring over Chinese here to be taught this great game ? For a while at least we could export Hurls to them ( which of course in time they would learn to manufacture too ! ) and maybe some of our over paid tribunal solicitors could start sponsoring and attending these hurling games and maybe we could make Hurling a professional game too and attract in some Knowledgeable Corporate sponsors , which in turn would create jobs within this industry?. Like we have Golf tourists coming to play our courses we could have plane loads of Chinese coming here to learn the Art of our ancient game.?
    But then again, since Dublin doesn’t have a knowledgeable Hurler this would be a non runner.

  10. b

    Robbie has what is know as physical intelligence. Just being a whiz at maths or programming doesnt mean you have all the intellegence or knowledge.

  11. Stephen

    But but…….gauranteed Robbie stuck on the bench mid-November,Liverpool 13 points behind Utd,in fifth place,cries of ”yanks out” from the Kop……again….and Robbie gets ”my life-long dream” move to Spain

  12. Eugene

    “In the legal profession, the same divergences are emerging, where the best barristers get paid multiples of the next best one”

    Right, but this has nothing to do with globalisation or knowledge economies since the bewigged gentlemen are following the same old professional standards as 1752 – for instance the solicitor, barrister demarcations. Its a cartel.

    Since they are not competing on the world market – unlike Robbie keane, who is – it is not the correct analogy.

  13. Philip

    I think the key message of this article is to understand the attitude rather than use it as a direct analogy of how to run an economy. The Winner Takes All/ Celeb Wannabism does have a negative conotation of extreme individualism. But I think the intended slant was the positive message of people adopting a winning and fearless attitude in ther lives.

    Being a winner does not mean you are wealthy and famous. We all have met many people who live modestly in many walks of life who have winning ways about them. They are very successful – maybe not rolling in lolly – but they are in there participating and having fun. Probably more so than Robbie et al.

    Was chatting to someone in buiz. 3 man operation etc. Doing okish. Her main gripe? Fcekers not paying on time. Cash flow. Plenty of buiz was there, but cashflow was a constant anxiety. Bigger the company and/or the closer to public service it was, the harder it was to get cash. She’s moving on, not tied to Ireland and can trade internationally. Far fewer issues. Winning attitude means you just move on and find “real” people and do not hang about. Dont waste time complaining as the cash will run out.

    Cowen and the lads could do worse than accelerate passing a long overdue law (as draconian as possible) on non-payers which needs to include the public service.

  14. B

    Irish companies tend to have a F off attitude to paying their bills.

    The only way to get paid is to sit on them followed by the threat and then carrying out of legal action.

  15. Jonathan

    Surely the overblow wages of top footballers and other celeb professions is a result of free market capitalism. Far too much money is chasing the top talent in many fields.
    I think you may find that the free market will need to start performing for the rest of the “football team” soon, not just the star players, or there may be a players revolt, so to speak.
    While Milton Friedman had many good ideas he took them to a fanatical level. The free market with low regulation has been tried an found wanting particularly for those at the end of the pile. A lot of speculative bubbles arise from unbridled free market flows of capital. These bubbles don’t really contribute to the productivity of a society or have any real benefit apart from making rich people richer and poor people poorer.

  16. B

    This isn’t a bubble. One swallow doesn’t make a summer either.

  17. Paul

    What is the point of the “paddy” victimhood tripe? Oh those nasty English..

    Why not write a piece on the that strange psycholigical disorder that seems to act as such an obstacle in many areas of the Irish economy, starting with the xenophobic attitude to trade?

  18. B said , One Swallow doesn’t make a summer either !, ..well B with yet another summer been rained out Hotel beds empty , beach resorts deserted , B & B vacancies ,spare tables in restaurants ,golf courses closed and the price of the pint rising again. We need more than the sighting of one little bird to fix this current mess here, and to think when our recent phase of building began , the Greens were telling us with Global Warming we were going to get warmer days ….. Where are they now !

  19. Philip

    Look at the longterm forecast on http://www.metcheck.com. Monsoon summers are now the order of the day. We’d better get used to it. And we’d better get used to the new permanent changes going on in the “economy” here as well. The winning attitude is to realise the game has changed permanently. There will be no recovery in the classic sense in our generation. New opportunities with new rules are starting to present themselves. Seasons have changed. Farmers are finding they can grow later and earlier. Sticking to the past rules on planting and yearly ebb and flow will invite trouble. Grass is growing all year round now. Winners keep listening and watching.

  20. Ed


    “Why not write a piece on the that strange psycholigical disorder that seems to act as such an obstacle in many areas of the Irish economy, starting with the xenophobic attitude to trade?”

    We’ve never been a trading nation on our own – we’ve always depended on others (British or Americans) to do it for us. We’re basically children of the soil and all the hype in the world wont change that – we’re insecure in ourselves and that’s why we have this off the wall obsession with property. Take farming and building out of the Irish equation and all that you are left with is the administration and that’s all about job security,as well.

  21. KD

    Re: Brendan W

    Your idea of exporting the Irish games is an excellent one, and the opportunity should be seized by the GAA, but please don’t stereotype all Premiership followers. I enjoy the GAA too alongside the Premiership. Your rant only makes you a stereotype of the head strong GAA supporter.

    Now back to economics B said “This isn’t a bubble. One swallow doesn’t make a summer either.”

    Wake up and smell the stock markets. Ireland’s economy has been propped up by property for several years and bad lending procedures have created this bubble. The demand is no longer there and we will see some big repercussions in our economy for this mistake.

    Look outside there are flocks of swallows

  22. Malcolm McClure

    David said “Those with unique talents will be rewarded enormously. In fact, more to the point, those who realise how to sell, market and promote those talents will be rewarded.”
    ‘Rewarded’ means that they receive the market rate for their talent, and nobody has any issue with that. The trouble is that inevitably ‘stars’ develop a sense of entitlement. Limos, enhanced security, and the ability to sit down without looking behind to check if there’s a chair there. Flattering flunkeys attend to every need.
    The next stage is realization that the good times won’t last for ever and that leads to entitlement’s unpleasant cousin–greed. That is the stage where their success begins to have negative effects on society as a whole.
    Lots of stars manage to avoid that fate, if they retire when their powers begin to wane. Others, elder businessmen, academics and politicians cling precariously to their perch well past their sell-by date, to the detriment of all around them. Compulsory retirement for all ‘stars’ at age 55? Or wait for proof they need a nappy?

  23. coldblow

    I think I’m a “recovering” football snob, or traditionalist rather – I’m still coming to terms with 3 points for a win instead of 2. It took a while for the penny to drop with me that top players like Beckham did it for enjoyment – you can rattle around your Cheshire mansion all you like but you only fully become yourself when you’re on the pitch. The money has ruined the top English division and it’s so predictable now that it’s nearly as bad as the Scottish premiership and there’s far more interest in the relegation battle than which one out of the top 4 will win the damn thing. Skills are nice but the huge crowds who follow the lower divisions there (and the Irish league) are more interested in a decent competition.

    I remember a short exchange of views with an Irish nurse years back in London about medical consultants’ wages. I thought a factor of 20 was reasonable between the highest and lowest earners in the country but I think infinity would have only barely satisfied her. I’m sorry but I can’t go along with this economic argument at all, now of all times when the bonus culture of the financial industry has brought the world economy to the brink. By all means incentives and recognition for those who work hard and take risks but: “because you’re worth it” – I ask you. Surely the challenge is to get everyone to be more responsible rather than further rewarding the few? And then dragging in that bit about the lawyers – David, you’re surely taking the p*ss aren’t you?!

    Looking back I often wonder if I should regret not having a misspent yoof – just think of all the “fun” I could have had. But if my teachers had tried giving me that line I’d have burnt the school down! I’m getting all worked up over nothing amn’t I – this is just a wind up!

  24. Re KD,… Thank you KD, far from being a head strong GAA supporter , to be honest I couldn’t name enough GAA players to make up a team , where as I can with the premiership due to the daily exposure to it, in and out of season due to the size of the business it is.
    The point I was trying to get across is , we have to start thinking within the box in order to survive outside it !
    Fifteen years ago I shared a few drinks with an American Consultant who had been to 119 countries with work and vacation , he then told me in the future ( which is now ) , we will pay for information. This is the Knowledge Economy at work.
    Reality is ‘the Credit Crunch’ is the new in phrase a few years ago it was ‘Global Warming’, ‘ Dot Com’ , ‘Pop Culture’, ‘Yuppies’, ‘Upwardly Mobile’ , ‘Information Technology’ even our own ‘Celtic Tiger’ , All nice phrases for their time.
    What’s happening now is certainly a Big re adjustment in commerce, Bono was looking to get third world debt dropped a few years back , which of course never happened , but our banks today are already, absorbing the bad debts of greedy developers who we ( well a lot ) paid over the odds for housing they threw up and were let away with building schools ,and social amenities. While if I or a general member of the public default on a loan repayment due to being made unemployed , our credit rating is hit stopping us from refinancing, where as your developer been a company can just open up a new company in his partner, son, daughter or wife’s name and carry on.
    As in the Premiership if a manager does not bring his team to the top or land some silver ware , the board replace him. This is what we need to do with our current bunch of politicians, only this is a Bigger dilemma, than the credit crunch as The Greens are no longer an alternative and as for F.G. , S.F and Old labour we don’t have a replacement to what we have there presently.
    It’s down to demographics , the Youth of this country who have been turned off politics by what they see with the tribunals farce and the cartels that are in place , a new option has to be put forward now as Mr Biffo , thinks been the Country’s leader is ‘Great Craic’ ….We need leaders like Mr Mc Williams here to step up to the mark and get us out of the rut we are in. The Old school who voted yes to Europe and no for Divorce and abortion have to now move out of the way.
    We are today a well educated and traveled nation , but as long as we keep voting in the Muppet’s , there is as much chance of seeing Hurling been played in Beijing as there is of the Tribunals gravy train been stopped for the farce it is.
    And fair play to Robbie , but I can’t see the Anfield Brigade taking Europe this coming season.

  25. b

    We are already in the knowledge economy. We just need to realise that the government is adjusting for the 1870′s and not the reality that is today.

    The best thing they can do is nothing.

    As for Robbie. All that is is the 80/20 principle working for him. It happens in all professions. The leader or highest earning bracket getting multiples of the journeymen.

  26. Philip

    People who possess a fluency of application with a body of knowledge in ANY area will always be in demand. People who know where those people are and how they can be applied to get work done will always be in demand. A key to success is making sure you are known and knowing where you can slot in. That’s all the Robbies do. And ditto for lawyers, economists etc.

    So how do you squeeze value of this? And if you read some of the bumph, you’ll find there’s value chains (much associated with manufacturing & logistics where value is added in steps), value networks (like telecoms, banks, RyanAir etc who get value by gaining enough punters) and value shops (like footballers, consultants, lawyers and the like where value comes from talent & skill – that’s all this article was about)

    In Ireland, it’s acually very simple. Value chains and Value nets MUST be transnational or you’ll be wiped out or marginalised – so people working in these industries will always be rewarded according to the world spot price for their type of labour – if you are on 50k and someone in the world is doing it for 20k, you are out of a job. Value shops is where the stability lies for domestic only environments and even these can make huge success by going international. They guard talent and keep a closed shop.

    The governement policies seem not to recognise the reality of the above and constantly risk damaging fledgling value chains and nets (all of which would benefit greatly from the diaspora concept) before they get off the ground. The nature of the knowledge economy will short current government policy and thinking and make it irrelevant. Good people will simply move to where they are doing it right. We’ll just be a nation a value shops – Lawyers, Doctors, Footballers etc.

  27. B

    The government cannot find their own ass with a map and a flashlight. I keep repeating that the best and most useful thing they can do for us is nothing at all.

    What they do do is usually crap, overpriced and not fit for purpose.

    What they think is that we are here for their amusement. This makes them dangerous.

  28. Philip

    100% agree. Sorry am long winded about it

  29. mishko

    “If we are going to be a knowledge economy, where creativity and uniqueness rather than conformity and repetition are rewarded, shouldn’t we be telling our kids about it?”

    It’s a different sport, but isn’t this exactly what Padraig Harrington is doing and has been doing for some time? Now surely there’s someone our kids can look up to. And I think he might argue that there was 99% conformity and repetition on the practice ground before the 1% which produced that unique 2nd shot on the 17th.

  30. MK

    Hi David,

    Well paid entertainers in ‘narrow markets’, such as Robbie Keane is in football, doesnt tell us too much either about globalisation nor creative sectors. Whilst it is true that ‘stars’ at the top in certain areas (especially entertainment) with talent can demand huge wages, these are more unusual sectors than typical. Incidentally, if you follow F1, the peak in drivers salaries has come and gone as younger and less-well-paid ‘jockeys’ are given the berths in the modern era. Who knows, maybe the same pattern will happen in football although each specific line of entertainment has its own nuances and will evolve separately.

    The money the football stars garner is as a result of paid-TV subscriptions in the main (in England, it is the main source, and Italy as well, Deloitte do a good study each year). Ironically, BSkyB have recently announced they are losing money. Many/most clubs are also close to losing money and in debt, even those at the top of the tree. So football as it has expanded and evolved certainly has problems and is likely to continue to change. Currently, the balance of the money would seem to be flowing to the players in the ‘circus’, but like F1, that may change in time. Owners cant go on losing money forever.

    Creativity may be something that schools should indeed give space to and encourage, as it cant really be ‘taught’, but I cant see Irish teachers saying “okay, hands up now who wants to skip this class and go out and play football in the yard instead?”.

    In terms of Robbie, I hope he does well …. from a football analysis point of view, he is perhaps at his peak now. Or just past it. Time will tell.


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