Pharma is exactly the medicine that our ailing economy needs right now

It’s a fascinating story. But look at how easily the same multi-billionaire owner of Twitter can destroy the value of the company he bought.

Perhaps we were too in awe of the new tech moguls and the corporate taxes they imposed in Ireland. Now we’re obsessed with the sector’s sunset here – even if, like any sunset, it’s only temporary.

Nonetheless, the pharmaceutical and medical device industry in Ireland continues to thrive.

The publicity of 1,000 lost tech jobs on Twitter, Meta and Stripe was so much bigger than the coverage of the 500 new jobs announced by Pfizer with its new €1.2 billion Dublin facility and by Aerogen whose invention will enable Chinese health authorities to get more Covid vaccines to more people without injections.

The scale of growth in the technology sector is enormous and well documented.

But here, too, the pharmaceutical and medical device industry has grown exponentially.

The difference is that the pharmaceutical industry is still running at full speed, at least for the time being.

This industry accounted for 50 per cent of all goods exported from Ireland that year. Production in Ireland now accounts for 5 per cent of the world market. The sector has invested €10 billion in Ireland over the past decade.

In terms of quality of employment, over 60 per cent of those working in industry are university graduates and it employs 25 per cent of all PhD students working in industry in Ireland.

So these are high-paying, quality jobs. One of the downsides has traditionally been that huge pharma and medtech investments don’t always result in large numbers of jobs.

A new plant can cost hundreds of millions to build and may employ as few as 120 people once built.

Tech, on the other hand, has the potential to employ thousands of people relatively quickly. But as we’ve seen in the past (and might do again), technology can flip quite easily and shed headcount as well.

There’s another good reason why pharma could be the sector to really focus on. We don’t have the homes for all of these potential tens of thousands of new tech jobs.

If the technology sector continued to expand as it has in recent years, tens of thousands of new employees would come to Ireland to take on new roles. But we don’t have the houses for newcomers.

The impact that a large number of well-paying tech jobs can have on the housing market is very real — and not always positive.

It has a trickle-down effect as tech companies pay big bucks to rent homes for well-paid employees. That drives up prices for everyone.

The pharmaceutical sector has large operations in Dublin and Cork. But it’s not just about these two cities. There are sizeable operations in Dundalk, Carlow, Athlone, Galway and Tipperary. It has a regional distribution.

There are also some negative aspects that any future industrial strategy must be aware of.

The pharma industry has been awash with tax-related reversals, with reverse takeovers by Irish-registered pharma companies providing plenty of income for lawyers and accountants – but also plenty of negative publicity for Ireland Inc.

Even former US President Barack Obama has vetted Ireland by name when it came to tax policies that made these reversals possible. These loopholes appear to have been closed.

Total employment in the pharmaceutical sector is around 30,000 – compared to more than four times as many in the technology sector. Tech has more than a few overvalued, high-growth companies that just won’t be around in seven or 10 years.

This is much less likely for pharmaceuticals and medical devices. The tech sector is increasingly closing itself off to US companies wanting to do business with China. Less in the field of pharmaceuticals or medical devices.

Aerogen’s announcement includes an Irish company winning major healthcare contracts in China. That’s something we probably won’t see too much of when it comes to technology.

Pharma is perhaps exactly the drug that the economy needs right now.

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Exports from the north show post-Brexit potential

So the Northern Ireland Protocol stifles the importation of goods from Great Britain into Northern Ireland?

According to the latest official trade statistics from the UK, this is not the case. The value of sales from the UK to Northern Ireland increased by 7 per cent in the year since implementation of the Protocol began.

Last year sales of goods from the UK to the North totaled £14.4bn compared to £13.4bn in 2020.

This trade is more valuable to UK corporate exporters whilst also reflecting the value of consumer goods imported into Northern Ireland. Exports from the north are more valuable to the Nordic economy and the numbers show that they have been growing faster.

The North’s external sales, which include exports to the UK and everywhere else, rose 14.5 per cent to almost £25bn in 2021. Sales to the UK alone rose 13 per cent to almost £13bn.

These figures show that the UK is still Northern Ireland’s largest export market. The UK, too, had several exemptions in relation to goods coming to the island after Brexit.

So it was smoother to sell to the UK than import from there. Another consequence of the mouth-to-mouth episode is Brexit.

While the main parties debated possible protocol breakthroughs during the week in Brussels, there are still difficult issues to be resolved.

Former DUP Secretary Edwin Poots recently debated the difficulties faced by farmers in the North in getting veterinary medicine from the UK on BBC Radio Ulster.

One farmer had problems with poots and said he had no trouble sourcing veterinary medicine since he switched brands. The names on the drugs were different (since they were from the EU now) but they did the same thing.

Northern Ireland exports to EU countries (including the Republic) increased by 16 per cent in 2021. With the new direct flights from Belfast City Airport to Frankfurt announced last week, more exporting companies seem to be looking to new opportunities.

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Government lives in Tír na nÓg on pensions

The government’s retirement age game is a ticking time bomb. The OECD projects that pensions will create a new €13 billion hole in the treasury by 2050 if we don’t postpone retirement to 68.

It’s time for politicians to have the courage to tell people that everything has a price and we can’t pretend we’re going to live in Tír na nÓg forever.