The Other Side of Recovery

In the centre of Lurgan, County Armagh, is a cafe called Palomo. It was probably the first establishment in the town to offer outdoor street seating. In the clean and urbane interior you will find a food menu and eclectic mix of coffees that cannot be found anywhere else in town. The service is timely, attentive, friendly, and one could even say distinctly American. Yet this is not another American franchise like the Subway sandwich bar next door. This is a family business owned by a local man. The reason for the high quality experience is the fact that the owner once spent some time living in the San Francisco Bay area and had grown accustomed to America's high standards of customer service. When he returned to the old sod he took his new ideas with him and implemented them in an Irish setting, raising the bar and giving other local businesses something tougher to compete with.

Historically there has been a culture of traffic moving from Ireland to America, a culture so ingrained that almost every Irish ballad song you have ever heard makes at least one misty-eyed reference to separation from loved ones and familiar sights to make way for a new life in a far away land. However there has also been a lesser studied amount of traffic going in the other direction. Long term emigrants who start families stateside are less likely to return across the Atlantic to resettle there. But there are still those who make the return journey, bringing back new ideas that they picked up in the new world and helping to improve the way things are done in Ireland.

Right wing interest groups in the United States lament the influx of labor from foreign parts, both skilled and unskilled. They complain about foreigners taking “American jobs," as if a job were something with a nationality. Yet over the long term, migration can have positive effects on the country that receives immigration as well as the country that loses people.

Take the matter of business relationships. America is strengthened by being at the hub of global networks, and her trading partners become part of a mutually beneficial relationship. Those who start businesses in the USA maintain links with their home countries through friends and family. News of a business opportunity appearing in one country is quick to spread to others via the friends and families of immigrants. The Chinese and Indian economies, the two major success stories of the early 21st century in which millions have been lifted out of poverty, have benefitted hugely from their interconnectedness with the rest of the world. So has Ireland.

Even second or third generation immigrants still have some sort of emotional connection to their ancestral homeland. Genealogy is a huge business in America where people spend considerable time and money every year attempting to trace their roots. Those who have lived in the same location for generations may find it hard to relate to this, but it exists.

Many investors such as Michael Dell who have poured much money into the Irish economy can trace their ancestry back to Ireland. While tax incentives and an educated workforce played their part in attracting this investment, it is unlikely that this sense of kinship was not a factor in deciding where to locate European operations.

The Irish republic expects to lose 120,000 people in 2011. In a population of 5 million, that is a substantial bite out of the workforce. What is worse is that those who are leaving are inclined to have a certain amount of entrepreneurial drive, a prerequisite for starting a new life in a foreign land but unfortunately just the kind of skill set that the country needs to stage a recovery from this financial catastrophe. The most productive people are leaving when they are needed the most.

However, emigration is not a curse that will forever bedevil Ireland. It has been proven that it does not have to be that way. When the export-driven Celtic Tiger of the 1990s took hold before the property bubble started, Ireland experienced net immigration for the first time in living memory. The demand for labour was so great that the number of returning ex-pats was insufficient to fill all the jobs, and workers migrated from Eastern Europe thanks to the newly-enlarged European Union.

When the economy recovers again, demand for labor will return and migrant worker traffic will once again flow back in the other direction. Hopefully this time policy makers will have learned the lessons of what caused the property bubble. They will have learned that the culture of treating the rules as an inconvenient annoyance has outlived its usefulness, that blindly worshiping at the altar of deregulation is idolatry, and that playing with the fire of cronyism gets ever more dangerous the higher up the ladder of government it takes place. Those who have not learned the lesson should be swept from the political landscape forever.

Not all of the current batch of emigrants will return, but those who don't will still have useful business connections to Ireland that can lay the foundations of future inward investment. Those who do return will do so having picked up new ideas that can enrich the business environment of their homeland.

When the recovery comes, Ireland will be stronger, leaner, and fitter than ever before.