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"Overall Ireland's improving competitiveness performance over the period 2011 to 2014 has been central to the recovery in employment and economic growth." (Source: The National Competitiveness Council, December 2015) (i) Outline the factors that influence the competitiveness of firms in Ireland - Leaving Cert Economics - Question e - 2016
Question e
"Overall Ireland's improving competitiveness performance over the period 2011 to 2014 has been central to the recovery in employment and economic growth." (Source:... show full transcript
Worked Solution & Example Answer:"Overall Ireland's improving competitiveness performance over the period 2011 to 2014 has been central to the recovery in employment and economic growth." (Source: The National Competitiveness Council, December 2015) (i) Outline the factors that influence the competitiveness of firms in Ireland - Leaving Cert Economics - Question e - 2016
Step 1
Outline the factors that influence the competitiveness of firms in Ireland.
Answer
Several factors affect the competitiveness of firms in Ireland:
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Economic Environment: The overall economic context, including inflation rates, interest rates, and economic growth, directly impacts business competitiveness. A stable economy encourages investment and business operations.
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Labor Market Conditions: Access to skilled labor and the labor cost impacts competitiveness. Education levels and training opportunities are crucial to maintaining a productive workforce.
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Infrastructure: Adequate physical and digital infrastructure enables firms to operate efficiently. Transportation, telecommunications, and energy are vital aspects that influence business operations.
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Government Policies: Tax policies, regulation, and support for businesses play a significant role. A favorable business environment can enhance competitiveness.
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Access to Finance: Availability of funding for firms, especially for startups and SMEs, is essential for innovation and growth.
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Market Size and Access: Proximity to markets and ease of access to international markets enhance opportunities for firms to grow and expand.
Step 2
Discuss three policies that the Irish government could consider to improve the competitiveness of firms in Ireland.
Answer
To improve the competitiveness of firms in Ireland, the government can consider the following policies:
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Investment in Education and Skills Training: Implementing programs aimed at enhancing the skills of the workforce can help firms boost productivity and innovation. Investing in vocational training and higher education will better align graduates' skills with industry needs.
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Tax Incentives for SMEs: Offering tax relief or reduced rates for small and medium-sized enterprises can lower operational costs and encourage investment. Simplifying the tax regime can also make compliance easier for businesses.
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Infrastructure Development: Prioritizing infrastructure projects, especially in transportation and digital services, can enhance the efficiency of businesses. Improved logistics and connectivity can make firms more competitive in both domestic and international markets.