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MULTINATIONALS WERE WORTH less to the Irish economy last year than at any time since 2009 as the “patent cliff” for drugs like Viagra ate into big pharma production.
Central Statistics Office (CSO) figures for the sectors dominated by multinationals – mainly made up of chemical, pharmaceutical, software and communications companies – showed production in those industries dropped 8.5% in 2013.
When referenced to 2012 prices, those sectors churned out products with a gross-added value of €38.6 billion last year – down from €42.2 billion in the previous 12 months.
Gross-added value measures the total production in an industry after taking out the goods and services that were consumed in the process.
Last year’s total was the lowest since 2009, when multinationals were worth the equivalent of €37.9 billion to the economy.
In contrast, domestic-dominated industries, like real estate, construction and agribusiness, all showed positive growth and were worth a combined €118.5 billion last year when compared against 2012 prices.
Multinationals off the cliff
The CSO said the fall in multinationals’ contribution was mainly down to software companies making higher royalties payments and the effect of the big pharma “patent cliff”.
The cliff arrived last year when exclusive licenses for several big-selling drugs, like Viagra and Lipitor, expired at the same time.
The drugs’ Ireland-based owners were forced to compete with generic brands churning out the same products once their patents ended.
This year’s manufacturing results have shown the pharmaceutical sector rebounding sharply again as they recovered from the downturn.
Finance Minister Michael Noonan included the sweetener of a “knowledge-development box” – otherwise known as a patent box – in this week’s Budget to offer tax breaks to companies making money from new inventions.
The scheme will still have to get the EU tick of approval and it came as Noonan announced he was winding up the infamous Double Irish tax loophole after international pressure to stop multinationals using the quirk to avoid paying tax.
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Viagra now has some stiff competition.
95% of companies and 70%+ of jobs here are outside of the Multi-national sector.
Jobs and money that stay here are from SME’s.
Jobs that can leave at anytime and profit that flows back to America are Multi-nationals.
They are nice but they are too focused on rather than just being a nice slice of the pie.
Time to change the focus of the economy (long over due). Viagra was a once in a lifetime product. Time to get our so called native entrepreneurs to invest some of their OWN money in ventures in this country. A huge part of German success is family owned companies generating employment and profit in their own country. Entrepreneurs here, in America and in the UK, are on the plane to China as soon as they have a marketable idea. The path forward is clear. Entrepreneurs, be satisfied with a profit, rather than an obscene profit, and everyone can benefit. Are you up to the challenge?
There are some incredible Irish SME’s that are exporting all over the world and in many cases employing hundreds but we never hear of them.
It is all Dell this, Facebook that.
The likes of baby Bruton have no interest in the indigenous or SME sector, no sexy photo ops or opportunities for free publicity, and most importantly for our political class – no kickbacks either.
I can’t edit, but to add to the above, indigenous businesses are more likely to get the Tom Gilmartin treatment over the facebook/apple one…
Soft landing.
A bit hard to believe.
Production seems to be drooping a little.
Someone made a cock up somewhere
The government will still bow down to them
Full recovery imminent following stimulus measures introduced in Wednesday’s 2015 Budget.
What sort of stimulants are you on?
Should that not read “worn” off. Just a thought.
Viagra will be a hard act to follow.
Viagra are blue, not yellow.
The only thing I want to know is.. What would happen if a girl took viagra?
The reverse to what happens to a man ,the headache get,s worse
have your say