Comment by soneil | Hacker News Reader

Comment by soneil | Hacker News Reader

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It sort of is. And isn't. It's a helluva mess we've got ourselves into.

Ireland has built its modern economy on being attractive to multinationals. And it's worked. 10 MNCs alone pay 40% of all tax revenue in the country. They've brought jobs and wealth to a country that was previously big in dairy & emigration.

For the generation above me, the career path was study, leave, earn your money elsewhere - and perhaps come home one day to start a family. Perhaps. For the generation below me, they can go straight from Uni to FAANG (maybe FAAMG? I think msft are bigger than netflix in Dublin), startups, or elsewhere in the booming tech & pharma sectors.

Pandering to MNCs was a good strategy. It paid off. But it's not sustainable - no-one actually wants to win a race to the bottom.

I'm not sure biting the hand that feeds us is the best step to make right now though. We need to diversify first. We need to encourage home-grown talent. We need to wean the MNCs off their tax strategies slow enough that we don't startle them, etc.

Like it or not we are currently intertwined. That needs to be solved first - otherwise we just turn the tap off and return to the 80s.

(Yes I'm biased: I work for an MNC that probably wouldn't be here without this strategy. Without this strategy, I wouldn't be living here.)

Is it a race to the bottom though?

I mean, a race to the bottom in the normal sense is cutting taxes or spending money on attracting these companies. We help these companies evade other countries' taxes, not our own.

Also, officially, the entities involved in the tax evasion are not related to the entities that actually employ people. Would Google move it european customer support offices without this tax deal? Theoretically, they could take advantage of it without employing anyone in ireland.

It's all horribly ambiguous. I've never really understood how it works.

It all gets terribly murky very quickly. For example, we often claim one of our strengths is that we have a highly educated workforce - but this is circular; people take this path because they know there's good work at the other end of it. If we ripped out those MNCs, that highly educated workforce would vanish quicker than you can say J1.

There are other benefits to being in Ireland. We have a common-law legal system, which is more familiar to Americans than most continental systems. We mostly speak the same language. We're still in the EU, etc.

How much of a presence you need here to make it work, I'm not entirely clear on. But it does seem apparent to me that once you're maintaining a presence anyway, it knocks down the largest barrier to actually building on that presence.

For example, it's widely assumed that Apple are only here for the taxes. I think they were originally here as a low-cost entry into Europe. But however it's worked out, last I heard Cork was the only factory (or perhaps the only factory outside the US?) that Apple actually owns. I'm typing this on an iMac that was assembled in Ireland. Apple are a success story - even more so because they're in Cork, rather than everything but everything being built in the Dublin bubble (a separate but very real issue).

And taxes aren't the only incentives; I used to work in a building that was sold to DEC (by the Irish Development Agency) for 1 Irish pound - which would have been $1.45 when we left the pound in the 90s. Not sure what it was worth when we sold the building, but .. probably still a close approximation of pocket change. And again, it paid off - it sounds like a story of us "bending over for the yanks", but the site passed through DEC to Gateway to HP to HPE. What started off as a factory for Digital is now stuffed full of developers for HPE. We haven't just had decades of employment out of that deal, but the value of that employment has been constantly rising. Ireland's modernisation is the result of thousands of such stories.

But as for a race to the bottom, it sort of is. Factories are being built in Central & Eastern Europe today, for most the same reason they were being built in Ireland in the 70s and 80s. Just as we were trying to undercut France, Germany & the UK to get our leg up - they're trying to undercut us to do the same. I do think there's a point where we need to "pivot" to actually acting like a modern economy, and let other nations take our rung on the ladder - instead of having to lay claim to one even further down.

I do agree with the idea that our modern economy shouldn't still depend on being a pseudo tax-haven. I just don't think "hit them as hard as we can" is the right solution, especially while we're still riding on their backs.

(To make this look a little less rant, I'll cheer it up with a fine example of a PDP that does not say Maynard on the front)

https://en.wikipedia.org/wiki/DECtape#/media/File:DECTape_un... https://www.flickr.com/photos/32614724@N06/3045263847

Yeah I think you're spot on with everything. I think some change in direction is needed for the long term but it's something we are not really seeing which is concerning.

The well known MNCs seem to be here largely in an operational capacity, the majority of their workforce would be something like trust/risk/support/finance/sales. In terms of "R&D" and "innovation", work that develops the products and services that are sold, I see very little of that happening in Ireland. Yet these companies have huge engineering and product teams in London which are still growing, and the fact they're not placed here is rather telling. For sure we've benefited from the presence of these MNCs so far, but for it to be more sustainable and for the economy to mature further I think we need to be looking to become a country that's attractive beyond being an operational base.

I'd largely disagree. There's a huge amount of R&D and Engineering work being done in Ireland.

On the hardware side Intel, Qualcomm, Huawei, HP, Analog Devices, Xilinx, Nokia Bell Labs and many more all have extensive R&D departments in Ireland.

On the software side, Amazon, Microsoft, Facebook, Google etc. all have engineering roles advertised currently on Linkedin.

Admittedly not too familiar with the hardware R&D work going on here, I know Intel is largely manufacturing with a bit of development from things like the purchase of Movidius.

For the software side, what are those R&D departments actually working on? Would you really say it's R&D and product development? From what I can see, both from my own experience and from job posts, most of the engineering jobs are themselves operations related (SRE, infrastructure, customer support). I wasn't saying we don't have engineering roles in Ireland, but what we do have are not prime roles in terms of the companies products and services, and we should be looking to grow beyond facilitating company operations.

I can only speak for myself, but I’m in a group of ≈50 working on prime software R&D (as you term it) in a very trendy space in Dublin for a large multinational. I don’t want to say too much beyond that - and you’re probably right that it’s the exception rather than the rule - but it does exist.

If you work where I think you work (Irish founded company, office is about as central as you can get in Dublin) it's a great example of the type of thing we need more of! I really do think it's the exception unfortunately, even within the other parts of the multinational here.

>(or perhaps the only factory outside the US?)

The only one I know is in US making Mac Pro.

Interesting, what else is assembled in Cork ? If I buy an iMac in UK, would it be assembled in Cork?

Why is a plant in Cork entry to EUR? Couldn't those be shipped from China?

( Considering this is Apple related I cant be the only keep reading Cork as Cook XD )

What you have to realise about Ireland is that “ripening bananas” is considered an industry and is protected for tax purposes. You can be doing any idiot job and it becomes a vehicle for tax optimisation. Kind of makes it tough for tech people socially here cause a lot of people assume you’re on a scam or a useful idiot for somebody else’s scam

I believe the Austin plant is owned/operated by Flex / Flextronics. Although I see some news blurb that Apple are building a campus out there too, so perhaps that's going to change in the future? As I understand it, it's all contracted out in various places - save Cork as one very odd exception.

For the UK - possibly. The only product I'm aware of, is that they build configure-to-order iMacs. I have no idea how far they distribute from there, but I think it's a safe assumption that they don't maintain this facility just to ship CTO iMacs to Ireland. So I'd consider the UK a safe bet, and most likely most of EMEA. Could they be shipped from China? Most probably - my CTO MBP was. I have no idea what their reasoning is. (Although I'm almost certain it's not all they do in Cork - they have a second campus in the city centre, which wouldn't make sense for manufacturing.)

But for Cork being a foothold into the EU - Cork is their EU headquarters. The company operating there is Apple Distribution International Ltd, not Apple Inc. This is a large factor in how the finances are set up (at least as I understand it) - a mac sold in the UK goes on the books at ADI Ltd, Ireland - not Apple Inc, Cupertino. And this is how "Apple" ends up holding huge amounts of cash outside of the US. Their right hand is an American company, but their left hand is an Irish company. So the US only taxes them on funds held in their right hand.

If you're in Europe, and you have any email receipts from buying things from the mac/ios app stores - scroll to the bottom and check the address. There's a very strong chance it's not Cupertino.

While I'm on a ramble - I also find it curious that Apple don't have a single physical retail presence in Ireland. There's an Apple store in Belfast, but not in Dublin - despite Dublin having 5x the population. I have a strong suspicion this is not a coincidence either.

(I have absolutely no relationship with Apple other than as a customer - this is all just my understanding based on paying attention, and absolutely no inside knowledge. Obviously, else I'd be screwed right about now, eh?)

> Is it a race to the bottom though?

It's a race to the bottom as soon as any of those other countries undercut your tax rate to try to steal the MNCs back. Most countries realize that isn't sustainable, so for now it hasn't happened.

Well... it's been 30+ years.

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