The annual Finance Accountancy Survey shows again how closely the accountancy, tax and associated consulting profession reflects the development of the Irish economy. This is not just in relation to fee income growth reflecting economic buoyancy, or increased employment, though these factors should be recognised as demonstrating the value-added that a well-developed professional sector delivers.
There is an underlying story about the sources of growth in the economy and the configuration of the accountancy practice as a whole. Clearly, the Irish economy is becoming ever more internationalised. The booming IT sector, the international financial services sector and the astounding levels of foreign direct investment are at the heart of internationalisation. This is reflected in the day to day work of many of the accountancy practices that feature in our survey, and also in the fact that the large firms which are part of international groups are rapidly changing character in response to internationalisation.
Ten years ago, people spoke about Craig Gardner and Stokes Kennedy Crowley, for example. It took a while, but the transformation from Irish firms in loose international confederations to fully integrated international practices is now very evident. The international financial services, IT and manufacturing firms that are serviced out of Ireland demand as much.
Productivity is higher in the international sector of the Irish economy. It is no surprise that remuneration rates in the professions has also cut loose from the general levels of wage increases that we read about in the context of social partnership. Higher productivity entails an ability to pay higher wages without a loss of competitiveness, and this applies as much to professional services as to the IT sector and manufacturing.
In short, those accountancy, tax and advisory practices that are growing and that will see further strong, sustainable growth will be the ones that align themselves to the internationalisation of the Irish economy. That is where the action is.
AIB reflects
Also this month, we have an extended interview on page 15 with Tom Mulcahy, Chief Executive of AIB Bank. Many of these themes of the dichotomy between an old domestic outlook and internationalisation came out in that discussion: judging by the domestic political agenda, Mulcahy ought to have nothing to talk about other than look-back tax audits in relation to DIRT. But, as is clear from the interview, the scope of the job of managing AIB extends far beyond the shores of Ireland.
The bank’s share price is influenced by the internationalisation of institutional portfolios. A major influence is also how the bank deals with the internet, where comparisons of bank strategies are made globally. Another practical example would be the developing business in Poland - strong profit growth of 82 per cent for the first half year was achieved, but at the same time, increased exposure to Poland is the reason for a ‘negative outlook’ comment from Standard & Poor’s. Managing across borders and into new markets demands internationally competitive skills.
The movement of banks like AIB away from a ‘pure Irish economy play’ reflects the movement of the Irish economy itself away from a ‘pure domestic play’. Financial services, like the accountancy profession, are at the heart of this benign movement in the Irish economy.
IDA day
It is also useful to note, in this context, the content of a job like that of Brendan Logue, the man in the IDA in charge of marketing international financial services. His ‘Day in the Life’ provides an insight into how the goals of the Agency cover regional development and the enhancement of international services, particularly at the time we caught his day, the appointment of a person to look after international insurance from Ireland. There are many people in Ireland whose careers have been helped enormously by the success of the IFSC, and for this, gratitude and recognition are due to Brendan Logue and his IDA colleagues. We are pleased to record that. |
