Achieving a ‘sustainable’ industrial base-why do two small open economies perform differently? The cases of Ireland and Sweden

With high profile Multinational Enterprise (MNE) job losses being a regular news feature in Ireland of late, beginning largely with the first big announcement of the transfer of the production facility of Dell in Limerick to Lodz in Poland in January 2009, MNE job losses have become an almost daily occurrence. The latter has contributed significantly to the ever increasing unemployment rate in Ireland currently standing at 12.6 per cent (CSO February 2010 Live Register). Developments such as the above have put into question the sustainability of an Irish industrial strategy which has placed most of its industrial development efforts into the FDI/MNE basket. It could reasonably be questioned whether such a strategy has led to the neglect of an indigenous (largely SME) sector. One of the key objectives of any industrial economic development strategy should be that the resulting economic activity and growth is sustainable, and that the industrial activity within the economy has some ability to cushion itself from asymmetric shocks such as the current global economic recession.