- Written by Naomi Rainey
- business reporter
Guinness produces 3.5 million pints of beer a day in Dublin.
Behind the traffic on Dublin’s Liberties Street lies the vast factory site of Ireland’s most famous brand.
Guinness has been brewing beer at a factory in the city since founder Arthur Guinness took over an abandoned building in 1759. Currently, the “black things” are being manufactured on the premises of a huge group of buildings, connected by metal piping and making a clanking sound. A metal barrel being carried by a forklift.
The business, owned by global drinks giant Diageo, may seem a far cry from Guinness’s early days, but head of beer operations Aidan Crowe says the fundamentals of beer brewing haven’t changed all that much. talk. “Our core process is actually very similar to what Arthur Guinness would have used.”
The St James’s Gate brewery opened in 2013 and was the most efficient in the world at the time, Crowe said. Currently, at his Dublin brewery he produces 3.5 million pints per day, or 1.3 billion pints per year.
“Technology has changed the way we manage things like chilled water, steam use, and electricity use, making them dramatically more efficient,” he says.
Crowe says there is still room for improvement.
image source, Getty Images
A worker at the Guinness Brewery in Dublin removes hops from a chute in 1953
“You set goals, maybe five-year, 10-year goals. But when you reach those milestones, all of a sudden you realize there’s so much more on the horizon.”
A giant company like Diageo can aim for that horizon if it has enough resources. And it’s not just Diageo. Ireland’s economy has benefited from being home to many multinational companies.
In economics, productivity is the amount of value that workers add to what they make and do, with some workers adding much more value than others. We are in a position to add.
For example, the productivity of the person behind the counter in a cafe is limited by how much they are willing to pay for the food and drinks they sell, even though they are busy all day long. On the other hand, employees at multinational technology and pharmaceutical companies are more likely to work on high-value products and services and are more productive according to official figures.
Dr Emma Howard, an economist at the University of Technology Dublin, said Ireland was a “unique” example globally as a high concentration of multinational companies contributed to improving productivity figures.
“If you look at our total labor productivity, it is 2.5 times the EU average,” she says. “However, if you break this down into domestic labor productivity and productivity in overseas sectors, there is a big difference.”
Dublin serves as the European hub for several major technology companies, including Google
The Central Statistics Office of Ireland measures productivity using Gross Value Added (GVA) per worker per hour. GVA is the total output of goods and services minus input costs.
These figures show that foreign companies are boosting productivity in Ireland.
The GVA of foreign companies in Ireland in the second quarter of last year was €414 per hour per worker. For domestic companies, this figure was only 55 euros.
The data also shows that foreign companies accounted for 56% of gross value added to the Irish economy in 2022.
Dr Howard said Ireland was attractive to multinational companies partly because of its low corporate tax rate.
“If you look at the companies here like Google, Microsoft, Pfizer and Meta, they produce a lot of very high-value products,” she says.
“Some of those goods may be intellectual property, but not physical goods. So some of them may be sent through Ireland to take advantage of lower taxes. .”
But other economists argue that all these multinational companies are distorting Ireland’s economic data.
Stefan Gerlach, chief economist at Swiss bank EFG International and former central bank deputy governor, said: “It looks like we’re generating a lot of economic activity, but the profits we’re getting from it are not that great.In a sense, it’s all artificial.” “It’s a target.” Bank of Ireland.
He said it is “impossible” that the productivity gap between foreign and domestic companies is as large as the numbers suggest. “It’s a matter of measurement,” he added.
Gerlach says using gross national income (GNI) may be a more accurate way to discuss Ireland’s productivity.
This measure better describes how multinational companies direct their income streams through their operations.
Gerlach said using misleading measures of productivity could lead governments in the wrong direction. “There is a risk that policymakers will overestimate the benefits of having large international groups within an economy and underestimate the potential risks.”
Dr Howard and Mr Gerlach say Ireland’s attractiveness as a place to do business is not just about taxes. Its status as an English-speaking member state of the European Union is also an advantage. Additionally, Ireland has a well-educated workforce.
“Across all age groups, we have a higher proportion of workers with third-level education than the EU average, and a much higher proportion in STEM. [science, technology, engineering, and mathematics] We have more graduates than our EU counterparts,” says Dr Howard.
“So we have a highly educated and highly skilled workforce, which impacts our labor productivity.”
Robin Blandford’s company is based on the site of a 19th-century lighthouse
No matter what the data shows, productivity often depends on the daily interactions between staff and management.
This is especially true since the pandemic, when more workers started working from home. These days, your staff is less likely to be in the office and may not even be in the same country.
This is a daily challenge for Robin Blandford.
His company, D4H, provides support to emergency response teams around the world. Based in his 19th century lighthouse at Howth Head overlooking Dublin Bay.
Blandford’s goal is to motivate staff in seven countries. “To me, productivity is when everyone is pulling in the same direction,” Blandford says.
“There’s really good communication, everyone understands people, over-communicates, understands what direction we’re going in, how we make decisions.”
Blandford added: “As we become more decentralized, what we’ve been asking people to do is to be part of a community. We don’t want the workplace to choose their friends.”