Ireland’s strong growth of knowledge-intensive occupations continued in 2020

The ECEPR and Nordic Capital Brain Business Jobs Index measures the share of the working-age population across Europe employed in highly knowledge-intensive enterprises, in 31 countries and 284 regions.

Ireland’s growth of brain business jobs continued in 2020

During the corona crisis, the number of brain business jobs decreased massively in Europe. However, Ireland was an exception, which not only maintained its knowledge-intensive occupations but also managed to increase them. During 2020, the number of brain business jobs in Ireland increased by 600.

Still despite this, the concentration of the population employed in knowledge-intensive firms decreased from 7.8 per cent in 2019 to 7.7 per cent in 2020. All in all, Ireland has added 74 500 brain business jobs since 2012.

Due to Ireland’s ability to maintain strong growth for several years, it is the Western European nation with the largest growth of brain business jobs since 2014.

Western Europe experienced a significant loss of brain business jobs in 2020

In Western Europe as a whole, approximately 59 000 brain business jobs were lost between 2019 and 2020. However, four Western European countries managed to stay stable during the year: Belgium, Ireland, France, Luxembourg, and the Netherlands. Still, these countries only managed to add a small number of jobs, which fades in comparison to the loss of brain business jobs suffered by the United Kingdom.

Fostering brain business jobs an important aspect of reducing regional unemployment

The region with the highest concentration of brain business jobs, the Slovakian capital region of Bratislava, has an impressive unemployment rate of 2.4 per cent. This does not seem to be a coincidence.

A comparison of 281 European regions shows that a strong link exists between high brain business jobs concentration and low unemployment and that this link is driven by regions with low brain business jobs concentration.

Amongst regions with up to 50 brain business jobs per 1 000 working-age population, a straight-forward linear regression shows that 28 per cent of the variation of unemployment can be explained by differences of brain business jobs concentration.

Geographical equalization of brain business jobs taking place in Europe

According to Dr Nima Sanandaji, president of the ECEPR, the overall trend is that Central and Eastern European countries are catching up to Northern and Western Europe. Knowledge-intensive firm occupation is also growing in several Southern European countries, such as Cyprus, Portugal, and Malta:

“Since 2014, Cyprus has had an almost 50 per cent increase in brain business jobs per capita. Slovakia, Hungary, Poland, Latvia, Portugal, and Bulgaria have experienced a growth of a third or more. The cost of labour is the main driving force. Brain business jobs are growing in places which combine an ample supply of talent with lower wage costs”.

Dublin is home to several innovative startup companies

The Irish capital region Dublin has numerous innovative start-ups, such as FoodMarble, a digital digestive health company that finds foods that are most compatible with a unique digestive system, and Immedis, a specialist provider of enterprise technology solutions for global payroll and mobility tax services.

Warsaw is the fastest-growing region, alongside Bratislava and three German regions

On a regional basis, the most significant increase of brain business jobs has occurred in Warsaw, the Polish capital region, followed by the Slovakian capital region of Bratislava, and the German region of Braunschweig. This German region was an important centre of commerce already in medieval Germany and is one of several strongly growing German regions.

Successful new European firms often combine service innovations with digital platforms for service delivery

A study of 150 innovation companies, founded in the top-30 leading European brain business jobs hubs, finds that the most common forms of innovations are business service innovation, consumer service innovation, and digital infrastructure/platform innovation. Often firms rely on digital platforms for service delivery. The least common form of innovation is manufacturing technology.

Firms in Western Europe has received significant investments, yet still behind the Nordics

The average company in the Western European brain business hubs, founded in 2015, has attracted 35 million Euros in investment, compared to 23 million in Southern Europe, and 10 million in Central and Eastern Europe. The innovation firms of the Nordic regions on the top-30 regional list have on average attracted 85 million Euros in investments, far outstripping firms in other parts of Europe.

”Knowledge is the foundation for attracting investments and creating value in a long term sustainable way. As a leading investor in Europe it is natural for Nordic Capital to support research on how knowledge strengthens good investment conditions”, says Klas Tikkanen, Chief Operating Officer at Nordic Capital Advisors.

”The study confirms that high knowledge intensity gives resilience in a time of crisis. Sweden and the Nordic countries still stand strong despite the pandemic. But now is the time for reforms and developing the regulatory frameworks in order to get back to the level before Covid-19. That will lead to increased investments, and the increase of brain business jobs again”, Klas Tikkanen adds.

Ireland’s weaknesses and strengths

Compared to the rest of Europe, Ireland has several strengths. The main one is pharmaceuticals, and additionally also high-tech manufacturing. Ireland lags in areas such as advertising and market research, as well as IT services.

If the growth of brain business jobs in Ireland continues during the coming years, the country can eventually gradually catch-up to and even surpass the UK in knowledge-intensive jobs concentration. The competition for brain business jobs is however intense in Europe, driven largely by the availability of talent and the cost of recruiting talent.