Ireland's economic upswing trickles down to its regions. Galway is getting the hang of success

By SAMANTHA HILL /GALWAY

alway artist and businesswoman Judy Greene gestures down a quaintly cobbled lane, past a pub, cafe and trendy patisserie. "This used to be a no-go area, full of rats, cats and hoboes," she recalls. "Local people wouldn't walk down it after 5 p.m." Judging by the number of people browsing around Greene's three shops--including one in a splendid 17th century conversion that showcases Irish-made crafts from both sides of the border--times have changed. "Now it's like a piazza in Italy, and you don't need to fly or change your money to enjoy it," she says.

Weatherwise, Greene's observation may smack of hyperbole, but something akin to Italy's famous Renaissance has indeed overtaken Ireland. This Celtic "tiger" now boasts one of the most dynamic economies in Europe, with an average annual growth of over 9% in the past three years. Ireland attracts nearly a quarter of all U.S. manufacturing investment in Europe, and is fully revved up for the advent of European Economic and Monetary Union next year. To be sure, much of the dynamism stems from massive injections of regional aid from E.U. coffers over the past 25 years. But it also reflects the dogged determination of successive governments to kick-start the country's economy with policies to contain public spending, encourage investment with a low 10% corporate tax rate, and build an educated workforce--the sine qua non of a modern, service-based economy.

But perhaps the biggest factor in the current resurgence has been the entrepeneurial energy of a people determined to shake off their colonial past and start making history for themselves. Nowhere is this more evident than in Galway, situated on the Atlantic coast 217 km west of Dublin. Surrounded by some of the most spectacular scenery on the island, Galway could have remained a sleepy tourist destination. Instead it has become the fastest growing city in Ireland thanks to a desire to make the most of its brains as well as its beauty. Tourism is a significant money earner, but last year the turnover from manufacturing and internationally traded services in the area topped $3 billion, and employment in these sectors increased by 60% between 1992 and 1997 to 8,000.

"If you go back 20 years, you would not believe the change," says Thomas Hyland, West Region area director of the Industrial Development Agency (I.D.A.), the state-sponsored authority mandated to attract investment. The I.D.A. has brought 29 overseas firms to Galway, representing 69% of its industrial employment. Galway's manufacturing base has been transformed from water-powered milling and textiles to the highest of high-tech industries, now boasting a range of multinational engineering, information technology and telecommunications companies. It has also carved a substantial niche in the health-care industry. Within the last few years American medical device manufacturers Boston Scientific and C.R. Bard have brought more than 2,500 jobs to the city, drawn by a well-educated and relatively cheap workforce, clean environment, and generous tax incentives. Continued diversification and a touch of grit are vital to sustain growth. As Judy Greene notes, "In business, you have to be a very good steeplechaser. If you haven't got that kind of pigheadedness, don't get into the race."

It is the "can-do" attitude that has helped Galwegians over a few start-up hurdles. When, in 1993, Digital announced that it would be moving its PC-manufacturing capacity to Scotland with the loss of some 700 jobs, Galway realized it had to take charge. "We set up the Galway Technology Centre, capturing people coming out of Digital with special skills and giving them a place to start off ideas of their own," says Michael Hegarty, president of the Galway Chamber of Commerce and Industry. "That was the turning point for us."At least 40 local businesses have since grown out of this initiative.

Such creative partnerships have long been a feature of Galway's history, from its vibrant 16th century sea trade with Spain to the influences visible in the medieval city center, in which a Celtic and Norman heritage neatly balances the modernity of nightclubs and cyber-galleries. The streets are thronged with tourists, shoppers, musicians and students. And with the largest proportion of native Irish speakers in an urban area there is an ancient music to the language that adds piquancy even to parking fines. All this has earned Galway various zeitgeist appellations, from "the Seattle of Europe" to "Ireland's Left Bank." Quality of life--it boasts both low crime rates and world-class golf courses--has become the area's unique selling point for tourists and industry alike. "It can be hard for our customers to get here, with no direct flights from London," says Kieran Gunning, vice president of Nortel's Meridian Systems Europe. "But once they arrive they really value the experience."

According to Ronnie O'Gorman, publisher of the Galway Advertiser since 1970, Galway "has gone from a dull gray town to a large bright city." In the mid-'70s, most of what is now the heart of the Left Bank by the city's quayside was a mass of derelict warehouses and abandoned shops. Regeneration began slowly, but really took off once Galway started receiving its share of money from the government's 1986 Urban Renewal Scheme. "It was like a mouthful of bad teeth being slowly filled with gold," observes Tom Kenny, whose family bookshop has been in the quay area since 1940. The dentistry shows no sign of slowing: cranes loom above the skyline, and the incessant construction of new hotels, houses, and business parks has eaten up thousands of acres of suburban greenfield land.

Rapid expansion is putting a strain on a city whose personality and infrastructure have always been closer to that of a county town. Galway's once quiet roads are frequently snarled with traffic; and while environmentalists and city planners wrangle over the location of a new waste treatment plant, the city is discharging eight million gallons of raw sewage into Galway Bay daily. Many people are concerned about the danger of killing their golden goose, and of the increasing difficulty of affording to live near it: Galway's hugely inflated house prices, second only to Dublin's, are forcing people to move further and further from the city center. But the locals are generally undaunted, and learning from their mistakes.

Galwegians love to have a good time, hosting a plethora of Bacchanalian annual events like the Galway Races. But as Galway's parliamentary representative Michael D. Higgins notes, "The arts community really gave the city its reputation and its image." The Tony-nominated Druid Theatre Company is a source of immense civic pride. The Galway Arts Festival, Ireland's premier arts event, attracts over 80,000 people each July to experience the best of international and home-grown talent. Unsurprisingly, the festival's most popular event is a free parade by Ireland's foremost street-performing theater company, Galway-based Macnas. In 1985, Macnas' founders published a mission statement which proclaimed: "We hope to make fun and have fun on a grand scale and amongst ourselves." Which could just as easily be the motto of the entire Republic of Ireland--a country riding the crest of a boom, and enjoying every minute of it.

--With Reporting by Tony Connelly /Dublin