While, at a sectoral level, productivity growth over the past 15 years has been particularly strong in the manufacturing sector, this finding needs to be interpreted with caution for a number of reasons. First, high productivity in Irish industry is largely a result of extremely high productivity levels in a small number of foreign-owned firms, mainly in the Pharmaceuticals and ICT sectors.
These high productivity levels largely reflect rewards for R&D effort and marketing by the parent company and should more correctly be attributed as a return to factors of production in the country of ownership. Productivity growth and levels have been much weaker in many other sectors of the economy, including the more traditional manufacturing sectors and many parts of the services sector.