GES Live Blog Day 1: Global economy will ‘grow by 3% this year but then slow down’

Welcome to the Global Economic Summit live blog.

This page will be used by the Business Post team to provide you with updates from picture-esque Killarney, the venue of the inaugural Global Economic Summit sponsored by Accenture.

17.55 - Day 1 of the Summit complete

That’s it for the day here in Killarney. Over 35 speakers have addressed the hundreds of delegates in Killarney. Back tomorrow here from 8.30am.

17:45 - Ireland has shown how US politicians from rival parties can cooperate

Former US Congressman for New York, Joseph Crowley, has said in the normally tribal world of Washington politics, the issue of Ireland has been one matter where bi-partisan cooperation has occurred.

In a powerful address, Crowley said both Republicans and Democrats have shown serious and consistent commitment to support the 1998 Good Friday Agreement, which he said is a model of peace building others have sought to emulate.

16:55 - AI could have ‘enormous impact’ on ESG

Artificial intelligence (AI) has the potential to have an “enormous impact” on the ESG sphere, according to one expert in sustainable investing.

Emma Bickerstaffe, the managing director of Holtara, which provides advisory sustainability services to investors, said that the technology’s ability to process data rapidly will play a “huge role in the underlying company level”.

Speaking on a panel discussion moderated by Daniel Murray, our policy editor, Bickerstaffe pointed to the increasing volume of ESG regulation facing firms across the EU and beyond.

“All the regulatory challenges [facing firms in reporting on sustainability and governance], is about gleaning as much accurate information as you can from huge numbers of runtime stakeholders and companies - and that's really what AI excels at.

“So, in terms of disclosures and challenge on regulation, I think it will have a huge role in the underlying company level,” she said.

16:18 - Governments must ‘embrace private markets’

Politicians and policy makers must move to embrace private markets, the founder of Elkstone, the Irish investment house, has warned.

Alan Merriman said that while many economists and leaders in enterprise are focusing on artificial intelligence, “private markets are eating the world”.

“The private markets are making up for the retrenchment of the public markets,” Merriman said.

“Private Markets need to be embraced from a policy perspective. Governments need to be more agile, and they need to be smart about encouraging private markets, to invest in what's good going forward.”

16:01 - Global economy will grow by 3 per cent this year

The global economy will grow by roughly 3 per cent in 2024, despite immense economic and geopolitical uncertainties, according to one international economist at Wells Fargo.

However, Brendan McKenna - who serves as a vice president at the banking giant’s corporate and investment arm in New York - warned that this growth is set to slow down in the coming years.

Speaking at a panel discussion, lead by Lorcan Allen, our Business Editor, McKenna said that the global economy has been “relatively resilient” despite inflationary pressures.

“We're in this really interesting place where we've had very extreme monetary tightening - very, very, very high inflation - but the consumer is actually in a relatively strong place.

“Going forward, I'm not as optimistic that we can sustain that pace of growth,” he said, citing geopolitical threats, fiscal deficits and high debt burdens.

“So I think the normal pace of growth going forward maybe in 5/10 years is going to be somewhere in the 2/2.5 per cent range, which is obviously slower than what we're looking at now,” he added.

15:39 - Remote working habits could ‘create dead zones’ in global cities

The prevalence of remote working carries the potential to “create dead zones” across cities worldwide, the governor of New York has said.

Delivering a key note speech on the future of cities, Kathy Hochul said that an abundance of empty commercial property in urban areas - coupled with a lack of affordable housing supply - creates a “real problem” for global cities.

Hochul - who became governor of New York in 2021, the first woman to assume the office - said that upon accepting the position, she was asked what steps would be necessary to clawback on the pandemic-induced deterioration of the city.

“I said: ‘Outlaw Zoom’,” Hochul told the GES.

Hochul warned that the longer workers remain remote, more and more businesses will let go of space.

“So what they'll do is be a real problem. The mortgages can't be paid and the banks will take over. We see that coming right now,” she said.

“So that ripple effect of people not coming in five days a week has the power to create great dead zones in the heart of our urban core. That challenge must be met by the business community and government,” she added.

15:15 - US-Irish economic relations worth $1 trillion, says Ambassador

US-Irish economic relations are worth more than $1 trillion, according to the US ambassador to Ireland, who described the ties shared by the two nations as “enviable”.

Addressing leaders in business and policy, Claire Cronin said that in addition to Ireland providing a “second home” to US enterprise, Ireland is the ninth largest source of foreign direct investment in the United States.

“Think of that a country of somewhere around 5 million people being the ninth largest investor in the United States. That is a wonderful story to tell - and Irish companies are employing over 100,000 people across all 50 states,” she said.

The ambassador also name-checked the Kerry Group as a “shining example of Irish industry in the US.”

15:10 - Summit resumes

The Summit has resumed after (a slightly extended) lunch.

Claire Cronin, the US ambassador, is next to address attendees.

14:22 - EU requires €500bn a year to fund green and digital transitions

The European Union will need to raise in the region of €500 billion in private investment a year in order to achieve its digital and green transitions, according to Ireland’s Commissioner.

Mairead McGuinness said that for the bloc to advance in “key sectors” including medicine, technology and energy, which will aid its long-term transformation goals, it will need to attract significant amounts of funding.

“We will need to invest €500 billion a year - and private investment will have to cover most of this investment gap. Because public money will not be enough,” she said.

The comments come amid debate over the foundation of a European Capital Markets Union to fund major, bloc-wide projects.

McGuinnness previously warned that the EU economy is at risk from a lack of sufficient private investment in areas like energy, tech and defence. While she said public funding should be used to support Europe’s economic and strategic goals, she said private financing should play a “major role”.

13:30 - Break

The summit breaks for lunch, and will return at 14:30.

Kathy Hochul, the New York governor, is among the speakers in the afternoon session

13:08 - Migration, labour shortages and climate top EU voter issues, says McGuinness

Mairead McGuinness has taken to the stage, using the opening remarks of her address to discuss the upcoming local and European elections and the key issues facing voters.

According to Ireland’s EU commissioner, migration, the cost of living, climate, as well as a shortage of workers, housing and infrastructure are chief among the challenges facing families and businesses.

“And these issues are being debated - and they're becoming increasingly very divisive,” she said.

McGuinness, who was first elected to the European Parliament in 2004, last year announced that she would not contest her seat in the June 7 election.

“I was elected four times to the European Parliament starting 20 years ago, and for the last time in 2019. So four times a winner, it's time to ease up,” she said.

12.55 – The cost of sustainability in the built environment

Asked about how contractors manage the added costs of sustainability measures when submitting applications to procurement tenders, Reynolds said the public sector was definitely ahead of the private sector in terms of the emphasis on sustainability in projects.

She said governments and state agencies have a mandate to reduce emissions, which allows them to give equal weight to applications based on sustainability measures and not focus purely on cost.

Henderson said price will always be extremely important in any tender, public sector or otherwise.

“When you’re in a transactional process, money talks. It’s hard to get away from that. So it’s important to be able to show how sustainability adds value,” he said.

12.48 - The circular economy and urban mining

Discussing the circular economy, Henderson said 98 per cent of waste in the construction sector no longer goes to landfill. However, he said there is a major opportunity in the industry to retain the value of products recovered from buildings, such as windows or doors.

“If you can preserve the innate value of these items, you can use that in the circular economy in a new project. It’s described as urban mining where you go into older buildings and take out the items of value,” he said.

Henderson cited a project in Amsterdam that BAM worked on, where the company removed the façade of an old office building and used the panels as partitions in the office.

“Urban mining does create challenges. If a company buys new products from a supplier or magazine, the items are bought on spec and to order. When you reuse items from older buildings, you don’t know the condition and you don’t know the size. But there is definitely an opportunity here and the industry is making real progress there to preserve high value items,” he added.

12.38 - Building water infrastructure in Ireland

Discussing the challenges of delivering water infrastructure in Ireland, Cory Reynolds of Veolia cites the Vartry water system in Dublin, which her company delivered on behalf of Irish Water. Reynolds said the facility is “perfect” and is built on a site that is a third of the size of the previous system.

“To deliver water infrastructure, it’s about working with local communities and government to future proof infrastructure. The thing with the built environment, you can’t just build anywhere. You have to think ahead about the demands of the future. What will demand be in 20 years’ time if the population has doubled. It’s about ensuring there are enough supplies and resilience in the water system for future generations,” Reynolds said.

12.30 - Decarbonising steel and concrete

Alasdair Henerson from BAM outlines some of the techniques and new technologies that the construction industry is using to lower its carbon footprint. Henderson said new alternatives are emerging to concrete and steel, which are two products very difficult to decarbonise.

12.20 - Panel discussion: sustainability in the built environment

Next up is a panel discussion on sustainability in the built environment. The panel includes Cory Reynolds, corporate affairs and communications director with Veolia, the infrastructure and engineering services giant, and Alasdair Henderson, executive director of BAM Ireland.

11.40 - Prince Albert of Monaco sounds warning on rising temperatures

Regions of the world which have been devastated by drought and floods mean the planet is on the verge of a climate breaking point, Prince Albert of Monaco has told the Global Economic Summit in Killarney.

In his keynote address, Prince Albert said the world is facing a triple crisis of climate change, biodiversity loss, and pollution that demand action from governments and the private sector.

He sounded a warning that the world is struggling to contain rising temperatures to 2 degrees and while combating this increase is “a vast and daunting” task, there are many opportunities for companies and countries.

“We are the generation and it is up to us with the help of future generations of course, to prove that we can meet these challenges and meet them as early as possible,” he said as he concluded his remarks.

11:00 - Prince Albert arrives to GES

Albert II, Prince of Monaco, has arrived to the Global Economic Summit in Killarney.

He will deliver a key note address shortly.

On arrival, he met a small selection of delegates, including Niall Kelleher, mayor of Killarney and Business Post editor Daniel McConnell.

10:35 - ‘Innovation is the future’

The future of the Irish economy lies in innovation, according to Michael McGrath.

“And that's why in a time of major global tax reforms, the government decided in the last budget to increase the research and development (R&D) offering that we have,” the minister for finance said, pointing to the increase in the R&D tax credit.

McGrath said that the most “important attribute” the Irish economy holds is “our people”, adding that collaboration across all areas of enterprise will be fundamental to Ireland’s economic progression.

10:20 - McGrath anticipates rate cut next month

Finance Minister Michael McGrath said that he expects the European Central Bank (ECB) to cut interest rates in June.

Addressing delegates in Killarney, the minister for finance said that the Covid-19 pandemic “shook” the Irish economy “to its core”, with spiralling inflation triggering “the necessary monetary response” from central banks globally.

However, he said that with consumer prices falling back in line with ECB targets, the public “will experience an improvement in living standards”, while business will regain competitiveness.

“We also anticipate, based on all of the public commentary, for the ECB to meet market expectations and that the process of reducing interest rates will begin next month - and that will bring some very welcomed relief for individuals, families and firms,” he said.

Delegates have also heard from country managing director of Accenture in Ireland Hilary O’Meara. Accenture are the primary sponsor for the Global Economic Summit.

10:00 - Global energy systems ‘no longer fit for purpose’

The world’s energy systems are “no longer fit for purpose”, according to the chief executive of the World Energy Council.

Delivering her opening address at the GES, Angela Wilkinson said that the green energy movement is “at risk”, placing international climate targets in jeopardy.

“Energy is still an existential issue for Africa. All signals point to an overshoot of 1.5 degrees centigrade. Extreme weather events are disrupting energy systems everywhere. And a new global crisis of access and affordability is still unfolding,” Wilkinson said.

“We spent an inordinate amount of time talking about less than 8 per cent of the world energy system, renewable electrification. We spend a lot of time not talking about the other 92 per cent. We're not going to [reach our climate obligations] unless we change.”

06:00 - Global Economic Summit begins

While the summit does not officially start until 9:00am on Monday morning, a small number of attendees got a flavour of what’s in store with the arrival of Kathy Hochul, the governor of New York, on Sunday evening.

Hochul - who is New York's first female governor, and who’s grandparent’s were born and raised in Co Kerry - arrived at the Europe hotel after being honoured at a civic reception in the county.

The event was held in Spillane’s Pub on the northern tip of the Maharees peninsula, within a stone’s throw of her paternal grandparents’ homesteads.

Hochul attended a drinks reception at the Europe hotel, and will deliver a key note address on Monday afternoon.

She was joined by Joe Crowley, the former US congressman, who is also due to speak today.

06:00 - ‘Industrial revolution 4.0’

The advent of artificial intelligence (AI) has spurred the global population into the world’s fourth industrial revolution, according to Ivan Yates.

Speaking on the eve of the Global Economic Summit in Killarney - of which he is the primary moderator - the veteran broadcaster and former Fine Gael minister said that the international economy is facing two major challenges.

“We are in the middle of industrial revolution 4.0 - [driven by] generative AI.

“And secondly, the challenge of the globe for this century is obviously the challenge of sustainably living and dealing with climate change,” Yates said, adding that delegates attending the conference will come away from the event “greatly informed by the best brains in thought leadership”.