Walking around the back of the Hook lighthouse, the oldest in the country, where the Atlantic waves crash against the dark grey, muddy limestone, it’s not hard to see why this has been a crucial landmark for mariners. The tower at Hook was first constructed in 1247 and has guided ships into the harbour at Waterford for centuries.

The area around the lighthouse offers a fascinating glimpse of the ebb and flow of Irish history. There is so much economic history in so small an area that a few days spent here gives you a feel for how industries and sub-culture spring up and thrive in certain regions and not in others.

For example, a mile or two from the tower at Hook Head lie scattered medieval ruins, evidence of large moats and fortification, cathedrals, late medieval castles and abbeys. It is apparent that this part of the country was a hive of creativity in the medieval ages. Why here?

The Cistercian monks from the local monasteries built the first Hook lighthouse in the 13th century and suffered greatly from the Black Death a few decades later but remained here as a cultural presence until well into the Tudor period.

The monks also linked the region to the Continent and, while much of Ireland was cut off from continental influences, this connection thrived until quite recently. These monasteries were part of a European-wide network of settlements of French Cistercian monks who eschewed worldly pleasures and the commercial distractions of the medieval world.

They arrived in Wexford in 1140. Their austere approach to life was reflected in the simple architecture of the great Cistercian abbeys of south Wexford — Dunbrody and Tintern. The monks’ presence and security was bolstered by the arrival of the Normans in 1170.

It is often forgotten that the middle ages were years of great discovery and the castles and abbeys of Wexford had direct links with the Crusaders in Jerusalem.

They were part of the great historical narrative which divided West from East, Roman Catholicism from Byzantine Orthodoxy and Muslim from Christian. For example, the Knights Templar had a base in Templetown, near Hook Head.

The overlapping of religious, military and Norman settlement patterns linked the south- west of Ireland to an economic system which stretched from Ireland to Wales, the southern towns of England and most importantly, the fortified Norman strongholds of Normandy and Brittany stretching further south to Bordeaux in an early example of European economic integration.

So why did so much activity seem to cluster around this part of the country? The answer is in the trading patterns of the day, the topology of the region and the access, via inland rivers, to the agricultural hinterland of south Leinster and east Munster.

The three great rivers of the south-west were its economic lifeline. On the river Suir, market towns like Cahir, Clonmel and Carrick on Suir flourished as trading outposts, bringing produce and people into Waterford city. To the north, the river Nore linked Kilkenny, Thomastown and Inistioge with New Ross and Waterford. The Barrow allowed trade with Monesterevin, Kildare, down through Carlow and Graignemanagh.

All this commerce centred on Waterford harbour and this part of Ireland rapidly became the most cosmopolitan and outward-looking region in the country.

Waterford was one of the key areas of economic growth and innovation in Ireland for a few hundred years and its economic importance implied a strategic significance also. To protect the harbour, Duncannon Fort was constructed in response to the threat of the Spanish Armada. Here is where King James II fled after his defeat at the Boyne and later again, it became the one of the last anti-Cromwellian strongholds in Ireland.

As a result of geography and international trade flows, Waterford and south Wexford had their commercial years in the sun. After the 1798 Rebellion the place went into decline.

However, when things were looking up, the age-old patterns of economic “clustering” repeated itself here. People tend to cluster around other like-minded individuals and positive economic development reinforces itself with trade begetting innovation, begetting more trade, more exchange of ideas, more development and a rising population. We see these clustering patterns in almost every industry. In Silicone Valley we see technology entrepreneurs, high-tech research and financial venture capitalists all keen to drive the area forward.

We see the same in the City of London, which has emerged pre-eminent in the financial world. The greater the cluster, the more insulated the industry and the better the chance for the region to prosper.

Ireland has got to create such a cluster around its high-tech industry which we know has been losing export market share for the past few years. When we see a company like Seagate Technologies closing down in Limavady, it is hard to reconcile this with a company whose share price has risen close to 30pc since May of this year. This is not a company in trouble, at least from the investor perspective. It is just that Seagate Ireland is a part of a supply chain which makes us vulnerable.

Trying to built a cluster of industry, technology, financial and marketing competence won’t protect us if we become uncompetitive, but it will mean Ireland as a location should be more attractive and resilient. More significantly, the commercial infrastructure servicing the large multinationals would be built up, adding an extra competitive edge.

In the past, these economic clusters were driven by geography, geology, irrigation patterns, rivers and agricultural yields. Things moved slowly and settlements were gradual.

Now things move quickly. Innovative clusters can be created and protected and geography matters less. In the years ahead, Irish economic policy should be focused on clusters so that unlike the Hook peninsula, we have more to sell than our heritage industry.

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