In London on 23rd February 2006, speaking to a group of Irish expatriates, I said:

I am told that many of you here this evening are considering returning to Ireland, and that some of you are thinking about setting up your own business there. So I will focus in these remarks on what you can expect if you do that – and on what you can't expect.

As the title of my talk is “Ireland is the place and now is the time”, you may be expecting an unvarnished commercial. In fact my message is somewhat more nuanced that that. I intend to give you both sides of the question, so you can make up your minds on the basis of a rounded picture. Certainly, there is a buzz about Ireland these days. It's a more exciting atmosphere than I can remember at any time during my 45 years in business in Ireland. There are two reasons for that, and they are linked together.

The first is that there is simply more prosperity around. There are more people at work - the labour force now tops the two million mark, a figure that would have been unthinkable even a few years ago. Unemployment has virtually disappeared, and is the lowest of any country in the EU. The wholesale emigration that characterised my generation has now been replaced by migration in the other direction – to the extent that 9% of people working in Ireland now were born outside the country.

Underpinning this prosperity is a growth rate that is one of the highest in the OECD, and is more than twice the European average. Ireland continues to attract more foreign direct investment, especially from the US, than anywhere else in Europe – and it consistently remains the most profitable overseas location for US investors. In certain areas, we have succeeded in carving out for Ireland a place in the world pecking order. These include chemicals and pharmaceuticals, high-grade electronics and software, and financial services.

All this has contributed to the second reason there's a buzz in Ireland today. People are simply more confident than they ever used to be. Gone is the feeling that you can't achieve anything by staying in Ireland, that you have to leave the country if you want to make an impact on the world stage.

Replacing what once a feeling of despair and despondency is a cockiness that is breathtaking in its self-assurance. Today's young people in Ireland feel confident they can take on the world and win. And because they feel that way, they are often motivated to do what it takes to succeed.

In purely business terms, the buzz comes from an environment that is highly favourable to enterprise. Corporate taxation, for all companies, is at the low rate of 12 ½ per cent – a level that makes it possible for successful companies to finance a lot of their expansion out of their retained profits. In general, the attitude from the State is to be business-friendly – certainly there is little of the stifling bureaucracy that you find in some other European countries.

Okay, that's one side of the picture. What's the other side? Well, first of all, we have all the problems of success.

Ireland is no longer a cheap country- in fact, it is now one of the most expensive places in Europe to live. That is something to bear in mind if you are thinking of moving back - you will need more to live on than you do here. One element of life that you will find horrendously expensive is housing: we are in the grips of a housing boom that shows no sign whatever of slackening, despite the dire warnings of many economists who argue that it is unsustainable in the long run. Maybe so – but in the short run, houses keep getting dearer.

Allied to that is a commuting problem, especially in the Greater Dublin area. The times when a long commute in Ireland was 20 minutes have gone for ever. The high cost of houses in the capital has pushed development further and further out, so many people now commute to Dublin from homes that are half-way across the island. And despite a massive road-building programme, the infrastructure hasn't kept up with demand – so traffic congestion is a major fact of life in Ireland today.

So if you have been out of the country for, say, ten years – today you may find Ireland a much less pleasant place than it once was. It's more crowded, more expensive, much less laid-back. Overall, there's a much more materialistic atmsophere than there once was.

This is what you must balance against the tremendous sense of buzz. Along with that buzz comes some disadvantages. If, like many people, you feel you can take those disadvantages in your stride, then the Ireland of today may well be the place for you to come back to.

But before you do so, give a thought not just to the Ireland of today but to the Ireland of the future. Just as the Ireland of 1996 was a lot different to the Ireland of today, the Ireland of 2016 and the Ireland of 2026 will be very different places again. It makes sense to think about what lies down the road for Ireland, especially when you are making career choices.

For instance, take manufacturing. Today, manufacturing accounts for about a third of Ireland's GNP. But it accounts for a much greater share of exports – about 60%. There is absolutely no doubt at all that the much-vaunted success of the Celtic Tiger was achieved on the basis of Ireland becoming firmly established as a manufacturing location for inward investors, particularly in the high-tech areas. Today, manufacturing remains crucial to Ireland's performance.

But the hard fact is that by 2026, and perhaps very much sooner, manufacturing in Ireland will have virtually disappeared. I like to mention that when I graduated from university in 1960, agriculture was still the dominant sector of the Irish economy. Look at agriculture today – it accounts for well under 10% of GNP, and in economic terms is of lesser importance to the country than tourism.

In the 45 years since I graduated, agriculture has been eclipsed by the growth of manufacturing and by services, in the classic pattern of a developing economy. For most people who have grown up in Ireland over the past half-century, manufacturing has been the backbone of economic success.

Those days are numbered, and it is vitally important that we recognise that fact and adapt ourselves to it. With every month that passes, we hear news of factory closures in Ireland. These are not closures of traditional firms, the kind of closures we got used to during the 70s and 80s. Today the factories that are closing are the new ones – the ones that the Celtic Tiger was built on, over the past 20 years.

All over the world, not just in Ireland but across the whole of the western world, there is a massive shift in manufacturing to cheaper countries. Once Ireland benefited from the trend to seek a cheaper manufacutring location – now it has become the victim of the same trend.

On a firm-by-firm basis, we struggle to hold this trend at bay – and in our macro-management of the economy, we struggle to keep our costs as competitive as we can. But if we take a long-term view, we must face the truth: which is that we will never be able to compete with locations whose costs will laways be sharply lower than anything we can offer. In the long run, Ireland simply can't win against competition like that.

To survive in this challenging environment, we can do only two things.

One is constantly to keep pushing up the value chain – shedding all the time the lower-value added activities while concentrating on those areas where we can compete not on crude costs but on the higher level of skills that we can offer.

The other is to realise that in the future our real future will not be in manufacturing at all, but in services.

Already services account for the majority of our GNP, but they don't yet account for a majority of our exports – and that is the crucial thing, because it is only through creating wealth through exports that we can maintain our growth into the future.

Most of you here this evening are, I know, in service businesses of one kind or another -and so this analysis will probably give you a warm feeling. But I stress that the area that will determine Ireland's future prosperity is not just services, but services that are internationally-traded. As a nation, we can only pay our way by exporting.

Over the past 20 years, we have made a bridgehead in the world of international services, most notably in the financial area – and particularly due to the spectacular success of the International Financial Services Centre at the Custom House Docks in Dublin. But it is vital to realise that this is only a modest success, which we must aggressively build on and expand over the coming years. International services must move from being a sideshow into the main event. And we must do this quickly, because as in all economic revolutions we always have less time than we think.

I believe passionately that Ireland can carve out for itself a leadership position in the world of the future – and not just because our present economic strength and success record makes us cocky enough to attempt it. I believe it because I feel that the march of history is at long last moving decisively in Ireland's favour.

When I was growing up, two economic facts of life bounded all our ambitions. One was that Ireland was a small marketplace – at the time the population was less than 3 million, and it was going down. The other was that this small marketplace was remote from other world markets – it was offshore from Britain, further offshore from mainland Europe, and impossibly remote from the other markets around the world.

In the world as it was then, it mattered that we were small. And it mattered that we were in a remote location. But now things have changed for ever. Now, thanks to the information revolution, it doesn't matter how small you are – what matters is how smart you are. And equally it doesn't matter where in the world you are – because in the information society everybody is at the centre of a truly global marketplace.

Consider a small company called Skype, which I am sure that very many of you know about. Skype is one of the companies who have developed the technology to route telephone calls over the internet, and in doing so have radically shaken up the business model for every telecom operator on this planet. Though in an early stage of development and with still quite modest revenues, Skype was taken over last year by the giant eBay company, for a price of over 4 billion dollars.

My point about Skype is that it was not developed in Silicon Valley. In fact, it wasn't developed in America at all, but in Europe. And where in Europe? Not in Britain, not in France, not in Germany... but in tiny Estonia.

This illustrates my point that today what counts is not how big you are or where you are, but how smart you are. And I believe that, provided we can go on developing our people in the right way, Ireland can out-smart the rest of this planet any day of the week.

So if you are thinking of coming back to Ireland, think not about the Ireland of today but about the Ireland of tomorrow. Think about Ireland as a player in a new kind of world, the world of the Information Society. If you have a future in that society, then I suggest to you than you couldn't pick a better place to make that future than in Ireland.

Up to now I have been talking about what has changed, and what is going to change in the future. Let me change gear a bit now, and talk about some of the things that haven't changed at all – and in my view, probably won't change in the future either.

The best way I can do this is to talk about my book, “Crowning the Customer”. I do this not just to plug the book (though I'm quite happy to do that!) but because I think it illustrates a very important point about business success. And that point is that you should never forget the basics.

The book was first published over 15 years ago, and it has been through many successive printings and editions ever since then. There's a separate American edition that has sold heavily for years, and it has been translated into six or seven languages (including Korean and Japanese). So obviously in writing this book I must have done something right.

But let me tell you a funny thing about this book. Before it was published, before I had any idea at all that it was going to be so successful, I worried a lot about the kind of stuff I was putting into it. So much so that I sent the proofs of the book to a friend of mine, whose opinion I valued, and I asked him: “Can I get away with this?”

“Get away with what?” he asked.

I replied:

“What worries me is that every single thing I say in this book is so blindingly obvious. It is plain commonsense. It is also what you will find in any basic textbook about marketing. There are no magic bullets, no new philosophy. Can I get away with that?”

And he said:

“But that is exactly the strength of your book, that it dares to go right back to basics and remind people of their fundamental importance. Most people these days have become so sophisticated that they have forgotten the basic underlying principles that make for business success.”

I wasn't totally convinced at the time, and when we launched the book first of all I still had some trepidation. But he turned out to be perfectly right. People had forgotten the basics, and they welcomed the opportunity to revisit them.

These basics will still be important, I believe, in the new age of the Information Society – whatever exact form that may actually take. I am not going to go through them all now (after all, I want to leave you with a reason for buying the book!) but I will touch on just three.

First is the principle that every business depends on its customers for its survival and its growth.

A one-man business would never forget that obvious fact. But as a company grows, it can lose that single-minded focus on the customer that is the true key to business success. It can become fixated internally, or become fixated with what its competitors do, or become fixated on what the financial markets think about it. All of these things, however useful up to a point, get in the way of the main function of a company: which is to meet a customer's need better and more economically than anyone else can.

Second is the principle that winning customers is not the most important thing.

Making a profit from today's customer is not the most important thing, either. The really important thing is that you get your customers to come back to you, again and again. I believe that you should focus your business around that one big idea: what can I do that will bring that customer back in my door, again and again? In the book I call this “The Boomerang Principle”, and I tell how I learned it as a teenager in my father's holiday camp.

My third and final principle is that the best way to get your customers to come back to you is by getting close to them, by really listening to them.

Again, think of the one-man business. That one man will know each of his customers intimately. He will know what they want, he will be able to anticipate their needs. But as a company gets bigger, this closeness becomes more difficult. People who run companies keep putting up more and more barriers between themselves and the customers who should be the very focus of their business.

For a lot of people, the closest they ever get to an actual customer is by reading about them in a market research report. Others think they are clever by setting up a customer complaints department that effectively shields them from hearing the criticism they need to hear directly. And yet others again think that their own experiences of 10, 20 or even 30 years ago tell them all that there is to learn about how a customer feels today.

If all this seems too elementary to you, I am delighted – you don't need to read my book! You will already be convinced that, no matter how much the world changes, certain basic things remain true – and it is those basics that can be the key to success in a business venture.

I hope that at least some of you will decide to take the plunge and come back to Ireland. Don't say I didn't warn you about what will be waiting for you!