It appears so. While Ireland still has one of the lowest unemployment rates in Europe with less than one in 20 of our two millionplus workforce left idle, the jobless total has been rising recently and breached the psychological 100,000 barrier late last year. At the same time, unemployment is dropping among our main competitors in Europe, particularly in the new EU member states such as Poland. It's not so much that we're slipping, but that our competitors are now doing as well as we've been doing for the last decade.

Why are these 'blue chip' companies leaving, and where are they going?

Abroad to developing countries, where they can source cheaper labour. Kieran Mulvey, chief executive of the Labour Relations Commission, said that of 10 disputes over forced closures and redundancies presented to him last year, four were off to China, two to Central America, two to north Africa and two to eastern Europe.

Described as "regime shopping", this is where multinationals put pressure on a government - usually in a developing country - to deregulate the labour market and become more 'multinational friendly'. "In these islands, we have to be more conscious and fearful of the nature of the rapidly intensifying global competitive labour market, " said Mulvey. "It is relentless in a sometimes-brutal marketplace and it is truly universal. Whereas Ireland has long been a preferred destination for relocations or new starts, particularly in the ICT, pharmaceutical/medical products sector and in services, it is now haemorrhaging low skill and labour intensive manufacturing IT and electronic production facilities."

But what have we done wrong?

Let's be honest - the main attraction for the multinationals starting to come to Ireland in the grim 1980s was the highly generous tax regime offered by a government desperately trying to stave off bankruptcy.

We had a young, qualified workforce eager to work and a decent education system. But since then we have been dazzled. Wages have risen well ahead of our competitors and, more importantly for the multinationals, ahead of productivity. Our educational system is showing signs of stress while much of the promised infrastructural investment in transport, roads and broadband has been delivered late and over budget. Concurrent with our stagnation, sleeping giants such as China and India woke up and passed us out on the blind side. India, for example, is now considered the hothouse of the IT and technology sector - a mantle we would have liked to believe was ours not so long ago.

Thomson Scientific, for example, is quitting Limerick for India. The US-based software company cited the need to reduce costs in the face of increased competition as the reason.

But aren't there still plenty of jobs to absorb the losses?

Unlike the panic which gripped the country when Digital Ireland closed down in Galway, leaving hundreds without the prospect of ever working again, most of the workers in Cork, Limerick and Dublin will find alternative employment. But the jobs will not be as good - and they certainly won't be in manufacturing. According to the latest Fás labour market commentary, manufacturing continues to be the only sector which is consistently shedding jobs. It dropped another 6,000 in the third quarter of last year and now employs 288,000 people, or one in seven workers.

Where are they going to get work?

Services and construction. These two sectors have fuelled the jobs boom on their own, absorbing the thousands of migrant workers from eastern Europe who have flooded into Ireland since they joined the EU in 2004. Two out of three jobs in Ireland, or 1,351,000, are in services, and this has been rising by around 75,000 jobs a year.

Construction employs 263,000, distributing one in eight pay packets around the country.

What's the problem?

There are clear signs that the jobs boom in construction is starting to bottom out, limiting its ability to mop up the thousands of jobs haemorrhaging from manufacturing.

Construction accounted for 19,000 additional jobs last year. But this year, Fás predicts a slowdown and says jobs growth will be "virtually zero". This leaves services to shoulder all the redundant workers from the other three main sectors - agriculture, manufacturing and construction. The good news is that Fás predicts services will perform strongly again this year, creating an additional 72,000 jobs in 2007.

The bad news is this may still not be enough to absorb the mounting job losses in manufacturing and the slowdown in construction. This year, Fás also predicts an increase in the number of migrant workers coming to Ireland to find work, with 93,000 expected - up from the 89,000 who arrived last year. They will now only find work in the services sector. But the services sector cannot continue to expand at its current rate. To a large extent, the services sector feeds off a highly productive manufacturing sector.

So what can we do?

There is no way that, having enjoyed such wealth for the last decade, Irish workers are going to revert to low wages and jettison their hard-fought-for labour protection laws. Instead, current government policy seems to be that we cannot compete against the likes of China and India and instead should try to corner the high-skills jobs market. But to do that, we need to radically improve our economic infrastructure, pour more cash into our education system, and upskill and train our workforce. Last month, finance minister Brian Cowen announced that as part of the government's Euro182bn National Development Plan, over Euro28bn will be invested in the country's 'human capital'.

This will include investment in education at all levels, upskilling and retraining of workers over the next seven years. But the initiative has come too late for the workers in Cork, Limerick and Dublin and the thousands more working for multinationals who are likely to see their jobs move east.