New strategy please
The Government held a Global Irish Economic Forum in Farmleigh on 18-19th September. It was a well attended event with roughly 170 high fliers from the worlds of business, academia, politics and culture in attendance. Whether anything tangible comes out of the forum remains to be seen. There was certainly a head of steam being built up by some of the participants to turn the conference into a regular event. But perhaps the two-day forum will prove to be as much of a psychological watershed as an economic milestone. (continues below)
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The political culture in Ireland has for far too long been dominated by clientelism and expediency. There has been very little evidence of vision and long-term planning - apart from the education system. Graduates of Irish universities from over the past few decades have risen through the ranks of some of the biggest corporations in the world. Moreover, there are now as many Irish business people in Asia and Russia as there are in traditional destinations such as Europe and the US.
Well before the Celtic Tiger came to pass, successive governments throughout the 1960s, 70s and 80s had the foresight to invest in second and third level education. Irish universities compared favourably with their international peers. The benefits of that investment were evident at Farmleigh.
The education system has slipped down the ranks of international league tables over the past decade. The former chief executive of Intel, Craig Barrett's comments in Farmleigh that Ireland was well behind where it should be in terms of pumping out science and engineering graduates and investment in research should send alarm bells ringing. The economy has become much more global in nature, notwithstanding the setback caused by the credit crisis. Countries such as this one will have to carve out a niche if it is to achieve sustainable long-term growth. What has become all-too-obvious is that Ireland is no longer cost competitive. Even taking into account the current deflationary environment, input costs such as energy, labour and others are well above what they should be. Moving up the value chain has been invoked by the Government everytime there is a question about this country's economic future. So far this has amounted to nothing more than a series of vague blandishments.
The reality is that Ireland is going to have to move up the value chain in less cost-sensitive and more value added activities. That means it has to become a world leader in research and innovation in life sciences, greentech, information and communications technology and other cutting edge sectors. To do this, there has to be a huge ramp up in investment in research, and a similar ramp up of top quality graduates in the right disciplines. Moreover, one of the attendees at the Farmleigh conference, the former Harvard don and current Chancellor of St Andrew's University, Dr Louise Richardson, argued that education cannot just be about training and plugging short-term gaps in the skills base, it has to be much more holistic. It has to include concepts such as ethics and other disciplines. She has a point. Standards in corporate Ireland fall well short of what will be required in the future.
This presents a catch-22 for the Government. If it under-invests in education, then it will almost certainly weigh on future economic growth. If it commits the necessary funds needed to bring the education system up to international standards, then it will have to make cutbacks in other sectors. In other words, what is needed is a government with a clear mandate to make some tough and unpopular decisions. There is cross-party support for the Lisbon Treaty. There is much less support for Nama, but it is by far the most effective way of dealing with a property sector that threatens to derail any incipient recovery.
This Government should use the next budget as an opportunity to get that mandate. There have been a slew of reports published recently, including the Commission on Taxation and An Bord Snip Nua, that could change the contours of Irish society for generations to come, if implemented. If this crisis is not to be wasted then tough radical decisions have to be made.
There is also an onus on the Irish people to elect the Government they want. In the general election of May 2007 Fianna Fail came close to getting an overall majority. The party, it seems, was elected on the basis of its competence in handling the economy. Then when the economy went into freefall, the backlash from the electorate was redolent of an east European country revolting against a dictatorship that had been foisted upon it. Ireland is a democracy and we do have choices. It's about time that the electorate too started voting with some long-term vision in mind.
From the archives
Read the editor's comment from previous issues.