I think everything is about balance in the economy and also there is something that could be called a critical mass. By critical mass I mean professional groups, i.e. builders, drivers, engineers, doctors, etc. If critical mass suffer job losses then you would like to find some other space for these professionals. So you need to find a new opportunity for the redundant people. On the contrary to boost certain new sector the government needs to be able to build the critical mass consisting of enough talented people. Here the problem comes: not every redundant builder or line operator could become a high-tech industry engineer or eco-friendly energy producers employee. This is where I see some challenge. However there is a bit of optimism as well: Ireland is not populated by that many people, so it’s a way easier to transform economy of 4.5 milions rather than 40 (I’m Polish and know how slow the reforms could be in a bigger country).

There are many considerations that need to be addressed in Ireland before we could ever hope to move towards the kind of economy you have in mind.

1. How would you address the brain drain of qualified technical people, salaries for ‘knowledge ecomony’ workers are below those for comparable business and administration roles, from technical disciplines into other, better rewarded sections of the economy?

2. Where is the venture capital supposed to come from? Enterprise Ireland persists in providing substance grants instead of risk taking with backing which revolutionise the firms it supports. The enterprise support structures are mired in civil service, low risk taking, retention of maximum control attitudes which leave their dependant partners limping along like clients.

3. Are you expecting stagnant academic institutions, with poor publication and research records, to drive or support this knowledge ecomony when industrial interaction is only tolerated as a source of funding?

The answers to these issues individually is straightforward but the likelihood of an Irish government showing the dynamism to tackle all of these seems improbable.

Your right. Ireland cannot continue to rely on attracting MNC’s with low taxes and a smart productive workforce. As for the delusional obsession on property over the last few years, enough has been said and the final gory chapters are being written right now. Dues must be given for Ireland’s many successes but a focus on the strategies that have worked in the past is not going to work moving forward. In the words of Andy Grove, “Only the paranoid survive”. As with companies so with economies and cultures.

Ireland and the world have changed dramatically since the 70′s and 80′s when the foundation stones for the current success was laid. I just came across this graph in biz week that maps international student performance against affluence. (http://images.businessweek.com/ss/08/02/0214_numbers_education/image/science.jpg) Ireland is sticking out as rich and not too educated in the sciences. We are behind every major industrialized country on the graph. The other 2 countries that stick out of the main clusters are Poland and Czech Republic except they are the inverse of Ireland – not so rich but smart in the sciences. Now if I am sitting in my corporate suite in Silicon Valley making strategic plans for locations in Europe where would I choose? So we need plan B as David says.

David, you also touch on something about the nature of the Israeli entrepreneurial drive. There is something to emulate in relation to how they nurture a start-up environment. It is a country and people to watch and to understand. The number of Israeli start ups in the US are amazing. I am with my 2nd. The 1st went bust with the big dot com blow up. I met one of the co-founders recently and he is building his 2nd company. He had built an idea in to 200 people and a high valuation. He could have easily got a senior level position with a tech company. No, he decided to go back and start from scratch all over again.

There is a mentality. Now, some of the comments saying that we could not do the same are based more on political biases than actual real observations. When developing policy we should look for the best and understand why a company/country succeeds rather then jumping to conclusions. If anything Israel is far less cohesive than Ireland. Beside the huge Israeli-Arab population there is a the religious jewish/secular divisions. So saying that Israeli “start-up” success is based upon cheap labor, $$ from uncle sam or because it is more homogeneous is letting ourselves off the hook. If anything, if there is any ethnic group more than the Israels that can pull on the good will of the Americans it is the Irish. Why do you think we have so many US MNC’s to begin with.

American high-tech companies did not invest till our politicians/policy makers had something to sell – low tax rate, access to Europe, smart lads and lassies etc etc. The same is true for access to capital. If Ireland is brimming with ideas and becomes know for creating products/ideas/whatever stuff the market wants then the capital will flow.

Ireland was a musical backwater till U2 decided to stay. Then all the music execs put Ireland on their maps. U2 and all the other bands/writers/artists have made it without gov support. It is a cultural thing. It is something we do well – tell stories. For a very small country we are over-represented in the literary arts. We are entering a time where entertainment is fluid and can be distributed seamlessly. We tell stories. There is a world looking for stories. It is a huge industry that is based on intellectual capital and therefore it can be easily defended. TV set production was one of the 1st industries to move out of the US. The content is still very much created and controlled in the US.

And Ireland probably does not need foreign capital to kick start things as it has loads right now. It would be interesting to compare the amount of Irish $$ put in to VC funds versus the amount that went in to buying property around the world. It would be a lot more interesting to see those $$ go in to madcap ideas. There will be a lot of failures but that is the name of the game. It is also a lot more fun. We only need a few winners and the return will be far greater than rental income on condos in Florida.

on March 14th, 2008 at 3:43 pm

Jonathan, you should have been an accountant and an advisor to Bertie and Cowen. We’re lost without you! Why not just catch the thieves that don’t pay their tax and try and stop the government from squandering all our money on voting machines, bogus asylum seekers etc. The only thing is we would need somebody to spend the money wisely, that could be your job!

Minister for Spending Money Wisely…..I like the sound of that. I propose John Q. Public for Minister for Cracking Down. The two of us could run the country nicely. :)
I don’t know if I could have been Bertie’s accountant though. Whoever he or she is, they are seriously creative in ways that are beyond mere mortals. lol. And I know nothing about accounting.

Do you think I could get a grant?