Smart Economy Q & A

Still stuck in the dumb economy? Wise up to the new, smarter world

What is the smart economy?

“A smart economy combines the successful elements of the enterprise economy and the innovation or ‘ideas’ economy while promoting a high-quality environment, improving energy security and promoting social cohesion.”

That’s according to an extract from a speech the Taoiseach gave to the Dáil in July. Alternatively, any foreign direct investment, State enterprise scheme or job creation that falls under the banner of RD can be comfortably labelled as part of the smart economy. (Anything that involves property developers does not.) See also: the knowledge economy, the knowledge society, the innovation society, the Innovation Island, green tech/clean tech, the digital dividend, our only hope.

That clears that up. Why do we need one?

Ireland needs to restructure its economy to target the next wave of economic growth (again, that’s according to Brian Cowen). Having a few bright new ideas, patenting them, incorporating them, exporting them, then setting up as many spin-off companies as possible is the “key to driving economic development and improving living standards”.

Is there such a thing as the dumb economy?

Yes, see Ireland 2002-2007.

Where can I read more about the smart economy?

The Government's mission statement was painstakingly expanded upon in a 105-page document titled Building Ireland's Smart Economy: A Framework for Sustainable Economic Renewal, a document of such historic proportions it was snuck out the week before last Christmas – when the Dáil was on a break and the banks were busy snatching all the headlines. More recently, a 94-page treatise called Technology Actions to Support the Smart Economywas published mere days after An Bord Snip's rather less utopian cost-cutting epic.

OK, but what’s new and where can I get a smart job?

Both documents were criticised for containing little that was "new". The main headline from Building Ireland's Smart Economywas a €500 million innovation fund for early-stage RD intensive SMEs; Technology Actionstouted a potential 30,000 smart jobs from six (mostly pre-existing) projects. So far, the biggest job announcement to be packaged under the Government's smart economy strategy is the 3,700 "green" jobs that the ESB said in April it would create over the next few years.

How can I tell what is part of the smart economy?

The smart economy has smart grids, smart meters, smart homes, smart networks, smart industries, smart energy, smart solutions, smart tools, smart traffic flows – and smart corporate taxation. These are just some of the "smart" things referenced in Technology Actions.

And smart people, right?

Yes. Science Foundation Ireland wants to double the number of PhDs produced by “fourth-level” universities. However, at second-level, only 16 per cent of Leaving Cert students sat honours maths this year, with 10 per cent sitting honours chemistry and 8 per cent taking honours physics. Business groups warned this could reduce Ireland’s attractiveness as a location for RD.

How will all this RD make us any money?

University research labs have generated a number of interesting commercial spin-offs over the last decade, but some commentators have expressed concern at the low percentage of post-doctoral researchers who make the leap to work in industry. In addition, most companies that engage in large-scale RD in Ireland are foreign-owned. How can Ireland ensure the financial benefits of RD don’t simply flow back to the multinational’s country of origin, leaving precious few spin-offs in their wake? Nobody has quite worked this one out yet.

Is it green to be smart?

It's as green to be smart as it is smart to be green, according to the Government, which quotes New York Timescolumnist Thomas Friedman in its Technology Actionsdocument: "You can't make a product greener . . . without making it smarter."

Don’t other countries have a smart economy plan?

Yes. Australia uses the term “digital economy” in its policy publications; the French “smart” strategy is called “France NumErique 2012”; while Malta wants to become the “Smart Island” of choice for telecommunications.

Are there more strategy reports to look forward to?

Yes. Technology Actionswas the first in a trilogy.

How long will it take before our economy is smart?

Over to Brian Cowen: “There won’t be overnight results – but there can be, and will be, successes over the period ahead.” So no dates have been fixed yet, then.