In the 1980s Ireland captured 2.5 per cent of United States investment in the European Union; in the late 1990s we have been capturing an average of 10 per cent. Of the 30 per cent of the working population employed in manufacturing industry, nearly half are employed in foreign firms.

Foreign firms account for two-thirds of industry's output and more than three-quarters of industrial exports. Much of this investment is in high-tech industries, which account for more than 50 per cent of manufacturing employment today compared to under 25 per cent in 1970.

In the 1980s there was a hot debate about whether Ireland's development should or could be focused so narrowly on attracting foreign investment. In the Telesis report published in 1982, overseas consultants questioned this strategy of seeking mobile investment. It had then been pursued for about 20 years and, with high unemployment, people were impatient to see better results.

Telesis and its supporters argued for a greater concentration on building internationally competitive Irish industry. They pointed out that much foreign investment in Ireland at that time was low-skilled, that it sourced few inputs locally, that high-level functions like research and development (R & D) and marketing were located back at the parent company and that these companies were using Ireland as a tax haven in which to boost output and profits artificially to avoid tax elsewhere.

Some of the most ardent supporters of this analysis in the 1980s are surprisingly accepting of the direction of industrial policy now. Paul Sweeney (a SIPTU economist, now an independent consultant), in his optimistic book on the Celtic Tiger, argues that in the era of globalisation only the very biggest countries can escape dependence on multinational companies.

"What defines a successful Irish company if most of its activities take place overseas or when its owner could sell it to a multinational overnight? This may be a negative argument but it is a realistic one in a world where calls to patriotism and national self-sufficiency echo hollow."

Eoin O'Malley, an ESRI economist and analyst of industry, also formerly a strong supporter of Telesis, is today broadly supportive of the direction of industrial policy which in his view took some of the Telesis criticism on board in the 1980s.

"There were significant changes in the 1980s in industrial policy. Industrial policy became more selective and concentrated on improving our weaknesses. It was a watered-down version of Telesis, not a dramatic shift but a gradual one."

Industry has staged a recovery since the late 1980s. After entry into the EEC exposed Irish industry to competition in 1973, employment in indigenous industry fell from 150,000 to a low of 105,000 in 1988 but then rose to more than 124,000 in 1999. Employment in foreign-owned firms rose from 75,000 in 1973 to begin to converge with indigenous employment at 113,000 in 1999. The growth in employment by foreign firms has been most rapid in the 1990s.

The improvement in indigenous industry since 1987 - in employment, output and exports - has been "without historical precedent in 20th century Ireland", according to O'Mal ley. This growth has been achieved in the face of international competition, whereas the industries which lost their jobs from 1973 were those which had grown up under protection.

In addition, its growth rate in the early 1990s, when domestic demand was not as strong as now, was close to twice as high or higher than the industrial growth rate of the EU or the OECD.

O'Malley attributes this improved performance to pay moderation under the national agreements, the higher level of education in the population, improved infrastructure resulting from EU support, stable public finances and the adoption in the 1980s of a more targeted industrial policy with eventually a specific support agency for Irish-owned industry.

The rapid growth of foreign-owned manufacturing, itself influenced by many of these factors, has also been key to the improved performance. Irish firms have grown as suppliers to foreign firms and then branched out into exports. Their managers and entrepreneurs have frequently worked for multinationals.

While O'Malley paints a generally positive picture, an element of the Telesis critique can still be sustained. There is still no clear example of a strong and competitive indigenous manufacturing sector. The debate about the direction of industrial policy has not gone away.

Meanwhile, the quality of the foreign firms themselves has improved greatly since the days of Telesis. Studies of the foreign-owned sector today have described it as high-wage and R & D-intensive.

Foreign firms are also more closely linked to the Irish economy, sourcing many more inputs locally than they used to and thus generating many more indirect jobs.

The average life of a manufacturing job in Ireland is 13 years in foreign industry and 10 years in Irish industry, compared to 18 in the US or Britain. Foreign firms export 89 per cent of their output, Irish firms 36 per cent. Average wages in foreign firms are 25 per cent higher than in Irish firms.

Technical and administrative staff comprise 19 per cent of their workforce compared to 14 per cent for all manufacturing jobs.

Most encouraging of all, business spending on R & D as a proportion of GDP had already risen to the same level as the Netherlands and Denmark by the mid-1990s, a rapid catch-up on 10 years previously.

How vulnerable then is Irish industry? Is it over-dependent on the computer industry, for example? O'Malley suggests not.

"Foreign investment is fairly concentrated in a number of sectors but it is growing and diversifying all the time. Most of the fast-growing sectors in the world economy are represented, not just computers but also telecommunications, pharmaceuticals, medical instruments. Software is diversifying."

His ESRI colleague, John FitzGerald, points out: "Scotland got 100 good years out of shipbuilding and Northern Ireland 100 good years out of linen. One cannot expect the current high-technology industries which have been so important to Ireland's success to survive as long, but I think we have at least a decade or so to go. It is important not to overemphasise one or two sectors. Education must prepare people for work in a number of different sectors in their lifetime."

It remains the case that the growth in foreign investment in Ireland has coincided with extraordinary growth in the US economy. Its continuation at these levels cannot be taken for granted, nor indeed could we supply the necessary workers if it did.