WHEN THE Irish business diaspora gathers for a forum at Farmleigh this month to map a future economic direction for the State, much of the focus will be on the creation of a smart economy. In the recent recessionary maelstrom, stability has been the immediate goal. And against this background, discussion of how to put Ireland at the forefront of the next growth phase may seem utopian. Yet, aspirations for a smart economy are commendable: most nations are pursuing a similar goal.
The problem for Ireland is that it is still not obvious where we can secure a clear advantage on the global stage. And – as set out in the latest edition of Innovation magazine which is published with today’s newspaper – the obstacles to success are manifold. For a start, there is no certainty that a smart economy will solve our unemployment problems. Such an economic model ultimately aims to transfer workers from supplying labour to skills and brain-power. But a transformation of this kind could take a generation or more.
It also begs the question: is our education system up to the task? Only 16 per cent of Leaving Certificate students sat maths at higher level this year, only 10 per cent sat higher level chemistry and just 8 per cent took higher level physics. This is hardly indicative of a nation primed to be a leader in research and development. And at university level, the plan to dramatically increase the number of PhDs will improve our research credentials but many current PhD holders seem less than confident about their immediate future.
Academic excellence is not the only requirement. Equally important is the entrepreneurial ability to commercialise discoveries. Ideally graduates would go on to create their own businesses. An associated question is whether any of these indigenous enterprises will have the scale to absorb the costs of failure that are inherently part of the research process. So far we have acquired much of our technology and research advantages on the coat-tails of multinationals. These firms have the capacity to fail. Can – or should – the Government offer a financial safety net to Irish firms?
And in creating the intellectual base for this new strategic direction we must not ignore a core driver in our economy: small local businesses. If there is to be indigenous innovation from future Irish entrepreneurs, then it is these firms that will take centre stage.
It is a complex picture but the issues involved are not new. It is time the Government addressed them.