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Ireland gives itself a challenging self-assessment October 12, 2006

Posted by Tom in Community, Economic Development, Education, Technology, Workforce.

Being a layperson in the world of professionalized economic development, I would like to think that I have a common-sense view of the styles of economic development that our ED professionals practice. In some communities, public-private partnerships (the concepts of which are broadly outlined at this great United Nations website) facilitate the community opening up a sector of the economy for private investment in an economic development effort, subject to regulation and oversight by the community. (The most recent widespread application of this theory came with the Cable Television franchise boom in the 1970’s, but now is again coming into play as municipalities are leveraging private resources to bring broadband telecommunications to town.) In others, like my new hometown, I observe a community that is fortunate enough to have a rigid (dare I say exclusive?) set of guidelines for any economic development. And there are many other approaches.

Perhaps the approach I with which I am most familiar is what I will call the “turnaround” approach to economic development. This approach recognizes that changes in the economy (globalization, technology advances, emergence/death of markets) have forced the economic developer to push toward an entirely new direction in efforts. My “Rust Belt” heritage has shown this to be the case as manufacturers were forced to abandon established production techniques in the 1970’s and 1980’s in response to economic conditions. Those manufacturers that did not adjust…well, they’ve largely failed by this point.

So communities are going in new directions. Using individual examples (that may or may not be reflective of larger trends):

In most of these turnaround stories, civic dialogue has often cited one of the world’s leaders in this area, the country of Ireland. The “Celtic Tiger” saw remarkable change and growth over the 1990’s and early 2000’s, moving one of Europe’s poorest economies into one of its wealthiest. Consider this account:

The story of Ireland’s economic turnaround has been well told. With growth rates on top of the European pile, Ireland is moving closer to full employment. Two-thirds of young people leaving college have either business or technical qualifications and have a myriad of career choices. As recently as the late1980s, their counterparts left Ireland in their thousands and went in search of work, any kind of work, in the UK, the US or beyond.

Today, Ireland can’t find enough skilled people for its hi-tech sector. Ironically, over the course of a decade, the country has switched from being an exporter of knowledge workers to being an importer. Eastern Europeans, Americans, Australians and many other nationalities have filled the vacancies.

Ireland, as the US’s number one choice for overseas investment in Europe, is home to a who’s who of leading technology companies – Microsoft, Intel, Hewlett Packard, IBM, Dell, Apple among others. Analysts usually focus on Ireland’s benign tax climate when examining the reasons behind this influx of foreign investment.

However, its population profile – 55 per cent of the population are under the age of 34 — and its skills base are of equal importance. An enlightened educational regime that has focused on technical and business skills means that graduates are in huge demand. Some even command signing on fees for the privilege of taking a new job.

That flurry of inward investment has spawned a thriving domestic software sector and an enterprise culture that would have seemed improbable a couple of decades ago.

As amazing as this growth is, Ireland is not sitting on its laurels. The Irish National Competitiveness Council offered up a frank assessment of the Irish economy – one that, at first blush, would make you wonder if the Celtic Tiger was a myth:

“Of total business spending on R&D in Ireland in 2003, almost three-quarters were conducted by foreign-owned companies, indicating a weak performance by Irish-owned industry,” the report states.

Although Ireland’s expenditure per capita on ICT remains above the EU average, according to the study, the ratio of computers to students in secondary schools is low. Furthermore, Ireland is still performing poorly overall in the broadband stakes, with too few businesses and households hooked up to high-speed connections.

Although competition exists in the telecoms sector, the report found that the market was still dominated by the incumbent operator — Eircom — with a 70 percent share.

Limited availability of public services online has been blamed in part for the domestic services economy’s use of ICT to promote growth.

Once again, underperformance in science and maths has been raised as a problem, along with the low numbers of PhD students in science. This indicates that the country may not be adequately preparing the workforce to fill skilled jobs in the future as the country moves towards a knowledge economy.

But this appears to be a friendly nudge:

“Overall, Ireland’s business environment remains strong and Ireland’s knowledge infrastructure is delivering huge improvements in the educational attainment of people entering the labour force,” said Forfas chief executive, Martin Cronin.

“To maintain Ireland’s competitiveness we need a consistent focus on moderating price and cost increases, improving the physical infrastructure, developing pre-primary and fourth-level education and achieving a better innovation performance — particularly in the business sector,” he urged.

Again, the successful economies keep looking for ways to become even moreso in the midst of constantly changing times. This is a lesson that all communities, regions, states and countries can learn from. Never – ever – rest on your laurels.



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