Saving the idea of the ‘smart economy’

When  two years ago it became clear that Ireland faced potentially dramatic economic problems as the property market collapsed, the government rightly initiated an analysis of how the country could be regenerated quickly by redirecting the economy from property transactions and domestic consumption to knowledge-based exports. The outcome of this analysis was the paper Building Ireland’s Smart Economy, which has provided the blueprint for this country’s renewal. In chapter 6 of that document the government committed itself to the further development of research, R&D and world class higher education. Many of these objectives were re-affirmed in the recent report of the Innovation Taskforce.

The problem for us now is that the policy imperatives highlighted by the government are being fatally undermined by the absence of any kind of resourcing strategy for the institutions that alone can make all of this happen. As the government has struggled with bringing the public finances under control, it has treated higher education and research just like any other public service, and has cut it and placed major operational constraints on it. Indeed the cuts applied to higher education now look larger than those applied to some other services. And as we have heard this week, these cuts are now set to continue and potentially get worse.

Today’s very timely editorial in the Irish Times underscores all this. As a country, we need to understand that we cannot be a world class innovation and knowledge society unless we are ready to provide the means. We cannot educate students to international standards of excellence while funding higher education with resources more appropriate for a developing country. We cannot be a magnet for R&D while cutting research funding – Ireland’s R&D expenditure is now half of what the government itself has said it should be, and it’s falling. In fact, the only firm policy on higher education resourcing that I can easily identify is the apparent imperative financially to protect the children of wealthy voters; but even they will be educated in deteriorating buildings that are inadequately equipped with student-to-faculty ratios that are unacceptable by international benchmarks.

An innovation culture is not achievable on a shoestring. A smart economy doesn’t materialise just because we call for it, we also need to pay for it. It is high time to align practice with rhetoric.

The government has in fact been good at identifying the way forward, and as a country we now have some excellent policy documents. But however hard it is to find money in our current circumstances to make these policies real, we have to do it. There is no viable alternative. There is no turning back to low value manufacturing and call centres. We are a smart economy and society, or we are nothing. It’s time to face that reality.

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18 Comments on “Saving the idea of the ‘smart economy’”

  1. enda Says:

    This really just shows how vapid the whole ‘smart economy’ schtick from FF actually was. It was merely a sop, something positive to say to the public which made a nice press story. Constantly repeating the word ‘innovation’ does not a smart economy make.
    The ironic thing is that there are good ideas here, and probably good people were involved in creating this report, but at the top level of this government there is just a big hole. Time and time again, we see such a lack of joined up thinking and an appalling lack of judgement. It really does seem as if the tribal instinct of immediate political survival is the only thing of consequence to FF. I know it shouldnt, but their stupidity never ceases to amaze me.

  2. colummccaffery Says:

    I am concerned that debate about Irish education is becoming too confined to funding and more particularly to the campaign for a return to fees. While this is not an accusation I’m leveling at Ferdinand, it may be part of the bizarre tendency to believe that there are simple solutions to major problems.

    I’ve argued before on this blog that we have not been realistic about the changes wrought by information technology and what they mean for education. Indeed some in Ireland would like to see education head off in precisely the opposite direction to that required. If this is of interest, I’ve a few thoughts here
    and here
    (God, Am I becoming a self publicist??)

    On the wider front, there is a failure to appreciate that while innovation, enterprise and ideas are important, they are not sufficient. Have a listen to Will Hutton:
    It’s not necessary to agree with him but here’s someone who recognises that thought matters and that complexity cannot be avoided. An over reliance on silly, lazy liberal dogma will end in disappointment. Good business ideas, new products are important and entertaining but “Dragons’ Den” is not development policy.

    The very language necessary to getting this right is devalued as words are reduced to meaningless incantations. Documents are “retro-sprinkled” (See, I can do it too. It’s easy! I mean the words are added to a late draft.)with “innovation”, “entrepreneurship”, “knowledge economy”, “information society”, “smart”, “robust” etc in the belief that they are required to lend credibility.

  3. John Says:

    Colum – just a note on your opinion that “thought matters and that complexity cannot be avoided.”

    I hope you’ll agree that good analysis can reduce apparent complexity, and that being happy with complexity is a weakness rather than a strength. My experience is that things generally appear more complex to the less capable.

    I hope that the “smart economy”, when it comes, removes complexity – unnecessary jobs for example.

    Just think: if we had the opportunity to start over, from scratch, how much would we keep and how much would we chuck out?

    I can see whole layers that would go if we were really smart.

  4. Sally Says:

    John, That’s not what they mean. They’re talking about a bit more “money” to do “R&D” to make a few minor tweaks here and there and “stimulate” their “economy” (as if the economy had a will of its own) and keep their “jobs”. Remember this is still the early part of their 21st century and that’s the way people thought then.

  5. John Says:

    So they thought that in order to get this economy thing generating more of this money stuff it needed to be fed with more of the money stuff itself.

  6. Sally Says:


  7. John Says:

    And where were the people in all this?

  8. Sally Says:

    Well their role was to act in such a way that the economy felt “confident” enough to “give” them “jobs”, many of them as “economists”. The economy would then give them a little bit of the money stuff to buy back some of the “commodities” that they had themselves produced.

  9. John Says:

    Amazing. What were these “commodity” things?

  10. Sally Says:

    Well they started out being useful things like potatoes, bathroom suites etc. Then came insurance, followed by each other’s debts. Then, just before the collapse, what they called “knowledge”, much of it about stealing autos and shooting each other as far as I can make out.

  11. John Says:

    And how was all this resolved?

  12. Sally Says:

    They sent all the economists to planet zog to think about more complex ways to grow potatoes, install bathroom suites etc.

  13. John Says:

    Whatever happened to planet zog?

  14. Sally Says:

    According to the archeological evidence they lasted about three months but in that brief period had all built up solid portfolios in potato futures.

  15. John Says:

    Any sign of a bathroom?

  16. Sally Says:

    Not a one.

  17. Jilly Says:

    Great stuff, John and Sally!

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