Four conditions for a ‘smart economy’

At a workshop last week on the future of the education system held in TCD’s Science Gallery, Intel’s general manager for Ireland, Jim O’Hara, set out what he argued were the main requirements for economc growth:

‘There are four pillars that are needed to succeed in a smart economy. Having the best education system is one (there is a link between education and the wealth of a nation); having a strong research capacity; having a great 21st century digital infrastructure; and having public policy that supports all of that.’

Ireland can potentially score on all of these, but only if we focus properly on what needs to be achieved. Currently Ireland’s education system is in some crisis, and its various components are not delivering what is needed. On the other hand there are many dedicated and intelligent staff, and there is an understanding of the importance of education; and we have a history (now somewhat lost) of excellence.

Ireland’s research capacity has improved markedly over the past decade, but the government’s target expenditure of 3 per cent of GDP on R&D is very far from being met, and the trend is in the wrong direction. Again, a refocusing is needed – and it will be important to watch funding announcements on PRTLI and Science Foundation Ireland.

We are very far away indeed from having a 21st century digital infrastructure, and we need to plan to achieve it. And we also ned to develop a much clearer public policy framework for a developed knowledge economy, though in fairness some steps that have been taken have been helpful.

Over the next while, I shall be return to these themes. It is time for us to focus, and to do it in a spirit of determination and optimism.

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5 Comments on “Four conditions for a ‘smart economy’”

  1. Vincent Says:

    If Vince Cable continues as on the tack he spoke about last evening the Irish Academics will thank their lucky stars. For the only other English speaking Country that is holding their finance is Australia.
    I wonder which they would prefer, that the R&D budget was lifted or that a mortgage NAMA was begun.

  2. The “four pillars” would be better described as “four elements of the foundation”. Just like any fine house needs a dependable foundation, a sustainable smart economy needs those elements.

    However, this is where I depart from the argument. There is no point investing in foundations if the house is never built. Nobody admires a bare foundation. That is just a testament to bad planning.

    The four elements above do not in themselves make a smart economy, they only set the environment.

    It is only when economic benefit is delivered that all the investment in the smart economy makes any sense. If there is no credible programme to commercialise the “smarts”, then even the investment in creating the environment will be wasted.

    That’s not very smart, is it?

    Raymond Hegarty, intellectual property evangelist.

    • Raymond, why don’t you elaborate a little on your gospel :). You refer to commercialisation to create economic benefit – which of course is part of the ‘smart economy’ concept. How do you want to see that developed?

      • It would be arrogant for me to suggest that I have anything as sophisticated as a “Gospel”. However, I am working actively in global commercialisation of IP, so my eyes have been opened to the possibilities as a tool of economic development.

        I do not want to run down the efforts of sincere people but I regret that very little is being done in that area in Ireland. It is a shame, because Ireland has the potential.

        Whenever policy makers talk about commercialisation in Ireland, it seems to be in the area of commercialisation of academic research. While it is an admirable aspiration, the results are woeful.

        For example Trinity College had a research investment of EUR 71million in 2008. It had a royalty income of EUR 130,000. If the university is being measured on commercialisation success, that is a loss of 99.8% on its investment.

        Of course, I accept completely that there are other enormous benefits from university research. I just mean that they are dreadful at commercialisation. If you consider the EUR 531,000 loss in the Enterprise Centre as a subsidy to the commercialisation, then the return is in negative territory.

        In contrast, they made a profit of EUR 17,000 on the creche. Would it be mischievous to suggest that their childcare model is a better example of commercialisation?

        IP commercialisation is a “deep-pockets” game. This means that it cannot be played at a low level. On the other hand, the returns can be spectacular. I have first-hand experience of companies that make hundreds of millions of Euro of income with small, focussed commercialisation teams. This is the scale of projects that Ireland should be targetting.

        Another example is the composition of state bodies. Intangible assets now make up more than 80% of market capitalisation of the S&P 500 companies. Try looking at the structure of IDA or Enterprise Ireland to see what percentage of senior executives are specifically charged with the intangible economy. If that ratio has changed to 80%, then I will be delighted to eat humble pie.

        It would be the best signal that Ireland is committed to the Smart Economy.

        As you know, such signals are important.

  3. Kevin O'Brien Says:

    There is a very noticable “pillar” missing – a culture of life long learning.

    The “smart economy” will depend greatly on having up-to-date IT skills, whcih requires upskilling every couple of years. It isnt possible to go back to get a masters every five years.

    An equivalent of a Post-graduate certificate or diploma, earned through short summer courses or self study modules would complement the current framework.

    I propose Computer Based Testing to be part of this framework, for any suitable modules.

    There are plenty of examples around that demonstrates what I mean. Although, I have to say, some seem to primarily exist as cash-cows.

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