Posted tagged ‘‘Smart Economy’’

Four conditions for a ‘smart economy’

July 16, 2010

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.

Sliding towards the Not-So-Smart Economy?

July 7, 2010

Earlier this year I pointed out that, notwithstanding Ireland’s commitment to spend 3 per cent of GDP on research and development, our actual performance does not measure up to that target. In fact, according to my calculations Ireland’s R&D expenditure now lies at around 1.4 per cent of GDP, and it is falling. Even assuming that the Government is still going to fund the next cycle of the Programme for Research in Third Level Institutions (PRTLI), which I believe it will, the trend will remain unsatisfactory.

A key worry right now is that funding for Science Foundation Ireland (SFI) is being affected. A report in yesterday’s Irish Independent newspaper indicated that SFI has advised the government that 950 research posts will cease to be funded over the near future due to lack of funding. There will be very few newly funded research projects, and some new research themes (including the important theme of sustainable energy) will not after all be resourced.

I am aware of the fact that in some circles the funding for research is being questioned, and it is suggested that some or all of this should be diverted to other public funding causes. What needs to be understood, however, is that low-tech employment will not be the engine of growth for Ireland; we are still too expensive for that. Research and development is the basis on which we can expect to attract foreign investment and domestic start-ups. Without that, we have very little too offer.

Right now we have rhetoric about innovation which is not reflected in actual decisions. This is a dangerous game.

Feeding the ‘smart economy’

June 30, 2010

Nearly two years ago the Irish government published a paper (Building Ireland’s Smart Economy) in which it identified what it called the ‘smart economy’ as the best support for economic regeneration and an escape from the deepening recession. In the paper, the idea of the ‘smart economy’ was explained as follows:

‘The Smart Economy has, at its core, an exemplary research, innovation and commercialisation ecosystem.’

Leaving aside for a moment the increasingly irritating use of the term ‘ecosystem’, the general concept is fair enough: that research, innovation and commercialisation come together to create new economic activity. This happens in two ways: more directly but with fewer short term benefits, the intellectual property from some research can be turned into economic value through licensing and spin-outs; and secondly, high value research linking with industry can generate conditions in which both foreign and indigenous investment may create jobs.

But one issue which perhaps has not received all the attention it deserves is this question: which areas of research are relevant here? Could it be any area at all, or do we need to focus on a small selection (given that we are a small country and cannot do everything)? And if we need to focus, which areas should attract our attention?

The ‘Smart Economy’ report did not itself specify exactly where the focus should lie, but it did make frequent references to areas of research that would align with industrial priorities, together with the provision of transferable skills from other disciplines. On the whole it is assumed that Ireland’s focus should be on the areas highlighted by Science Foundation Ireland – i.e. biotechnology and ICT and, more recently, sustainable development. But is that adequate?

Last weekend the Sunday Business Post published an article by TCD Professor of International Business, Colm Kearney. In a nutshell, he argues that the focus on the areas identified by SFI and in other reports is not necessarily right. In particular, he takes the view that the arts, humanities and social sciences (as well as other science areas that have not been prioritised nationally) have lots to offer that could benefit Ireland’s ‘smart economy’ and assist in regeneration. And this is what he concludes:

‘Ireland’s knowledge society must be broadly conceived. It will be inhabited by committed citizens who have access to a broad range of artistic, cultural and recreational opportunities in a sophisticated and tolerant society.’

It is certainly tempting to agree – and it is clearly right that a broad range of disciplines and areas of expertise will help to educate skilled graduates and develop vital benefits from research. But at the same time, Ireland needs to offer a highly focused set of key areas where it can add value to international and local investment. We cannot possibly compete with the best in the world if our priorities are too thinly spread. In fact, it seems to me that the SFI priority areas (the result of a Technology Foresight exercise in the late 1990s) are far too wide now. On the other hand, it is right that we should look more closely at the arts, humanities and social sciences to see what contribution they can make, either in their own right or in collaboration with other disciplines.

The biggest risk we face is that this whole debate has simply been taken over by clichés. ‘Smart economy’, ‘innovation’, ‘knowledge transfer’, ‘ecosystem’ – all of them no doubt ‘going forward’ – have been so over-used that in many ways they are now meaningless. That is why a restatement of priorities has become so important, because it forces us to address matters of substance rather than just churning out slogans. We must move, because we have an economy (and a society) to save.


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