Investing in the knowledge economy

30-06-2006

by Ciara O'Brien

The Government has announced a plan to develop technology in Ireland, but is it enough?

Over the past few years, it has become clear that the future of Ireland's economy lies not in the traditional manufacturing sector, which is currently haemorrhaging jobs, but in the more high tech sectors.

The Government's new science strategy is designed to move Ireland that bit closer to becoming a knowledge economy -- something it has been quite vocal about in recent times. With an increasing number of factories shutting up shop on these shores to move to lower cost economies, the move certainly seems a prudent one.

Although the Government may be vocal about its intentions, the truth is that those within the high tech industry have long been calling on the Cabinet to help redress some of the obvious deficiencies within the system.

There are several things holding Ireland back as a knowledge economy, not least the concern over the diminishing numbers of students opting for scientific and engineering degrees. Infrastructure is another hot button issue, with the lack of broadband access of particular concern.

The Government recently came under some heavy pressure from industry groups who pointed out that building a strong IT infrastructure was as important in the new National Development Plan as transport was in its predecessor.

Northern Ireland, for example, has 100 percent broadband availability, thanks to some intervention by the Government and effective partnerships with telecoms firms. The Republic, on the other hand, is still struggling to get broadband to rural areas. Meanwhile, the lack of graduates in science and engineering subjects could impact on Ireland's competitiveness in the future.

It seems that to some extent, the concerns have been noted. As part of the new National Development Plan, the Strategy for Science, Technology and Innovation, which covers the period from 2006 to 2013, provides for some EUR3.8 billion investment in the sector. This includes Government spending of some EUR2.7 billion up to 2008 on third-level research and the private sector.

The plan is also to double the number of postgraduates, aiming for 1,000 PhDs every year by 2013. The new strategy also has a particular focus on R&D: grant supports will be made simpler, while technology transfer will get increased support, as will industry-led networks. It is also planning to get some 1,000 Irish firms involved in R&D, with the aim of boosting spending to 2.5 percent of GDP by 2013. Currently it stands 1.4 percent of GDP.

The plans also highlights the importance of competence centres, which will be developed in conjunction with the development agencies, to transform advanced research into technology that can be commercialised.

The announcement has, in general, been welcomed, with Dr Maurice Treacy, director of bioengineering and biosciences, Science Foundation Ireland, describing it as "ambitious". Other quarters have also been complimentary about the plan.

"It is an impressive statement on the part of the Government that demonstrates an understanding of what is required to create a knowledge economy and a commitment to deliver the conditions and the capabilities that will make it happen," said John Gannon, Association of Information Managers Ireland.

However, is it simply a case too little, too late? For some time now, industry groups and think tanks have been warning of the impending skills gap. A declining number of students are taking up scientific degrees in Irish third level colleges, not enough to fulfil the employment requirements of the future.

"As a strategy it is comprehensive but we look forward to learning more of the details," said Gannon. "In particular, we are anxious to see continuing and increased provision for accessible high quality infrastructure and education, so that every business, irrespective of size, and every consumer, irrespective of means, are equipped and skilled to get the full benefit of technology in their lives."

At present, Ireland enjoys a large inflow of funds from sources such as US multinationals like Microsoft, which has seen its operations change dramatically over the past 21 years, and now offers jobs in sectors such as business processes, rather than "box building".

The opening of a new STG70 million science park in Northern Ireland shows the importance with which science and technology is held in other economies -- and the amount of investment it can attract simply in a supporting role.

For his part, Gannon does not believe that Ireland has a massive amount of ground to make up, and warned that it is not the responsibility of the Government alone to ensure that technology and science advances in Ireland.

"The knowledge economy is a multi-faceted concept, and we are well advanced compared to other countries in many respects, less so in others," he said. "We need to be careful though not to talk ourselves into believing that we are behind or that we might have a problem where one doesn't actually exist. In as far as we are behind in some aspects, yes absolutely we can make up ground, but it is not about government alone. Both commercial and civic society have a role to play and a new element of partnership is required if we are all to benefit from this investment to the extent that should be possible."

Although judgment on the plan's usefulness may have to be reserved for some time yet, the general consensus is that it clearly a step in the right direction -- for the Government and the economy.