This morning, I was an invited speaker at the Fine Gael National Conference in Killarney, at their session on “Getting Ireland Back to Work”.
I am not a member of Fine Gael! At their conference, they invited a few guest speakers from outside of their membership, to give different perspectives on Irish society and the economy.
I was asked to say a few words about the Innovation Taskforce, but was strictly limited to just five minutes, followed by some Q&A. My presentation therefore had to be short! I was asked by a few people present for a copy of my speech, so I have posted it below. Regular readers of my blog are unlikely to find any new messages 🙂
Ladies and Gentlemen, it is a privilege and honour to be invited to speak to you this morning.
We have 430,000 people unemployed.
What are we going to do ?
The smart economy is one part of the answer.
What is the “smart economy” ? Many economists will tell you it is about productivity and competitiveness. I believe the smart economy is really about winning: winning confidence in our public sector, winning with new practical ideas, and winning worldwide with innovative products and services.
Many economists will tell you we need to rebuild our banks, de-leverage our assets and restore competitiveness. Many economists will tell you we need to roll back the clock to the good years of the Celtic Tiger, before our property bubble.
But I believe the world has changed behind our backs.
The US has had its “war on terror” and entered recession in December 2007.
Meanwhile China has quietly gained the confidence of many governments worldwide, built export markets and gained global control over important raw materials such as bauxite, silicon metal, coke, magnesium and zinc. Newsweek just this week noted the rise of the Yuan as an international currency; the Shanghai co-operation organisation as a central Asian NATO; China’s successes and further ambitions in space including lunar landings; its rapidly emerging world leadership in high speed trains, the internet IPv6, and green and clean technologies. The San Jose Mercury just yesterday noted that Silicon Valley may be losing green technology leadership to Beijing.
Craig Barrett, at the Royal Irish Academy a few weeks ago, noted the recent emergence of 3 billion middle class consumers in Brazil and south america; India, China; latin america; central Europe and south east asia.
The environment for the Celtic Tiger has gone. Ireland no longer has a global monopoly on low costs and a low corporate tax rate, nor on a technology skilled and English language competent labour pool.
It seems obvious that the world has changed. It seems clear that restoring our national competitiveness to pre-bubble levels is insufficient. We need to create value rather than low cost volume. If we can create high value services and goods for the international markets, then we will create wealth for our economy and also sustainable employment freed from the vagaries of an international race to the bottom.
How do we do this ? How are we going to accelerate our smart economy, make an immediate improvement in employment and also at the same time build sustainable growth ?
I honestly and sincerely believe that Ireland has a great foundation. We have many multinational companies present in the country, and are thus jealously viewed by competing jurisdictions such as Israel, Singapore and even indeed Silicon Valley. We have our natural resources, including agri-food, marine and – uniquely – our under-used electromagnetic spectrum. We are native speakers of the international business language. We have an international diaspora, several times larger than the combined Israeli and Indian diasporas. Our glass is thus half full. How do we fill the rest of it ?
We have the opportunity to build Ireland as the place in Europe for innovation, new products and services. We have attracted foreign direct investment; now we need to go further and also attract foreign risk capital. We have attracted multinationals through the IDA and world leading scientists via SFI: we now need to go further and attract overseas entrepreneurs to Ireland to augment our own. We can make Ireland the place where all European entrepreneurs are most likely to be successful.
For every multinational we have, indigenous companies can be accelerated and orphan projects built out as new companies. For every new company we build, others will be inspired to try. For every company that is successful, several others will be spun out. If we build this chain reaction, we will get positive feedback, a self-sustaining dynamic engine of enterprise growth and a rapidly expanding job market.
To do all this, we need not increase our national debt. We instead need to re-balance our priorities and put some wood behind the enterprise arrow. Out of all our Exchequer investments this year, less than 5% goes to the combination of the IDA, SFI, Enterprise Ireland, FAS and Forfas – are we serious about re-building our economy ?
I believe we have an enormous opportunity. The Celtic Tiger is over. Now it is the Celtic Phoenix. We need to believe in ourselves; we need to have confidence in our ability; and we need to have pride in Ireland.