Nat O'Connor: From the global clamp-down on corporate tax avoidance, the failure of the EU to co-ordinate a jobs-rich recovery strategy and the continued recession and high unemployment in Ireland, there is a need for a serious re-think on the economic policies and industrial strategy underpinning Ireland’s future economic development and recovery.
TASC has just published a series of Industrial Policy discussion papers as a contribution to discussion of central themes in Ireland’s industrial strategy.
Professor Seán Ó Riain provides an overview of the challenges facing Ireland in relation to industrial policy; from the short-term need for job creation, to the longer-term goal of sustainable prosperity. He proposes a balance between private and public activity, with a role for the State in ‘making winners’ through the production of new industry capabilities; the creation of networking spaces and the promotion of ‘conceptions of control’ that are favourable to industrial development.
Professor David Jacobson examines the difference between innovation and the narrower concept of R&D. He points to evidence that the national innovation system in Ireland is inefficient and ineffective.
Dr Eoin O’Malley’s paper questions the received wisdom about Ireland’s competitiveness and the undue focus on labour costs. Instead, he argues that Ireland’s rising and falling shares in export markets is more nuanced indicator of real competitive performance.
Professor Jim Stewart examines the vexed issue of Ireland’s 12.5% Corporate Tax rate and overturns the myth that it provides a ‘cornerstone’ of industrial policy. On the contrary, he argues that a tax based industrial policy will not result in an innovative, research led economy.
Chair of TASC’s Economists’ Network, Paul Sweeney, has provided a compelling calculation of the amount of public money used, directly or indirectly, to support the enterprise sector in Ireland. He estimates this at between €4.7 and €6.2 billion per annum, which is far more than is generally imagined. This raises the question of whether we are getting value for money, or whether these supports should be reallocated.
Each of these papers provides a thematic analysis of a core aspect of Ireland’s industrial strategy. They are intended as a contribution to debate, to encourage a much wider and more critical scrutiny of the future pathway to Ireland’s recovery.