Thursday, 4 July 2013

A New Industrial Strategy for Ireland?

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.


Brian Woods Snr said...

I posted a comment (a reply to Prof Ó Riain)) earlier. It 'failed' to appear: electronic gremlin or censorship? Not sure.

The Ó Riain paper is useless. Nice, but useless. We have a severe (like pretty bad) economic situation, and I guess it will get worse before it gets worser. We'll see.

Advocating the provision of more taxpayer monies to initiatives which have a low probability of creating employments is not exactly a bright move. How, about banning all forms of tax incentives to anyone - make folk spend (or invest) their own monies.

We need to 'invest' in public works which have little prospect of any monetary returns. Are immune to interference or gaming by trades union. Have nothing to do with Public-Private partnerships. And will 'benefit' as wide a section of our population as possible.

1. A comprehensive energy conservation programme.

2. An armoured sea-wall and promenade across Dublin Bay from Dun Laoghaire to Sutton.

3. Householders sink fresh-water wells (or re-open existing ones) - where feasible.

These are all practical, visible and achievable. There will be positive outcomes. And some employments for ordinary folk.

Seán Ó Riain said...

Sorry Brian I don't see anywhere that you have actually addressed any of the arguments in my paper.

Based on your comment on IE, I think your main problem is with the section on research funding, where I support continued funding of research. However, my key point there is the need to restructure the model of funding and the mechanisms that allow researchers and firms to engage with each other.

For what it's worth, I am skeptical about PPPs and favour getting rid of almost all tax incentives and investing in an energy conservation programme.

You suggest both getting people to spend their own money and investing massively in public works. How do you see the link between these?