Since stepping down as president of Dublin City University (DCU) in 1999, Dr Danny O'Hare has had little time to put his feet up and relax.

The founding president of DCU when it opened in 1980 as the National Institute of Higher Education Dublin, he is currently preparing reports for, among others, the World Bank.

Dr O'Hare is also a member of several State boards, although he is probably best known as head of a Government initiative to analyse the growing skills shortages.

Appointed chairman of the Expert Group on Future Skills and a task force on the physical sciences, Dr O'Hare faces enormous challenges.

With unemployment at under 4 per cent, the Republic is close to full employment, pushing up wage levels in some high-tech sectors and undermining the State's competitiveness.

A steady decline in the number of 17 to 18-year-olds and a fall-off in the numbers of students willing to study science subjects are compounding the skills problem. But it's not all bad news, says Dr O'Hare.

"Ireland has been very innovative and positive about the skills issue, while a number of other countries haven't."

Following two published reports from the Expert Group on Future Skills, the Government agreed to allocate €413 million (£325 million) to set up various programmes to address the issues.

"Over the last number of years a very substantial amount of money has gone in to support research and development - something we had not supported in the past," he says.

However, these programmes bring additional challenges. A new report, due to be published shortly by the Expert Group, will highlight a decline in the percentage of graduates moving directly to postgraduate research.

"In order to implement ambitious research programmes you need researchers," says Dr O'Hare. "This is a new issue but it's more at the heart of Government policy now than at any time previously."

A special committee may be set up shortly to analyse how the State can attract more people into research.

This would examine the amount of money a researcher can earn while studying and how foreign researchers can be attracted to work in the Republic, says Dr O'Hare.

There also needs to be an attitude change within the university sector towards research and a more proactive approach towards encouraging students to do research, he says.

"I think too many of our academics were passive in attracting students towards research in the past," says Dr O'Hare.

But even areas that have been targeted by Government with substantial investment over the past few years are posing continuous challenges.

Although, the number of computer science graduates has risen fourfold between 1997 and 2004, there will still be an annual shortfall of more than 3,000 information communications technology graduates over the next three years, according to the Expert Group's new report.

This is despite the recent downturn in the technology sector, says Dr O'Hare.

Changes in demography, as the number of 17 to 18-yearolds declines over the next few years, will accentuate this trend, he says.

"A few years ago we were turning away excellent people who wanted to study engineering in Irish colleges, while in the Netherlands they couldn't fill their places for the same subject.

"So we have to be innovative and face up to the fact that the solution for the future will not lie with the usual answers like creating more college places," he says.

Dr O'Hare says it is "worrying" that just 5 per cent of places at Irish colleges are taken up by mature students compared to a European average of 20 per cent.

"But it is also a positive because it represents an untapped resource," he adds.

Other marginalised groups within society will also be required to fill skilled jobs in the new economy. This will have the dual benefit of addressing the skills shortage and promoting social cohesion, says Dr O'Hare.

"For far too long we have ignored the skills and talents of people who were just born in the wrong area. I don't believe that skill or intellect has anything at all to do with the social standing of people and the skills profile of people from disadvantaged areas is every bit the same as the skills profile of middle-class and upper-class areas."

Company up-skilling will be an increasingly important way to boost skills. Foreign companies are twice as likely to provide opportunities for upskilling as indigenous firms but this should change, says Dr O'Hare.

Other key issues also need to be addressed such as the 15 per cent non-completion for college courses and a sharp decline in the popularity of science subjects.