The blame game has started. One of the more significant snippets of news to emerge last week was IDA Ireland's explanation for why Cavan lost the 800-job Teradyne project. Sources at the agency laid the blame squarely at the feet of the planning process. They argued, with some justification, that if the US technology group's investment had not been delayed by the labyrinthian planning system for 12 months, the project would have been so far advanced that it would not have made sense for Teradyne to pull out. They compared Teradyne with Xerox in nearby Louth, which is persevering with its Irish expansion despite cutting costs by $1 billion (€1.1 billion) worldwide. Xerox was committed to the Dundalk plant by the time the cold winds of recession started to blow and it is now central to its future plans for Europe, explains the IDA.
The message being sent by the IDA to its political masters was a simple one. The agency was doing its job, but the other player on the team - the Government - was falling down on its responsibilities.
It is not quite that simple, needless to say. The Department of the Environment - which is responsible for the planning process - is quick to point out that the Planning Act 2000 allowed for the establishment of Strategic Development Zones (SDZ) which were meant to speed up the planning process. Once an area is designated an SDZ, any development that meets the relevant criteria would be fast-tracked through the planning process, with a successful outcome pretty much guaranteed.
The legislation was enacted at the end of 2000, but almost a year later the IDA has still not availed of it, the Department correctly points out. The current IDA position is that it is "in discussions on the identification of the most suitable locations and on the possibility of having a number of such sites designated". No reason is given for the delay. Admittedly, an SDZ would not have saved the Teradyne project. It was a one-off development and subject to the normal planning process, which takes a minimum of three months - assuming there is no appeal to An Bord Pleanβla. Setting up a SDZ in Cavan would have taken even longer.
This does not take away from the fact that IDA has been very slow off the mark in using the SDZ legislation to remove an unnecessary obstacle in the battle for inward investment. Given that the designation process takes at least nine months, none of these zones is now likely to be established until the end of next year. Fortuitously, this is around the time the IDA expects to see a recovery in the US economy and a consequential pick-up in inward investment by US multinationals. Management failure may yet end up looking like good strategic planning.
One would still have to ask if the organisation has not taken its eye off the ball. Perhaps a little too much time was spent during the boom years engaging in navel-gazing about future strategy and not enough time focusing on the nuts and bolts of jobs creation.
In a recent speech, the chief executive of the IDA, Mr Seβn Dorgan, set out the long-term strategy that is the fruit of a debate that took place inside and outside the agency in the last few years.
The heart of the strategy is that "in time, Ireland would be, in areas we have not yet clearly identified, the equivalent of Silicon Valley for ICT, the Nordic countries for mobile telephony, Hollywood for films, Minnesota for medical technology etc". Needless to say, this is of very little comfort to someone in Cavan who thought they might get a job in Teradyne, and would now like a job with someone else.
To be fair to Mr Dorgan, an organisation like the IDA needs a long-term strategy - and his has merit. If it is followed, Ireland will move away from trying to grasp bits and pieces of investment from the market leaders in numerous industries to being the home base of market leaders in a couple of sectors. The various strengths and weaknesses of the Irish economy indicate that these will have to be industries in which location and low-cost manufacturing are not vital prerequisites. The best bets are in the areas of bio-medicine and software. The goal may be long on aspirations and short on specifics, but its supporters in the IDA would argue that the strategic plan adopted 10 years ago was equally vague, but turned out to be one of the fundamental building blocks of the economic boom. Cynics would argue there really was no master plan, the IDA just went out and grabbed whatever investment it could.
Mr Dorgan's vision was clearly born in the economic boom - now fast disappearing - when we could afford the luxury of a debate about what type of industrial development we wanted. At its heart is an IDA that is not primarily focused on job creation, but equally, if not more interested, in shaping the industrial base of a strong economy. This subtle change is reflected in the new mission statement adopted by the organisation: "We will win for Ireland, its people and its regions, the best in international innovation and investment so as to contribute to the transformation of Ireland to a world-leading society which is rich in creativity, learning and personal and social well-being". It was clearly conceived at a time when the economy was predicted to continue growing strongly for the foreseeable future and job creation could pretty much be left to look after itself.
Compare it with the mission statement in the 1994 annual report, the last time the Irish economy was faced with growth rates as low as 2.8 per cent: "To win new investment projects into Ireland from foreign companies. To stimulate and support expansion of the existing base of overseas-owned companies in Ireland. To achieve the most effective distribution of development across the country". Not a mention of "world-leading society". If the current slowdown proves short lived the IDA's new strategy may well turn out to be an appropriate one. A few more Teradynes and there may have to be a hasty rethink.
jmcmanus@irish-times.ie
