BRITISH ECONOMIST and public intellectual Will Hutton was critical of the recent Innovation Taskforce report when he delivered a public lecture in Liberty Hall in Dublin this week, writes COLM KEENA

The report “does not go any way far enough”, he said. “The first page of the report talks about tax breaks for entrepreneurs. We are going to need a lot more than that.”

Referring to the dire state of the Irish economy and the “scarcely credible” contraction it is going through, he said investment in innovation was the only way forward.

He said a new suite of institutions needed to be created to facilitate investment in innovation and described as shocking the low level of investment coming from the financial sector into innovation and start-ups.

Public action and investment were needed to “populate your republic with a network of institutions to run an innovation ecosystem”. At the moment, the channels did not exist for stimulating the economy through investing in innovation.

Huge changes were going to occur in the coming decades on the back of technological innovation and consumer demand, and Ireland needed to identify and target those areas in which it could create opportunities. “The way you have been trying to create jobs in Ireland, as in the UK, has come to a dead end,” he said.

Significant political leadership and public investment were needed. Ireland needed to think more smartly about its strategy as a small state. “Tax cuts to promote private enterprise is a barren discourse,” he said. Whole societies had to take risks and innovate, he added.

However, he reacted strongly to a series of comments and questions from the floor, many of which involved criticisms of Mr Hutton’s views on the role of private entrepreneurs and companies.

“You are close to a bankrupt state and some of the stuff you are talking about is out to lunch,” he said, appearing emotional. “I don’t think becoming the socialist republic of Ireland is on the cards at the moment.”

Mr Hutton said fairness was an indispensable value without which capitalism could not function. Human beings were “embedded” with a sense of proportionality and fairness.

He said the financial markets had a view that Ireland was coping with its difficulties in a “solidaristic” manner and that this was impressing the credit rating agencies.

Solidarity was becoming a “must have” rather than a “nice to have”, he said.

The level of debt that existed around the globe would make economic growth very difficult in the coming period. He believed China could soon “hit the rocks” and that the world could be in for a period of economic stagnation.

Ireland had massive private debt and had been living in “la la land” up to 2008.

The deficit and the level of debt constituted an “existential threat” and as the State could not devalue its way out of its difficulties, it was taking the necessary alternative measures.

Mr Hutton was speaking in Liberty Hall as a guest of the Irish Congress of Trade Unions in the first in a series of talks designed to encourage debate. The president of Ictu, Jack O’Connor, said Mr Hutton’s talk had been challenging, not least for the trade union movement.

Noting that he was speaking on the anniversary of the execution of James Connolly, Mr O’Connor said social democrats had to come up with a vision that was consistent with the values of the people who had founded the trade union movement.

“We haven’t been doing that,” he said. “It is not the same as repeating slogans. You need to contest the ideological space or you’re not in the game.”

Ictu general secretary David Begg said the crisis in liberalism created an opportunity to discuss social democracy and what it meant. Innovation was the correct thing to be doing, he said, but he did not think it would solve the unemployment problem.

Referring to Mr Hutton’s views on solidarity, he said there was in fact a huge amount of anger in Irish society and this would become evident if the promised economic growth did not occur. There was no point in “burning buildings”, but there was a need to contest ideas, he said.

Joan Burton of the Labour Party and Paula Clancy of the Tasc think tank also spoke at the meeting, which was attended by former taoiseach Garret FitzGerald and former Labour Party leader Ruairí Quinn, among others.