The privatisation of State companies is about to give the Exchequer a vast injection of money, for which it has not yet developed a plan. There is a simple, elegant project that would benefit the entire State now and continue to do so for the foreseeable future.

In effect, the Government can buy equity in future tax revenue for little or no cost. This revenue, which otherwise must be diverted to pay-down the much-diminished national debt, should be invested in the human intellectual capital this State requires to secure its future.

Thirty years of investment in education has produced a workforce that has proven its ability to compete and win at European and international level. The standard of education, the cost of labour and the productivity of Irish workers led (among other factors such as English speaking, tax regimes etc) to massive influxes of manufacturing jobs with multinational companies looking for a European base.

Up to now we have been lucky in that the skills required by high-tech companies have been the ones that our third level is good at producing. But there has always been a ghost at the feast; the spectre of mobile manufacturing plants has not gone away. As our expectations of what our lifestyles should be rise and our work becomes more expensive, it is inevitable that manufacturers will (indeed must) seek cheaper places to have their work done.

We are moving from a manufacturing-centered economy to a services and, critically, a knowledge-based economy, but we must make the right policy choices.

Several recent reports from the Government and its agencies all point to a "knowledge economy" and knowledge itself has been described as the raw material of the next millennium.

Our competitors are making this investment now, knowing that they must run simply to stand still in the modern knowledge economy. The inescapable conclusion is - brain power is the future.

We have been lucky that the skills that the multinational companies have required are those produced by our third-level sector. But what of the skills produced by our tiny "fourth-level" sector - the skills of postgraduate and postdoctoral researchers?

One of the primary things that differentiates Ireland Plc from the countries that we would emulate - the small rich nations like Denmark, the Netherlands, Finland and Norway and the larger rich nations like Germany and Canada - is our pathetically small level of investment in the research base of the economy.

The US invests (privately and publicly) about 3.3 per cent of GDP in research; Finland and Denmark slightly less than 3 per cent; Germany and Norway about 2.5 per cent. Our figure is about 1.1 per cent (about the same level as Turkey) - one of the lowest in the OECD.

By and large, multinationals do no research work here. Production lines are easy to move, but research facilities are not.

Because of this absence of investment in "normal" science (either in industry or in public), we do not have the things that other normal countries take for granted. These include: a thriving postgraduate and postdoctoral (fourth-level) training system; a thriving and innovative scientific culture; and large-scale and ongoing interactions between third-level institutions and industry at all sizes from fledgling campus enterprises to large multinationals.

Instead, we have scientific groups which are run on shoestring funds and agencies which disburse tiny science and technology (S&T) budgets.

The links between ongoing investment in science that is funded on the basis of excellence and subsequent wealth and employment creation in the economy are simply not understood by either the public or politicians.

Recent studies show, to take just two examples, that research in Stanford University, has created in excess of one million jobs and billions of dollars of wealth in the US economy. The same is true of the Massachusetts Institute of Technology.

So how do we pay for this investment? We can no longer rely on Brussels. We must invest from our own resources. We must implement programmes of investment in research that maximise human intellectual potential. The future payoffs will be enormous and unpredictable. Just think, for example, of the world markets that exist for rational drug treatments for common diseases that are currently without a cure, such as Alzheimer's Disease. We propose that the Government, with the proceeds of the forthcoming Telecom Eireann sale, establish a "Millennium Innovation Fund".

This fund, perhaps to be managed by the National Treasury Management Agency, would have several purposes. It would generate income which in turn would be used to grow the fund and also to secure a permanent investment in brain power through public basic and strategic science programmes, broadly conceived from the social through the biological to the physical sciences.

Such a fund would work rather like the Wellcome Trust in Britain or a large pension fund; generating and sustaining its own capital base and income stream.

We in Ireland can create and dominate the wealth-producing technologies of the future by investing in research now.

Before these things can happen, our political leaders have to demonstrate the vision and capacity to think not simply to the next election, but beyond to 20, 30 and more years hence. In other words, we need to decide now how we will shape our own future.

Dr Shane O'Mara (chair@irsa.ie) and Dr John Donovan (secretary@irsa.ie) are, respectively, chair and executive secretary of the Irish Research Scientists' Association, the representative organisation for research and researchers in Ireland.