Microsoft Ireland has announced a €2 million joint venture with the Irish Management Institute (IMI) to develop a National Productivity Centre which will open on the IMI campus in Sandyford, Co Dublin, next spring.

The centre will showcase how new technologies, management practices and people can be combined to improve organisational productivity. The target audience will primarily be small to medium enterprises and Government organisations.

The centre will act as an innovation hub and a physical manifestation of what the knowledge economy should look like, according to IMI chief executive Tom McCarthy.

Microsoft Ireland managing director Joe Macri said the centre would not be about demonstrating what was possible in the future, but rather what was achievable through the application of technology and management practices today.

He said Microsoft and the IMI were negotiating with other technology companies and telecommunications providers to get them involved so that the National Productivity Centre would be "truly an industry partnership".

Mr Macri said the inspiration for the establishment of the centre was the 2005 study on productivity in Ireland by economist Paul Tansey which Microsoft funded. This report highlighted the role that technology has in increasing productivity levels.

"Productivity is actually decreasing in the Irish economy at the moment and we have to do something about that," said Mr Macri.

The €2 million investment includes financial supports, technology donations, expert personnel and the capital costs of building the centre.

The centre was officially launched by Minister for Finance Brian Cowen yesterday.