Ireland's prosperity is under threat because of the declining value of our exports, according to the chairman of the Small Firms Association (SFA).

The economic boom has been fuelled by domestic demand because easy credit has over-stimulated personal consumption, Pat Crotty said at the SFA's annual conference in Dublin Castle.

At the same time, the value of our exports last year was 5 per cent below the 2002 level and Ireland is losing share of the European Union's total exports.

"Amidst all the euphoria about rising house prices, SSIAs and buoyant consumer spending, it has almost gone unnoticed that the traded sectors of our economy are in recession," Mr Crotty said. While exports of goods and services accounted for a major part of our income growth at the start of the decade, net exports had a negative impact on economic growth by 2005 and some 30,000 manufacturing jobs have been lost in the last four years.

Ireland's economic boom is now entirely dependant on domestic demand, a source of growth that is unsustainable, the SFA chairman warned.

"In the recent past, the Irish nation has been behaving more like a drug addict than a well-oiled business - high on cheap money," he said.

Minister for Enterprise, Trade and Employment Micheál Martin told the conference that Irish businesses will face increasing competition from major international players with highly sophisticated business models and economies of scale. "From earlier stages in companies' growth cycles, most firms must build the means to do business at an international level," Mr Martin said. "They must have the skills to win international sales and reputations while establishing an overseas presence in core markets."

Mr Crotty called on the Government to introduce a major readjustment to the current tax credit system for research and development in the next budget to help small Irish businesses boost innovation.

The chairman of the National Competitiveness Council, Dr Don Thornhill, told delegates the energy regulator should allow utilities to change prices in response to global trends such as the recent drop in oil prices.

"Other countries haven't quite as rigid a regime as we have here," Dr Thornhill said.

"Energy companies have to apply to the regulator to reduce prices. No company should have to apply to any regulator to cut prices."

Eircom chairman Pierre Danon pledged to make improving the availability of broadband internet in Ireland his first priority as the French businessman embarks on his new role at the helm of the former telecom monopoly.

"I will remain frustrated until this problem is solved," he said.

Mr Danon stressed that countries with high broadband penetration have had assistance from their governments in rolling out exchanges in rural areas.

"Under law, we are not allowed to sell broadband at a loss, but the Government could roll it out," he said. "It may require a public tender."