Comment: The analysis of the challenges facing the manufacturing sector put forward recently by the Chambers of Commerce of Ireland failed to address the real issues. Instead, it retreated into the well-worn rhetoric of "cut taxes, reduce the State".
This is not good enough. Revitalising the manufacturing sector will require increased investment, planning and co-ordination in which the public sector will play a leading role.
The Enterprise Strategy Group's paper Ahead of the Curve identified a number of weaknesses in the Irish manufacturing sector, highlighting the need to develop international sales and marketing expertise, world-class capability in technology and innovation, and an enhanced education and training regime if we are to increase our competitiveness.
It put forward a number of measures: dedicated bodies to focus on export market intelligence and promotion; placement of sales and marketing experts in Irish firms; market-led applied research and technological development - all supported by increased public expenditure for in-house R&D; enterprise networks; ongoing learning and skill upgrading programmes, along with closer ties to the education sector and cluster-led innovation partnerships.
The new direction for Irish industry outlined by the group provides the basis for a progressive and expansionary programme.
What will this require? First of all, increased public investment and a greater developmental role for the State in partnership with management and trade unions - the very thing that the chambers advise against. What do they blame for the problems in the Irish manufacturing sector? Taxes.
The Irish industrial sector is one of the least-taxed in the EU. Not only do we have one of the lowest corporate tax rates in the EU, employers' payroll taxes rank at the bottom as well. Whatever the problems in our manufacturing sector, taxation is clearly not one of them.
The chambers' suggestion that local water charges are the current obstacle to developing a high-tech manufacturing base shows how absurd this argument can become when taken to extremes.
The Enterprise Strategy Group went further in highlighting the obstacles to a sustainable and wealth-creating industrial sector. We need a highly trained, educated workforce.
We need affordable homes. We need to reduce the crippling economic and environmental costs of traffic congestion. We need to rapidly expand our communications networks, in particular low-cost broadband. We need low-cost childcare facilities. Given that we rank at the bottom of European tables in almost all these areas, the necessity for substantially increased public investment is obvious.
The group also referred to the quality and style of Irish management. Hierarchical, directed management styles are an obstacle to prosperity. According to the National Centre for Partnership and Performance, participatory approaches are more effective in improving the quality and efficiency of business processes, reducing costs, improving innovation and customer service, reducing industrial relations conflict, and developing positive responses to organisational change.
We must now create new workplace models to provide employees with an equal stake in the operation and decision making processes of the enterprise if we want to improve competitiveness. Finally, high levels of poverty and low pay are a major obstacle to expanding our economy. Ireland leads the EU in poverty levels and low pay.
Recent studies from the United States show that income redistribution programmes introduced under the Clinton administration not only reduced poverty but also increased the educational achievements of children in low-income households. Similarly with health: poverty and income inequality puts an enormous strain on our social systems.
This only confirms a truism that many European countries accepted a long time ago: a modern infrastructure is not just about service delivery systems, but egalitarian social programmes to make it work. We cannot build a competitive economy on the basis of poverty and low pay.
All this requires "a new strategic direction", according to the Enterprise Strategy Group. Sectoral reforms, infrastructural investment and enhanced public services: will this cost money? Yes. Will this mean more State expenditure? Yes. Will this entail increased taxation? Yes.
Will this reduce our international competitiveness? No, it will enhance it. It is worth highlighting the global competitiveness survey published by the World Economic Forum.
Using a number of criteria - taxation, infrastructure, education, macroeconomics, communications - the forum ranks countries on the basis of their business competitiveness.
Ireland comes out a disappointing 30th - behind 12 other EU nations, including Sweden, Austria, Denmark, the Netherlands - economies with high levels of public expenditure, taxation, regulation and worker protection.
This shouldn't be surprising. Societies that strive to integrate economic aims such as profit, expansion and investment with social goals of prosperity and equality work better. When everyone benefits, so too does business. Management, shareholders and entrepreneurs can't, on their own, create a prosperous environment.
We are not suggesting there's an automatic cause-effect: increase taxes, throw money into Irish firms and the public sector and all the problems will be solved. It needs planning, co-ordination and focused, long-term strategies.
But what all the evidence indicates is that efficient public-led co-ordination of enterprise activity combined with greater State investment and enhanced public services are not an impediment to competitiveness, but rather a necessary component.
Trade unionists are willing and ready to create the new policies and institutions necessary for a sustainable and profitable manufacturing sector. What we are waiting for is a dynamic and far-sighted vision to emerge from the representatives of the business community.
Michael O'Reilly is regional secretary of the Amalgamated Transport and General Workers' Union
