Key elements of our long-term enterprise strategy still need to be formulated, writes Frances Ruane
The recently published Enterprise Strategy Group (ESG) report, Ahead of the Curve, received a generally positive response. Many of its recommendations should be quickly accepted and implemented. These include: rationalising regulatory bodies, committing to long-term funding for research, monitoring R&D tax incentives, and quality-benchmarking Irish degree programmes.
The Tánaiste's original exhortation to the group to be "radical" in its approach led to high expectations that it would deal with key long-term issues and thus complement the more short-term analyses and recommendations of existing bodies such as the Competitiveness Council, Forfás, and NESC.
Long-term issues that one might have expected to find dealt with in greater depth include education, effective policy delivery and public sector reform. The report deals extensively with education, which is ultimately the bedrock for development in a knowledge society.
However, it does not examine whether our education system really matches Ireland's future economic and social aspirations. For example, it does not question whether we have the right type of third-level system now that over half of our school-leavers continue in education. Is it sensible that most students choose their degree programmes at the point of entry? Should we consider moving to the US/Canadian-style modular-type system, which would allow students to experience a range of subjects before deciding on final subject choices?This would contribute to addressing in a substantive way the recognised need for greater cross-disciplinarity within and across the arts and sciences.
Within the sciences, it would provide graduates with more of the skills necessary to work at inter-disciplinary boundaries. It would also help young people to realise their potential and minimise the costs to society of high drop-out and switching rates.
And if so many are going on to third level, what are the implications for the second-level programme, which was designed originally when most students terminated education at Leaving Certificate? Is it timely to review the Transition Year, introduced primarily to cut the dole queues over a decade ago?
In terms of global languages, how do we begin to make progress on the teaching of Mandarin and Arabic at third or even second level? Should Spanish be more widely taught? Such language skills would be important for promoting the "customer-centred" export drive identified as crucial in the report. New language provision requires serious long-term decision-making and planning. In terms of policy delivery, it might have been timely for the group to re-examine the Culliton recommendation of creating separate agencies for foreign and indigenous industry (IDA Ireland and Enterprise Ireland). The ESG report does not deal with this key question but rather limits itself to recommending greater co-ordination at board levels between these organisations.
A critical question is whether a small country should have two agencies operating on the international stage. The blurring of organisation forms is one of the significant changes over the 1990s, and it does not respect a dichotomy of what is "indigenous" or "foreign". An analysis of whether or not to integrate the international branch offices, if not the agencies themselves, is the type of long-term issue that would have merited attention.
The report points to the need for a more innovative public sector as a route to increasing its efficiency. But it is disappointingly circumspect on the topic of public sector modernisation. It could almost be interpreted as implying that all is well except for a few non-performers and the need to monitor outputs.
It does not query whether Ireland might benefit from a long-term policy of reducing the cultural differences between the public and private sectors. It does not question whether the private sector can be expected to accept a public sector remuneration system that is virtually independent of the economy's ability to pay, when private sector companies have to maintain flexible remuneration contracts to cope with structural adjustment.
It does not ask how the public sector will attract the talent needed for efficient public sector management if the remuneration system is almost exclusively limited to rewarding effort through periodic promotion. It does not inquire how the public sector should build its skills base.
In thinking more long-term, Ireland might usefully reflect on Singapore, as well as on the smaller European countries. Singapore is the economy that most resembles Ireland in that it has pursued a policy of promoting export-platform foreign direct investment . The type of analysis Singapore has undertaken and some of its long-term strategic initiatives would be worthy of attention. One can only presume that the Tánaiste's decision to establish the ESG was influenced by her belief that Ireland needs to prepare for long-term global repositioning. The key message in the report - namely, that we must not take our recent economic success for granted - has benefited from reiteration, and the speedy implementation of reforms that enhance our competitiveness will be welcomed. However, in some areas, especially in education, key elements of long-term enterprise strategy need to be formulated and the recommendations in this report should not be seen as the final word.
Frances Ruane is professor of economics at Trinity College Dublin