A RECENT newspaper article's front page headline "Massive salaries at UCD revealed", identified people at UCD, myself among them, who were earning €200,000 or more. The union head, whose press release announced the fact, viewed it "truly shocking", writes Tom Begley
No doubt €200,000 is a lot of money. Also not in doubt, going beyond Civil Service pay scales must be done, and with some frequency, if universities in Ireland are to become "world class". Ireland's leaders proclaim their dedication to developing a knowledge economy. It will never happen. Ireland is on the brink of relegating itself to the second division. The attitude expressed by the union leader illustrates why.
In a knowledge economy, the vital resource is brain power. To compete effectively, countries harness sufficient brain power to develop cutting-edge ideas that lead to new services and products. Brain power requires scale to flourish. Talented people want to work with other talented people, to feed off the intellectual stimulation and motivation. Small countries lack sufficient scale to create such environments based solely on native talent. They must augment university academics and company scientists and engineers by recruiting internationally.
To recruit effectively, they need competitive compensation packages and a cost of living modest enough to encourage inbound migration. Ireland's universities cannot pay internationally competitive compensation and the cost of living here scares people away.
As the dean of the UCD business schools, I speak from hard experience. When I started the job two years ago, we set a goal of recruiting top talent to the school. A top business school in Ireland could provide a source of advantage for the country. Building a top business school comes down to employing the best academics in the world, not only Irish academics, but also top international scholars.
We had openings for 10 chaired professors in the autumn of 2006 and immediately set about recruiting them. We broadcast our openings far and wide. A chaired professorship is the most prestigious position in any academic institution. Despite that fact, few high quality applications came from academics outside Ireland.
Since we were not an elite school, we could not rely on that status as a draw. In several instances, our compensation package was insufficient: in others, compensation looked okay until candidates investigated the cost of living in Ireland.
The same story has repeated itself in recruiting at more junior academic levels. This past year we made offers to four newly-minted PhDs who had already demonstrated skill in publishing in top journals. Each offer was rejected because the pay was inadequate because of the high cost of living. In instances where we have succeeded in hiring, it is mainly because they were willing to rent rather than buy.
The extremes are in accounting and finance, where top academics command $350,000 (€242,000) and up in the United States. The very top of our professorial scale is €145,000. Even with the exchange rate woes of the dollar, $350,000 buys more in the US than does €350,000 in Ireland.
Singapore is also a small open island economy of four million people that seeks to become a knowledge economy. How does it stack up against Ireland?
To start, its personal tax rate tops out at a maximum of 20 per cent, but only on incomes of more than 320,000 Singapore dollars (€160,000). It has quickly become a global leader in cancer research because it opened its cheque book to Nobel prize winning researchers.
Science Foundation Ireland has offered attractive packages to support research projects by accomplished international academics including the transfer of their entire research teams. Singapore offers that, builds the labs, and seals the deal with very attractive personal compensation.
The country has invested substantially in its three state universities. Among business schools, National University of Singapore Business School (NUSBS) is knocking on the door of elite status after a major recruitment drive for prominent international academics yielded several quality hires. NUSBS was not shackled by civil service pay scales.
So UCD, in trying to compete internationally, does what it must do in order to have any chance of succeeding. Under the exceptional circumstances clause offered by the Higher Education Authority, it pays what is needed to bring people in to fill important positions that will help Ireland develop.
Instead of being congratulated for his vision and ambition, the president of UCD, Hugh Brady, is excoriated for not sitting back and passively accepting an otherwise impossible situation.
With that kind of thinking, the only knowledge that will exist in the Irish economy in the future is that it has been left in the dust by other nations.
Prof Tom Begley is dean of UCD business schools - Michael Smurfit Graduate Business School and Quinn School of Business