Our analysis of the annual Forfás survey of agency-assisted firms suggests that the objectives of the National Spatial Strategy (NSS), launched ten years ago, are not being met.
The NSS sought to restrict the concentration of growth in the Greater Dublin region by diverting investment to the main regional centres – termed “gateways” in the NSS – and a number of smaller centres called “hubs”. However, Dublin alone, with 35% of all foreign employment in 2001, has attracted 53% of jobs in new foreign firms since then.
Almost 80 per cent of jobs created by new foreign firms in the last decade were located in Dublin, Cork and Galway. With these three cities also accounting for 62 per cent of job gains in existing foreign firms and less than half of job losses, their share of all foreign employment rose markedly, from 49% to 58%, over the period. This process of concentration has accelerated since the onset of the economic crisis in 2007. This level of concentration in just three cities shows that the objectives of the NSS are not being met.
New foreign firms have a key role to play in meeting regional policy objectives, as they are more flexible in choosing locations for new investment compared with existing foreign firms while Irish firms tend to expand in existing locations. Galway’s established reputation as a centre for the medical devices industry has made it increasingly attractive for new investments in that industry, while Cork has a strong profile for both the pharmaceuticals and electronics sectors. Meanwhile, Dublin has been absorbing the bulk of investments in the rapidly-growing computer software and financial services areas.
The NSS aimed to build up the attractions of the other gateways for incoming investors, but clearly this has not happened. Dublin, Cork and Galway were the only NSS gateways to experience net employment growth between 2001-2011, when jobs in Irish state-assisted firms are factored in. Letterkenny remained stable, while the other five gateways (Dundalk, Midlands, Limerick, Sligo, Waterford) experienced a combined job loss of 20% – three times the national average.
The performance of the eleven hubs was mixed, with Cavan, Tuam, Ennis and Kilkenny all gaining employment, while the others (Ballina, Castlebar, Monaghan, Killarney, Tralee, Mallow and Wexford) experienced a very high combined employment loss of 35% – further evidence that the NSS has been ineffectual.
More detailed findings will be presented at a conference at the Economic and Social Research Institute (5 June 2012) entitled “Ten years on: revisiting the National Spatial Strategy”. The conference is organised by the Regional Studies Association Irish Branch in collaboration with the ESRI. For Further details see:
http://www.regional-studies-assoc.ac.uk/international-networks/rsair.asp
Proinnsias Breathnach and Chris van Egeraat
Ireland after NAMA 
June 2, 2012 at 11:33 am
Brian O’Nolan died on April Fool’s day in 1966. Shortly after, a normally faceless civil servant allowed his physiognomy to be photographed and transmitted to the nation on the new medium of television. In his interview he confided that the civil service had taught O’Nolan – Myles na gCapaleen – to write “basic English”. This seeming admission was in fact in accord with the principal tenets of Cruiskeen Logic which Myles in his turn had revealed to the civil service.
Cruiskeen Logic states that when you want to assert something unpalatable you must begin by stating the exact opposite. This is predicated on the fact that people’s attention span is so short – even that of learned academics – that they will remember only the first assertion and will fail to notice the antithesis stated in the later conclusion.
Myles is said to have invented Cruiskeen Logic in 1934 when he was secretary to the minister for Local Government. He drafted the county management act and certainly influenced the first planning act of 1934 and perhaps the second of 1963. Local Government was then such a dangerous occupation that the first manager, Phil Monaghan, negotiated as part of his ‘package’ a pension ( payable to his wife in the event of his probable death in office); a fast car (to try to escape his fate) and a Smith & Wesson revolver (as a last resort ).
But the principles of Myles’ Cruiskeen Logic combined with civil service basic English has, over time, allowed managers to dispense with the fast cars and guns. (They have however held onto the pensions). The NSS is an excellent example of Cruiskeen Logic.
For example the present authors assert that;
“The NSS sought to restrict the concentration of growth in the Greater Dublin region by diverting investment to the main regional centres – termed “gateways” in the NSS – and a number of smaller centres called “hubs”. ”
According to the NSS;
“To stabilise the GDA’s share at its current level, 75% of the growth in manufacturing and key services sectors would have to take place in other regions.”
But if you do believe it then you haven’t read down to Page 30 of the NSS;
“…diversion of this level of growth away from the GDA could damage the successful dynamic achieved in the GDA which is of vital national importance.”
And in Cruiskeen fashion the NSS goes on to conclude;
“Such a scenario is clearly unrealistic …”
So effective is the Cruiskeen technique when combined with civil service basic English that ten years after publication, symposia are still being devoted to detailed consideration of what the NSS is NOT about.
Myles concluded that the first product of the institute of Advanced Studies was to prove that there were two saint Patricks but no God.
I think he would enjoy this blog.
June 3, 2012 at 10:41 pm
We are in the realm of Lewis Carroll rather than Myles na Gopaleen here. We said that the NSS sought to restrict the concentration of growth in the Greater Dublin Area (GDA), not to hold Dublin’s share of population at its current level. Page 30 of the NSS (quoted by skepticalstrategian) also states that the aim of the strategy is to achieve a situation where the growth in the GDA’s share of the national population would “happen at a slower rate than would otherwise be the case if Ireland had no spatial policy”. Thus, “over time, as the process of implementing the NSS continues and regional development intensifies, the tendency for the Greater Dublin Area to increase its share of the national population will level off” (page 31). Restricting the concentration of growth in the GDA does not mean stopping it (see the Free Online Dictionary: restrict = to keep or confine within limits).
The NSS aims to achieve this objective through enhancing the attractiveness of the identified gateways as targets for investment in internationally-competitive economic activity. This in effect means attracting a greater share of inward investment, which is by far the main source of export-oriented investment in Ireland. Accordingly, “IDA Ireland will continue to target cities and towns with the potential to develop their advantages in terms of the existing enterprise base or economic, social or innovation infrastructure. Developing competitive advantage associated with such cities and towns supports the creation of an internationally competitive position” (page 98).
In the last decade, only Cork and Galway of the eight NSS gateways (excluding Dublin) managed to increase their share of inward investment (in the form of new plants established by foreign firms). The other six, which between them accounted for 15.9% of foreign employment in 2001, only attracted 7% of employment in new foreign plants. Furthermore, they lost 38% of the employment which existed in foreign firms in 2001, compared with a fall of 23% for Dublin and actual increases in Cork and Galway. What may be of particular concern to some is that Waterford and Limerick/Shannon, representing 8.8% of all foreign employment in 2001, attracted only 2.8% of employment in new foreign firms while losing 40.5% of their existing foreign employment.
Proinnsias Breathnach and Chris van Egeraat
June 4, 2012 at 12:10 pm
I chose Myles because of his historical connection with the Department of Local Government (more lately Environment and a few other things) but I agree that Lewis Carroll too might have been apposite;
“When I use a word,” Humpty Dumpty said in rather a scornful tone. “It means just what I choose it to mean – neither more or less.”
“The question is,” said Alice, “whether you can make words mean so many different things.”
“The question is,” said Humpty Dumpty, “which is to be Master – that’s all.”
The quotation from Page 98 on the putative efforts of the IDA might have been indicative of intended mastery, but the IDA did not refocus their efforts on Gateways other than Dublin until 2011. Earlier, Master McCreevy sought propitiousness through a bizarre decentralization. Then there was the illusory ‘Gateway Development Fund’ for which the other Gateways were to compete – with Dublin!
One could also extend the analogy between the intended effect of the NSS and Humpty Dumpty by reference to the writings of another clergyman, the reverend Sidney Smith, who suggested on hearing that St. Paul’s churchyard was to be paved with wooden blocks;
“There will be no difficulty about it, if only the Dean and Chapter put their heads together.”
The utterance of certain words (capable of contradictory interpretation) and their encipherment in a printed volume to be entitled NSS, smacks less of a strategy and more of the recording of Spells in a Grimoire. If the book is opened and the words are uttered in a propitious circumstance, Magic will surely ensue.
June 6, 2012 at 9:35 pm
Richard Tobin’s contention that “the IDA did not refocus their efforts on gateways other than Dublin until 2011” is entirely at odds with the historical record.
With the IDA enjoying unprecedented success in attracting foreign investment and the country approaching full employment, in the late 1990s the Agency moved the achievement of a more regionally balanced distribution of foreign firms (one of its responsibilities under the 1969 Industrial Development Act) towards the top of its policy agenda. There had been a widespread dispersal of inward investment in the 1970s, but this had mainly involved low-skill work with few skill requirements. However, the much higher quality of investment being attracted in the 1990s was much more particular as regards locational choice, placing emphasis on access to skilled workers and an urban environment conducive to attracting such workers and providing good connectivity and a strong service base.
The IDA concluded that the best (and probably only) approach capable of spreading inward investment throughout the regions was to develop regional specialisations focused on the main regional centres where local higher education institutions and service providers could focus on providing skills, research and other inputs related to these specialisations. Investment in environmental and cultural amenities and other services and facilities would also, it was hoped, make these centres attractive both to potential investors and mobile skilled workers.
The IDA produced a policy document based on this approach which used the term “gateways” to refer to the target regional centres – several years before the term was popularised in the National Spatial Strategy. The IDA, therefore, was a champion of the NSS both before and after its publication. In its Annual Report for 2002, the IDA gave a warm welcome to the publication of the NSS in that year and went on:
“Our commitment to regional development is stronger than ever and now with the National Spatial Strategy in place IDA is determined to see the emergence of strong magnets of attraction in each region. For their successful development each region needs to have clear, competitive reasons why companies would wish to locate there, rather than elsewhere. Much of the work needed to achieve such competitive advantage is outside of the scope of IDA but through working in strong partnership with other organisations at national and local level IDA can support and influence the delivery of some of the required solutions” (IDA Annual Report 2002, p.8)..
The report added:
“Ireland is moving up the value chain and the foundation for our future success will be based on innovation, education, skills and research. Each location in Ireland also needs to be competitive in what it can offer, so as to have the opportunity to win inward investment against other similar locations in Ireland, across Europe or globally. As we seek to attract the higher levels of knowledge based investment and higher added value we must be seen as premiership players in the big league” (p.3).
Furthermore:
“Developing clusters of excellence where companies, business service providers, and those in education and research, network together to create a climate of innovation and entrepreneurship is a key area of IDA activity” (p.20)
In its 2003 Annual Report, the IDA developed this theme further:
“At the core of IDA’s regional strategy is a sustained commitment to contribute to the developing knowledge economy across all regions of the country by increasing the amount and quality of inward investment…Central to delivering on this commitment is the development of a strong urban base in each region, with critical mass and attraction features supported by infrastructure of international standards, to drive greater economic and social convergence between the East Region and the rest of the country. International experience tells us that proximity to urban environments is more attractive for advanced mobile investments. This underpins the importance of the implementation of the National Spatial Strategy, with its focus on regional gateways, for inward investment to continue its contribution to more balanced regional development” (IDA Annual Report 2003, p.9).
In each of the following five Annual Reports, the IDA pointed, with growing concern, to the need for implementation of the NSS if the Agency was to achieve its regional objectives. It repeatedly advanced the argument that Ireland was competing internationally with large cities in other countries for mobile investment, and that it was vital to strengthen the urban structure in the Irish regions if they were to have any hope of attracting such investment:
“The challenge of good regional spread in investments increases as the higher value parts of business value chains are targeted. Then, the need for a critical mass of qualified talent, supporting infrastructure and sophisticated business services can draw investors towards cities. The competition for such investment is intense and unrelenting from a growing number of locations across the globe.
For most of the investments IDA competes for each year, the competition is from city regions with a population base of over a million people. In Ireland, only Dublin has a population of this size. Other cities and towns are small in global terms. For this reason, every location in Ireland has to think and act regionally, rather than locally, if it wishes to succeed” (IDA Annual Report, 2005, p8).
The IDA also emphasised that it alone could not achieve its regional targets without parallel joint action on the part of the various other organisations with a role to play in developing the gateways:.
“The National Spatial Strategy sets out the framework for development in this way and needs to be followed by all economic and social actors…Success will be attained not by any one agency alone but by the combined efforts of many. IDA plays its full role across the country, working with others, by seeking to build on existing regional strengths and adding to them” (p.8).
Even in the absence of NSS implementation, the IDA was able to claim considerable success in diverting investment from the Dublin region, mainly through its development of strategically-located business parks and development sites. Thus, “In 2006 almost 60% of new greenfield projects, and 6 out of every 7 R&D investments (or 85%), took place outside Dublin, with a wide geographical spread of high quality investments” (IDA Annual Report 2006, p.8); “In 2007, circa two-thirds of projects approved were to locations outside of Dublin” (IDA Annual Report 2008, p.12) while “In 2008, 60% of foreign investments to Ireland were located outside of Dublin” (IDA Annual Report 2008, p.12).
In the 2007 Annual Report the IDA called for a new mindset which focused on collaboration in pursuing the tenets of the NSS and a shift from the local to the regional in policy thinking:
“If we are to continue being successful in realising a geographical spread in our business portfolio, all economic and social stakeholders will need to adhere to the framework on which the NSS is constructed. In future, both thinking and action must be aligned and focused on a regional rather than a local basis; this requires a significant change in mindset” (p.12).
The 2008 Annual Report almost ritualistically reprised the same arguments that had been put forward for the previous five years but after that the IDA clearly gave up on the NSS, which is not subsequently mentioned in these reports.
It should be clear therefore, that from the late 1990s the IDA put renewed efforts into achieving a regionally balanced spread of investments, and achieved considerable success in this respect, at least in some locations. However, its hopes of placing its regional objectives on a sound footing were clearly frustrated by the failure of the NSS and hence the failure to develop the gateway centres along the lines both envisaged by the NSS and considered essential by the IDA.
June 7, 2012 at 9:13 am
Dr Breathnach,
First let me thank you for a most informative and entertaining review of the IDA statements of policy and achievement from the Nineties through the Noughties.
Inevitably of course there is a quibble.
I must ask why, if the IDA were so seized of the NSS objectives, did their policies not have the desired effect? You yourself point out above that in several regions FDI declined rather than increased in accord with the objectives of the NSS viz.
“In the last decade, only Cork and Galway of the eight NSS gateways (excluding Dublin) managed to increase their share of inward investment…”
IDA is the sole body charged with attraction of FDI – the Gateways themselves are merely receptors of the IDA’s efforts. In Autumn of 2011 the IDA (Cork branch) toured many local authorities to explain their new “Transformation Agenda”. If I am not mistaken the word transformation is defined as;
“a thorough or dramatic change in form, appearance or character”
Thus, by definition the policies now (2011 – 2012 as opposed to prior to 2010) being espoused by IDA are to be dramatically different from any policies expressed before – as for example those quoted by your goodself.
The IDA policy document entitled “Horizon 2020: IDA Ireland Strategy” published in March 2010 clearly states on page 2;
“We also set out specific targets for the period 2010-2014:
…
50% of investments will be located outside Dublin and Cork”
This commitment is repeated on page 13 as part of their “10 Steps of Transformation” in the context of “Balance Regional Development” ;
“IDA will ensure that by 2014, 50% of FDI projects will be located outside of Dublin and Cork. In line with the Government’s National Spatial Strategy (NSS), IDA will make smart use of its property portfolio in regions targeted for investment. We will work with local authorities to make potential sites as attractive as possible for investors.”
So it would appear that this recent Damascene conversion is a little at odds with your statement;
“The 2008 Annual Report almost ritualistically reprised the same arguments that had been put forward for the previous five years but after that the IDA clearly gave up on the NSS, which is not subsequently mentioned in these reports.”
The NSS as a document regrettably does not have the effect of a Grimoire of magical spells. It relies for effect on the actions of various bodies of which the IDA is a very important one. Your note makes it very clear that the IDA was certainly using all of the right words and phrases but as your previous comment made clear, its actions were not having the effects desired.
So is my statement on “refocus” really at odds with the historical record? Was Mr McCreevy’s decentralization not bizarre? Was it not odd that Dublin was allowed to compete for a share of the Gateway Development Fund?
Perhaps these words have “Humpty Dumpty” meanings. Or maybe as George Orwell once said of the text of public discourse perhaps the IDA policy statement;
“…falls upon the facts like soft snow, blurring the outlines and covering up all the details … prose consists less and less of words chosen for the sake of their meaning, and more and more of phrases tacked together like the sections of a prefabricated hen-house.”
June 7, 2012 at 4:03 pm
Come now, Richard. While you describe my previous piece as being informative, you do not appear to have read it yourself, or at least to have absorbed its content. The whole point of the piece was to argue that if both the IDA and the NSS were to be successful in their objectives for more balanced regional distribution of investment, this would require targetted investment in the selected gateways in order to make them more attractive as possible locations for inward investment. Your notion that “the Gateways themselves are merely receptors of the IDA’s efforts” completely misses the point. This may have been the case in the 1970s when the IDA was able – at government behest – to parachute low-skill assembly plants into virtually any location in Ireland as required. Today’s foreign investors are much more demanding in what they require of investment locations – which in turn reflects their higher levels of technological sophistication and, by extension, the better quality of jobs they provide.
My piece makes the point – several times – that the IDA alone did not have the capacity to effect the changes in gateways necessary to make them attractors (as distinct from receptors) of foreign investment. For the benefit of readers I reproduce some of the relevant passages below:
“For their successful development each region needs to have clear, competitive reasons why companies would wish to locate there, rather than elsewhere. Much of the work needed to achieve such competitive advantage is outside of the scope of IDA.”
“The IDA also emphasised that it alone could not achieve its regional targets without parallel joint action on the part of the various other organisations with a role to play in developing the gateways.”
“The National Spatial Strategy sets out the framework for development in this way and needs to be followed by all economic and social actors…Success will be attained not by any one agency alone but by the combined efforts of many.”
“If we are to continue being successful in realising a geographical spread in our business portfolio, all economic and social stakeholders will need to adhere to the framework on which the NSS is constructed.”
The fact is that the NSS did not deliver on its objective of enhancing the attractiveness of the gateways through the promised programme of focused investment. This was due in part to its failure to put in place structures both capable of focusing investments by central government departments on coordinated action at local and regional level and conducive to coordinated and collaborative action at the same levels on the part of local authorities, and in part due to a lack of political commitment to achieving the NSS objectives (the McCreevy decentralisation proposals being a classic case in point).
Otherwise, the point of your reference to the McCreevy decentralisation programme and the fact that Dublin was allowed to compete for a share in the Gateway Development Fund is not obvious to me. Surely you are not blaming the IDA for these too?
Despite the difficulties created by non-implementation of the NSS, the IDA did succeed in securing a high proportion of new projects for non-Dublin locations. However, these tended to be smaller projects with lower employment content as most of the intended gateways did – and do – not possess the scale to absorb larger projects. Had the gateways achieved the scale of growth intended for them in the NSS document, they might have improved their chances of obtaining bigger projects, but the failure of the NSS means that this growth has not been achieved either.
As for the Transformation Agenda included in the IDA’s “Horizon 2020” strategy, this emphasises transformation of existing foreign companies to increase their capacity for further expansion and change in the types of firms and types of sectors which the IDA will pursue for future investment. Richard Tobin portrays the commitment in this strategy statement to ensuring that 50% of FDI projects will be located outside Dublin and Cork by 2014 as a “Damascene conversion” on the part of the IDA to the cause of regional balance. In fact, as far back as the year 2000, an enterprise strategy document prepared by Forfás (“Enterprise 2010: A new strategy for the promotion of enterprise in Ireland in the 21st century”) included a commitment to the objective of locating 50% of new greenfield FDI employment in the BMW region. This reflected the IDA’s own policy at the time, and was a much more radical commitment to regional redistribution in that it referred to employment rather than projects, and referred to the BMW region, and not just “outside of Dublin and Cork”.
So it would appear to me that it is you who is doing the “blurring” and “covering up” of details.
June 7, 2012 at 5:55 pm
Dr Breathnach,
This exchange is in danger of becoming a symposium in its own right and I am sure both of us may have better things to do with our time but I cannot let your last remarks pass without answer. I believe that we have both concluded that the NSS did not achieve its stated objectives. The principal difference between us is that you believe that the NSS objectives were serious, whereas I believe that they were cynical.
To my way of thinking the NSS was supposed to have been a statement of strategy to guide the apparatus of the State in directing investment to various chosen parts of the country in an optimal manner so as to achieve the appropriate development of the State. The IDA is merely a cog, albeit an important cog, in the said apparatus of state.
The thrust of your remarks (if I have understood aright) is that the IDA could not do its job effectively because no one else was investing in the Gateways. But in this case the “no one else” being the rest of the government apparatus and I think we can agree that the McCreevy decentralization was indeed a classic case in point.
During the immediate aftermath of the NSS publication, I had the rather deflating experience of meeting with representatives of the Department to lobby for a necessary infrastructural investment which would have enabled our Gateway to achieve the desired scale of growth and enhance its attractiveness to FDI projects. Our approach was dismissed with the comment that “the Department rather hoped that private investment would suffice” to meet our infrastructural needs. Such experiences (which I know were repeated in other Gateways) have led me to the conclusion that the NSS and like documents are merely window dressing, words without meaning, no better than magical incantations at least insofar as they may have a role in directing the apparatus of state to enhance the capacities of the non-Dublin Gateways.
It may be that you would point to the development of the motorway system to demonstrate that the state did invest in significant infrastructure outside of Dublin. However every day we now read of local distribution businesses closing down because the logistics business can now be more effectively delivered to anywhere in the country from some location just off the M50. Thus even the large scale infrastructural investment of the state acts merely to further enhance the agglomerative capacity of the capital.
I agree with the original statement of the NSS that “To stabilise the GDA’s share at its current level, 75% of the growth in manufacturing and key services sectors would have to take place in other regions.” Your analysis however makes it perfectly plain that this was not done.
You seem to attribute this to some abstract “failure to put in place structures both capable of focusing investments by central government departments on coordinated action at local and regional level and conducive to coordinated and collaborative action at the same levels on the part of local authorities, and in part due to a lack of political commitment to achieving the NSS objectives”
I would rather characterise it as realpolitik; a quite deliberate decision not to intervene in the status quo and a concealment of this decision in a flurry of high-sounding words and phrases. Such is the nature of what passes for Planning in Ireland.
June 8, 2012 at 1:43 pm
I agree entirely with Richard Tobin that the National Spatial Strategy was a cynical exercise in political window-dressing. Indeed, the Irish state has a long record of announcing plans and programmes which it never had any intention of actually implementing. The lack of any culture of accountability and post-hoc evaluation in the Irish polity has allowed successive governments to get away with this practice of appearing to be doing something while actually doing nothing.
My concern was to exonerate the IDA from any culpability for the charade which was the NSS. Almost alone within the state apparatus, it is a highly professional and effective agency, and widely recognised internationally as the best in the business of attracting inward investment. Because of its success in this respect, it has generally maintained a high level of autonomy from the rest of the state apparatus, with successive governments quite happy as long as it generated a continuous inflow of job-creating projects.
It was only when, in the late 1990s, the IDA turned its attention seriously to the issue of the regional distribution of inward investment that it ran foul of the entrenched sclerosis of the state apparatus. The agency saw the selective development of gateways as the only way to achieve its regional objectives and clearly was one of the prime movers behind the formulation of the NSS. It was a reasonable strategy which didn’t stand a chance in the face of the irrationality which permeates the Irish polity.
I have written extensively elsewhere on how the NSS had no hope of being implemented because this would have required, firstly, a form of spatially selective investment which runs entirely counter to the localism of Irish electoral politics and its “one for everyone in the audience” mentality and, secondly, a major decentralisation of Ireland’s extremely centralised administrative system which is anathema to the powerful and entrenched central bureaucracy. All the indications are that none of this will change under the present government.
June 8, 2012 at 4:04 pm
Hmmm…? Amen!