What’s ‘smart’ about emigration?

“I know we are the country’s future but at the same time why should we stay and pay for someone else’s mess?”

I find this quote, discussed in one of our Friday posts, fascinating and troubling on a number of levels.  It is by a 26 year old graduate on a short term contract.  His girlfriend left for a job in London on Saturday, where she is joining former college class mates.  He’s almost certainly going to follow.  This is the generation that only knew the Celtic Tiger.  A generation that as a state we have invested in heavily through the education system.  A generation that should have been the next wave of Ireland’s economic miracle.  At present, they are the generation that is increasingly disillusioned with the situation they and the country are in and they are leaving.  And with them goes a large slice of our potential future.

A story published last Thursday in The Kingdom newspaper gives some idea of the scale of younger emigration and its local effects on communities.  They report that 197 GAA players transferred their club registration out of County Kerry in the first seven months of the year, the vast majority heading to the UK, US and Australia.  At least the same number again have left without re-registering for clubs at their destination.  And with them goes not only their sporting skills.  Scale that up outside of the county and one organisation and the effect becomes clear.

The next budget and the four year plan are partly predicated on emigration (40,000 in 2011, 100,000 over the next 4 years).  Instead of trying to retain of best and brightest, our policy is to hope they leave!  And they go disillusioned and resentful, feeling that they are not only paying the price for other people’s mistakes but if they stayed that they are expected to carry the burden of debt and woes into the future; hardly the best sentiments for encouraging later return.

There are many, many priorities for action at the minute, but near to the top should be job creation for young graduates such as intern schemes and targeted programmes to incentivize and mentor start-ups (the Union of Students in Ireland have made good suggestions).  Encouraging emigration, on the one hand, and failing to implement a job’s strategy to retain graduates, on the other, does not constitute a policy to build a smart economy.  In fact, there is very little smart about it.  It is just plain dumb.

Rob Kitchin

 

Trading and Investing in a Smart Economy

After three years of rapidly rising unemployment, and 22 months after the government published Building Ireland’s Smart Economy – A Framework for Sustainable Economic Renewal, it has finally set out a plan for job creation (three years since the crisis started and 22 months between vision and plan is poor progress to say the least).  Earlier today the Taoiseach launched Trading and Investing in a Smart Economy: A Strategy and Action Plan for Irish Trade, Tourism and Investment to 2015, which details plans for programmes and investment to generate trade and tourism (how tourism constitutes being part of the ‘smart’ economy I’m not sure, but we’ll leave that to one side for now).    Effectively the strategy and action plan is the implementation phase of the Forfas report, Making it Happen – Enterprise Growth in Ireland.

The aim of the plan is to put focused effort into seeking new inward investment and expanding exports of indigenous and foreign-owned businesses.  Specifically it hopes over the next five years to:

• Create over 150,000 direct new jobs in manufacturing, tourism and internationally trading services, with another 150,000 spin-off jobs
• Increase the value of Irish exports by indigenous agency-assisted firms by one third
• Increase the number of overseas visitors to Ireland to eight million (growing by a million)
• Diversify the destination of indigenous exports
• Attract an extra 780 foreign investment projects through IDA Ireland [780 is a nice specific figure, why not go for a round 1,000?]

Key actions to support the implementation of the Strategy include:

• Developing a strong international reputation for Ireland in high-growth markets and repositioning our reputation in existing markets through a joined-up approach;
• Developing cohesive marketing messages for distinct markets combining economic, tourism and cultural identities;
• Developing and internationalising our enterprise base
• Developing Ireland as a hub for global high-technology enterprises and clusters;
• Maximising the effectiveness of our overseas diplomatic and agency representatives in key markets; making effective use of EU diplomatic resources, the Irish diaspora and country/state specific collaborative agreements and fora;
• Improving the environment for trade, tourism and investment by expanding our international access and air connectivity, and driving the deployment of next generation broadband nationally;
• Internationalising our banking links; further developing our international network of tax treaties;
• Aligning visa entry requirements with our trade, tourism and investment priorities;
• Developing joint actions and partnerships with other countries to promote trade, investment, and market access.
• Exploiting the potential of EU Free Trade Agreements and WTO trade agreements, while advancing the strategic interests of key indigenous sectors.

The strategy is to focus attention on the following sectors: services, tourism, food, education, life sciences, software, creative industries, Next Generation Network-enabled sectors, clean technology and green enterprise, construction and the built environment, ‘silver’ technologies (loosely meaning ‘stuff for older people’).

The plan will be driven forward by a new agency, the Foreign Trade Council comprising representatives from all relevant government departments and agencies.

“The intention is that joined-up thinking will lead up to joined-up action, and that all of the available resources are used to ensure that our trade, tourism and investment sectors are well positioned to respond smartly and effectively to emerging opportunities as the global economy returns to growth” (p. vii)  Thankfully, I have faith that Forfas, IDA, EI, and some government departments, if not ministers, can do joined up thinking and action; hopefully the Foreign Trade Council will be more Forfas/IDA/EI than Fas Interesting Fas (Ireland’s National Training and Employment Authority) is not mentioned once in the document and nor were they represented on the high level group that put the plan together – one would think that given its remit it might have a role to play in creating a smart economy?).

Section 6 (pages 43-54) is the key part and there’s good stuff in there.  I’m sure there are other good ideas that could be added by opening it up to wider consultation.  What is missing are time frames, goals/targets and milestones.  Without these there is every possibility the plan will slip (and if the lead up to the plan is anything to go by, the slippage will be significant).  Indeed, it will be interesting to see in a year’s time how many of these initiatives are underway in any meaningful way.  It is critical at this stage that all the initiatives in this section start as soon as possible.  Like now.  We’ve waited long enough for the plan, we don’t need another long delay for implementation, we need action.

Rob Kitchin

 

Creative Industries: “smoke and mirrors” or shining light?

If ever there was a divisive term, it’s the phrase “creative industries”.  People just seem to either love it or loathe it. Advocates of  an Irish “smart economy” economic recovery see the creative industries as a collection of innovative business sub-sectors who generate novel intellectual property and redesign/recombine existing technologies into new products that are both intermediate inputs into the economy-wide innovation process and finished products in their own right. At first glance, this doesn’t seem so objectionable. While not being a panacea to the economic travails we’re enduring at the moment, it offers the hope of enhanced productivity and (dare we say it) a “competitive edge” for Irish firms in the domestic economy and in the global marketplace. The creative industries may even generate some sustainable employment, if not directly then indirectly (though nowhere near the number of new jobs we need to absorb our ever-growing dole queues).

Critics of the “creative industries” notion, however, would beg to differ. First, there’s the term itself. Creative industries are generally defined as those industries which generate intellectual property (IP). But this implies, according to the critics, that creative ability is only harnessed for economic gain and that it can be measured in economic terms. What’s more, this established definition can be traced back to the UK’s Department for Culture, Media, and Sport in the mid-1990s – which leads some to dismiss “creative industries” as Blair-era spin aimed at rebranding the economy and producing flattering measures of both current and potential economic activity. A second (perhaps more pragmatic) critique is similar to that voiced on RTE’s recent The Front Line discussion of the Smart Economy idea (May 10^th): basing strategies for economic recovery on the creative industries would involve investing serious amounts of taxpayer’s money in R&D activities that may or may not succeed in the long term, and are unlikely to create significant employment in the short-term for the cohort of people (such as construction workers) who have been hardest hit by the recession.

No doubt, the debate regarding the merits of the “creative industries” will rumble on indefinitely. However, we would like to offer a few  suggestions: first, maybe the hostility engendered by a term such as the creative industries could be mitigated if we reframe it as something more limited, such as “those industries that generate intellectual property and other novel products/ processes from existing technologies”, and accept that fact that creative thinking itself will never be amenable to industrial classification. Second, instead of talking in terms of a sub-set of creative industries, we could think in terms of “creative” activities embedded across the entire economy. Thirdly, we think those familiar what are deemed to be creative industries would accept that the industry itself is not one to generate large-scale employment opportunities, but instead is centred on micro-firms and the self-employed. In light of this, it would be wrong to trumpet the creative industries (or smart economy, or “innovation island” etc) as the potential source of short term employment, but rather as a source of differentiation that enhances domestic products and services though novel inventions and processes.

Even if one is not overly enamoured with the idea of the creative industries, it is still informative to have an impression what exactly is meant when we speak of the Irish creative industries.  Established industrial-classification based definitions of creative industries such as those discussed above point to the following as the creative industries sub-set: advertising; architecture; the arts and antique market; crafts; design; designer fashion; film and video; interactive leisure software; music; performing arts; publishing; software and computer services; and radio and television. The Arts Council have estimated that at a national level these sectors generate approximately €5.5 billion in terms of gross value added. A recent report published by Dublin City Council (which we have authored) estimates that, in the Greater Dublin Area, that same subset of industries employ over 77,000 people (59% of Irish Creative workers; 10% of total Dublin employment) and generate approximately €3.25 billion a year for the Greater Dublin Area. [The full report is available from Dublin City Council’s International Relations and Research Office and can also be accessed as a working paper here].

While the sub-set of industries included in this type of estimation is open to debate, the key message is that there is a significant reservoir of creative abilities in place within the Irish economy. The report also indicates that this sub-set of industries appears to be relatively more concentrated in larger urban centres. However, rather than being ammunition for a “Dublin versus the rest of Ireland” argument over job creation, the question facing us is how do we mobilise these creative resources (wherever they are located) to enhance the competitiveness of the broader economy in the medium and longer term.

Declan Curran and Chris van Egeraat

 

Disinvestment in education is the path to an ‘innovation island’?

Brian Cowen had an editorial in the Irish Times on Saturday arguing that Ireland will recover as a global innovation hub – ‘the best place in Europe to turn research and knowledge into products and services’ – guided by a policy of creating a smart economy. Presumably this would necessitate a highly trained workforce and a well developed research culture and facilities?

Apparently not.  At the same time that billions of euro are being pumped into propping up the banking and property sectors, there is presently underway a massive disinvestment from the education system – core budgets are being drastically trimmed, staff are being cut, supports slashed, capital programmes terminated, research funds hacked, etc.  And this is despite the fact that the the OECD reports that Ireland, pre-the crash, was one of the lowest spenders per capita on research and development, and on education in general, with very large teacher-student ratios and weak support infrastructure (see paras 18 and 23; Tables 4 and 7; also see here).

At a time when we should be investing heavily in education, we are undertaking savage cuts and doing serious damage to the limited capacities that have been built up over the past few years.  How this helps to foster innovation and entrepreneurship, attract inward investment, and create a smart economy is anyone’s guess.  Without a clear roadmap, accompanied by proper financial investment and political will – as opposed to a list of hopes – it is difficult to see how Ireland as an ‘innovation island’ will materialise.  Perhaps if we repeat our desire to be an innovation island enough, it’ll simply happen?  Or perhaps we could invest in education and research capacity building, or at the least seek to maintain pre-cut levels?

Here’s an interesting research question for the government – who do they think will want to move their research and development operations to a country where they are actively disinvesting in the creation of talent?

 

When smart economy and planning collide

Carton House

As someone who works in NUI Maynooth in an institute which specialises in spatial planning, I’m a little conflicted over the news that An Bord Pleanála has rejected plans for the university to build a business and technology park in the grounds of Carton House.  As the The Irish Times reports ‘the development would have seen the construction of 8,431 metres of office space of up to four storeys in height; 9,202 metres of university buildings including a research centre, a sports science building and an innovation centre; and 130 apartments and houses.’  It’ll be interesting to see how this unfolds as the area could really do with an innovation cluster that will help to create new jobs and partner up indigenous start-ups with both the university and nearby FDI businesses such as Intel, HP, IBM, etc.  At same time, the last thing we need is more bad planning.

Rob Kitchin