Some 80pc of Ireland’s knowledge workforce for 2015 is already at work, which indicates a potential acute skills shortage if the country’s knowledge economy aims are fully realised. In its end of year statement for 2003, Forfás has warned that increasing costs of doing business in Ireland are driving down job creation and that R&D investment is not increasing at a rate that would improve our position relative to other countries.
In its end of year statement, Forfás acknowledged that significant milestones had been achieved in making Ireland a knowledge and innovation-driven economy, including the introduction of R&D tax credits, major broadband infrastructure investments announced by the Government and Eircom and the development of long-term skills strategies. As well as this the arrival of Google, eBay and Overture to establish European centres in Dublin as well as major R&D activities by indigenous technology companies like Cape Technologies, DigiSoft.tv and Vistamed pushed the country further down the road of becoming an innovation economy.
However, the state agency warned that although industry in Ireland has increased its investment in R&D activities in recent years, it has not done so at a rate that will improve the country’s position relative to other countries. It said that the introduction of R&D tax credits in the 2004 Budget would help ensure that Ireland is not at a competitive disadvantage as a location for R&D and will assist firms already here to invest significantly.
Forfás said that Ireland’s ability to attract and sustain knowledge-intensive industry will depend critically on the supply of high-skilled people, including researchers. It estimated that some 80pc of the people who will make up the workforce of the knowledge-based economy of 2015 are already at work. Forfás warned that priority will have to be given to the ongoing training and education of workers. Formal education, it said, will need to be enhanced by a commitment to life-long learning incorporating informal on-the-job experience as well as a formal framework that encourages both a return to education and the constant upskilling of the workforce.
2003, Forfás said, was also marked by major advances in Government investment in research funding with Science Foundation Ireland investing €285m in 2003, up 39pc on the year before, as well as increasing the awareness in science generally and as a career. Forfás also worked with the Irish Council for Science, Technology and Innovation (ICSTI) to develop new standards and protocols for the sharing of intellectual property funded by publicly funded research between the private and public sectors. The first guidelines for this kind of collaboration between industry and the third level sector will be published early this year.
Overall employment levels in the economy continued to grow in 2003, Forfás said. The total number at work rose by some 26,000 to more than 1.82m during the year. This, Forfás claimed, was a particularly strong performance given the fact that most developed countries experienced falls in employment during the same period.
Employment levels in agency-supported companies stood at 297,000 in 2003, a decrease of almost 7,500 on 2002. 2003 was the third consecutive year where there has been a net decrease in employment in agency-supported companies. This resulted in 19,000 less jobs in manufacturing and internationally traded services compared to the peak of 316,500 in 2000. However, employment in agency-supported companies is still one third higher than it was a decade ago when it stood at 224,000.
The manufacturing sector accounted for all of the net decrease in employment in 2003. Within the internationally traded services sector, job gains and losses were in balance with 8,500 job gains and losses. In contrast there were 14,000 jobs created in manufacturing, but they were more than outweighed by losses of 21,500, with the computer and electronics sector accounting for almost half of the net decrease. The textile sector and the paper and printing sector also witnessed significant net decreases in employment with approximately 1,000 jobs being lost in each.
Forfás said that the decline in overall employment by agency-supported companies in 2003 reflected sluggish import demand from Ireland’s major trading partners, increasing competition for mobile investment projects from Asia and central and eastern Europe; and the increasing cost of doing business in Ireland relative to other countries.
By John Kennedy