A knowledge economy requires strategic long-term thinking

7 Jun 2016

Taoiseach Enda Kenny and the current minority Government need to affirm their commitment to Ireland's knowledge economy

As part of the Irish Research Council’s #LoveIrishResearch campaign, IBEC’s Danny McCoy discusses why it is imperative for both industry and government to invest in education and research and development.

For years, successive governments have talked about the need for Ireland to build a smart, knowledge-based economy – one that drives research and innovation, develops talent, creates high-value jobs and pushes the country forward both socially and economically. However, the commitment and investment required to make this a reality has always been wanting.

While Ireland has made great strides over the past 15 years to become a more knowledge-based and innovation-intensive economy, we still lag well behind world leaders like Denmark, Germany and the Netherlands. Internationally, we are still classed as an ‘innovation follower’ and a high proportion of Irish companies do not engage in any R&D activities.

Investment in research and development 

Last December, the previous government published Innovation 2020 – Ireland’s new strategy for research and development, science and technology. With this strategy, there is an opportunity for the new minority Government and all those who espouse the vision of a knowledge economy to turn words into action.

Implementation of this strategy will require ambition and a significant increase in both public and private investment. The Government is currently committed to a target of increasing total investment in R&D to 2.5pc of GNP by 2020. The lion’s share of this – approximately two-thirds – will be covered by industry. But government should be prepared to cover the remainder. Come budget time, the new Government may be tempted to row back on these commitments. And while this may provide some short-term fiscal relief, it would damage the foundations of the country’s long-term growth and competitiveness.

A strong pipeline of talent 

A knowledge economy is built around people and skills. In 2016, our talent pool remains our key global competitive advantage. This was underlined recently when Ireland’s strong skills base helped Ireland jump to seventh place in the IMD World Competitiveness rankings. However, there is no room for complacency.

Education spending has been cut in recent years, in spite of growing student numbers, and the higher education sector is at breaking point. Irish school and university capacity will need to increase by more than 220,000 over the next 15 years. Investment in the system and a sustainable solution to higher education funding need to be prioritised by the new administration

We also need to take a strong look at how we are preparing our young people for life after school. Full implementation of the new junior cycle is critical in this regard. For the last 24 years, the Junior Certificate has been little more than a dress rehearsal for the Leaving Certificate and a guide for making decisions around subject choice.

The new model will help students develop the higher-order thinking skills and character qualities they need to thrive in the 21st century: the ability to think critically and creatively, to adapt to changing situations, to make a strong argument, take initiative and work in collaboration with others. If this purpose is met at this critical time in a young person’s life, the benefits will carry all the way through to third and fourth level and prepare the student for a lifetime of learning to follow.

Long-term thinking needed

Building a knowledge economy requires long-term strategic thinking. The return on investment, however, is a better society backed by a stronger economy. In 2016, Ireland has the fastest-growing economy in Europe. As the economic recovery gains momentum, it is crucial political expediency and short-sightedness do not undermine this goal.

Danny McCoy

Danny McCoy is the CEO of IBEC, which represents Irish businesses spanning every sector of the economy.

Image of Taoiseach Enda Kenny via Flickr.com/European Council