Future Prospects in Addressing Economic Development

May 24, 2011

The revision of national economic priorities with the election of the new Government has taken place against a considerably different socio-economic environment to that when the National Development Plan 2009-2016 was published. It therefore comes as no surprise that public policy makers in Ireland will be undertaking a comprehensive spending review to bring further significant savings for the Exchequer. This will mean a significant re-focusing of public expenditure over the next five years. So where does this leave those charged with delivering on a substantially changed set of local economic priorities?

Our focus must be on addressing competitiveness gaps that require attention at local and national level if the Irish economy is to return to sustainable growth. This includes dealing with public service reform but should not be limited solely to this, admittedly challenging, issue. Both national and local political and administrative processes require considerable reform but we also need to look at how a renewed regulatory environment can be used to enhance sustainable growth. In addition, our infrastructure remains an on-going issue. However, thanks to the heavy investment of recent years, our understanding of the nature and type of infrastructure necessary for a successful 21st century economy must change. We need to look at infrastructure as not only roads and rail, water treatment or broadband but also as people with the skills to allow us to compete internationaly. This particularly includes people with skills that are not being used to their full potential.

Furthermore, the balance between public and private provision has to be addressed. Such thinking is increasingly an influence in investment decision-making by the likes of the World Bank, the International Finance Corporation and other major institutional investors, some of whom Ireland is now dependant for resourcing.

A new role in economic development?

Given the above environment those responsible for economic development need to bear in mind the challenges that confront business and economic development. This will be difficult against a backdrop of increasing constraints on local and national resources. Thankfully however, there are plenty of existing examples of where local and national initiative can and does facilitate economic renewal.
Some of these include:

Economic Profiles/Information

It can be amazing that there are still some agencies and authorities which have poor information about investment and economic opportunity in their areas. This contrasts with others that provide both the investor and the enterpreneur with exactly the right amount of information to support business case development, a critical feature of all business decisions.

Training/retraining

Unsurprisingly the Programme for Government identifies various initiatives to underpin a re-skilling of newly unemployed and under-employed people. In many instances there are proven local examples where this is already working. We need to ask how these successful labour activation projects can be translated into programmes that will create sustainable employment across the State.

Regulatory/Policy opportunities

The regulatory sector is identified in a series of policy documents issued by the last government as having the potential for new employment. This thinking has carried through into the Programme for Government. The potential from sustainable employment remains great in Ireland if we could get all the policy-makers and implementation agencies moving in a shared direction.

International networking/ambassadors

The announcemnent of the employment reward programme by an Taoiseach highlights a much under valued feature of our international diaspora. Several local authorities have in the past year already identified the economic opportunities that could arise from international networking, including with their County Associations, to generate economic opportunity.

R&D networking

The potential opportunities arising from the significant level of investment in R&D within the third level sector has being highlighted by the Minister for Enterprise, Jobs and Innovation. A number of local and national agencies are already well advanced in supporting such initiatives but there is a need for this to be put in place across the State. Examples include liaison with the education sector to network the academic/research community with local businesses and other potential investors. The objective of translating research into business development ideas has been demonstrated to deliver real economic progress. The challenge is to build on this success over the coming years.

For those charged with economic development (and this pretty much applies to most agencies at the present time) there is a need to focus on the SMART Economy and what is to be done to underpin a revitalised new economy which will sustain both local and national expectations. One of the more notable features of the new policy arena is the need to have clearly established work programmes supported by SMART thinking and evaluation critieria. This will allow those responsible for economic development to keep a firm perspective on substantive outcomes. In doing so they will be well positioned to take advantage of new economic opportunities. In addition, the recently adopted Programme for Government includes several initiatives of direct relevance to sustainable economic development. These include renewable energy, adaptation for climate change, and regulatory reform. All economic actors, public and private, should reflect on these areas and explore them to identify potential oportunities to create economic development.

Finally, the networking of local business remains an on-going challenge, particularly if there is to be an increase in indigenous exports. The clustering of local entrepeneurs in Ireland has already proven to be a successful model, as it is all over the globe. Doing so allows smaller businesses to move into the international arena and with that comes the market response which is central to a viable future for many Irish businesses, manufacturing and service based.

There is much to be positive about the shift in policy direction currently underway but it really will only be seen to be effective if progress can be measured in a substantial reduction in unemployment, an increase in local export potential and an enhanced access to opportunity for the many people currently confronted with the fallout of the past three years.