Former IDA chief executive Seán Dorgan has an interesting article on the Smart Economy in today’s Irish Times, partly rebutting some of the points made in Declan Jordan’s recent piece. One of the arguments made by Dorgan that I found interesting was the following:
The Technology Foresight reviews were undertaken a decade ago with the realisation that a production model based on low costs and labour surpluses had run its course.
Instead, Ireland had to move to higher value activities and create a new dynamic for growth. The competitive power of knowledge and innovation was identified, for indigenous development and winning international investments.
One of the points I made when last discussing this issue was that the Smart Economy strategy seemed more appropriate for the later days of the Celtic Tiger, when the economy was at full employment after years of attracting FDI. Dorgan’s article further enforces that impression: With unemployment already at almost 12% and going higher, should we really be talking about moving beyond industrial policy strategies based on the availability of labour surpluses?