Guinness and the knowledge economy

One of the points which smart economy boosters often miss, but which is obvious to economists, is that technology is internationally mobile. It follows that productivity growth in a small open economy like Ireland depends much more on the domestic adoption of foreign inventions than on domestic inventions. This in turn has implications for the sorts of arguments that can be made in favour of government R&D expenditure in Ireland.

Cormac provides a nice historical example here.

7 thoughts on “Guinness and the knowledge economy”

  1. Whilst clearly technology is internationally mobile, certain technology might still be suited to invention/establishment in a small economy. Chiefly say the type of technology that is best aided by co-operation amongst diverse stakeholders and requires enabling legislative framework. In this regard Ireland, as a small common-law country, is well placed. 2 related examples strike me:

    1) Mobile phone as payment device: that one’s mobile phone could act as a) a simple local electronic purse b) a debit card c) a credit card
    The convenience advantage of carrying just one device are obvious but the security advantage is perhaps more subtle

    2) Identity Management System
    Increasingly we require to prove our identities more to perhaps a) gain access to our homes or works b) log onto various computer systems c) use banking services d) interact with our state

    Generally an “ID Card” has been the wish of socially authoritarian figures, however and “Identity Management System” could be designed that would safeguard and indeed enhance the rights of the individual whilst allowing or greater economic efficiency

    As said at the outset either of these 2 endeavorers are examples that would require widespread co-operation & legislative framework and are perhaps best achieved in a country of our modest scale

  2. I read Cormac story very differently. I think it is a clear illustration that innovation is not just about things but about perceptions as well. The current government policy on R&D is limited to things only (and particular things at that) and is thus biased.

  3. @ Kevin O’Rourke

    I must read the IT article properly, but I will say this much. What Kevin suggested in his comments is very true indeed. That the Lisbon referendum at the moment. I have been studying European ‘Environmental Performance in Buildings’ directive legislation for the past year. It is to do with conservation of fossil fuels that we burn in our buildings for heating, cooling purposes and so forth. There is not a hope in hell, that the Irish themselves would have the competence – but, not so much the competence – moreso, the hassle of getting any kind of political agreement on what should be a suitable strategy going forward, to deal with fossil fuel dependency etc. Basically in Ireland, burning of fuel is a national past time. Be it flights in airplanes, driving on roads or burning heating oil in houses, we cannot get enough of the stuff. Then we watch the telly and we see international strife and trouble over black substances in the ground.

    Anyhow, it has occured to me, that many ‘experts’ that I have worked with in the building industry over the past number of years have not done much to develop an awareness on this subject. In almost all other aspects of innovation to do with construction of buildings, I think they are probably outstanding in their efforts – the best of them that is. But even the best here in Ireland struggle with the energy conservation aspect. It goes against our national custom, to have someone dictate to us about conservation of fuel etc.

    Anyhow, there is a new green economy growing up around this area, it doesn’t gel at all well with the national customs. There will be frictions. But the point is, Ireland managed to develop competence and even began to come to the forefront of innovation in terms of building construction over the past ten years, due to all of it we were doing. But the energy conservation aspect to building construction, is an innovation that has completely wrong-footed a lot of otherwise, clever and creative people in construction here in Ireland.

  4. Guinness was a Dublin drink and Beamish and Crawford began operations in Cork in 1792 and Murphy’s in 1856.

    Most of the pubs in Co. Cork at least, were so-called tied houses controlled by Beamish and Murphy’s until recent decades.

    With the demise of Waterford Glass, the Irish global brands Guinness, Jameson and Baileys Irish Cream are owned by foreign firms.

    In the food area, Ireland remains as a primarily commodity producer but there is more potential than banking on university research:

    http://www.finfacts.ie/irishfinancenews/article_1017985.shtml

  5. Ireland is not a great country for innovation of the type Desmond talks about. The consumer economy here is quite conservative and government purchasing is tremendously conservative for the most part. If you want to test stuff of that scale, you’d be better off in Scandanavia or Iceland.

  6. It is certainly an issue that Ireland has not produced that many ‘brands’ in the last 20 years. Ryanair is the exception. Ryanair has fantastic recognition, even in the United States. Aer Lingus also has good recognition, mainly due (in my opinion) to its strategic location in alphabetical lists of airlines.

  7. @ Brian
    Good point about construction innovation.
    To effect a change…..???
    People do want the tried and trusted: cavity walls etc.

    If the mistakes could be made in the innovation process and then the finished product rolled out into a nationalised standard.
    If there was a Govt department of innovation that could identify problems, pull the strings of the various bureaucracies and deliver a product or process out of it.

    There is also the educational aspect to this: upskilling of the professionals and crafts involved. Coordination of academic research, testing of finished products, etc.

    That or a 400% fuel tax!

    Al

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