NESC Report: Promoting Economic Recovery and Employment Post author By Philip Lane Post date February 2, 2012 The report is available here. Categories In Uncategorized 11 Comments on NESC Report: Promoting Economic Recovery and Employment ← Friday Conference: Demography Session → Friday conference: banking and the euro. 11 replies on “NESC Report: Promoting Economic Recovery and Employment” Under the section ‘Responding to the crisis’, p.91 A wide array of state supports and actors can be part of this problem-solving process. The cases highlight that the acid test of state support is increasingly linked to the extent to which it can be a partner to this measured search process. The input of the state is not limited to its impact, via grants and other incentives, on the rate of return for a given activity. Instead, the state in various guises is seen as a potential contributor to the process of reimagining possibilities. The cases highlighted that not all parts of the enterprise support system are engaging in this way with companies. Indeed, difficulty in supporting firms’ open-ended search to create new economic possibilities seems more pronounced in the wider public sector. Michael Hennigan has made the point several times here that the state already operates a generous investment bank via the science budget. There seems to be no ‘acid test’ for state support failure, a.k.a. the Smart Economy. Surely, in the context of graduate emigration and rising long term unemployment if anything needs ‘reimagining’ it is general R&D funding. And indeed if there is such a demand for ‘new’ universities, as I gather from reading the press from afar, shouldn’t the demand be tested with a round of third level privatization? What I took away from this report is a ‘keep things as they are’ emphasis. Also didn’t Colm McCarthy’s crowd recommend abolishing NESC or was it NESF, or something like that? It’s amazing that, given the range of special interests represented in the Council (and by very senior people) and the topics being considered, a 120 page report could be produced without, apparently, ruffling any feathers. The Secretariat to the Council deserves enormous credit for its ability to produce such a huge volume of material that successfully avoids engaging with key issues or identifying specific, implementable policy proposals. It is a total waste that so much time and and effort is being expended and such valuable resources are being deployed producing, what in the main is, BS to try and say something on these issues in a way that papers over and conceals the underlying conflicts between all the special interests represented. As for most of the key structural reform elements in the EU/IMF MOU, it’s as if they didn’t exist. No serious consideration of competition policy, economic regulation, the efficient financing of the infrastructure and utility sectors, etc. The most they could rise to is the possibility of some financial repression to finance investment and the consideration of New ERA, FG’s flagship programme to refrom the semi-states and create 100,000 jobs, is less informative than the cryptic piece on the NTMA’s web-site. The NESC should be abolished and the Secretariat should be re-deployed as full time reseacrh support for Oireachtas Cttees. @ Paul Hunt Hang in there and keep hurling. It’s a long road that has no turning. I’m sure that the folks in the secretariat are well-meaning but this report is typical of the deference to authority and while Richard Bruton may well not welcome home truth inputs for his upcoming SAP (schemes, aspirations and platitudes) jobs plan, he should be given them. Civil servants with their special unfunded pension scheme recommending that clapped out pension funds for the minority of private sector workers be used for infrastructure projects is one thing but have we actually improved on public project management since the boom? Some Irish are suckers for fairytales and the Examiner has a story today: ‘Ireland to be medical tech leader’ and it says “the IBEC-affiliated Irish Medical Device Association said its aim is that by 2015, Irish-made medical technology products and solutions will be major contributors to global healthcare and the global economy.” Aspirations indeed and the NESC report says ‘It may well be the case that the foreign-owned sector with higher propensity to export, spend on research and development, and higher productivity masks a weak and underdeveloped indigenous sector. However, this view is hard to reconcile with evidence from individual companies and from the enterprise agencies. Along with the cases discussed above, there are various pieces of evidence that suggest a more careful analysis is required. For example, in 2010: 1. Enterprise Ireland client companies achieved €14bn export sales, which included €1.95bn of new export sales; [new does not necessarily suggest from new exporters EI told Finfacts last month] 2. Irish companies operating in the US employed 80,000 people compared to 110,000 employed by US companies in Ireland (IBEC, 2011); [most of the 80,000 would be at companies majority owned overseas and maybe Accenture the US consultancy firm which has its hq in Ireland] 3. Food exports increased by over 11 per cent in value terms; and, [big deal during a global food price commodity boom] 4. In volume terms the increase in Irish service exports in 2010 was 9.9 per cent which was the largest increase in services exports in the EU (15) (NESC, 2011b). [big deal again — about 93% are from foreign firms; so services exports from Irish firms are low] The Alchemist covers the ‘smart economy’ which takes the lion’s share of enterprise funding and data on outcomes – – pending patience. EU data suggests Ireland has a low rate of exporting from SMEs compared with other small countries – – don’t expect an agency chief to say that. Finally, why is Ireland ranked with Malta, Cyprus and Luxembourg for the poorest level of enterprise data in the EU27? Has it occurred to anyone? The good news is that Eurostat will force the issue – – the cheek of them impinging on our incompetence. .. maybe that should be sovereignity. There’s a good point on procurement but be adventurous and advise the conservatives to lift the Victorian veil of secrecy on the system that aids insiders. @Paul Quigley, I’m not sure if you want me to keep hurling and road bowling, but I think I get the mixed metaphor message 🙂 And I suppose I should make it clear that my blunderbuss may have hit the academics on the Council – some from this parish – but that was not my intention. I understand that if one is invited by Government to be a member one should be honoured and that it would be deemed churlish (and possibly vaguely anti-patriotic) if one were to refuse. It’s just a shame that no one has the guts or gumption to say that all this is a load of cobblers and simply serves to sustain the optical illusion that the government-machine is determined to project. @ Paul Hunt Keep up the good fight. In my little corner of the public sector (healthcare) we’re planning and building new facilities at the moment that we (a) don’t need; and (b) won’t be able to staff when they do open. We’re spending lots of money without any option appraisals and, even when they were carried out in the past, no financial expertise was used (the HSE has never heard of the ‘time value of money’). We’re building Primary Care Centres (through expensive PPPs) that don’t provide services after 5pm in the evening and are really only replacing nice office and clinical accommodation for public health nurses, physiotherapists, OTs, dentists, etc. with MUCH NICER accommodation without any new services being provided. I’m afraid I couldn’t get past Page ii of the report – the Membership of the Council. @All Paul Hunt suggested “The NESC should be abolished and the Secretariat should be re-deployed as full time reseacrh support for Oireachtas Cttees.” Given that the NESC report on such a fundamental issue as Promoting Employment and Economic Recovery only attracted six posts begs the question as to the organisation’s relevance, notwhtistanding its expertise. Why not merge it with the ESRI and (as previously suggested) become research organisations for Dail committees and TDs. @Brian Flanagan, We’ve been down this road before. There may be some (private) recognition that the ESRI needs to have much more independence (and its resources possibly supplemented by the secretariats of the NESC and the NCC) – but to advise government directly without fear or favour. There is hardly any recognition that the powers and resources of the Oireachtas need considerable augmentation. But, so far as I am aware – and quite understandably, there is no Government willingness to contemplate this. There seems to a widespread lack of recognition that in the absence of the Dail being unwilling or unable to even to begin to assert its primacy over government, Ireland does not have a functioning parliamentary democracy. This very much suits Government – and the government-machine behind it – ‘to let sleeping dogs lie’. But that’s what got us in to this mess in the first place – and previous messes. But if TDs are not given “grown-ups'” responsibilities – and unfortunately they seem to have no incentive to demand them (and every incentive not to) – they will behave like children. So I’m arguing that they be given the keys to the car and told that they’re grown-up enough now to drive it responsibly. But getting the keys off government – or encouraging, cajoling, or even compelling TDs to demand the keys – is the challenge. Very good argument, Paul The NESC report has some good points and some weaker points. Unfotunately though it is weakened by the lack of an evidence base in some areas, and also by its own self watering down or ignoring of key issues (to be maybe expecded as as part of the NESC, NCPP, NESF, NESDO social partnership merry-go-round). There is a huge gap in evidence based policymaking in many areas in Ireland and a need for a truely independent economics based organisation, far away from the hands of social partnership ‘experts” and assistant sectretaries. That said there will also be vested interests using reports without proper evidence or bending the analysis (yes it does exist in many other countries – business groups, trade groups, trade unions, community groups, government departments, marketing organisations etc). As well as existing another problem is for too long these groups have been getting the ear of decision makers at the cost of proper economics based advice, whilst propping up their own spin. They must be placed further away in the futue, with the gap filled by proper economic advice using data, analysis and other economic tools getting the ear of decisionmakers. Of course a 100% utopia is never realistic but the vested interest balance in Ireland is too far. On the R&D debate people are entitled to their opinions. But what evidence do they have that applied R&D investment is bad for productivity and growth? Most economic literature points to it as a driver of growth. Also every developed country is playing this game (investing much more as a % of GNP than Ireland) – are they also wrong? What do we replace R&D investment with? Ok the spin is over the top and Ireland is way behind in cost benefit analysis but what is the alternative? Do we go got low cost manufacturing, agriculture, what? Should we be encouraging more private R&D in Ireland – it ringfences jobs in other non R&D parts of organisations and presents a positive image of the nation? Much of the private R&D needs to be supported by public R&D (Pharma, ICT) which in effect will (hopefully) train people for future employment.Without the supply there will be little new firms coming or expanding? But the huge failure perhaps isnt in the MNC area but perhaps the weak performance in our indengenous sector even through the boom. What can be done here – will laissez faire get us through? What role does the state have? Perhaps economists could take up more research of the business sector? When did you last see business performance or R&D evidence presented at Kenmare or get the same attention as other economics areas such as regulation, banking or tranpsort economics? In other countries there is a wealth of researchers in these key economics areas. i think this blog would be a much better tool if people countered criticism with some positive suggestions (maybe backed up by data and economic findings). @Holes in the data, I expect your well-balanced assessment expresses the views of many people who toil in these areas, but they are constrained – and constrain themselves – in every way imaginable from speaking out in the public interest. I am well aware that there are many competent and dedicated public servants in all parts of the government-machine that fully recognise the problem, but they can’t break cover. The current arrangements perfectly suit those who make policy decisions behind closed doors, who wish to conceal the concessions they have made to special interests and whose demand is for policy-based evidence. And there is an entire ‘industry’ to manufacture this for them. They live in fear and terror of the process being opened up lest some evidence-based policy intrude. So the doors remain firmly closed. It is difficult to see how these closed doors will be forced open. TDs seem perfectly happy to swallow a bite-sized version of the party-line and to regurgitate it endlessly irrespective of the situation or question they are asked. And most of the people with any competence in the public policy aspects of the various sectors are either locked in to the ‘industry’ manufacturing policy-based evidence for government or involved in the parallel ‘industry’ that manufactures special pleading and self-serving analysis for the various narrow sectional economic interests. And many of the academics with public policy knowledge and competence are involved in both ‘industries’ and often switch between the two. A huge and complex edifice of legislation, regulation and procedures has been built in most sectors. Navigating this requires some knowledge of a relevant discipline or technical skills. Even the averagely intelligent and interested lay-person is easily deterred from scrutinising what is going on – and that, of course, is the intention. And the media are a total waste of space. Anyone outside of these closed and charmed circles who lacks ‘public standing’ and who offers a critique is simply ignored or brushed aside. It is a bit dispiriting. Comments are closed.