Reaping the Benefits of Globalisation: What are the Opportunities and Challenges for Europe and Ireland?

This Conference, jointly organised with the European Commission, is an associated event of the Irish Presidency of the Council of the EU. It will present and discuss the main findings of the 2012 edition of the European Competitiveness Report as well as recent related empirical evidence and their implications for industrial and innovation policies in Europe and Ireland. The Conference Programme and more information are available here.

The Effect of the Euro on Irish Exports

An important argument for the adoption of the euro was the expectation that it would boost trade.  This paper  analysed the effects of the euro on Irish exports over the period 1993-2004. The results  indicate that the impact of the euro on Irish exports to euro area countries relative to the rest of the Irish trading partners was significant and positive from 2000 onwards. This effect has increased over time. Furthermore, it apperas that the impact of the single currency on Irish exports has varied across industries.

The Four-Year National Recovery Plan

You can read my view on the Four Year Plan here.

My comment included two additional paragraphs which were cut, I suppose due to space constraints:

“The current economic and financial crisis has slowed down economic growth in the advanced economies which are Ireland’s main trading partners. Against this background, the assumption of a strong export-led growth might be too optimistic. In addition, improving price competitiveness and reducing the debt burden are two conflicting objectives.   

Operational measures are to be discussed at a later stage and there is little information about the measures to be taken beyond 2011. It is not clear when and how the plan will be reviewed, enforced, and monitored. There is no clear sequencing of the reforms to ensure that short term negative effects on demand are minimised.”

ESRI – TCD Conference: Turning Globalisation to National Advantage: Economic Policy Lessons from Ireland’s Experience

This conference will be held at the ESRI on Thursday 28th October from 13:30 to 17:30 and will discuss research results from two IRCHSS-funded projects focused on the effects of globalisation on the Irish economy and related policy responses. The conference programme can be found here. There is no attendance fee, but guests are asked to register here by the 23rd October. Any queries can be addressed to Karen Mayor (karen.mayor@esri.ie).
 

The OECD Innovation Strategy

The OECD Innovation Strategy brings together the results of a three-year analysis of innovation and innovation policies.

The Executive Summary of the analytical study can be found here and the Key Findings here. A Compendium of Indicators to measure innovation and monitor the implementation of the strategy can be found here.

 An Expert Advisory Group including experts nominated by the governments of member states and other selected governments has provided advice and feedback on the project. As far as I can see in this Expert Advisory Group Ireland is not represented.

Economic Policy Advice to the Government Prior to the Financial Crisis

Economic policy advice on reducing the risks to macroeconomic and financial stability from the housing market, restoring competitiveness and preparing to adjust in a downturn was available to the Government prior to the financial crisis.

In a research paper which I presented in the plenary session of the Annual Economic Policy Conference in Kenmare on 13 October 2006 (attended by a good number of senior civil servants), after discussing the adjustment mechanisms available to Ireland as a member of the European Economic and Monetary Union, I pointed out four main challenges facing the Irish economy and suggested a combination of policy measures to respond to these challenges. The four challenges that I identified were as follows: 

a)      maintaining a high potential output growth rate

b)      restoring competitiveness

c)      managing potential risks to macroeconomic and financial stability from the housing market

d)      adjustment to a slowdown in the United States and an expected appreciation of the euro against the dollar

 The policy measures suggested to respond to these challenges included the following:

     a)      fiscal tightening to reduce domestic demand pressures

     b)      a wage restraint in the public sector

     c)      fiscal measures to reduce the risks to macroeconomic and financial stability such as phasing out the tax relief on mortgage interest payments, a tax on imputed rents, a broader capital gains tax, or  a property tax on vacant of secondary dwellings (as options available to the Government)

    d)      limits on the use of real estate as collateral to protect the banking system against over lending and bad loans

    e)      running a large fiscal surplus during the current boom to prepare for a downturn in the world economy

The Irish Times of 14 October 2006 covered extensively my main points. The paper was published in the Quarterly Economic Commentary in March 2007.    

European Research Area Conference

A recent international conference held in Brussels discussed strengthening research and research policies in Europe. The Conference Programme  addressed issues such as the long term perspectives for research and researchers; developing world-class research infrastructures in Europe; improving funding conditions for European research institutions; research and innovation during the current crisis; priorities for EU research policies post 2010; S&T specialisation; indicators to monitor progress towards the European Research Area and a knowledge-based economy. The papers and presentations can be found here. The conclusions of the conference sessions can be found here.

Effective Collaboration in Multidisciplinary Research

One of the points made often in relation to improving science, technology and innovation policy is the need for more effective multidisciplinary research. The ESRI is organising a Training Workshop focused on understanding multidisciplinary research collaboration and learning how to make it more effective. The Workshop will take place on 3 November 2009, 9:00-13:00. More details can be found here. Places are limited to 30 participants including researchers and policy analysts. Registration before 25 October 2009 here.

What Determines the Location Choice of Foreign Investment in R&D ?

There is an ongoing discussion on this blog about attracting foreign investment in R&D in Ireland. In a recent research paper we analysed the location decisions of foreign affilates in the R&D sector incorported in the European Union over 1999-2006. Our research results suggest that, on average the location probability increases with market potential, agglomeration economies, R&D intensity and proximity to centres of  research excellence.  The determinants of the location choice of R&D foreign affiliates vary depending on the country of origin of the foreign investor. Thus, it appears that agglomeration externalities and business R&D intensity had a higher positive effect on the propensity to locate in an EU region in the case of multinationals from North America in comparison to European based multinationals. Proximity to centres of research excellence had a positive and significant effect on the location choice for North American R&D multinationals but no significant effect in the case of  European R&D multinationals.

Our research results suggest a number of policy implications. First, policy aiming at increasing the R&D intensity of regions are likely to foster the attractiveness of regions to R&D foreign investment. Second, positive externalities from clustering of R&D foreign affiliates outweigh competition effects. Third, given the heterogeneous behaviour of foreign investors, differentiated policy depending on target partner countries can increase the success of such policies.

More University Rankings

Quantitative analysis of science and technology is  a growing research area.  There are two university rankings based on bibilometric indicators which are worth watching:

Cybermetrics Lab has this university ranking for Top 100 universities in Europe, published in July 2009. TCD is the only Irish university in this list, ranked 49th in Europe and 169th in the world ranking. In the world ranking UC Cork is 393rd and UCD is 457th. The world rank of Irish universities can be found here.

The Centre for Science and Technology Studies of the Leiden University has constructed several university rankings based on scientific output. While based on the same data and methodological background, rankings differ depending on the focus of the impact – indicators. The Leiden ranking results 2008 can be found here.

Fostering Innovation in a Time of Economic Crisis

OECD has analysed the likely impact of the current crisis on long-term economic growth and the innovation-related actions in policy responses of its member countries.

You can find the report here

Ireland is not covered in the report. It appears that Ireland has not responded to the questionnaire circulated by the OECD by the cut-off date for this report (early May 2009)

How efficient is public spending on R&D

In the context of current discussions about the government spending on R&D and more broadly on science, technology and innovation the key question should be how to use the public resources in the most efficient way. While the fact that markets do not provide sufficient incentives for individuals and firms to engage in socially optimal R&D and innovation is well established in theory and documented by existing empirical evidence (due to positive externalities private returns to R&D investment are lower than social returns), in some cases government action may not provide effectively appropriate incentives at sufficiently low administrative and compliance cost, and without creating further distortions (crowding out).

Given scarce public funds, assessing the efficiency and effectiveness of public spending on R&D and their determinants should be given a high attention in Ireland.

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