We must stop depending on US firms, warns report

IRELAND can no longer rely on American multinationals, the first major report on the country’s enterprise policies for over a decade has concluded.

The report, Ahead of the Curve, identifies two key areas as crucial to this strategy.

One is substantial investment in research and development in Irish-based companies. The other is a beefing-up of Irish sales and marketing efforts overseas.

Government-appointed think-tank, the Enterprise Strategy Group, said our ability to deliver what customers want will be the “crucial component for Ireland’s future enterprise success and will ultimately determine whether we sustain the huge gains of recent years”.

Vital to that will be a commitment by Government and industry to recruit 1,000 sales and marketing graduates who will help bolster an overseas sales drive.

It will also entail a major financial commitment to R&D from the State, especially through third-level educational institutions.

The review group head, Eoin O’Driscoll, new chairman of Forfás, yesterday gave a graphic illustration of how Irish companies are falling behind.

He said the value of exports by foreign companies based in Ireland grew by almost 700% between 1990 and 2002 whereas the value of exports by indigenous companies had hardly doubled in the same period.

The report said that when inflation is taken into account, “the real growth for indigenous companies has been negligible. The poor performance of the majority of (Irish-owned) companies is partly hidden by the exceptional performance of some individual companies”.

The group also proposed closer interaction between government and business. This would involve heads of Government departments meeting with four top executives from Irish business on a regular basis.

Mr O’Driscoll also suggested that the Government take the unprecedented step of allowing the executives to brief a Cabinet meeting twice a year.

Tánaiste Mary Harney said while the economy has performed exceptionally well, it was no longer low-cost and that meant investment in education would be crucial for the new knowledge-based economy.

Agreeing with the group’s findings that the low-tax regime should be retained, Ms Harney said if Ireland is not in a position to generate wealth, it will not have the resources to become a caring and compassionate society.

“Social inclusion and economic growth are not mutually exclusive. They are both dependent on each other,” she said.

The report will be studied by a small team of civil servants who will report back to Government in September. Ms Harney said an implementation process would then begin.