Domestic economy starting to deliver at last
However, with over two million employed in the economy the importance of Foreign Direct Investment (FDI) is becoming significantly less critical.
Subtle indications of how government thinking is changing on industrial policy can be deciphered from the presence earlier this week of Minister for Enterprise, Trade and Employment, Micheál Martin, at the publication of Enterprise Ireland’s (EI) 2005 annual report, which highlighted that this government believes the indigenous sector has to have a more central role in this economy’s long term future.
That is also reflected in the number of major trade missions led by Enterprise Ireland in recent years.
In fact, the minister and the top brass at EI will lead another week-long trade mission to Japan and China, starting today, as more Irish companies seek to build stronger trading links in those major business arenas.
EI has 950 staff of which 150 are based abroad in its 33 overseas offices spread across key markets.
How successful these initiatives will ultimately be is difficult to tell. But one thing is certain that unless the move to Research and Development (R&D) with the strong support of government is pursued relentlessly the indigenous sector may just flatter to deceive.
Here too however, signs are emerging that the R&D issue is finally hitting home.
Speaking in Dublin yesterday Patrick Lysaght, senior director of Xilinx Research Labs and the worldwide Xilinx University Programme, acknowledged the Government’s recent €3.8 billion investment strategy in support of Irish research. “This represents an impressive commitment which will not go unnoticed by leading research based corporations throughout the world.”
If the seven-year funding goals of the State are substantially achieved then this will undoubtedly result in economic benefits for Ireland in the creation of a world-class research infrastructure, indigenous research industry growth, spin-off employment creation and additional foreign direct investment,” he said.
This latest €3.8bn package follows the highly successful Science Foundation Ireland initiatives that sought to link academics and universities to each other in the push to deliver leading edge technology to be used to the benefit of Irish business.
Frank Ryan, chief executive of EI, said he was unashamedly going after that research to translate it into commercial opportunities for Irish firms.
In that context EI has also set itself ambitious targets to get Irish firms to spend more on R&D.
By end 2005 close to 600 firms were spending over €100,000 a year on R&D, designated as “meaningful R&D” by the State body.
The number engaged in “significant” R&D, where over €2m is spent per annum is just 33.
By 2007 the agency said it hopes to have 42 companies spending over the €2m mark every year.
These figures are part of a three year target set out by EI called Transforming Irish Industry 2005 — 2007.
At the time they were regarded as ambitious as were targets set in other areas by the agency.
One of the headline grabbing targets was to boost new exports by €3 billion over the three years.
And by the end of 2005, the first year of the new targets, the export sales figure had already made €1.25bn of the target as Irish exports totalled over €10bn.
A number of other targets were also set and it looks as if EI will succeed in getting Irish business to deliver on them all over the period.
All of this serves to underline the emerging reality that the domestic end of Irish business is starting to take a more prominent role in the on going success of the economy.
Further evidence of that comes with the 75 start ups in the economy last year.
The target here is for 210 by end 2007 and many of the firms who got going last year were impressive.
Much more needs to be done, but it is a testimony the EI and the entrepreneurial flair of Irish people that the domestic engine of the economy is starting to is deliver serious results at last.
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