Time for our leaders to do some heavy lifting

According to the pundits it’s time to do some heavy lifting.

In the last few days we have been given a very clear picture of the future direction of Ireland and Ireland’s economy. No, we are not talking about the troika, IMF, ECB or the EU. We are not talking about Government spin or wishful thinking.

Straight from the proverbial horse’s mouth we’ve been effectively told that it’s time for us to do some serious heavy lifting. I’m sure we all thought that we’ve been doing a lot of heavy lifting over the last four years, making up for the willful mistakes and greed of others. Unfortunately, it would appear that we are going to have to do a lot more.

Craig Barrett, former CEO of Intel and the man who ultimately decided to put 6,000 jobs into Dublin, was in Cork speaking to the Irish Technology Leadership Group. The main gist of his words was that Ireland now needs to foster its own industries. Indeed, speaking to industry leaders some years ago, he made what to many would have been startling claims. Companies making a decision for a new location make their decision on many grounds. Such major decisions are never based on any single reason. They are certainly not made on the basis of sentiment as some would have us believe. Paddy, particularly one who has made it in the big world outside of Ireland will never make a decision to locate ion Ireland just because he is Paddy. He wouldn’t last long if he did.

So it was particularly interesting to note that of the 14 reasons why Intel decided to come to Ireland the only one that survives is our low corporate tax rate. We should note that he did not mention a highly educated young and willing workforce. Given other recent articles about the dumbing down of the quality of some degree courses it’s a possibility that such a claim may not even be possible now. Notwithstanding everything else he had to say we need to make sure our so-called friends in Europe do not deprive us of that incentive.

He went on to comment on the emergence of an additional three billion capitalists in the economic system very many of whom are in China, but also in Russia, India and South America. One of the main reasons US and other FDI companies came to Europe was to be close to the large and, to some extent, the emerging market of a united Europe. We should not be surprised therefore when companies chose future plants to be closer to the markets they wish to serve. In effect, the attraction of FDI into the future is only going to get tougher and tougher. These countries also have educated workforces but right now they are an awful lot cheaper to employ.

His advice was very simple. “The future of countries like Ireland and the USA is not so much to do a ton of manufacturing. You are going to have to have your workforce use their brains and add value to what they do.” He said that Intel and EMC were examples of what he was talking about. Frank Ryan, CEO of Enterprise Ireland, echoed those words and said that Ireland’s reign as the destination of choice for FDI is coming to an end.

That might all seem like bad and even worrying news but that day was always coming. Those of us who were around in the seventies and eighties will know that we’ve climbed out of a hole before and we will do it again. Only this time we have a lot more intellectual resources and an awful lot more educated people to do it. The trick is not to see the bad side but to see the opportunities that exist.

As Frank Ryan says we have to “make progress towards a model that is reliant on FDI only. We’ve learned from the multinationals so now it’s our turn to do it ourselves. The bottom line is if this is to happen we need joined up government, and we need it urgently”.