EDITOR'S BRIEF

For some of us, we are entering the great unknown. A working life defined by strong economic growth undoubtedly led to more adventurous business and career decisions. Now the economic constraints are starting to tighten and though growth will continue, the heydays of the 1990s seem unlikely to return, if you listen to the masters of that black art of forecasting.

As economist Michael Casey outlines in the column in this month's magazine, the ESRI have issued a long term perspective on the economy, suggesting we may bounce back in 2010 with growth of 5 per cent, followed by several years of between three and four per cent. Further comfort can be garnered from its forecast that Ireland will outperform the EU up to the year 2025.

That is all to the good, but there are warnings implicit in this as well. We remain dependent on foreign direct investment, particularly from the US. Over 60 per cent of our GNP already comes from foreign multinationals and 90 per cent of our merchandise and service exports.

It seems outside forecasters agree with local economists on the challenges ahead. Robert Shapiro, a former economic adviser to the Clinton administration, hails Ireland for creating the kind of healthy jobs environment that encourages workers to come here and exempts Ireland, along with Sweden and Finland, from his dismal assessment of western Europe's economic prospects.

He praises our economy for being "responsive to the forces of globalisation, whereas the major European countries have not." However, he warns that being a low-cost launching point into Europe isn't unique any more.

It is generally accepted that private sector entrepreneurs will drive the economy in the years to come. As Casey states: "ultimately, it will be the quality of entrepreneurs that will determine the economic future of the country". That is perhaps where we need to be paying more attention not only to our large corporate giants, but to the minnows as well.

In that regard we may look to Germany. As Bernd Vohler of Berlin's School of Economics explains to Derek Scally, the hidden champions of that economy have been the small and medium-sized firms. These firms have taken Adam Smith at his word and pushed the division of labour to what they see as the logical conclusion: specialisation. A vibrant and innovative small firm's economy could cushion us from the global economic storms ahead.