"No man has the right to fix the boundary of the march of a nation; no man has a right to say to his country: thus far shalt thou go and no further." That was Charles Stewart Parnell in 1885 brilliantly capturing in one short sentence the aspiration of political self-determination. The "national question" is not as it was, but his words now ring true in relation to Ireland's economic development.
In planning the economic future of this State, our failures could end up as failures of ambition. We might have battled through the wilderness years and now, seeing the promised land of Ireland as the economic shining light of Europe, perceive an economic boundary of the nation. It is not so.
A debate has begun as to whether we have had enough foreign direct investment into our economy with the aim of generating employment. The ESRI's report on National Investment Priorities for the Period 2000-2006 contended that "a re-evaluation of industrial strategy for the next decade is required by the changing nature of the labour supply. Once the current rapid increase in labour supply falls off by the middle of the next decade, the nature and volume of new jobs that may be needed could be greatly altered". The argument is that the justification for industrial policy which sought, with incentives, to attract jobs to Ireland is likely to disappear. When the effects of re-immigration and the entry of women into the labour force have settled down, we may not need to spend State resources, such as through the IDA, in attracting foreign direct investment.
It cannot be true that "what we have we hold" in relation to the volume or nature of jobs that have been generated in Ireland by foreign direct investment. It was only a short time ago that leading-edge companies, such as Wang and Digital, were jewels in the IDA's crown. New companies will come and go. Some of the leaders now will be losers. Microsoft may not be a market leader in five years time. If it goes, it cannot be assumed that another board of another company will decide to locate its European operations in Ireland. Still less can we assume that companies bringing new technologies to market, such as in biotechnology, will locate here.
Even if we manage continuously to lift our educational levels to the highest in the developed world, there will always be the question of where each new wave of jobs will come from. Where is the capital investment going to come from to be exploited by this educated workforce (rather than exploit the workforce - the relationship is the opposite)? It is fanciful to suggest that sufficient capital resources to generate lots of high-value added jobs will come from Irish venture capital markets or from "indigenous" capital resources. We are, and will remain, dependent for jobs on the ability to attract international capital investment. On the venture capital side, Irish so-called "indigenous" firms will have to continue to be able to compete in international capital markets. If I were a prospective technology graduate, and was not yet ready to start a business, I would not like to be wholly dependent on what are called indigenous firms for my employment prospects. I would want Ireland to continue to compete for direct investment in high-technology investment. The IDA might well adopt a different focus or approach or sales line. But it should not be told simply to abandon the market to competing countries because we are fearful of the consequences of any further success.
What does it mean to fear we might be dependent on foreign direct investment and on companies which rise and fall? As Professor Frances Ruane of Trinty College wrote, such a view appears "to be an entirely static perspective, out of kilter with a world in which the pace of change (both technological and other) is accelerating".
We play in the international capital market and we are dependent on being competitive in that market. What is the alternative? Not to be so? To rely on domestic capital formation or venture capital, when that capital is also free to seek investment opportunities outside of Ireland? Just as our highly-educated workers can walk, and the more highly-skilled, the easier. The dependency on being competitive in international markets is a risk we cannot eliminate. We must think of that apparent threat as an opportunity. We must substitute the words "integrated in" rather than "dependent on" international markets. The direction of future industrial policy and the role of the IDA is under review as part of the National Development Plan. No plan has the right to fix the boundary of the march of a nation.
Oliver O'Connor is managing editor, Fintel Publications
