Ireland has strengths in areas such as information technology which couldfeed into the research, US competitiveness expert tells Cliff Taylor, Economics Editor.

Irish companies could participate in new research on competitiveness and security being pioneered in the US following the terrorist attacks of September 11th, 2001, according to the head of a high-level US business body.

Ms Deborah Wince-Smith, president of the US Council on Competitiveness, said there was significant interest in the area off "competitiveness and security" - developing new technical capability to allow economic activity to continue safely in the face of terrorist threat.

This agenda had moved well beyond "guards, gates and guns", she said. For example, among the areas of technology involved are the digitalisation and sharing of medical research to respond to a chemical or biological attack. In the wake of the anthrax scare in Washington, it emerged that the major hospitals could only communicate through phone calls, highlighting the need for digital storage and accessibility of records.

A whole range of measures related to flows of goods and people would also be examined, such as the IT-based identification, tracking and verification of container cargo movements. Many of the technologies involved would have much wider applications than merely security, she said and some could be very profitable.

Initially the US was drawing its neighbours in Canada and Mexico into this research programme, she said. However, other countries would also become involved. One of the messages Ms Wince-Smith will be bringing to a major competitiveness conference being held in Limerick this month is that "we would welcome Irish participation". Ireland has strengths in areas such as information technology which could feed into the research, she believes.

The US Council on Competitiveness is a non-profit coalition of business leaders, academics and trade union leaders, aimed at improving the competitive position of US industry. It was established in 1986 amid fears about the long-term productivity of the US economy and now undertakes a range of competitiveness studies - since replicated globally in world competitiveness reports - and initiatives in areas such as innovation, education and benchmarking.

Speaking to The Irish Times ahead of an address to the All Ireland Competitiveness Forum 2003 being held in the Bunratty Hotel Limerick on February 18th, Ms Wince-Smith said that the key factors which had driven the strong US performance of the last decade remained in place.

The US is "still in a permanent productivity boom", she said and this would support growth in the long term. This productivity rise reflected a rapid and widespread investment in IT, increased efficiency in business systems and management and strong investment in research and development.

Against this background the fallout in the markets and the meltdown in the high-tech sector were short-term corrections, she said, while the governance issues which have severely hit investor confidence were now being addressed and a "tremendous self-correction" has taken place in US boardrooms.

What of the outlook for Europe, whose economy has growth less strongly than the US over the past decade?

"The last few years have been very successful for economic and political integration" she said, but much of the European economy suffered from a "very sluggish performance in productivity".

The European economy needed to address a number of key issues. These are the lack of diffusion of advanced IT in many businesses - with the exception of mobile telephony where Europe is ahead of the US - and a continued heavy regulatory burden on business.

Also, many European economies had "no culture yet of risk-taking, entrepreneurship and flexibility". This was in contrast to the US where the "fallen stars of dotcom are not sitting around nursing their wounds, they are out starting new businesses".

Ireland's performance stood in contrast to much of the rest of Europe, she said. From a competitive viewpoint, the keys to Irish success had been building a skilled workforce, long-term investment in key areas, a favourable regulatory environment and an openness to foreign direct investment.

Looking to the future, any economic programme based on low wages and tax advantages would not be sustainable she said, as was evident in the case of Mexico, where just such a recipe had been pursued, only to see many of the big employers move to China.

The challenge for Ireland is to "identify and build on key strengths, taking advantage of the knowledge brought in by foreign industry and developing indigenous talent in areas such as software."

The drive to embrace technology much cross all businesses to ensure competitiveness, she believes, "There is really no such thing as high-tech industry," she argues, as all industries must deploy industry to the best advantage. Ireland could continue to attract investment and jobs if it made itself a centre for top talent and knowledge in key areas, a task now being taken on by the new agency, Science and Technology Ireland.

Ireland must have a "fundamental knowledge platform" she said, allowing the development of new industry areas such as nanotechnology and the molecular and genome sector, where a link between the life sciences and information technology were promising revolutionary advances in healthcare.

Developing these industries requires a base across a range of areas, she points out. In the US, for example, there has been heavy investment in the life sciences, but less in physics, maths and engineering,which are also essential and are now getting fresh funding.

Ireland is not big enough "to sustain leadership in the new era of computing", according to Ms Wince-Smith, but can develop key expertise in niche areas such as biotech, medical devices and nanotechnology.

Ireland also had strengths in software development, she said and in areas of IT spun-off from the multinational base here. In terms of the North's economy, meanwhile, she believes there is a need for a drive to reduce the reliance on the public sector and develop a more vibrant private sector. A start might be made by outsourcing some of the services currently provided by the public sector, she says.

The Irish economy - North and South - faces new competitors in lower cost areas of Eastern Europe and the Far East. Ms Wince-Smith instances Hungary, which not only offers a relatively cheap location but also has a strong basic and applied research ability, particularly in maths based areas. However, if Ireland can develop its key strengths - and attract key technologists in targeted development areas - it can continue to attract investment and enhance productivity and growth.