For a very long time the Irish were prone to demonstrate both a lack of self-confidence and paradoxically, a sense of moral superiority over many others. Perhaps this was the inevitable concomitant of centuries of perceived defeat and disadvantage combined with a certain sense of our righteousness as a people, argues Peter Sutherland

This was a peculiarly Irish variety of a continental European disease that has existed for over two centuries and which has been described as romantic pessimism.

Indeed this university (UCD) and its products were probably not immune to this syndrome. More generally, we Irish lacked self-confidence in intellectual terms, perhaps in part resulting from our absence from philosophical traditions and debates over the centuries such as those surrounding the Enlightenment.

In addition, we have a tendency to both revile and revel in our heritage. In a sense, we view ourselves as being slightly better than others, while at the same time often corrosively attacking what we are.

Whilst self-criticism and sceptical enquiry is often a necessary antidote to hubris and complacency, in some quarters it has gone too far. Some seem to be unable to applaud our success and prefer to indulge a notable and potentially debilitating cynicism.

. . . There are some positive signs. . . It seems to be no exaggeration to say that our young have to some extent broken out of the paradigm of cynicism.

One of their most evident qualities is a confidence and positivism that belies much of the negativism that has been around. This is remarkable and deserves to be nurtured.

Real credit for this must go not merely to their families but also to their schools and universities - and this one in particular. It seems difficult to make a strong case that a clear superiority in their education brought them to this place.

Equally, however, it can be asserted that there has been no inferiority in that education inhibiting them in seeking a place in the world. Perhaps their self-confidence is a temporary phenomenon born out of recent and startling economic successes or a sense of the esteem in which Ireland is held.

This may not always have been deserved, but has somehow been achieved. Wherever one goes today, being Irish is a badge of honour. Doors are opened with a smile. Perhaps we are inheritors of a regard that comes to some extent from selfless service by our missionaries and, more recently, NGOs too, in various parts of the world of which we should be legitimately very proud.

We should recognise that this esteem will continue only if we sustain the best of our values as well as developing our talents. This is where UCD must continue to engage not merely in fostering talents in natural sciences and the capacity to contribute to economic growth that comes from this but it must persist too in being a university that cares about the disciplines that focus on values and, in particular, humanities and philosophy. These will help to anchor us to the values that we proclaim.

Let me refer now to some specific aspects of the future. The recently published OECD report on tertiary education makes a real contribution to debate on the development of our universities.

Deservedly it pays tribute to the growth in the numbers receiving third-level education here. In 1965 Ireland had an age participation rate at third level of 11 per cent. In 2003 it was 57 per cent. Of course statistics like these do not address the issue of the quality of that education, but they are impressive by any standards. Furthermore, what I can assert is that the impression given by our young, and the statistics of their recruitment - at least in the world of business and the professions - bear this out, is that they are highly valued.

Much remains to be done and others are not static either. We now live in a world that has embarked upon a process of remarkable and rapid integration and increasing competition.

The rapidity of this change, and the urgency of the response demanded by it, needs emphasis. We should of course both endorse and participate in it.

. . . Some of the challenges are simple and relate to education. For example, today 11 per cent of our students in UCD are foreign. Many of these are Erasmus students. We need a far greater percentage from around the world studying here not merely as testimony to the quality of what we provide but to continue the process of opening our minds.

. . .We must do much more to foster the growth of postgraduate numbers. In a sense this is a defining issue in a great university and it is where, for example, Harvard, which surely is the greatest university of all today, really scores (with the help, it must be said, of nearly $30 billion in an endowment fund).

As the OECD report confirms, we have not succeeded in this area. This is particularly true in science. The number of PhD students per 1,000 head of population in Ireland aged 25 to29 is at 1.8 per cent, much lower than the EU average of 2.9 per cent. (In Finland and Sweden it is nearly 6 per cent).

Of course this is, in significant measure, a question of resources - but that is not all. We have to change a mindset that sometimes focuses on broad numbers to the exclusion of promoting the exceptions. The exceptions, keeping them at home and fostering their abilities, will be central for our future.

On the matter of resources, let it be said that the State's relative contribution to education here is not bad. Of course it could be better, but maybe it is time for us to seek courageously to look again at the vexed issue of free third-level education for all to provide additional and necessary funds.

Of course the truly needy should be supported, but our political system, having done much in some areas like funding research, should now address the fundamental issue. For example, Australia, China and others have found a way to do so through loans. Student loans and some differentiation based on ability to pay must be used to provide further badly-needed resources for our universities in their search to be top of class in comparative terms.

We are not there at the moment. The universities, too, have a role in taking on hard issues relating inter alia to performance and its relationship to security of tenure.

In this day and age teaching at all levels has to be linked to performance value and to duck this issue is damaging to our young. On the other hand, so too is ducking the issue of paying our professors at the rates required to attract and retain the best of them. And issues such as collaboration between institutions of higher learning will also have to be addressed.

We need a mechanism logically to allocate research funding now generously available. As Garret FitzGerald has pointed out, on the basis of relative size Ireland can legitimately claim one research university where the Americans have 80. This means division of tasks on merit has to be undertaken if we are to be effective.

This is not, of course, to suggest that our universities should not compete with each other just as they will increasingly be called upon to compete with universities elsewhere and, particularly for undergraduates, with the UK universities.

Therefore our future in these and other respects is in our hands. To a not insignificant respect, that future depends on a step change in our universities that cannot be delayed. Time is very short. We have seen how rapid the climb up at least one ladder of relative economic success can be. A fall can take place just as quickly.

The above is an edited version on an address delivered by Peter Sutherland at a dinner to mark the 150th anniversary of University College Dublin when he was honoured for his contribution to public life.

Peter Sutherland is chairman of BP plc and a former Director-General of the World Trade Organisation