Job creation: A reduction in subsidies for the business sector and a new approach to dealing with unemployment are called for in the ESRI review.
It suggests that subsidising business to create jobs is no longer appropriate at a time of high employment.
Announcing the review, economic consultant Mr Colm McCarthy said a number of national policies were "lingering around like Banco's ghost from the days when we had 15 per cent unemployment".
"We've got a tight labour market, thankfully, and it's still fairly tight even though the unemployment rate has drifted up a bit.
"But we still have all sorts of policies which may have made some sort of sense in the early 1990s. They don't make any sense now."
Prof John FitzGerald of the ESRI said giving public money to subsidise business was "generally not a good idea".
"So we are recommending a reallocation of subsidies away from the business sector, broadly defined."
The review shows that more than €250 million was spent on industry in the first three years of the National Development Plan.
It recommends that investment in this area be reduced in the remaining years of the plan, and also suggests a radical change in the way businesses compete for support. Instead of allocating funds to different sectors, as at present, it says enterprises should be required to compete across the board for NDP support. "We feel that all the sectors should compete together," said Prof FitzGerald. "They should come in and say 'we have a great idea', and you have the food sector competing against the IT sector or whatever."
Such an approach would create more transparency, the ESRI argues, in assessing the merits of individual projects and the likely returns on public investment.
The provisions made under the NDP for industry were "too generous", the review says, and "a smaller provision would be appropriate for the rest of the planning period".
It recommends, however, that funding be maintained at existing levels in research, technological development and innovation.
