THE GOVERNMENT has launched a recovery plan designed to boost the economy by attracting cutting-edge business ventures into the State. The Opposition dismissed the initiative, saying it did nothing to tackle the worsening economic crisis.
The key element in Building Ireland's Smart Economy: A Framework for Sustainable Economic Renewalis the establishment of venture capital funds worth €500 million designed to lure innovative industries and boost research and development.
Speaking at a press conference in Dublin Castle, Taoiseach Brian Cowen conceded there was also a need to deal with the gap in the public finances but said he would be working with the social partners to agree on an approach by the end of January.
"Social partnership has always had its critics but I assert today the Government's commitment to that process and the engagement on the basis of mutual dependence and respect which it has always brought to problem-solving," he said.
The Taoiseach said there was a number of internal and external factors conspiring to create the "biggest economic challenge we have faced in a generation".
"We will eventually come through this. But I don't want us to come through it merely as a matter of surviving as best we can. I want us to come through it with a strengthened capacity to provide our citizens with enhanced opportunities and living standards," Mr Cowen said.
"The aim is that Ireland becomes the world's leading location for business innovation, a country where there will be a critical mass of companies - both Irish and international - at the forefront of innovation, creating the products and services of tomorrow and well-paid quality employment."
The Government's €500 million investment fund will involve three US-based venture capital companies backing small Irish and foreign-owned high-tech companies setting up in Ireland.
Mr Cowen held talks with a number of key principals in the investment companies during August, The Irish Timesunderstands.
The State will put up €25 million a year for 10 years and take a 49 per cent share in the investment companies, which will seek out IT and environmental "green tech" opportunities. The US investors will be offered a 15 per cent tax rate on profits while major changes to intellectual property law will also be introduced.
The plan is modelled on Israel's Yozma Fund, which was set up in 1993 with just $200 million and today holds $10 billion worth of investments.
Fine Gael deputy leader and finance spokesman Richard Bruton said the Taoiseach was right to state that a transformation of the economy was necessary, but he said Mr Cowen had refused to make the difficult decisions needed to begin that process.
Labour's finance spokeswoman Joan Burton said the plan amounted to "100 pages of stale reheats, leavened with vague aspirations" and she called for action instead. "There is no leadership, and little action."