The Coalition Government must reaffirm its policy of shaping the future of modern Ireland through science, research and high-tech industry, when Ministers meet in the autumn to decide on spending estimates for 2004. The prospects for such an outcome are worrying.
The Government appears to have lost both its nerve and its vision as a result of the economic downturn. A one-dimensional, fiscal approach by the Minister for Finance, Mr McCreevy - 'when I have it, I'll spend it and when I don't, I won't' - is in the ascendant. Ministers are reverting to failed, pro-cyclical responses, instead of planning carefully for and investing in the future.
Three years ago, as the so-called Celtic Tiger roared, the Cabinet adopted a creative policy of funding research and science projects through the National Development Plan, a €600 million Programme for Research in Third Level Institutions, and other measures. The private sector was encouraged to part-fund projects. And the State was applauded internationally for its vision. Nothing less than the creation of a high-tech, knowledge-based economy was being planned, as low-cost countries began to attract an increasing number of industries from the developed world.
Since then, the need for such a policy has become more urgent. Last year, 35,000 low-skilled jobs supported by FÁS and Enterprise Ireland closed here. And while 25,000 new jobs were created, the message is clear. Our economy has changed. Tax breaks are no longer sufficient to attract, and to hold, low-cost manufacturing jobs. We must develop our skills base and move up the value-added chain.
Instead of investing in the required infrastructure, however, various projects are being affected by across-the-board cutbacks sanctioned by Government. An estimated €150 million needed to buy laboratory space and equipment will not be paid this year. And, as this newspaper reported yesterday, cutbacks in research funding for universities are likely to continue into next year and beyond.
These developments have been criticised by the employers' body, IBEC, because they send the wrong message to high-tech overseas companies that may invest and create jobs here. One of the architects of Government policy in this area, Dr Edward Walsh, is also concerned by the "pause" in university funding. But his main worry is that the Government may roll back funding for science and research under the National Development Plan. Such a development would be catastrophic and cause long-term damage to the health of the Irish economy. Ministers must ensure that it does not happen.