There is a feeling of transition in the air at the moment. People are still hoping that the interminably bad weather this summer will come to an end. Thousands of Leaving Cert students certainly experienced a similar feeling earlier this week on the eve of their results, writes Danny McCoy.
The economy also feels like it is in transition, particularly given the gloomy news and market turbulence of the past week. There is an understandable sense of gloom that the party is over. Having been driven by cheap credit and a strong consumption boom, there is now a perception that the day of reckoning is fast approaching.
Rising interest rates and tightening credit are having effects internationally. The implications of the US subprime mortgage fiasco are already having an effect on our stock markets which in turn is hitting our future pensions. This is giving rise to a sense of despondency, as recent consumer confidence indicators show.
Yet the future prospects for our Leaving Cert cohort remain bright. The global economy remains sound, as are the prospects for continued prosperity at home, albeit at lower growth rates. Sure, we aren't building as many houses as before, but this will return a dose of reality to what was a burgeoning residential property sector.
Construction activity will remain strong in the non-residential buildings sector, as foreseen in the National Development Plan 2007-2013 (NDP). These are signs of a welcome rebalancing which shows that our economy is growing up and that a sustainable growth rate is the order of the day.
More encouragingly, our manufacturing and exporting sectors are again performing strongly after a number of years in the doldrums.
These are the sustainable drivers of our economy. GNP growth will be close to 5 per cent this year and in the region of 4 per cent in 2008.
These are far from the double digit levels of growth of the late 1990s, but are of an order of magnitude to see us growing almost twice as fast as the eurozone average.
The NDP sets out ambitious targets to transform Ireland over the next seven years. This will be a great time of change involving all forms of capital. Our prosperity depends on the utilisation of the capital embodied in our infrastructure, in our people, in nature and right throughout society. The quintessential element that brings these factors together is enterprise. Enterprise is the elusive commodity.
Having spent six years in secondary education, culminating in last Wednesday's results, the current cohort of Leaving Cert students now have huge potential over the next seven years and beyond. Indeed all our well-being is dependent upon how well they make the transition to the knowledge economy.
The disappointing maths results this week and the low uptake of science subjects in general are a cause for concern, given the needs of the knowledge-driven economy of the future. Even more worrying, however, are the opportunity costs to our economy that come from losing 18 per cent of our student cohort who do not even sit the Leaving Cert.
This must alarm us. The necessary transition to the knowledge economy will require flexibility on the part of our young people and their ability to upskill. Today's students leave with a secondary education that no longer qualifies them for the secure, pensionable jobs of yesteryear. Academic inflation has seen the university diploma and degree become the new "gold standard".
Obtaining the Leaving Cert is now the gateway to further educational attainment. This is merely the end of the beginning for these students, not an end. Will the significant investment announced for education and training in the NDP deliver our goal to be a leading 21st century learning economy?
We desperately need to increase the number of science students at all levels and to greatly improve mathematical literacy. If we are to develop a true knowledge economy that reflects the Ireland of the 21st century, then it must be open and accessible to all and information technology usage must be maximised. Ireland needs to be a broad-based economy that reflects the skills of our people in maths, sciences, engineering, the legal profession, healthcare professionals, our educationalists and our humanities graduates.
The NDP, with planned expenditure of €184 billion (equivalent to over €13,000 per annum, per person working), is a huge investment by any measure. How we use this money and how well we manage it will be crucial to the sustainability of the high-income levels that Ireland has achieved over the past decade.
The NDP, therefore, must be directed unequivocally towards enhancing the ability to generate the highest and most sustainable returns from our capital assets. While we often focus on the flaws which we see today, it is important to acknowledge the enormous achievements that have already been secured. There are challenges ahead but there are also enormous opportunities. We should be very optimistic that our young people have the latent capacity to thrive in the new knowledge economy. It is vital that they grasp the opportunities for lifelong learning and realise the importance of moving to an understanding economy. This is, indeed, only the end of the beginning.
Danny McCoy is director of policy at the employers' group, Ibec