FROM THE ARCHIVES:Amid the dire prognostications about the economic future in the mid-1980s, Economics Correspondent Ken O'Brien detected a ray of hope in a prescient series of articles from which this is an extract. -
JOE JOYCE
WHILE THE immediate outlook for the Irish economy on the jobs front is fairly horrific, there are grounds for optimism that indeed a successful response will be possible for Ireland.
For one, there are no reasons in economic theory for the current popular notion that technological progress and lack of growth will continue to militate against an increase in employment levels. Thus, there are good grounds for scepticism about such fads as the belief that young people should now be educated for “leisure,” or that worksharing is the only possible alternative to massive dole queues.
Technological development has been with us since the earliest days of the industrial revolution, and job-shedding as a result of productivity advances is nothing new. All that is new is the technology. Neither has the rate of productivity advance seen since the beginning of the 1970s been rapid by historic standards.
The downturn that occurred in the Western world after the second “oil crisis” in 1979 was severe, coming as it did not so long after the mid-seventies recession. Perhaps it is the very severity of the present recession that has resulted in such despondency about the future. After all in 1930 and 1931 in Britain and the United States similar notions gained currency.
In Ireland, of course, we have our own third problem – the rapid rate of population growth. But there are grounds for hope for us, in certain trends that are occurring in the international economies of the 1980s.
The pattern of growth today shows a particularly strong prospect for development in the “new” sectors of electronics services, and, in what is sometimes referred to as the “fourth” sector – information. It is the hinterlands of heavy industrial development – Northern England, the central European axis, and the Northern US industrial belt that have suffered most in the resent recession.
For 200 years, Irish economic development has been held back by the geographical isolation of the island. The physical weight of the products of the first and second industrial revolutions made Ireland a costly place for most commodities to be manufactured.
Today it is weightless, even intangible commodities that are the boom products. Hence the upsurge in economic development in rural areas in America and Europe, not previously associated with industrialisation. Information travels through a wire or a radio wave, a cheaper form of transport than a container ship. Clearly, the emergence of the high-tech industries with their relatively easily transported products is a factor working to help reduce one of the traditional disadvantages of the Irish economy.