Net Results Karlin LillingtoneBay's announcement this week that it would come to Dublin and create 800 jobs is being touted by the Government as a vindication of its industrial development policies.
If anything, the news should signal that it's time for Government to think seriously about the implications of its policy mistakes, which - as I wrote when The Irish Times broke the eBay story two months ago - nearly cost the State this blue-chip firm's investment.
IDA Ireland's insistence that this investment go to Athlone - when eBay representatives had their own clearly stated interests - went beyond helping a firm to explore investment location possibilities. But it's not just the IDA. Frustrated eBay executives, it is believed, asked to meet the Tánaiste, Ms Harney, who backed the IDA. At this point, eBay came close to dropping the project. All this is deeply worrying.
One thing is clear: eBay's decision to base in Ireland was not due to this Government's policies. Such firms come here because the Republic has a critical mass of firms around the information and communications technologies area, backed by a broad collection of financial services firms. Also, we continue to have a low corporate tax rate. And such firms believe they can get skilled employees.
These are all elements put in place by policies that emerged from successive governments of all political hues, stretching back to the 1980s when the seeds were planted for today's more successful Irish business environment.
Some of those decisions, such as the International Financial Services Centre, were heavily criticised at the time because they seemed to have no immediate benefit. But without the IFSC, I doubt we'd have the IT presence we have now.
I'd argue that the ICT cluster we have emerged despite some slipshod government policies and approaches, especially in recent years, when the failure adequately to develop infrastructure has left the regions at a serious disadvantage to urban centres like Cork, Dublin, Limerick and Galway when it comes to attracting investment.
Worries on these same issues have been voiced by leading firms from Intel to Microsoft. In his annual study that benchmarks Dublin as an "e-city" against nearly a dozen other global cities, Iona Technologies chief executive Dr Chris Horn has argued that Dublin is sliding down the competitiveness and innovation scales, dragging the State with it.
So we have a Government that wants an international internet star to fit into its regional development policies, policies not backed by attractive investment propositions precisely because the Government failed to address key problems in the regions from the late 1990s on.
Where the Government has proposed good projects, internal political and financial roadblocks have been stuck in the way. And not just now, when finances are pinched, but three to five years ago, when they were not. Along with wobbly policy and meagre vision on the ICT front go outmoded agencies that need an overhaul: Enterprise Ireland and the IDA. Each has excellent people working on the ground whose creativity and ardour can get crushed.
Examples? IDA people out in the US are measured only on their success in bringing in greenfield projects, not for the equally important task of getting existing firms in the State to expand operations (this, at a point when getting more R&D from such companies is, in my opinion, much more important to the State's economic health than bringing in scattered jobs).
When hard-working people in the field do get a prospective project, it often runs into bureaucratic wrangling back in Dublin. With eBay, the failure to support a potential investor nearly lost us this project.
The same thing happens in reverse with Enterprise Ireland. Talk to anyone in Enterprise Ireland in the US and they'll tell you few Irish firms are seriously looking at operating in the States, and few of the many that went out in recent years have been able to survive there.
While in Canada last week I spoke to many agencies similar to the IDA and Enterprise Ireland and found they operated differently.
The government is seen solely as top-level support and back-up.Promotion of cities and regions is handled by many public-private partnerships, primarily driven by the interest of private industry in getting new investment. The Canadian groups say it is more productive to have firms talk to other firms rather than to government. They listen to companies, because they work on behalf of industry companies already.
These operations are lean and successful. Compare that to the huge employee rosters of the IDA and Enterprise Ireland.
Neither the US nor Canada rely on such agencies or such a level of government intervention. If, arguably, we spend more time looking to Boston than Berlin in economic and business policy, perhaps it's time to consider whether huge semi-state agencies are best for promoting Irish industry and investment.
