THE FRIDAY INTERVIEW:Danny McCoy, director general, Ibec

DANNY McCOY is the ether. Or, at least, that's what I think he's about to say.

The new director general of employers' group Ibec is talking about capital: the human kind, "which is industrial relations, what Ibec traditionally gets involved in"; physical capital (or what he hopes the State will give sterling-struck exporters); and what he calls the social capital and natural capital space, which, incidentally, he is "very comfortable dealing in".

The question was what he thinks he will bring to Ibec now that he has taken over from Turlough O'Sullivan. McCoy has an analogy to make: "Pretentiously, perhaps, I explain it like this. If you think of the Greek earth, wind, fire, water, the four elements . . ."

Okay, yes. "You need a fifth element to bring these things together. Now the Greeks called it the fifth element, the quintessential element, the ether. In the analogy that I'm using here, to bring all those various forms of capital together, the ether is enterprise."

Ah. So that's the ether. His point is that business cannot behave in a way that is completely at odds with the society in which it trades. And whereas O'Sullivan came from an industrial relations tradition, he, McCoy, is eager to promote the business agenda. After all, the reputation of business has been given a nasty shunt by that whole banking mess.

"Maybe a fresh injection of new thinking from the business side, maybe that's what they were hoping I would add," surmises McCoy, a former editor of the Economic and Social Research Institute's (ESRI) quarterly economic commentary, who takes charge at Ibec after serving as its director of policy for four years.

Not that Ibec has washed its hands of industrial relations. "I actually believe in the concept of social partnership. I think, as a society, it's a much more sensible way to engage stakeholders alongside the Government in decision-making processes. It has a capacity to work," he says.

But, then again: "Obviously it has peculiar difficulties in a deflating environment . . . Social partnership grew up in a win-win situation. Now we've got a lose-lose, and it's a question of who loses least."

Being an economist means he has "a good handle on the big picture", he believes. "Economics is an international currency in many ways in terms of dialogue and one of the things I would certainly hope to do is help re-establish Ireland's international reputation," he says.

A Yes vote in the Lisbon Treaty referendum would be a good start. "I think Lisbon for Ireland should not be about introspection. We should be extroverts during this phase, and show that Ireland has learnt its economic lessons."

Not that Ireland deserves all the flak it has been getting. Some of the commentary has been "grossly unfair", he says. "I understand where it comes from though. There's nothing sweeter than seeing the star pupil stumble and have a humiliating failure. We have to be big enough to understand that lots of people were glad to see us stumble. Our arrogance may have played a part in that, and I think we've been humbled."

Those painful "adjustments" are happening, both in terms of pay packets and people's psyche, McCoy claims.

"People have become much more flexible in the workplace. I don't have any stats actually right now, but I imagine absenteeism is . . . [ makes plummeting gesture] . . . down a lot. And I would say duvet days aren't huge at the moment."

Duvet days would have been plain old sickies back when McCoy was growing up in Tuam, Co Galway. "I'm a CBS boy," he says. But his old school has just closed down, he notes sadly. "After 150 years or so, the last Leaving Cert students were going out the gate just as I was getting the job here," he says.

"When I was growing up, Tuam would have had a sugar factory, a very socioeconomic industrialisation plonked in the middle of rural Connacht. I wasn't that nerdy as a kid, thinking about it in these terms, but in retrospect I've realised that I was influenced by the old economy, the old industrialisation."

Then came the arrival of Digital Corporation in Galway. "This was modernity, and the young people gravitated toward that and they went to the regional technical colleges and the universities."

So it became ingrained within him that what were needed above all else were opportunities. But there haven't been too many of them knocking around lately.

"I think the shock to people's systems with this unemployment phase is that there is a sense that opportunities are disappearing from us. Even the escape valve of emigration is kind of being denied."

For all of the violent booms and busts, ambitious policy pioneering and humiliating policy misadventures, McCoy has a deep affection for the Irish way of doing things. "When the Economist Intelligence Unit declared Ireland to be the best place in the world to live a couple of years back, that was a real shock to the system. Irish people always felt terribly frontier, they always felt there must be somewhere better to go: 'This couldn't be it, I'm not that happy, I haven't reached a zenith.' So there is a bit of a frontier, an economic frontier aspect to Ireland, which I think makes it an exciting place to be, to grow up in and to work in."

The imbalances in the economy were talked about both at Ibec and at the ESRI when he was there, he adds.

Could they have talked about it a little more? "I genuinely believe, I'm not trying to smooth over this, but using that analogy of the frontier economy . . . you can't stop the tide. Globalisation was the tide and easy money has been a phenomenon of globalisation over the last 15 years."

Money is not so easy anymore, of course, and jobs are being sucked out of the economy at an alarming rate.

Although some sectors, such as pharmachem and medical devices, have held up relatively well, none of the 80 business sectors represented by Ibec would claim to be completely immune, McCoy says. Tough times have also heightened some of the "natural tensions" between its members - "the food and drink guys and the retailers wouldn't be happy bedfellows a lot of the time".

The "common glue" between them is Ibec's lobbying agenda: how to create an environment that keeps business in business. McCoy doesn't like the phrase "enterprise supports" because it implies a dependency on the State. But he does, at the same time, want the Government to "be more aggressive" on capital supports for enterprise and negotiate the State aid sensitivities with a greater sense of urgency.

Just hours before the interview takes place at Ibec's Baggot Street headquarters, the first-quarter national account numbers emerge. They show a 12 per cent annual decline in gross national product (GNP) in the first quarter. "They don't have any historical precedent for Ireland, we've never seen numbers like this, so there's no real point in trying to extrapolate from them, they're so exceptional," he says. "And that's why anything we put in place for business now has to be temporary and exceptional."

It would be "a great tragedy", says McCoy, if the infamous adjustments scheduled to take place in 2009 were to be skewed too much on the side of spiking unemployment and not enough on the side of tax increases, wage cuts and, of course, higher productivity.

"Those who have lost their jobs and are losing their jobs are disproportionately feeling the pain. It can be evened up and has been evened up during the year, but it hasn't been fully equalised, by the rise in taxation," he says. (McCoy sits on the Commission on Taxation, which is due to publish its recommendations later this month.)

Aside from the immediate task of helping Ibec members trade their way through the recession, McCoy wants to work more closely with the teachers' unions in designing more business-friendly qualifications. His target is the Junior Certificate.

"The Junior Cert should be about important competencies: confidence, articulation, problem solving. It fairly quickly became a Leaving Cert for little people," he laments.

Whether the teachers' unions want to work more closely with him is another matter. "We're sowing the seeds for business. We're not necessarily looking for drones for the satanic mills of Manchester," McCoy laughs.

But that's the fear? "Well, that's the image," he replies. It all comes back to "working in that social capital space", he explains. Not that Ibec is going soft, he cautions. "The business of business is business."

On The Record

Name:Danny McCoy

Position:Irish Business and Employers' Confederation (Ibec) director general

Age:42

Family:married, with four children

Background and education:From Tuam, Co Galway, he was educated at Tuam CBS and received a BComm from NUI Galway and MEconSc from UCD. Now lives in Templeogue, Dublin.

Career:He lectured at DCU before working as a research assistant at the ESRI from 1990 to 1992. He then moved to London where he lectured at University College London. He worked at the Central Bank from 1996 to 2000 and was editor of the ESRI's quarterly economic commentary from 2000 to 2005, when he joined Ibec as director of policy.

Why he is in the news:He officially took the reins at Ibec on Wednesday.