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THE FRIDAY INTERVIEW/Martin Shanahan, chief executive of Forfas:HE HAS ASCENDED to the top job at Forfás, the State agency that advises on enterprise policy, at a time when advice is cheap and implementation costly. But that hasn't deterred Martin Shanahan from getting on with Forfás's core business of evidence-based research, analysis and development of policy recommendations.

There is “daily interaction” between his team and the Department of Enterprise, Trade and Innovation, he says, as well as with the staff of IDA Ireland, Enterprise Ireland, Science Foundation Ireland and Fás, all of which have representatives on the Forfás board.

“I suppose the broad thrust of our advice to government is that there is one engine of our economy that is working at the moment and that is the export component,” says Shanahan, who took up his role in June.

For the positive year-on-year growth in exports to continue, he is adamant “we need to contain costs and reduce costs”. And so Forfás’s pre-budget submission will centre on its belief that higher taxes on business should be avoided.

In Shanahan (37), Forfás has a chief executive whose background is in tourism and whose speciality is in training, skill needs and labour market flexibility. He is also keenly aware of the strength of the global economic winds that can either buoy up or batter Ireland: Shanahan grew up working in bars and restaurants in Co Kerry, with the tourism buzz leading him to the Dublin College of Catering in Cathal Brugha Street, and from there to the hotels industry.

His office at Wilton Place in Dublin 2 seems a world away from the Connemara Coast Hotel and the Great Southern Hotel properties in which he cut his catering teeth. He laughs at the suggestion he might one day enjoy putting a “vacancies/no vacancies” sign above an establishment of his own. “No one retires to the hotel industry. They retire from it.”

Shanahan now finds himself in a cauldron of quangos at a time when the axe is poised to fall. Last year’s McCarthy report largely left Forfás alone, simply recommending greater shared services between it, Enterprise Ireland and IDA Ireland and slimming it down by 20 per cent, saving €2 million. “If something happened on the shared services side, then that may be possible,” says Shanahan.

Forfás, which employs 110 people, looks “for every opportunity to be as efficient as possible”, he adds. “We haven’t been around as long as some other agencies,” he says, implying that there has been less time for legacy inefficiencies to build up.

Forfás was conceived as an umbrella organisation – a “super-agency” overarching the IDA and Forbairt, a forerunner of Enterprise Ireland. Its birth gave rise to a debate about its name. The Dáil’s translation service suggested it should have been called “forás”, meaning “growth, development, progress”, and that “forfás” was an incorrect contraction of “for-”, meaning “super-” and “fás”, meaning “growth”. (Under Irish grammatical rules, it should be “forfhás”.)

An element of confusion about Forfás has lingered in the public consciousness since this puzzling wordplay, largely because the agency’s role in forming “a coherent enterprise policy narrative”, as Shanahan terms it, is more of a back-room one.

For example, many of Forfás’s recommendations found their way into the department’s document on trade, tourism and investment launched by Brian Cowen two days before the bank bailout Bill formally rose to €50 billion. The document was exactly the kind of blueprint Forfás is paid to deliver. But it had few of the attending policy implementation measures that might be expected from a report that courted fanfare by promising 300,000 jobs.

The Government’s record on following the advice of its agencies, from the Central Bank to the Equality Authority, has been sketchy, at best, and Forfás has fallen victim to the same attitudes. Year after year, the National Competitiveness Council, a subset of Forfás with its own chairman, makes its familiar recommendations: a property tax to replace stamp duty; lower labour taxes; more competition in sheltered sectors. Doesn’t Forfás get frustrated?

“Forfás’s role is to provide advice and continue to provide good evidence-based advice,” Shanahan says. “Where actions aren’t taken, and sometimes there are good reasons why actions aren’t taken, we will obviously continue for as long as there is an issue to provide the advice as appropriate.”

Budgetary pressures are not the only reasons Forfás’s recommendations are shelved: sometimes it’s because Government departments other than enterprise “don’t look at their policies solely from an enterprise perspective”, he explains. “I think it would be fair to say that there are a myriad of reasons why things aren’t implemented.”

The courage of Forfás’s convictions has surfaced most evidently in one issue: broadband. Earlier this year, a senior official in the Department of Communications wrote to Forfás to complain its proposals for the State to take the lead in the deployment of a next-generation broadband network were “not credible” and “would ultimately detrimentally impact on enterprise, research, innovation and investment”.

Under the Forfás plan, the State-developed network would be available to all telecom providers on an open-access basis. But the department was concerned such market intervention – or infrastructural investment, depending on your perspective – had not occurred elsewhere in the world.

Shanahan sighs when asked about the difference of opinion. “I think we believe investment in next-generation networks is hugely important from an enterprise perspective,” he says. “It would seem at this point in time the investment is slow in coming from the private sector. I think it is realistic that the State at this point in time is not able to provide the entire investment that is required and maybe nor is it appropriate that it does, so it is about finding a mechanism whereby we leverage private investment through some State investment.”

Shanahan sits on the research prioritisation steering group chaired by Intel Ireland’s general manager Jim O’Hara, which was set up by Minister for Enterprise Batt O’Keeffe in September. Its task is to identify up to 20 priority areas for the allocation of public funding of research and development over five years. Forfás will prepare the report of the group within a year.

“We need to know what our strengths are, we need to know what we’re good at. It’s not about picking winners. It’s about supporting areas that we have already developed a capability in from a research perspective.”

So which would be the priority areas?

“As the concentration exercise has just commenced, it would be inappropriate to comment on it at this point,” he says.

Perhaps proof of Forfás’s policy wisdom will come if its analysis of how to retrain, re-educate and re-employ people who have lost their jobs in this recession – including the large numbers who exited the retail, construction and manufacturing sectors – holds true. “Some jobs will come back in those sectors and we need to look beyond where we are, as to what that looks like,” says Shanahan.

But while there is no single big sector that will suck in significant employment numbers,Shanahan does cite the potential of the biotech sector and retro-fitting under the green initiative, which he says is already providing jobs.

Is there ever any disagreement within Forfás? “We’re all at one . . . Oh, if only that were true. No, there’s always good robust debate in Forfás.”

On the record

Age: 37

Background and family: From Abbeydorney, Co Kerry, he now lives in Skerries, Co Dublin, with his partner, Gary.

Education: He studied hotel and catering management and completed masters degrees in hospitality management and research in education.

Career: He worked in the Connemara Coast Hotel and the Great Southern Hotel Group before joining tourism training body Cert in 1999. He joined Forfás in 2005, where he worked on the expert group on future skills needs, set up the labour market policy department and helped develop the National Skills Strategy.

Hobbies: Collecting art (from Andy Warhol to Louis le Brocquy), cinema and walking.

Something you might expect: He is fond of cost-competitiveness.

Something that might surprise: He's not a State agency "lifer".