Last week a lot of fuss was made over Media Lab Europe (MLE), the wholly independent spinoff of the Massachusetts Institute of Technology's wellknown Media Lab.
MLE, described as a "pet project" of the Taoiseach, Mr Ahern, received funding despite the reservations of some civil servants, and an academic complained that the lab would not have its projects peer-reviewed.
Questions were raised about its funding - both what it received from the Government to start (about £40 million, or €50.8 million, was touted) and its ability to raise its £20 million annual operating costs. Academics also complained that an MIT lab was given funding rather than Irish programmes.
Some clarifications. First, MLE received £28 million from the Government. That's it. A further £15 million was set aside for the Government to acquire a premises, a Government asset that MLE then leases for a token amount.
Second, MLE is an independent, European institution based in the Republic. Third, a central tenet of MLE is collaboration - it will issue joint degrees with European institutes. Thus, it will be able to amplify research funding and bring in a level of joint work with European institutions that is nearly non-existent now. Fourth, there is a difference between pure and applied research. MIT's Media Lab continues to draw a healthy level of funding from the private sector, which apparently does not have qualms about whether it receives a practical product at the end of the day. Media Lab is not a "normal" lab - no other lab anywhere unapologetically crosses the arts with the sciences, a direction MLE is also committed to, along with e-commerce-oriented research.
If MLE is European and privately funded, surely its sponsors and researchers should approve its projects, not Irish academics. In addition, MLE's arrival has already benefited Irish education by pressuring the Government to produce a £1.9 billion research programme for the Republic, and a £1 million annual fund for collaborative projects between MLE and national universities.
Fifth, MLE was not rushed into approval as a pet project, but was argued over for nearly two years, sometimes bitterly. Those thorough arguments are reflected in Government documentation, and should be. A key achievement of the Government was linking MLE to the Liberties digital district. Without such a prominent tenant - one intended to interact with other resident companies and third-level colleges, as well as the community - it is doubtful whether such an ambitious project would work. MLE isn't simply a lab but part of an economic and social project and is connected to the Information Society programme. Thus, it eventually - at the very end of negotiations - ended up within the Taoiseach's Department.
Finally, MLE is the Irish project that most impresses international technology companies that I speak to, especially those in the US. They are astonished it came here, and see its arrival as evidence of a strongly developing telecommunications infrastructure and technology industry, of the expansion of Irish research programmes and, most significantly, of an attractive creative and imaginative life. The Government could not buy such publicity, and the IDA could not bring it into being through grants. MLE must now begin to prove its worth. But thank God a few people - both in business and Government - understood its possibilities and drove this project through.
Reports of the death of the new economy are greatly exaggerated. So are reports that it never existed.
We most certainly do have a new economy, just as we've had one many times throughout history. New economies emerge when a technological breakthrough starts to shake the foundations of a society. In the aftermath, society has to alter and adapt to the changes, and opportunities are created for those who can think differently, understand the change, and see how it might be used.
The printing press. The machinery of the Industrial Revolution. The railroads. The telegraph. Electricity. Each wrought this kind of transformation.
The widespread use of computers and the steady advance of the Internet are the latest shockwaves. Certainly, the speed of the Net and rapid expansion of computing power has accelerated the rate of change beyond new economy shifts of the past. This time, traditional, bricks-and-mortar companies have had to respond within weeks and months, not years. The dot.coms have realised that this altered landscape will offer opportunities for new kinds of businesses. What we might call the new, new economy has now begun to take shape.
Why are we so eager to pronounce its demise? For, despite what you might read, we most certainly have not returned to the old economy. We cannot possibly pretend computers and the Net will go away. Old economy companies know full well they must function in a business world that moves ever faster, that requires greater transparency, that has narrower margins and that gives great powers to consumers.
All that the recent failures prove is that we're still negotiating the earliest stages of this new economy shift, and that some, probably most, dot.coms were given funding that they never should have been given.
In the process, companies were buoyed up that, under less feverish and greedy circumstances, would have sunk well before the IPO.
Those wrecks are being blamed on the failure of the new economy. In fact, the dot.bombs are a consequence of the failure of investors and dot.com company management to understand the way in which the new economy works. Understanding its operations will take time. But there's no going back, and we ain't seen nothing yet.
Klillington@irish-times.ie
