"I'm tired of hearing about Ireland," said the exasperated deputy minister for tourism in the Scottish Parliament recently. He feels the exhaustion of a government constantly being told that they do things better in Dublin.

Where once the Republic would have been dismissed as an economic failure, it has now become the model for not only Scotland and Wales, but the regions of England too.

The political struggle to win devolved parliaments in Edinburgh and Cardiff began with the politics of identity. Scotland deserved its own government, so the argument ran, because it had a separate education and legal system and a distinct national identity. In the 1960s and 1970s the debate for constitutional change was as likely to rage over medieval battles as it was to concentrate on the economy.

This slowly began to change in the 1980s and 1990s. The politics of identity were forgotten as the politics of economic growth took centre stage. In the new debate the unionists began by saying "but you surely don't want to end up like Ireland?".

That has changed to the cry heard in every enterprise agency and government department. Now the question is "how do we get to be more like Ireland?".

It is hard to say exactly when the Republic's image in Scotland changed from one of failure to success. Perhaps it was in 1990 and Ireland's World Cup success. The Scots had been qualifying for years and failing with ease. The only pride was in the fans said to be the happiest of any nation. Then along came the Republic. Not only did they get to the semi-finals, but they had good fans as well.

More likely it was in the steady success of IDA Ireland which began to beat its Scottish rival. Then came the offshore banking centre in Dublin, which set a standard for innovative development.

To cap it all, the European Summit of 1992 was held in Edinburgh. It was intended to show the Scots the Tory government cared about them. The Irish delegation left with £8 billion (#10.16) in promised aid. The Scots were left with the bill to clean up the city once the politicians were gone.

When the Scottish Development Agency was reformed into Scottish Enterprise at the beginning of the 1990s, it was to cope with the renewed competition over foreign direct investment which was coming for the Republic and other countries. The Republic's success didn't become a live political issue until the Scottish National Party began to look longingly over the water.

With the identity issue long settled, the argument against Scottish independence began to focus on economics. The British government started in 1992 producing a book called Government Expenditure and Revenue in Scot- land. As Conservative ministers at the time admitted, its purpose was political. It hoped to show that Scotland would go bust if left to run its own economy.

To counter this the SNP had to engage on the notoriously dull territory for voters, that of economic theory. They didn't accept the government verdict that Scotland was in the red, but they had to convince voters their jobs and pensions were safe. The best way to do this was to point at Dublin.

Charts showing Irish economic growth from the 1980s onwards became vital to the nationalists, who found themselves trying to prove that things can change for the better.

SNP leader Alex Salmond latched on to the low corporation tax levels in the Republic. In 1998 he began to argue that cutting corporation tax in an independent Scotland could result in a greater income to the Treasury through increased volume of business.

The Labour government was swift to condemn the policy. The Scottish Office Minister Lord Macdonald rounded on Salmond and uttered the infamous line "Dublin may be a great place for a stag weekend but it's no place for an economic policy".

This row was in fact a reflection of a process that was taking place across Scotland. Regardless of political persuasion, people could see that Dublin was enjoying a boom. People looked at Riverdance and thought they may not want Scottish culture to end up like that, but they wouldn't mind some of the profits.

The Republic has now become the benchmark for many areas of government. The huge tourism industry in Scotland has just been reviewed and new structures are being considered. At the back of the glossy document proclaiming the future for the £2.5 billion industry is a small line saying consultants will contrast Scotland's performance and the Republic's to gauge success.

A row rippled across the entire Scottish media when the Observer revealed that tourism and golf course bosses were holding emergency talks on how to cope with the threat from the Republic. The home of golf had suddenly woken up to the fact that its near neighbour was building top-quality courses and pulling in foreign tourists to play. Now there is a new strategy for golf - and it's to be compared with the Republic.

Scottish Trade International is the agency charged with encouraging firms to export. It realised that other countries, and particularly the Republic, had a head start through their networks of embassies. STI is now frantically trying to upgrade and expand the 20 or so offices it has abroad into stronger units.

The First Minister of the devolved Scottish Parliament, Mr Donald Dewar, told Labour's annual conference in Edinburgh last week that one of his main aims was to provide an educational system that equipped people with the skills for e-commerce.

The fear is that Glasgow and Edinburgh have fallen behind Dublin as centres for new technologies. The irony is that the Scottish education system was the model for reforms in the Republic in the 1970s.

As proof that the politics of identity in Britain has been replaced by the politics of economic competitiveness, a new campaign group was launched in Westminster a fortnight ago. It was for a regional assembly for the north-east of England.

No longer would the rallying cry defend the identity of Newcastle and protect Brown Ale, instead the organisers stated that the assembly was needed for the region to compete economically with Scotland and the south-east of England. Where once patriots followed flags, now they follow spreadsheets and Dublin has set the tune by which they all march.