Harney sets out to reshape industrial policy

Report contents: A "new and different" enterprise strategy for the economy has been set out in a major study published yesterday.

Twice-yearly Cabinet meetings that would concentrate on enterprise, and initiatives to promote research and development and improve sales and marketing skills, are among the recommendations made in the 176-page report.

Ahead of the Curve: Ireland's Place in the Global Economy will provide the agenda for what the Tánaiste, Ms Harney, has said will be a reshaping of industrial policy. Having commissioned the report, she welcomed it yesterday. But it is not Government policy - a group of civil servants will now study it and make recommendations to her on implementation.

The report notes that Ireland's strength has been in the operational aspects of manufacturing and services. The "over-arching strategy" contained in the report is for the building of improved R&D and product development skills, and international sales and marketing skills, to complement this strength.

It says Ireland will succeed if it focuses on niche areas of activity.

The report notes that foreign-owned enterprises account for most of our exports. The foreign-owned sector "produces goods that were designed elsewhere, to satisfy market requirements that were specified elsewhere, and \ sold by other people to customers with whom the Irish operation has little contact and over whom it has little influence."

This profile substantially applies to the indigenous sector also, according to the report.Food, which accounts for 55 per cent of indigenous exports, has been primarily production rather than market led.

"Overall, indigenous exports have not grown significantly in real terms over the past decade," the report notes. It identifies five areas which, if developed fully, could provide Ireland with a competitive advantage. These are: expertise in market intelligence; expertise in technology; skills and education; taxation; and government agility.

Among the recommendations made under these categories are: the placing of 1,000 extra sales and marketing professionals in Irish firms over the next five years; public funding of applied research and in-firm R&D; having the proportion of graduates in Ireland in the top decile of OECD countries.

The Government should reiterate its commitment to the current corporation tax rate of 12.5 per cent. Carbon tax should be initially set at a low level and paid by all sectors of the economy on all fuels.

The report also identifies what it says are four prerequisites for the development of the competitive advantages listed above. These are: cost competitiveness; infrastructure; innovation and entrepreneurship; and management capability.

Among the developments required in these areas, according to the report, are the dismantling of legislative shelters that restrict competition; prioritised investment in National Spatial Strategy designated gateways and hubs; and the re-energising of the Strategic Management Initiative/ Delivering Better Government programme.

On State agencies the report recommends a common chairperson and common directors for the boards of Forfás, IDA Ireland and Enterprise Ireland; and the creation of a regulatory body to regulate all networked sectors (gas, electricity, communications).

To see its recommendations implemented, the group has proposed the creation of an expert group of secretaries-general from six Government Departments which, along with four private sector representatives, would meet four times a year.