Ireland must position itself as a centre for fourth-level learning if it is to thrive in challenging times, writes Tom McCarthy
IN ECONOMICS, a new expression to explain the phenomenon of countries like Ireland, Korea, Finland and a few others has emerged. It is called "the island factor" and it is based on the idea that countries like Ireland, due to major shocks or crises, had to take momentous decisions that explains their rapid success.
This theory is in its infancy but is quickly outstripping the old "tiger" theory, which was used to explain Asian and Celtic successes. Whatever about this new method to describe Ireland, the concept of shocks or crises, internal and external, forcing decision making is a relevant consideration.
In the last century, governments made many momentous decisions. Deciding on universal access to second-level education was a huge one in the 1960s. Deciding to break with sterling in 1979 after 200 years was another giant one. The tax and investment decisions over the past three decades have all been milestones, resulting in Ireland having 25 per cent population growth in 30 years and reversing the net outward migration of 4 per cent of the labour force, which happened throughout the 1980s.
The work of IDA Ireland has also been critical in that our growth has been driven as a joint venture between Ireland and foreign investment. This is reflected in an 85:15 split in the resulting dividend, which is the way, I believe, we should view the fact that Ireland's GNP is 85 per cent of our GDP.
While we have been unique in doing this, the conditions for replication are transferrable. The Czech Republic, Estonia, and Hungary now have GNP/GDP ratios equivalent to Ireland's ratio in 1994.
Past decisions were all forced by shocks of various forms, mostly related to us all being poor, unemployed and forced to emigrate. Now, as we are about to see days of a darker hue again and with new potential shocks on the way, the need for momentous decision making is urgent.
The reality is that if Ireland is going to continue to make the strides forward, especially in these more challenged global times, it needs to start making more groundbreaking decisions that will keep it in the premier league.
So what decisions does Ireland need to make? An obvious one is that Ireland needs to position itself in the global value chain. IDA Ireland has an excellent ad running in the US portraying Ireland as a modern, vibrant, innovative country. As the ad is never shown here, I intend to show it to the Irish chief executives attending next week's Irish Management Institute conference.
However, I think the Government should go further than the advert and establish a fourth-level university "front" that would be used to distinguish Ireland abroad.
Fourth-level refers to PhD study and research. This research ranges from basic to commercial exploitation, often in partnership with foreign multinationals. PhD graduates are the lifeblood for an economy that wants to attract R&D investment. They are critical to sustaining our leading position in attracting foreign direct investment.
We have set ambitious targets for PhD output. However, we must ensure that these graduates are of the first rank. This requires migration of talent to study at PhD level in Ireland. We must make momentous decisions to achieve this.
I am not suggesting Ireland sets up a new university, but I think there should be a chancellor's office with the primary purpose of promoting Ireland's fourth-level education model across the world. The departments of this fourth-level university would be the specialist divisions of the universities and ITs across the island. So for example, the fourth-level university's biotech department would be the third-level institution that has the best offering in that area as judged by an independent process.
This assessment process has been ongoing for almost a decade through the work of the Programme for Research in Third Level Institutions (PRTLI) and Science Foundation Ireland (SFI). We know most of the winners. Now is the time to give them the institutional support to project them onto a world stage.
A further ingredient would be the designation by the fourth-level entity of outstanding professors as "Government of Ireland professors". Apart from the honour in the title, the chosen professor would be exempt from income tax.
This type of model would give Ireland the advantage in positioning the Republic or perhaps the island in the global mind as a "fourth-level country".
The economic success that Ireland enjoys at the moment is due largely to the high standards of education that our graduates and employees have benefited from. However, it would be foolish to expect that the growth and success can continue if we don't equip and position ourselves well in the global market. Keeping up the "island" phenomenon and managing the shocks can be done in a "fourth-level" model.
Dr Tom McCarthy is the chief executive of the IMI