Focused strategy could rescue Limerick from Dell collapse

 

The skills of Dell's about-to-be former employees can be used to create new businesses in Limerick - if the Government acts fast, writes Stephen Kinsella

DELL IS shedding 1,900 jobs in its Limerick plant, a move which, at a conservative estimate, will affect 10,000 other jobs in the Shannon region. Dell's closure will cause an employment crisis in Limerick, increasing levels of uncertainty among many families as they head into a hard new year.

The situation caused by Dell's departure, albeit dire, contains the germ of an opportunity if the correct development policies are put in place to ensure Dell's skilled workforce stays in the Limerick region, rather than dispersing to find work.

Beginning in April, 1,900 skilled workers will be signing on to the Live Register. The next three months constitute a window within which focused policies can be embedded in the region to turn Dell's middle managers into entrepreneurs, risk takers, and business owners.

Dell's decision to move its manufacturing operations abroad proves one fact at least: cost matters, and matters more than any other factor. In the global market place for semi-skilled labour, jobs can move at speed. In the short term, Ireland cannot compete for manufacturing jobs, because its cost base is too high.

Ireland needs to move from producing manufactured items in high-tech industries to researching, designing, and developing them, and it can do that by stimulating those recently unemployed to innovate, by giving them development grants, education, cheap business loans, and practical mentoring advice.

The State agencies already exist to provide these services: Enterprise Ireland, the University of Limerick and Fás would lead the way.

The plan is simple: use government funds recently ploughed into banks as a fund to allow new businesses to flourish in the Shannon region. Offer expertise, tax breaks, and credit in a focused and determined manner to Dell's former employees, coupling their individual needs to survive with the urgent national priority of establishing a knowledge economy.

The cost to the State will be in the millions over the next three to five years. The benefits will be in the hundreds of millions, as public investment begets private investment, which generates jobs, and keeps technologically savvy workers employed, and employing others.

Workers with jobs consume more, produce more, pay more taxes, and those who start successful new businesses will create more employment in the years to come.

Be under no illusion that some of these new businesses will fail. That is the nature of international competition. The attrition rate will be high, but if we decide to see failure as market feedback rather than evidence of incompetence, then we can build the smart economy the Government has recently called for. Some businesses will succeed, some perhaps brilliantly.

We can give Dell's former employees the chance to create an Irish Google if we act swiftly. The resources exist. A large reserve of skilled and experienced labour now exists. A coherent set of policies are all that is needed. The Government has from today until April to implement these policies.

It should begin forthwith.

Stephen Kinsella lectures in economics at the University of Limerick; www.stephenkinsella.net