Thursday, March 11, 2010

Innovation task force launched by man who cant innovate.

An Taoiseach Brian Cowen has today unveiled a new plan to help us out of the mess he created - an innovation report. ( lets see how much innovation he supplies at the cabinet shuffle - not a lot I would think)

Whats the great idea? Well it's the Knowledge economy – sure its your only man. The Knowledge economy has assumed an almost gold like currency in the position of public debate. Its only rival is of course green jobs. Both the "knowledge economy" and "Green jobs" are the successors to "competitiveness" which has for so long been a driver of public policy.

Now I am not railing against either the need to build an economy that controls its costs and has high productivity; nor against the utilisation of our well educated population to create jobs and wealth or against the bottom half of our country developing sustainable energy sources etc.

My concerns with such initiatives are two-fold:

Firstly the Irish media is only all too keen to seize such easily processed soundbites and add them as impressive baubles to whatever article they are writing. The upshot is that the debate becomes centered around powerful slogans that dominate and ultimately stifle discussion. Tremendous heat may be generated reporting these ideas but often there will be little discussion on where ultimately we want these approaches to take us.

Secondly I am sceptical that the current Govt. is capable of actually developing and rolling out the ideas in the report in a useful way.

Having failed to develop such initiatives at a time when the southern state was running surpluses then it seems unlikely that the self same ministers will have the ability to provide them when there is a deficit – and its not a question of money but of ability, imagination and vision.

The study wants:

Additional seed funding for start up enterprises and entrepreneurs,

- but can a govt. that oversaw an economy where the Irish-owned business sector got under €200 million in venture capital investment while €13.9 billion was invested in European property deals have any credibility in providing seed funding.

Better co-operation between the jobs creation agencies.

- Yet as noted by the Business post a while back this part of Ireland is "drowning in an alphabet soup: HEA, Hetac, Fetac, SFI, IRCSET, IRCHSS,HRB, EI, Fás, Forfás, NCC, IDA. . . the list goes on". Fas anyone confident about their contribution? This soup of agencies is dished out to political appointees in a system created by the present administration. Can they then reliably reform it?

Finally and briefly I'd like to consider their point on start up funds. In their own words:

Insufficient early stage funding is currently available through the private sector and Enterprise Ireland

The Taskforce recognises that some of the following recommendations have substantial resource implications which cannot be met from EI's existing budget without cancelling other significant programmes, while others would require a change in Government policy regarding the provision of matching funding. We acknowledge the extreme pressures on the Exchequer and recognise the rationale for requiring co-funding in a scheme of this nature. However, we believe that there is a clear market failure at present which may prevent worthwhile start-ups proceeding. For that reason, some flexibility in this provision is proposed.

(my highlights – report pg 67.)

Well NAMA should solve that problem shouldn't it? And an interesting question might be to what extent did the Irish govt. simply allow non-state bodies, like the banks, assume almost responsibility for nurturing Irish businesses and creating jobs. When, as the report noted, the market failed in its assigned responsibility there was a dearth of investment for companies and potential jobs not created.

This situation does not just happen. It's the result of a conscious abdication of responsibility by the Govt. over the last 10 years. Now we are seeing the Irish govt. pick up the financial tab from the banks and also having to reassert control over the areas of responsibility it left to those same banks etc.

How then can we entrust them with the responsibility for solving these issues?

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