The National Economic and Social Council (NESC) analyses strategic issues relating to the efficient development of the economy and the achievement of social justice and the development of a strategic framework for the conduct of relations and negotiation of agreements between the government and the social partners. It reports to the Taoiseach, is chaired by the Secretary General of the Department of the Taoiseach and contains representatives of trade unions, employers, farmers’ organisations, NGOs, key government departments and independent experts. Arguably therefore, what it has to say represents the collective view of some of the key players involved in shaping policy relating to the economic and social future of the country.
Every three years, NESC prepares an overview of economic and social conditions. These reports constitute a key input to the negotiation of the partnership programmes.
Its latest report has just been issued, called “The Irish Economy in the 21st Century”. The central tenet of the report is that ours is an Economy in Transition. Given the potential of those involved to both formulate and drive policy at national level it is extremely interesting to see where the authors see us going in the years ahead.
The view of NESC is that we are in transition
• towards a period of robust but slower growth that will be driven, largely, by services exports but with a steadily widening set of indigenous enterprises and organization as well as multinationals contributing. Strong domestic demand will also retain a significant role.
• towards a period in which standards and accomplishments in social and environmental areas and dynamism at the regional level will be factors strengthening Ireland’s economy.
• towards a period in which competitiveness will be based largely on the ability to source and creatively apply knowledge, skilled and flexible workers and the high quality of the infrastructures, regulatory framework and public services supporting businesses.
The first and third of these I can fully appreciate, although they will present policy makers with considerable challenges. One key challenge will relate to how we develop effective industrial policies for a situation where indigenous industry will be more important than foreign direct investment, and where services will be more important than manufacturing. Another will relate to how we actually create a knowledge economy and do so to the extent that it gives Ireland Inc. a competitive advantage in economic terms.
The second transition identified by the NESC, however, I cannot get my head around! I do not see the transition the NESC are talking about. Indeed their own figures would seem to support my viewpoint. For example in absolute terms, the additional jobs created in the Greater Dublin Area between 1997 and 2006 were greater than the stock of employment in any other region, with the exception of the South West. Also, 20% of employment in the GDA was in financial and other business services (the area of greatest potential growth); the South West had the next highest share but at 11% was just over half the level of the GDA. All other regions, by contrast, had significantly higher employment shares in construction, manufacturing and agriculture than the GDA (all sectors with considerably less growth potential going forward into the future). I simply don’t see any evidence of the dynamism the NESC refer to at the regional level at present; don’t’ see policies in place to create it, and cannot envisage it being created in circumstances where all key policy is decided at the centre. Some civil servants may have been decentralized, but power remains firmly as centralized as ever. We still have a highly centralised command and control economy. While that remains the case the possibility of dynamic regions being “factors in strengthening Ireland’s economy” seems less a transition and more an aspiration to me. Perhaps I am missing something here, or perhaps I am just living in the wrong part of the country.
Of course this report is so all encompassing that everyone will find much to ageree with in it, as well as elements with which they disagree. Agree with it or disagree with it the reality is that most of what is contained in the report will be at the core of policy formation in the immediate future, and what our policy makers make of it will have a major effect on our future prosperity.
