Lessons of the Celtic Tiger We Do Not Fool Ourselves That Investment in Basic Research Is the Passport to Continued Economic Growth. Unless We Take the Opportunity to Learn from One Another, Then Nobody Moves Forward; CAN Wales Emulate the Irish and Become the Mouse That Roared? Here David Jones Looks at the Lessons to Be Learned from Their Experience
Byline: David Jones
DON'T ask Brendan Whelan for the magic formula that will transform the economy of Wales into the Celtic Tiger Mark 2. He'll tell you there isn't one.
He is more than happy to reel off the sort of economic development strategies that in recent years have turned the largely agricultural Irish economy into one solidly based on knowledge-based industries, enabling the country to leapfrog others to the top of the European prosperity league table.
It's not simply just a job of cloning Ireland's economic blueprint and applying it to Wales - just 90 miles from Dublin by fast ferry. So much hinges on what happens in the global economy.
What Wales can do is look closely at what Ireland has done and to pick out some of the best ideas before working out how they can be harnessed to good effect on this side of the Irish Sea.
Professor Whelan is director of the Economic and Social Institute, a Dublin-based think-tank, and is in Llandudno to share his thoughts at a seminar at the Tomorrow's Wales 2002 exhibition at the North Wales Conference Centre. The secret of that Irish economic miracle?
``There is no magic bullet, no single ingredient,'' he says. ``It is an interacting set of outside influences and policies which produced that success - a mix of policies that have to work together in a co-ordinated way.
``They also have to work consistently, and that is one of the strengths of what happened in Ireland. Even during changes of government there was no major disagreement between parties on industrial and educational policies.
``Thirdly, external circumstances can prevent even the best policies from working. For example, a collapse of world trade or a currency problem.''
He warns that bad policies can almost be guaranteed to lead to failure as Ireland showed in the 1980s. It was a different story there in the 1990s, though, when a period of sustained and remarkably high growth built one of the knowledge economy powerhouses of western Europe.
Irish GDP grew rapidly - by an average of 8.5pc a year from 1995 to 2000 - and unemployment fell from 16pc in 1988 to 4pc today.
Back in 1964, 57pc of Irish exports were agricultural - 22pc of that live animals - and the remainder industrial. The Irish economy had been turned around to such an extent that by 1998 agriculture represented just 7pc of exports - and live animal exports less than 1pc - while industrial exports had mushroomed to 93pc.
Driving forces behind this rapid and striking transformation of one of Europe basketcase economies included globalisation. Joining the EU in 1973 not only gave a country of four million people access to structural funds with which to rebuild and modernise its economy but also opened the door to a market of 350m.
Availability of structural funds now being put to work under the Objective 1 programme in North West Wales enabled Ireland not just to dip into a pot containing billions of pounds but also imposed upon its government the obligation to design and monitor, in a more rigorous fashion than had been the case up to that point, the way in which those funds were spent to increase GDP.
Direct investment into Ireland by foreigncompanies, especially American, saw the rapid development of high value sectors such as computers and pharmaceuticals. While US investment into Europe remained fairly constant, Ireland saw its share of that investment increase, peaking at more than 15pc in 1998, because of its attractiveness as a location for business.
Other crucial forces driving the engine of economic change in Ireland over the past decade were a bigger and better educated workforce, due in part to the legacy of a high birth rate, increased female labour force participation and inward migration, and a social partnership which meant reduced industrial conflict and relative stability of labour costs resulting from understandings forced between government, employers and trade unions. …