Slag off the Innovation Task Force? Fine: but come up with some ideas yourself

Colm McCarthy wrote a really scathing piece in our newspaper, yesterday, about the Innovation Task Force's report.

His analysis is worth a read, as it brings up one or two valid points. But he's fundamentally missing the point of what the Task Force was set up to do.

McCarthy, at the end of the day, is an accountant. (Sorry, an economist -- which is an accountant with a few airs and graces.) His main focus is the bottom line. He really doesn't care whether that bottom line is achieved through cleaning toilets or making silicon chips. It's purely, 100%, a numbers game.

This is fair enough, in its own contained way. We can't run a profligate house. And there is definitely a tendency among Irish 'entrepreneurs', whether in construction, technology, science or farming, to simply put out the begging bowl for state subsidies.

But I've read the Innovation Task Force. It has some decent recommendations. Like reforming personal bankruptcy laws, which are archaic and stupid. It also suggests double points for maths in the Leaving. And reform of certain tax codes, such as abolishing capital gains tax for founders of successful start-ups.

Its whole raison d'etre is to try and come up with a way for Ireland to survive in the long term. To actually have some sort of proper indigenous industry once again.

McCarthy seems to have missed this point. So far as I can make out, he himself has no vision -- whatsoever -- of what we should do next, industrially.

And make no mistake: we have got to come with some sort of industry, fast.

At the moment, Ireland's indigenous industry makes almost nothing. We make food, which does reasonably well abroad. And we have some expertise now in horse-breeding, for all the good that does us. And our tourist industry will survive in the long term.

Aside from that, Ireland is purely an outsourcing location for large multinationals (including pharma and tech), with almost no local brains running any kind of successful, in-demand industry.

You cannot base a country's future on the hope that multinationals will stay content with their factories here. No country has ever done that and kept pace with first-world loving standards.

Furthermore, there are very few first-world countries that do well without making things themselves. Look at Germany, France, the US, Italy, Holland, Scandinavia. The main drivers for their success, and long-term reliability, is that they make things that other countries want. And by indigenous companies.

Now, McCarthy deserves huge respect for the bluntness and the truth he brings to our national economic disaster. I think he's a breath of fresh air. But he is clearly far more comfortable sitting back and picking holes in things rather than suggesting anything. (In fairness, that would make him very representative of the country at large.)

This Task Force report sets 2020 as a target for world-beating, indigenous tech and science companies.

Whether we have the culture, the brains, or the entrepreneurship to reach that target is another matter. But don't blame the Innovation Task Force for bringing it up.

Comments

[John Reynolds]

If you look at Ireland's current situation in that light, you have to wonder whether we're actually still at square one - like we were in the 1990s when we were sucking in all that EU money.

Does Poland make anything that we could name? None that I can think of...but now it and the other new EU countries are sucking in EU money.

The way that the world has changed has arguably exposed the fairly grim reality that the question you pose has been largely ignored in the past 20 years.

It's happened to a lesser extent in the UK too, for instance - the rise of the City and the demise of manufacturing, the associated skills and the kind of education system needed to foster those skills, but we're starting from an entirely different place altogether.

As the old adage about the tourist visiting Ireland goes: "Well I wouldn't start from here."

If we had decent infrastructure that gave us a few advantages, we could maybe hang onto that and say things aren't too bad. But I'm not sure we do.

We have some strengths in green technology such as marine energy and so some wave and tidal turbines might be made here for example. You've mentioned food and drink and horsebreeding. There's tourism. But that's more or less it really.

But you also have manufacturing itself changing so we seem to be seeing more localised manufacturing to serve markets nearby. You might have a factory in Poland supplying to Russia and Eastern Europe for example.

You might have an Irish company with an innovative product. But if they can make it in China or India and supply those markets, where is the advantage in making it in Ireland and incurring freight and all other costs of doing so?

From what I've read recently, I don't think I'm alone in arguing that what we need to do is create the conditions to foster as many small businesses with a creative or design-led edge of some sort as possible.

We need to help them get out to the export markets - not just Europe, the US and the UK - but the emerging ones, India, China, South America.

I would've thought that the chances of a few major successes from doing this that lead to spin off services and trickle-down jobs and growth in the domestic economy are the best we can hope for right now.

To get one or a few real successes, at a certain point, no matter how many reports are written by however many taskforces, at a certain point, to use your phrase, it is just a numbers game.

Maybe McCarthy would have been better writing this and being bluntly realistic instead of overly negative, but any venture capitalist will tell you that we'll probably need at least 1,000 startups, so you have the time it will take to do that to take into account.

If 10 survive and reach a certain point of success, we'll be doing well. Out of those 10, perhaps we'll have a few big successes.

What exactly they will do or make doesn't seem to be clear right now, realistically, I'd argue.

Some people on the taskforce might be qualified to "pick winners," as the phrase goes. We all know the government isn't. Is Enterprise Ireland?

We can only hope we find out what it is they will do or make as soon as is humanly possible.

[Adrian]

John,

No I wouldn't argue that we're at square one. We're a lot better off than we were 15 or 25 years ago.

I'm saying that we're no further down the road of indigenous industrial strength than Poland or other outsourced locations. But we're too rich (=expensive), now, for it to make any sense for large-scale outsourcing either. So what happens when an outsource location becomes too pricey to outsource into?

Not a problem if we had our own large companies making things we could export.

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If you look at Ireland's current situation in that light, you have to wonder whether we're actually still at square one - like we were in the 1990s when we were sucking in all that EU money.

Does Poland make anything that we could name? None that I can think of...but now it and the other new EU countries are sucking in EU money.

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