The need to make knowledge work

There is a widespread and growing consensus that Ireland needs to complete the transition from what has been termed an investment driven economy to an innovation and knowledge driven economy. We are recognised for our high level of performance in an investment driven context. We secure a disproportionate share of FDI (foreign direct investment) relative to our size. As a result we have become the location of choice for manufacturing and international services in areas such as electronics, pharmaceuticals and financial services.

However, our success inevitably has to change the dynamic of our national strategy going forward. We are now in the upper quartile of European GDP per capita. And while we need to address certain aspects of the cost structure of the economy, we will never revert to the kind of low cost economy we had in previous decades. Nor should we wish to do so! We have worked very hard to develop an economy that delivers high wages and high standards of living to our citizens and which shares the fruits of growth with those less well off. We need to build further on this.

We are an exceptionally open economy, critically dependent on trade. Because of our willingness to embrace openness we have benefited hugely from the creation of the single market within the EU and from the wider trend towards global trade liberalisation. The process that has yielded those benefits also brings challenges. The industrial structure, which was appropriate to Ireland’s stage of development in the twentieth century, will not serve us in the new millennium.

Many developing countries are now competing to be the location of choice for routine manufacturing operations and lower value added industries – and rightly so. It is a step on the same staircase to prosperity that we took previously. As our competitors ascend the staircase, we need to move onwards and upwards.

Going to the next level will be critically dependent on making knowledge work. In their report “Europe in the Creative Age” Florida and Tingali argue persuasively that creativity has become the driving force of economic growth. They identify three T’s – those of Technology, Talent and Tolerance - as core components of creative capacity linked to competitiveness. They point out that in Europe a growing proportion of the labour force are in what they call the "creative class". The report identifies seven countries where the creative class is close to 30% of employment and, crucially, that these are the countries, which can hold their own with the US competitiveness terms. It also affirms the importance of openness and tolerance in stimulating creativity and economic growth.

The results of this research work are interesting and have an intuitive rightness about them. Whether we look at the flowering of mathematics and the arts in the Persia of the Middle Ages, or the tremendous outburst of human creativity during the Renaissance it seems clear that there is an intimate connection between knowledge, creativity and growth.

Creativity and knowledge far transcend the boundaries of science, technology and innovation, but there is an intimate connection between the two. The kinds of institutions that produce great scientists are also likely to produce great historians or great economists or great designers.

Making knowledge work for Ireland is about more than science, technology and innovation, but STI will be a major driving force in our quest to become truly knowledge driven creative society. We have been making great strides in this regard recently, but we still have some distance to go.

Recent Key Achievements

Recent reports show that, in line with Ireland’s economic performance generally, while we have been late out of the starting blocks, we are running fast to catch up in the R&D race.

The current National Development Plan has marked a decisive strategic shift in support for science, technology and innovation, with the earmarking of €2.48 billion in the period 2000 to 2006. That shift could be summed up as follows: firstly, recognition that Ireland can only succeed in long term technological and enterprise development if it has a sustainable base of excellent science. And secondly, recognition that that the tertiary education sector, our Universities and Institutes of Technology, are the bedrock on which this system should be built.

Two of the principal initiatives under the plan are the resourcing of Science Foundation Ireland (SFI) and the programme for investment in the Third Level Institutions (PRTLI). Some headline achievements of the SFI and PRTLI investment include:

PRTLI

• 97,000 square metres of new research space, including almost 20,000 square metres of new library space;

• 5,800 research spaces and 1,600 new library spaces for researchers;

SFI

Over €338 million in research support involving more than 149 outstanding researchers and their teams in creating the knowledge and driving the discoveries to underpin future competitiveness in key industries.

Establishment of six Centres for Science Technology and Engineering (CSETS) involving collaboration between outstanding researchers and world leading companies in areas such as medical therapy, software engineering and nanotechnology.

These are the tangible outputs. But the new strategy for investing in STI has had other less tangible, but no less significant effects:

It has begun to establish a research driven culture in third level institutions. More critically, that culture is based on competitive excellence as defined by international peer review.

It has greatly enhanced the capacity of the universities to plan strategically and to identify and prioritise their research strengths.

It has brought an infusion of new blood into the research system, allowing the return of our Diaspora of outstanding young scientists and the attraction of globally recognised leaders in research.

Industry in Transition

The current trends in the engineering sector worldwide point to an industry in transition. One of the most important trends is in the number of companies engaged in Research & Development activities, particularly smaller enterprises, thereby attempting to move themselves up the value chain. This protects the companies from intense price competition associated with the manufacture of commodity type engineering products.

Developments in technology have meant that companies in the engineering sector are now focussing on product and process design and innovation as a means of sustainable competitive advantage in the marketplace. Developing a cadre of suitably skilled graduates and post-graduates in this space is crucial to the economic growth of this sector. These graduates need qualifications up to fourth level in many cases for leading edge companies.

With increased automation, there is a need to increase productivity and reduce unit cost in order to compete with lower wage economies. The engineers of the future will need strong project management skills, process automation skills, and cost management skills, along with good basic engineering/re-engineering capability.

Maintaining our Competitive Advantage

Across the world, regulatory shackles and controls that limited trade and investment are being loosened. Economies, companies and employees that have only dreamed of our prosperity are hungry to compete against us and capture our markets. Now that technology and knowledge are vital to prosperity, engineering innovation must become a mantra for success.

Our capacity to sustain growth, at least to the levels we have been accustomed to, cannot rely on the same policy prescriptions that propelled our economic and social modernisation in recent times. Our competitive characteristics have changed and the world has changed. Eoin O’Driscoll’s Enterprise Strategy Group’s report published last July points towards an agenda to help manage this change – an agenda based on a consistent and inexorable move that brings knowledge and innovation into everything we make, do and sell.

Specialists and particularly engineers are the enablers of this transition. The O’Driscoll report recognises that the essential conditions for competitive advantage are constant skill development and a determined focus on market led research and innovation. If we don’t have skilled engineers to design products and processes for demanding markets our market share will erode.

Creativity is almost built into the gene pool of engineers. Innovation requires a particular mindset – one that involves curiosity, creativity and ingenuity. It involves the ability to question established ways of doing things, while having the ability to apply knowledge and intuition to change them. Engineers have the enquiring minds to create tomorrow’s products in today’s companies. Their development skills should be less constrained by how we organise our enterprises and our approach to building overseas markets.

International competition is unrelenting. The pace and intensity of competition is developing in unusual ways. The competitive characteristics of our economy have changed fundamentally over the past decade. Our economy has developed to the stage where success in global markets will increasingly rely on competition between minds rather than competition between factories. That future ultimately lies in using engineering abilities across a greater range of company functions.

We have to encourage more students to see engineering and science as exciting careers. To help in this Discover Science & Engineering is the new National Integrated Awareness Programme, launched by the Taoiseach, Mr Bertie Ahern in October last year. It brings together many existing science, engineering, technology and innovation awareness activities previously managed by different bodies, both public and private. The goal of Discover Science & Engineering is to build and expand on these activities and to deliver a more focused, strategic and quantifiable awareness campaign. It was developed as a response to a key recommendation of Task Force on the Physical Sciences to pursue a co-ordinated approach to increase interest in science and to encourage young people to consider science as a viable career option

Expert Group on Future Skills Needs

The importance of engineers and engineering to the Irish economy is recognised by the Expert Group on Future Skills Needs. The report which they published in June, 2003 on the demand and supply of engineers and engineering technicians identified the anticipated mismatches between supply and demand for the engineering profession across all sectors of the economy. The report also makes important recommendations to Government, employers and the engineering profession. The maintenance of the pool of skilled engineering professionals is a vital national interest and I look forward to the outcome of further research work by the EGFSN later this year.

Reform of Educational System

Creating 21^st Century engineers is about achieving excellence in our undergraduate education system, complemented by life long learning.

Our educational system enjoys an excellent reputation for quality worldwide and this factor has been instrumental in attracting Foreign Direct Investment into the country. However, as the Expert Group on Future Skills Needs has suggested, it is imperative that the standards in teaching, curriculum and assessment must be maintained and improved, where necessary. Our graduates need to be recognised as world class if they are to capture for Ireland the complex, high-level investment activities that we want to attract to this country.

We need to ensure that our educational system fosters flexibility, adaptability and a general openness to change among young people. Individuals with such an attitude will thrive in the highly dynamic business and technological environment of the future. In particular our education system must support and actively encourage up-skilling and the periodic renewal of skills through life-long learning. This need stems in part from the ever-decreasing life-cycle of technology and the associated skills, and also from the fact that 88% of the current Irish labour force will still be in the labour force in 2015.

There is a need for greater interaction between third-level and enterprise; this is necessary in order to drive innovation in the enterprise sector, and to ensure that third-level curricula are aligned with the contemporary needs of industry. This latter point is particularly important as there is evidence that the third-level sector is not teaching the skills that industry requires in disciplines as diverse as Sales and Chemistry.

Enterprise Ireland is working closely with a number of Third Level Institutes, other development agencies and industrial representative organisations in identifying skills needs for the future development of industry in Ireland. The Agency is represented on many of the sectoral subgroups on future skills needs which have been set up by Forfas to address these needs.

Generic Skills

The greater prominence of high-tech manufacturing, internationally traded services and R&D activities in Ireland’s economy in the future means that young people must achieve high standards of generic skills, to complement their academic or vocational ones. These generic skills include communication and influencing skills, team working, critical thinking as well as self-management and self-directed learning.

Collaboration and engagement between individuals underpins successful innovation; modern high-productivity work practices hinge on greater individual autonomy in a team-centric work organisation. The globalisation of markets, the supply-chain and R&D means that effective multi-national and trans-cultural communication skills will be at a premium. The emphasis placed on being “closer to the customer” in the Enterprise Strategy report further underlines the importance of cultivating these generic skills.

ICT Skills For All

The ubiquity of Information and Communications Technology (ICT) in the future will elevate ICT literacy to the status of a core skill, on a par with reading and mathematics. ICT literacy will become a life-skill as much as a career skill. This inevitability must be reflected in the priority that is afforded both to ICT as a subject and to the use of ICT in the educational curriculum. ICT skills will also be a key facilitator of life-long learning through e-learning and distance learning. A recent US study has identified the use of leading-edge technologies as one of the six key elements of 21^st century learning.

ICT skills will also be a key facilitator of life-long learning through e-learning and distance learning. A recent US study has identified the use of leading-edge technologies as one of the six key elements of 21^st century learning.

Science, Engineering and Technology Skills

An innovation-driven, knowledge economy is one in which science and technology form a key component of enterprise activity. Therefore Ireland’s success in developing such an economy will be contingent on, inter alia, its ability to provide an adequate supply of science, engineering and technology skills in the years ahead.

Life Long Learning

Life Long Learning is crucially important to the future economic success of the country not least if we are to tackle some of the enduring problems of social justice, and to encourage genuine participation by all its citizens in its future. The compelling reasons to support a commitment to LLL are both economic and social.

It is widely recognised that the future of advanced economies lies increasingly in their ability to supply a highly skilled workforce and that workforce's capacity to drive productivity, innovation and adapt. Eighty percent of the workforce of 2020 is already in work and with the expected steady decline in the number of young workers entering the labour market we need to concentrate increasingly on upskilling those already in employment and to try to develop their motivation and ability to lifelong learning.

The importance of Life Long Learning for engineers is recognised by the Institution of Engineers of Ireland and by Government as a key driver in supporting Ireland’s knowledge based economy. My Department’s funding of the Institution’s Continuous Professional Development programme remains one of the more innovative investments in training, which the Department has made under the NTF since the Fund was established.

Concluding remarks

This conference is hugely important to policymakers and those in education. If we are to attract investments in new technologies we must have a pool of technically proficient engineers with the ability to blend technology and talent. I am confident that the conference will create a forum for very constructive, critical and informed debate on the kind of environment that is needed to encourage and develop tomorrow’s entrepreneurial engineers that will drive innovation and create conditions for even greater economic expansion and prosperity for this country and its people.

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