What can the Government do, aside from spending money to boost the economy?

blue shimmering

This question has plagued me for some time now, would it be better to try other options and what could they be? What about Exports, Imports, Investments, and so on....Should they look at boosting consumer income and hope they will spend this money wisely, what do you all think?:cool:

silverharp

cut taxes and cut public spending, otherwise the irish economy is like a flea on an elephant, enjoy the ride and don't bother looking to politicians for any answers

Akrasia

silverharp wrote: »

cut taxes and cut public spending, otherwise the irish economy is like a flea on an elephant, enjoy the ride and don't bother looking to politicians for any answers

The Irish government are totally hog tied. They have no control over monetary policy and because of our 'free market' ideology, even the money we're spending on capital projects is leaking out of the economy.

Cutting taxes is a terrible idea. It won't stimulate the economy because a lot of that money won't be spent in Ireland. Cutting public spending will just further depress the economy as more people are laid off.

The FF government have made an awful awful mess of the economy and now there is very little they can do to fix it. We're going back to the 80s, and this time we can't even emigrate to england or america because they'll be in just as bad a position as we are.

Tricity Bendix

Akrasia wrote: »

The FF government have made an awful awful mess of the economy

Only if you call fantastic growth rates over the past 15 years a mess. I'm no Fianna Fáiler, but Ireland has done amazingly well under them and the PDs (and dues to FG and Labour for their brief stint). If 15 years ago someone offered you a bag of beans that would make the economy grow 6% or 7% a year for 15 years and then grow at more modest rates of 2% or 3%, you wouldn't bloody turn it down.

You are right in saying that spending shouldn't be cut, though. At least not spending on the major infrastructure projects.

As to what the government can do, for a starters it could reduce the ridiculous amount of red tape that is choking entrepreneurs. Rolling out Broadband across the country would also help. Moving at least part of the service offered by Dublin Port to Bremore would increase our trade potential, which is currently being constricted. Improvements in our antiquated education system would take longer to come to economic fruition, but thats all the more reason to start now.

gurramok

b.ie polar wrote: »

Only if you call fantastic growth rates over the past 15 years a mess. I'm no Fianna Fáiler, but Ireland has done amazingly well under them and the PDs (and dues to FG and Labour for their brief stint). If 15 years ago someone offered you a bag of beans that would make the economy grow 6% or 7% a year for 15 years and then grow at more modest rates of 2% or 3%, you wouldn't bloody turn it down.

7% rates(2002+) mostly based on building houses which we sell to each other. Strip out the excessive housebuilding and your left with the likes of 1.6% GNP growth forecasted this year by ESRI.

10,000 houses built is suppose to be 1% GNP according to commentators, 2006 saw 93,000 built and this year might hit 40,000. We can't keep go on building houses with excessive supply.

Do the maths on GNP difference.

mike65

Free the markets from the avalanche of third rate regulatory bodies that keep prices high and service quality low.

Mike.

silverharp

Akrasia wrote: »

The Irish government are totally hog tied. They have no control over monetary policy and because of our 'free market' ideology, even the money we're spending on capital projects is leaking out of the economy.

Cutting taxes is a terrible idea. It won't stimulate the economy because a lot of that money won't be spent in Ireland. Cutting public spending will just further depress the economy as more people are laid off.

The FF government have made an awful awful mess of the economy and now there is very little they can do to fix it. We're going back to the 80s, and this time we can't even emigrate to england or america because they'll be in just as bad a position as we are.

Japan couldnt spend its way out of a funk, Ireland will be no different. Remember Ireland tried the Keynesian tax and spend nonsense in the 70's that bankrupted the economy. The best thing ireland can do is focus on getting more competitive and that can only happen with a smaller gov. (it wont happen of course)

daveirl

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blue shimmering

daveirl wrote: »

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Gosh everyone is very pessimestic aren't they, I do agree that to spend more money probably not be a good idea but so also is giving themselves a big salary rise which they will take when the whole fuss dies down - then we will have to pay for it! What about doing something about the big earners who don't pay any tax into the Irish economy - if you work, make big bucks here you should pay your fair share of tax! At the moment what is happening is they can afford to live out of the country for so many months and then don't pay a cent, the ordinary taxpayer who is close to the minimum wage has to pay for them - I feel this is not on and should be corrected! If we are proud to be Irish we should pay our fair share and the Government should make sure we all do, that is the big fat cats should be paying more than the little small cats?

Ekancone

b.ie polar wrote: »

Only if you call fantastic growth rates over the past 15 years a mess. I'm no Fianna Fáiler, but Ireland has done amazingly well under them and the PDs (and dues to FG and Labour for their brief stint). If 15 years ago someone offered you a bag of beans that would make the economy grow 6% or 7% a year for 15 years and then grow at more modest rates of 2% or 3%, you wouldn't bloody turn it down.

You are right in saying that spending shouldn't be cut, though. At least not spending on the major infrastructure projects.

As to what the government can do, for a starters it could reduce the ridiculous amount of red tape that is choking entrepreneurs. Rolling out Broadband across the country would also help. Moving at least part of the service offered by Dublin Port to Bremore would increase our trade potential, which is currently being constricted. Improvements in our antiquated education system would take longer to come to economic fruition, but thats all the more reason to start now.

This is the only sane post in this thread.

Akrasia

b.ie polar wrote: »

Only if you call fantastic growth rates over the past 15 years a mess. I'm no Fianna Fáiler, but Ireland has done amazingly well under them and the PDs (and dues to FG and Labour for their brief stint). If 15 years ago someone offered you a bag of beans that would make the economy grow 6% or 7% a year for 15 years and then grow at more modest rates of 2% or 3%, you wouldn't bloody turn it down.

There is more to running a country than gnp growth statistics.
The celtic tiger died in 2001 at the end of its natural life cycle. Since then, we have been in an over heating economy and the billions and billions of extra euros floating around was mostly created by debt and spent on over inflating a housing bubble.

Big numbers are very impressive but there is often a cost attached.
Even I could probably design a rocket powered car that could travel 600 miles an hour and that would look really impressive until someone took it for a drive and it exploded 30 seconds into the journey.

How much use will the last 10 years of economic 'growth' have been if a bank collapses this year and the tax payer needs to pay out billions of euros to rescue it.
What use was a boom if we have to cut back public services in our health and education departments even further?
What is the use of a boom if it doesn't raise the standard of living for the citizens in the country?

Akrasia

daveirl wrote: »

This post has been deleted.

cut tax and cut wages.. that's a genius solution alright.

Thomas_S_Hunterson

The public sector could do with a major shakeup IMO. There's far too many people twidling their thumbs in cushy jobs in there.

leninbenjamin

we need to sever our dependency on FDI, and give incentives to people to NOT invest in property.... we need to start trading more with Asia as well, but with the current set up in the economy we have no control over who we trade with.

Ekancone

Akrasia wrote: »

How much use will the last 10 years of economic 'growth' have been if a bank collapses this year and the tax payer needs to pay out billions of euros to rescue it.

A bank won't collapse this year, or next year, or the year after. Irish banks are highly capitalised and have strong liquidity ratios*, unlike our American counterparts. Luckily, Irish banks didn't follow the tactics of banks in the US and Northern Rock.

Akrasia wrote: »

What use was a boom if we have to cut back public services in our health and education departments even further?

Because people now earn more money and have the potential to earn more money better than we did 15 years ago. Also, our health service andeducation systems have improved since then. You seem to forget how bad this country actually was back then.

Akrasia wrote: »

What is the use of a boom if it doesn't raise the standard of living for the citizens in the country?

It did, are you honestly trying to say that living standards were better in Ireland in the 80's? If so, why did everybody leave? Why the net migration of the past 10 years?

*For proof of this see:

Top-Down Stress Testing: The Key Results by Allan Kearns (2006), Financial Stability Report 2006.

patslatt

blue shimmering wrote: »

This question has plagued me for some time now, would it be better to try other options and what could they be? What about Exports, Imports, Investments, and so on....Should they look at boosting consumer income and hope they will spend this money wisely, what do you all think?:cool:

In the last five years, a lot of our growth like that in the UK and the USA was fuelled by a credit binge. When an individual or a country borrows about 3% of income a year for consumer spending,the credit boost to living standards coming on top of normal pay-related spending increases of 2 to 3% is wonderful at say 6% total. But eventually after 7 to 10 years,debt repayments become a burden and inevitably in a period of economic uncertainty like the present consumer spending has to slow to a growth rate below what it would have been without incurring debt in the first place. Ireland,the UK and the USA are now undergoing this transition thanks to weakness in property prices and credit excesses.

In Ireland,this transition would be manageable except for excessive government spending.This spending has been boosted artificially by the government's untypically large tax takes from the property boom in VAT,capital gains and stamp duties. All these property related taxes are now falling,requiring restraint in government spending,especially in wage demands.

But what chance is there of wage restraint given high consumer price inflation and the example of the cabinet's excessive pay? The Taoiseach and the Cabinet have been acting like pigs at the pay trough and are now the most overpaid politicians in world democracy,which puts them completely out of touch with the economic realities of the average family.

So what can we do to improve the economic outlook,apart from reserving a seat on the proverbial emigrant boat to England in the event of a recession?

THe March 16th Sunday Independent offered some interesting analysis of the economy that imply possible quick solutions. It pointed to the bottlenecks in projects for sewerage and water services and in commercial development planning decisions that are holding up maybe €20 billion of developments all over Dublin. So why doesn't the government fast track these projects and keep council planners' feet to the fire? Why doesn't it pressure Bord Pleanala to make faster decisions on commercial projects,decisions that now take many years? Maybe it should revisit its decision not to create special divisions of the courts to fast track planning appeals,many of which are entirely vexatious?

THe Sunday Independent was also critical of the government's cosy relationship with the public sector unions which is likely to result in inflationary pay increases and continuing poor productivity. An example of this in my opinion is the PR exercise to create some redundancies at the HSE in its bloated admin staff,redundancies that will be vetoed by the unions unless the terms are gold plated. And why stop at admin staff? THe HSE funds the employment of twice as many nurses per 100,000 population as in France and the UK, thanks to poor IT systems and sheer ineptitude in hospitals. Obviously, the government needs to take a demanding, businesslike attitude to the public sector,but there is little chance of that barring an economic recession,if then.

Maerc Coleman,an economics correspondent to the Sunday Independent,called for an assault on Rip off Ireland with further deregulation to expose vested interests to competition. But vested interests are durable in Ireland, even if we have come a long way from the 1980s, when, in the words of a friend, "this whole country is a racket".

Finally,I would like to see some actions along the following lines:

1.Abolish the useless bureaucracy that is the HSE and replace it with a model of health care proven successful on the Continent,such as the Dutch system of non-profit insurers and private hospitals.

2.Restore university and third level fees in order to improve the quality of third level education and prevent further degrading of universities for lack of funding. At the same time,introduce an Australian style system of student loans and grants to assist low income families with tuition.

3.THe government should slow public sector pay increases until private sector pay can catch up with the public sectors'. Public sector pay levels should be set according to the actual performance of the private sector economy,not Finance's optimistic estimates of growth. The Cabinet should take a pay pause for the rest of this term of government to lead by example.

4. In line with stated government policy, ESB's power distribution system should be transferred to Eirgrid this year to encourage new power producers to enter the market. But the government is likely to cave in to the ESB unions this year and postpone the decision indefinitely.

5.Infrastructure spending should prioritise projects that improve the economy's productivity. Metro,a prestige project,isn't one of those.

daveirl

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SimpleSam06

daveirl wrote: »

This post has been deleted.

Why is everyone so focused on FDI? I mean whats so hard about domestic export based industries? Instead of dropping our trousers for whatever multinational sashays along this year, we go to their countries and sell our products. I really am tired of this hat in hand Irish attitude.

nesf

SimpleSam06 wrote: »

I mean whats so hard about domestic export based industries?

What kind of industries are you thinking about here?

What does Ireland export?

nesf

Deleted User wrote: »

What does Ireland export?

J1 Students?

Diairist

Deleted User wrote: »

What does Ireland export?

soon Poles & Lithuanians ?

SimpleSam06

nesf wrote: »

What kind of industries are you thinking about here?

Take your pick. With all the money and effort going into attracting "foreign investment" to come to Ireland, build industries, and export it for sale in their own country, Ireland is still locked in a 1980s mindset. You could easily put all that money and effort into whatever growth industry and do it domestically - Ireland has never been short of brains. I'd be favouring robotics at this time, the Japanese are too busy navel gazing to do a decent job of it. There are a wide range of options though.

Deleted User wrote: »

What does Ireland export?

Not much at this stage, which would be my point.

Ekancone

Wouldn't exporting products imply developing products?

SimpleSam06

daithifleming wrote: »

Wouldn't exporting products imply developing products?

Indeed it would. Which would be preferable to exporting graduates, and indeed the only long term growth plan that I can see for this country.

daveirl

This post has been deleted.

parsi

patslatt wrote: »

Maerc Coleman,an economics correspondent to the Sunday Independent,called for an assault on Rip off Ireland with further deregulation to expose vested interests to competition.

Hmm. Nice to see he waited until his boss was no longer in charge of eircom.

Do Independent still have a stake in those bastions of ripoffs formerly known as Chorus and NTL ?

Ekancone

SimpleSam06 wrote: »

Indeed it would. Which would be preferable to exporting graduates, and indeed the only long term growth plan that I can see for this country.

But isn't this what the government is spending our money on promoting?

SimpleSam06

daveirl wrote: »

This post has been deleted.

We can't compete on wages with lower paid countries, such as those in Eastern Europe, inflation makes sure of that. Lowering the taxes means finding somewhere else to pay for the powerful public sector (who will bring the country to a grinding halt at any mention of wage reductions), after years of rampant wage and job growth, far in excess of the private sector, which puts us in a fairly nasty pickle.

If we can't compete on the playing field as presented to us, we need to change the playing field entirely - that means export based domestic industries. Of course the time to get started on that was around ten years ago, when the record tax receipts of the housing boom should have gone into support for entrepreneurs and massive amounts of infrastructure.

Whats going to happen now is anyones guess, but its not going to be pretty, or fast.

daithifleming wrote:

But isn't this what the government is spending our money on promoting?

If you're referring to the recent Enterprise Ireland grant scheme, that's a fairly ludicrous effort that highlights the ignorance of beaurocrats when it comes to the SME sector, typically enough in my experience. Among the criteria for available assistance were "training key managers" and "technology aquisition". Worthless to most companies.

What is needed is

• a streamlined business accounting and registration process
• remove the red tape
• a direct channel for investors to find and fund startups, and ideally some measure of insurance for investors so that they won't take a bath entirely if their enterprise goes under (even a nominal amount would provide assurance). Either that or joint funding. This involves an element of risk mind you, something alien to the public sector.
• easy access to enterprise grants (and I mean grants, not just the find your own funding and we'll refund you a small percentage of that when you hand us the receipts)
• a grace period of a few years for taxation on startups
• foreign marketing assistance - if you want export based industries you need to form partnerships with foreign sales groups, and data on existing markets
• possibly a relaxation of IP laws to encourage innovation

Thats off the top of my head, I'm sure I could come up with a few more ideas if I spent a couple of hours on it.

I think you are missing the point (or else I am not getting it)

WHAT can Ireland export? We have little resources apart from

a)People
b)Agriculture

Of the first, the government is supporting this and the second is constrained by European politics.

Correct me if I am wrong, but don't you trade the goods in which you have a comparative advantage in producing?

What can Ireland (competitively) produce?

SimpleSam06

Deleted User wrote: »

WHAT can Ireland export? We have little resources apart from

a)People
b)Agriculture

So, much the same as Japan then. Or even China. How many resources does Taiwan have? Then you have places like the Philippines and many African countries, bulging with resources but no industry to speak of. We can draw lessons from all of these.

Deleted User wrote: »

Correct me if I am wrong, but don't you trade the goods in which you have a comparative advantage in producing?

What can Ireland (competitively) produce?

Same way as any business gets started. Take your pick, examine the market in that industry, and work out how you can produce competitive products or services. There is still a lot of legroom in most industries.

SimpleSam06

SimpleSam06 wrote: »

So, much the same as Japan then. Or even China. How many resources does Taiwan have? Then you have places like the Philippines and many African countries, bulging with resources but no industry to speak of. We can draw lessons from all of these.

China - I am not even going to bother replying to that comment.

Taiwan / Japan have competitive advantages in consumer electronics.
We. Don't.

SimpleSam wrote:

Same way as any business gets started. Take your pick, examine the market in that industry, and work out how you can produce competitive products or services. There is still a lot of legroom in most industries.

Do you understand the concept of comparative advantage?

SimpleSam06

Deleted User wrote: »

China - I am not even going to bother replying to that comment.

Sorry, what don't you like about that. China imports massive amounts of raw resources every year to fuel their industrial base. Resources aren't an issue for them.

Deleted User wrote: »

Taiwan / Japan have competitive advantages in consumer electronics.
We. Don't.

They didn't start out with that advantage, they accumulated it over time. Better to start now than be stuck fifty years down the line still wringing our hands and crying "but we can't".

Deleted User wrote: »

Do you understand the concept of comparative advantage?

You seem to have a real problem with the idea that Ireland could possibly support any industrial base at all. Your only rebuttal was the lack of resources available in Ireland. I responded to that. Oh yes, and:

The primary Natural resources of Ireland, include natural gas, petroleum, peat, copper, lead, dolomite, barite, limestone, gypsum, silver and some zinc.

SimpleSam06

SimpleSam06 wrote: »

Sorry, what don't you like about that. China imports massive amounts of raw resources every year to fuel their industrial base. Resources aren't an issue for them.

Sorry, I presumed it was common knowledge that it is cheaper to make something in China and ship it around the world then to produce it elsewhere.

China has a cost advantage in production, yes they import resources but they can make things out of these resources for cheaper then elsewhere.

They didn't start out with that advantage, they accumulated it over time. Better to start now than be stuck fifty years down the line still wringing our hands and crying "but we can't".

Switzerland has pretty much an monopoly in making good watches. Yet production in switzerland is not cheap. Why is this?

Countries with first mover advantage (eg CHF for watches, JPY for consumer electronics) can now produce things for less then the start up / intial production costs in countries that have cheaper labour costs.

Add to that the effect of learning curve and you start to see why we can't just decide to make something off the bat, you need to have an advantage in it for it to be profitable.

For china - they had people working in a subsistence environment, from which it is easy to switch into production as it is a benefit to all.

You seem to have a real problem with the idea that Ireland could possibly support any industrial base at all. Your only rebuttal was the lack of resources available in Ireland. I responded to that. Oh yes, and:

Because I have a gold filling in my mouth - do I start a jewelery store? We don't have enough of these resources to either compete or build a sustainable industry.

My problem is with the fact that the world is a lot more complicated then the way you are suggesting it.

Do you expect Ronan Murphy? Director of a non exportable industry to pack it in and start shovelling turf (an exportable product)?

SimpleSam06

Deleted User wrote: »

Sorry, I presumed it was common knowledge that it is cheaper to make something in China and ship it around the world then to produce it elsewhere.

Sorry, I presumed we were talking about resource availability, not production costs.

Deleted User wrote: »

Switzerland has pretty much an monopoly in making good watches. Yet production in switzerland is not cheap. Why is this?

Monopoly my arse. I have a €500 seiko on my wrist right now, and I'm very happy with it. Quality costs more, no matter where it comes from. Have you thought about that in your quest for Ireland's competitive advantage?

Deleted User wrote: »

Countries with first mover advantage (eg CHF for watches, JPY for consumer electronics) can now produce things for less then the start up / intial production costs in countries that have cheaper labour costs.

Yes, this is why all computers are now built in the USA.

Deleted User wrote: »

Add to that the effect of learning curve and you start to see why we can't just decide to make something off the bat, you need to have an advantage in it for it to be profitable.

By your logic nobody would ever start a business, unless there was some immediate clear advantage that only they had. Sorry, thats not how business has ever worked.

Deleted User wrote: »

Because I have a gold filling in my mouth - do I start a jewelery store? We don't have enough of these resources to either compete or build a sustainable industry.

Hey you were the one that was making out we had no natural resources worth speaking of. There are many mining companies that would disagree with you. There might be many more if the government allowed prospecting for uranium.

SimpleSam06

SimpleSam06 wrote: »

Sorry, I presumed we were talking about resource availability, not production costs.

Monopoly my arse. I have a €500 seiko on my wrist right now, and I'm very happy with it. Quality costs more, no matter where it comes from. Have you thought about that in your quest for Ireland's competitive advantage?

Again, learning curve, production costs, and dare I say it, Marketing.

You can't just decide ad hoc that 'Ireland will be the watch making capital of the world'. Lets say Ireland tried to do that..

1) Cost of building a watch industry

From scratch, very expensive. Huge fixed costs mean that straight off any watches we produce are going to be very expensive

2) Building watches -

First off, they would be crap. It takes time to make a quality product. But we already know that these watches will cost a lot, so we are producing expensive crap (which is exactly what happens when you produce somthing you don't have an advantage in)

Yes, this is why all computers are now built in the USA.

note the difference between assembles and built.

I bought a dell that was assembled in ireland but the components were not built here.

By your logic nobody would ever start a business, unless there was some immediate clear advantage that only they had. Sorry, thats not how business has ever worked.

Thats how every bloody business works! You do something because people pay you to do it. You do what you are good at, because it is easier to do better at it. I am tone deaf, i am never going to be a music teacher. However, if I am good at mechanical things, I may become an engineer.

Seriously, econ101 here...

Hey you were the one that was making out we had no natural resources worth speaking of. There are many mining companies that would disagree with you. There might be many more if the government allowed prospecting for uranium.

Yes, there are mines here and yes, we can make some money out of this but they are not long term (we run out, some mine just announced that it will be finished in 5 years) and again, we can only produce if the global price is greater then the production price - so we are still dependent on an exogenous variable.

Now, countries with an advantage in mining ie OPEC countries, south american copper producing countries will make more money as they have lower costs.. see where I am going here?

SimpleSam06

Deleted User wrote: »

Again, learning curve, production costs, and dare I say it, Marketing.

In your watch making analogy, you failed to witness the progress of history. Seiko started out building dodgy little plastic devices, simple and almost a byword for "cheap watches". Now I have a very expensive and attractive Seiko on my wrist. You can't just leap into it and expect a full blown industry to pop out of the ether.

The point you are missing is that we cannot continue to be dependent on other countries' direct investment forever, that is suicidal. We need to start this process, and the sooner it starts, the sooner we can be world class contenders.

Deleted User wrote: »

note the difference between assembles and built.

I bought a dell that was assembled in ireland but the components were not built here.

That was my point.

Deleted User wrote: »

Thats how every bloody business works! You do something because people pay you to do it. You do what you are good at, because it is easier to do better at it. I am tone deaf, i am never going to be a music teacher. However, if I am good at mechanical things, I may become an engineer.

Seriously, econ101 here...

Seriously, grasp this. People aren't born as engineers and music teachers. You don't need to have an overwhelming startout advantage, which is what you seem to be saying. Things are not nearly so black and white as you might think - just because there are competitors doesn't mean you should just quit. In fact, that there are competitors indicates a healthy demand for a product, I would view that as a good thing.

Deleted User wrote: »

Now, countries with an advantage in mining ie OPEC countries, south american copper producing countries will make more money as they have lower costs.. see where I am going here?

I weep, I seriously do. NOBODY is suggesting that Ireland exports raw resources like those countries. NONE of those countries you mentioned have a significant industrial base. There is no reason why we cannot follow in the footsteps of countries with a significant industrial base and poor local resources, unless you are just "ah them paddies are thick, sure what can they do".

This particular discussion is starting to go round in circles, so unless you have something new to add, which I sincerely doubt, I'll leave it there.

Ekancone

SimpleSam06 wrote: »

So, much the same as Japan then. Or even China. How many resources does Taiwan have? Then you have places like the Philippines and many African countries, bulging with resources but no industry to speak of. We can draw lessons from all of these.

Those are terrible examples of countries to follow (bar Japan).

Ekancone

SimpleSam06 wrote: »

If you're referring to the recent Enterprise Ireland grant scheme, that's a fairly ludicrous effort that highlights the ignorance of beaurocrats when it comes to the SME sector, typically enough in my experience. Among the criteria for available assistance were "training key managers" and "technology aquisition". Worthless to most companies.

What is needed is

• a streamlined business accounting and registration process
• remove the red tape
• a direct channel for investors to find and fund startups, and ideally some measure of insurance for investors so that they won't take a bath entirely if their enterprise goes under (even a nominal amount would provide assurance). Either that or joint funding. This involves an element of risk mind you, something alien to the public sector.
• easy access to enterprise grants (and I mean grants, not just the find your own funding and we'll refund you a small percentage of that when you hand us the receipts)
• a grace period of a few years for taxation on startups
• foreign marketing assistance - if you want export based industries you need to form partnerships with foreign sales groups, and data on existing markets
• possibly a relaxation of IP laws to encourage innovation

Thats off the top of my head, I'm sure I could come up with a few more ideas if I spent a couple of hours on it.

Well, i wasn't but that was a nice rant all the same.

I am referring to:

• Huge investment in research - €2.5 billion in National Development Plan 2000-2006 earmarked for R&D and Innovation
• Major sectoral funding programmes
• Establishment of Science Foundation Ireland (2000) and Programme for Research in Third Level Institutions (PRTLI)
• Established in 2000
• Key areas: Biotechnology and ICT (Information and Communications Technologies)
• Funds research based on excellence of science
• Funds large and small programmes and conferences and workshops
• Established > 160 new research groups
• 34 of these led by international scientists brought to Ireland by SFI
• Seven Centres for Science, Engineering and Technology (CSET, e.g., Alimentary Pharmabiotic Centre at UCC)
• Industry research heavily promoted
• Targets to increase PhD numbers significantly
• Position of chief science advisor to Irish Cabinet

Basically all of the recommendations stipulated in the Strategy for Science, Technology and Innovation. A plan that aims to move Ireland into the high technology sector and follow the models of Finland or Iceland and not Taiwan like you suggest.

daveirl

This post has been deleted.

SimpleSam06

daithifleming wrote: »

Those are terrible examples of countries to follow (bar Japan).

I didn't say we should follow their lead, I said we should learn from them. Specifically from their mistakes.

daithifleming wrote: »

Well, i wasn't but that was a nice rant all the same.

It was, wasn't it?

daithifleming wrote: »

Basically all of the recommendations stipulated in the Strategy for Science, Technology and Innovation. A plan that aims to move Ireland into the high technology sector and follow the models of Finland or Iceland and not Taiwan like you suggest.

And the total number of export based industries that have come out of these intiatives? In fact the total number of commercial entities that have come out of these no doubt worthy investments of public money? Seriously, I'd be delighted to know that my irritation with the government is misplaced, and we are happily sailing into a secure economic future.

These measures are all well and good but again they highlight the essentially beaurocratic (non commercial) nature of government involvement to date. This fundamental lack of understanding of what business is won't do the country at large any good in the short to mid term, although they may have some value in the long term. To someone, anyway, even if its not the Irish people.

SimpleSam06

SimpleSam06 wrote: »

In your watch making analogy, you failed to witness the progress of history. Seiko started out building dodgy little plastic devices, simple and almost a byword for "cheap watches". Now I have a very expensive and attractive Seiko on my wrist. You can't just leap into it and expect a full blown industry to pop out of the ether.

You really don't get this do you...

You want Ireland to become an export orientated production economy in order to prevent us from becoming dependent on the non exportable service industry. The latter part of the sentence is reasonable, I agree that over dependency on services is a bad thing.

However, if we go down the route of production, then we must suffer years of no-to-low economic growth and, providing we make it as an export orientated country, we are still dependent on an exogenous factor - namely whatever it is which we are exporting.

We. Don't. Have. An. Advantage. In. Production. Full Stop.
Eastern Europe, China, Asia, South America and Africa can produce things for export for far less cost then we can.

Therefore, we focus on what we are good at. Off the top of my head there are two things:

-People
-Agriculture

The government is focusing on investment in people, investment in 4th level education has seriously increased over the last while. We have smart people which firms are looking for.

Agriculture becomes a policial issue which I am not willing to discuss here.

The point you are missing is that we cannot continue to be dependent on other countries' direct investment forever, that is suicidal. We need to start this process, and the sooner it starts, the sooner we can be world class contenders.

Unless we go the whole hog of isolationism, we will always be dependent on other countries - trade is a two way deal here, people need to buy what we produce/make/provide.

My point (and that of general Interantional Economics) is to make/do/produce what you are good at.

Seriously, grasp this. People aren't born as engineers and music teachers. You don't need to have an overwhelming startout advantage, which is what you seem to be saying. Things are not nearly so black and white as you might think - just because there are competitors doesn't mean you should just quit. In fact, that there are competitors indicates a healthy demand for a product, I would view that as a good thing.

Wrong, people do what they have an advantage in doing, seriously, this is not a hard concept to grasp. I study financial economics because

-a) I like it
-b) I am good at it.

Therefore, I should look for work where I can use these skills.

I will never by a teacher - I could train as one, but what is the point? Other people will be better then me and be able to do the same level of work for less effort. Ergo, I don't become a teacher.

Of course, there will be exceptions given the size of the population and the lack of perfect competition among job offerers. However, (I say it again) People Work at What they have an advantage in.

Of course competitors are a good thing - but, and try and follow me here, lets say there are 10 people going for five jobs. Competition (the same competition that exists in global markets) will ensure that five best people (ie most talented) people will get the job, and not the other five people who really aren't good at the job but want to do it...

Get my drift?

I weep, I seriously do. NOBODY is suggesting that Ireland exports raw resources like those countries. NONE of those countries you mentioned have a significant industrial base. There is no reason why we cannot follow in the footsteps of countries with a significant industrial base and poor local resources, unless you are just "ah them paddies are thick, sure what can they do".

You just did...

I asked you what do we have an advantage in.. You linked in some wikipedia facts saying we have x resources..

Ireland has an advantage in its people - thats where the investment should lie..

Now, I am not saying that all investment should go into this, but the government is investing in its people in order to try and create a knowledge based economy.

There will still be people working in McDonalds, and I'm sure ABS pumps and Sola lenses will be making (and exporting) pumps and lenses down in Wexford, but why prop an industry that is going to get hammered in international markets?

SimpleSam06

Deleted User wrote: »

I study financial economics

I directly and solely own a spectrum of businesses with offices on three continents, so I'll be giving your opinions due regard.

Seriously, even in your last comment there are so many holes I could drive a truck through. You mention agriculture as one of our strong points. You are aware that agriculture in this country only exists through massive subsidies designed to keep us from being dependent on tinpot third world dictators?

We don't have any particular advantages in production, but then again we don't have any special disadvantages. Say resources again, I dare you.

Why would you focus on one particular export product and hence be dependent upon that? Why didn't the rest of the world stop exporting since these third world countries are so much better at it?

The actual point of international economics, and one which I and many others have leveraged greatly, is that one man can do what another can do, not "do what you're good at".

When you don't have an advantage, you make an advantage. This is business. I find your utter disdain for the ability of the Irish people to do so, offensive, not to mention extremely ill informed.

SimpleSam06

SimpleSam06 wrote: »

I directly and solely own a spectrum of businesses with offices on three continents, so I'll be giving your opinions due regard.

Ah yes, the e-penis effect..

Seriously, even in your last comment there are so many holes I could drive a truck through.

then please do -

We don't have any particular advantages in production, but then again we don't have any special disadvantages. Say resources again, I dare you.

Our spiraling costs would be one off the top of my head..
The whole being in surrounded by water another (less important) one..
Resources ARE a factor..
The lack of a tradition of producing, and hence being on the wrong end of the learning curve...

Why would you focus on one particular export product and hence be dependent upon that?

Why indeed?

Why didn't the rest of the world stop exporting since these third world countries are so much better at it?

Eh... how about all those firms outsourcing and switching production to China?? The country with comparative advantage..

The actual point of international economics, and one which I and many others have leveraged greatly, is that one man can do what another can do, not "do what you're good at".

Show a bona fide source who advocates

When you don't have an advantage, you make an advantage. This is business. I find your utter disdain for the ability of the Irish people to do so, offensive, not to mention extremely ill informed.

You can't just pull an "advantage" out of your arse.. you either have it or you don't.. many countries have potential advantages, but don't use them. However the potential is there.. and we don't have one in production of exportable goods. No matter how much you wish it were case.

I find this 'the Irish can do anything' attitude both infantile and insulting..

nesf

SimpleSam06 wrote: »

I directly and solely own a spectrum of businesses with offices on three continents, so I'll be giving your opinions due regard.

Um, how do you find the time to post so much here then? I'm genuinely curious.

Ekancone

SimpleSam06 wrote: »

And the total number of export based industries that have come out of these intiatives?

Well, the plan has only been fully implemented in the last one and a half years, so give it time, would you?

SimpleSam06 wrote: »

In fact the total number of commercial entities that have come out of these no doubt worthy investments of public money? Seriously, I'd be delighted to know that my irritation with the government is misplaced, and we are happily sailing into a secure economic future.

See above, I think the best model for Ireland in the future is Finland, and this is exactly what the govt are aiming at.

SimpleSam06 wrote: »

These measures are all well and good but again they highlight the essentially beaurocratic (non commercial) nature of government involvement to date. This fundamental lack of understanding of what business is won't do the country at large any good in the short to mid term, although they may have some value in the long term. To someone, anyway, even if its not the Irish people.

It is aimed at stimulating business, and is a very wise move, in my opinion. They are acknowledging that the manufacturing sector is out the gap and are attempting to stimulate R&D. These are exactly the recommendations anyone would make looking at Ireland's economic indicators. I don't know what you are harping on about really. What do you see as the way forward in your grand vision? No bullet points, just stick to a couple of topics.

SimpleSam06

Deleted User wrote:

Ah yes, the e-penis effect..

No, its a real penis, I assure you.

Deleted User wrote:

The lack of a tradition of producing

And that is the main thrust of your entire objection to the concept. Sure we never have so we never will.

nesf wrote:

Um, how do you find the time to post so much here then? I'm genuinely curious.

Delegation is a wonderful thing. Also sleeping four hours a day does help.

daithifleming wrote: »

Well, the plan has only been fully implemented in the last one and a half years, so give it time, would you?

Well connect me so, whats the link between these projects and a widespread industrial base? Surely the government has a roadmap for that as well?

daithifleming wrote: »

See above, I think the best model for Ireland in the future is Finland, and this is exactly what the govt are aiming at.

I disagree. The knowledge economy is only enabled by a race to the bottom in terms of manpower and industrial capability (get someone else to do your heavy lifting), but it is not sustainable for even a mid term duration. I am aware that this is a very complex and in depth topic, so I'll call it my opinion and leave that.

daithifleming wrote: »

It is aimed at stimulating business, and is a very wise move, in my opinion. They are acknowledging that the manufacturing sector is out the gap and are attempting to stimulate R&D. These are exactly the recommendations anyone would make looking at Ireland's economic indicators.

I agree its not bad, I just don't think its enough and its not in the right direction.

daithifleming wrote: »

I don't know what you are harping on about really. What do you see as the way forward in your grand vision? No bullet points, just stick to a couple of topics.

What confused you about the bullet points.

nesf

SimpleSam06 wrote: »

Also sleeping four hours a day does help.

You should get that looked at.

Ekancone

SimpleSam06 wrote: »

No, its a real penis, I assure you.


And that is the main thrust of your entire objection to the concept. Sure we never have so we never will.


Delegation is a wonderful thing. Also sleeping four hours a day does help.


Well connect me so, whats the link between these projects and a widespread industrial base? Surely the government has a roadmap for that as well?


I disagree. The knowledge economy is only enabled by a race to the bottom in terms of manpower and industrial capability (get someone else to do your heavy lifting), but it is not sustainable for even a mid term duration. I am aware that this is a very complex and in depth topic, so I'll call it my opinion and leave that.


I agree its not bad, I just don't think its enough and its not in the right direction.


What confused you about the bullet points.

Because all i see you talking is empty rhetoric, and no coherent argument backed by empirical evidence.


HINT: I think you are talking ****.

SimpleSam06

daithifleming wrote: »

HINT: I think you are talking ****.

See, this is why I don't bother telling people what I do anymore.

Ekancone

SimpleSam06 wrote: »

See, this is why I don't bother telling people what I do anymore.

Thank you for vilifying my belief.