19 Apr 20231

DEVELOPING COMPETITIVENESS IN IRELAND

DAVID LOVEGROVE

Bogota, Colombia

16 September 2008

19 Apr 20232

Tackling Competitiveness

Need to address at three levels:

1) Competitiveness in an Enterprise Policy

Development context

2) Competitiveness at National Level

3) Competitiveness at Company Level

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1. COMPETITIVENESS IN AN

ENTERPRISE POLICY

DEVELOPMENT CONTEXT

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1. The Enterprise Policy Development Process

1 Vision (The Big Picture)

2 Strategy (The what needs to be Done)

3 Policy Development (The How it will be Done)

4 Empowerment (Actually doing it)• Implementation and Structures• Resources

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The Enterprise Development Process

Vision:

The “Big Picture”

- Making Colombia the No. 1 location for FDI

in South America

- Doubling GDP per capita by 2025

Strategy:

Sets out how the vision will be achieved….By creating the most competitive business environment in South America

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The Enterprise Development Process

Policy Development:

Sets out exactly what will have to be put in place to give effect to the Strategic Plan and create competitive business environment:

- Public sector policy reform

- Education policy reform

- Regulatory environment

- Legislative framework

- Competitive business environment

- Support systems for Enterprise

- Competitive incentive package

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The Enterprise Development Process

Implementation:

Empowerment

The legal and legislative underpinning of the process that allows the actions necessary to achieve the desired results to be undertaken

Commitment by Government to providing the infrastructure necessary to achieve the outcomes

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The Enterprise Development Process

Implementation:

Resources

The financial and other resources that are required to achieve the desired results, despite strong and competing demands from all sources of the economy

And, most importantly,DON’T wait for the perfect solution….it never appears.

Implement, learn from your mistakes and keep moving forward.

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2. Partnership Process

Born from chaos in 1987: Ireland Inc. on the brink on ruin.

Coming together of three pillars of the economy:• Government• Employers• UnionsEveryone gave a lot and took little

Shared analysis and agreement on way forward

Wage restraint through lower personal taxation

Critically important to Ireland’s competitiveness

All economic policy developed within Partnership Process

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3. Drivers of Change

Innovation in strategy and policy formulation led to FDI driven growth, plus support for domestic sector

Hardware: IDA Ireland and Forfas

Competitiveness achieved through Partnership and Government constantly addressing issues to facilitate business

Hardware: Forfas and Competitiveness Council

Collective software was our ability to innovate

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2. COMPETITIVENESS AT NATIONAL

LEVEL

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The National Competitiveness Council (NCC)

History

Terms of Reference

Composition

NCC Competitiveness Framework

Key NCC Outputs

Modus Operandi

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The National Competitiveness Council (NCC)

History Established by Government in 1994 Emerged from Social Partnership Focus on competitiveness and addressing emerging issues

Terms of Reference Manages own work programme, but required to produce:

• Annual report on competitiveness policy (Challenge)• Annual report on competitiveness benchmarking (ACR)• Other studies requested by the Minister and Prime

Minister

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NCC Composition

Current membership is 16• Appointed by Minister• Representatives from employers, academia and trade unions• Appointees from diverse businesses - CEO level• CEO of Forfas

Assistant Secretary Advisors• Ministry of the Prime Minister• Ministry of Finance• Ministry of Enterprise, Trade and Employment• Ministry of Transport• Ministry of Environment and Local Government• Ministry of Education and Science

Forfás Secretariat• 5 Staff (Manager, 3 Economists, 1 Business Analyst)• Support for entire organisation and development agencies

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NCC Competitiveness Framework

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Annual Competitiveness Report

An Annual report which draws attention to

emerging issues and recommends policy changes

• 16 countries benchmarked (12 EU AND 4 others)• 128 indicators• 5 input and 2 output areas (growth and trade)• 23 sub-categories

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Competitiveness Challenge

Brings forward evidence from Annual report

Key competitiveness policy document

5 “input” areas examined

Key recommendations made to Government

Is the result of detailed studies by the Council

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Impact on Investment Policies

Advises Government on strategic areas for the

future

Pushes for allocation of resources to do the job:• Development agencies• National priorities• Focus on creating pro-business environment to

facilitate investment and enterprise sector.• Ensuring correct skills match in place

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Competitiveness Policy Formulation in Institutional Context

Government

Ministry

Enterprise IrelandIDA IrelandScience Foundation

Ireland

Private SectorConsultation

Policy Formulation

Private Sector Consultation

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Competitiveness in National Context

Need to look to medium/long term

Must be sustained over time

Need to capture private sector information

Ability to reflect information in policy documents for Government

Important to have effective communications channels into decision makers

Implementation is critical to continued support from private sector

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3. COMPETITIVENESS AT COMPANY

LEVEL

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Competitiveness at company level

4 Key Activities for Success

National Priority

Government Support Systems

Adequate Training Facilities

Institutional Structures

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Competitiveness at company level

National Priority

Competitiveness for domestic companies – very important

Government constantly listening to the requirements of private sector

Allocate resources to helping companies to become more competitive – Ireland very pro-active here

Aim at facilitation rather than regulation

An issue for the Prime Minister

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Competitiveness at company level

Government Support Systems

Constantly examine support systems to ensure they are relevant:

• Project Identification• National Linkage Programme• Technology Transfer Programmes• Mentoring• Export Promotion

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Competitiveness at company level

Adequate Training Facilities

Entrepreneurship training…..the next generation

of SMEs

Training for both management and operatives

very important

Part of on – going programme of development

Introduce new technologies and thinking

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Competitiveness at company level

Institutional Structures

Requires dedicated Agency with skilled staff

Companies need hand-holding

Good advice is better than money!

Aim at holistic approach addressing all aspects of the company

Constantly work with companies to facilitate development

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Conclusions

In a globalised economy, essential to be aware of competitveness rankings (and deficiencies) and be “Quick on your feet”

Establishing foundations for economic success requires patience and commitment and knowing where you are going

But globalisation means that economic turnaround can happen very quickly also easy to get caught out

Establishing a shared vision and policy coherence is key to developing a competitive economy

A Competitiveness Council is a very important institution in helping to establish an enterprise friendly environment