Transcript Building National Competitiveness: the Irish Experience A

DEVELOPING COMPETITIVENESS IN
IRELAND
DAVID LOVEGROVE
Bogota, Colombia
16 September 2008
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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
• Unions
Everyone 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)
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History
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Terms of Reference
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Composition
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NCC Competitiveness Framework
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Key NCC Outputs
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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
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Assistant Secretary Advisors
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Appointed by Minister
Representatives from employers, academia and trade unions
Appointees from diverse businesses - CEO level
CEO of Forfas
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
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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
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An Annual report which draws attention to
emerging issues and recommends policy changes
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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
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Brings forward evidence from Annual report
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Key competitiveness policy document
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5 “input” areas examined
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Key recommendations made to Government
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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
Private Sector
Consultation
IDA Ireland
Private Sector
Consultation
Policy Formulation
Enterprise Ireland
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Science Foundation
Ireland
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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
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