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Main Content
The Smart Economy
Do governments think we’re stupid?
Every once in a while a new phrase comes along that defines or captures the zeitgeist.
And every once in a while there are phrases which pretend to be meaningful but lack content. The trendy recent term "Smart Economy" falls firmly into this latter category.
The origins of the phrase are hazy, with many claiming ownership and the phrase itself coming in many guises such as: the knowledge economy, the digital economy, Numerique 2012, the Smart Island.
The term was first born in the Lisbon strategy of 2000. Europe’s farsighted politicians watched as Western Europe began pricing itself out of the manufacturing industry. New steps had to be taken to foster enterprise, to encourage a different type of industry. The Lisbon strategy had all these elements and absolutely none of the political will to implement them. Focusing on innovation and a knowledge economy, the strategy was declared an abject failure by 2008.
Yet, the idea itself did not die. Ireland, slower to realise its manufacturing industry had left the building, received a massive multinational slap across the face when computer giant Dell moved to Poland shedding 1900 jobs in the process. More multinationals followed suit and there was a massive scrambling in government offices for a rebuttal. This is how on September 4th 2009 the Smart Economy was reborn. Fuzzy policies and potential employment figures were laid out in Ireland’s Smart Economy: A Framework for Sustainable Economic Renewal. No Government press release was complete without a "Smart Economy" insert. The plan in a nutshell resembled much of the Lisbon strategy.
The Irish were no longer going to rely on manual labour to fuel the economy. Instead, in this new enlightened "Smart Economy" brain power would be the driving force. The state would provide not just the intellectual infrastructure but would guide the direction of the research and development, new ideas would be supported, patents granted, companies launched, 30,000 jobs created, social cohesion secured.
The EU did not rest on its laurels either. With only slightly less lofty ambitions than before, Lisbon II or Europe 2020 was launched in March of this year. With a green tinged technological theme and a broad anti-poverty agenda Europe 2020 wants to achieve the target of investing 3% of GDP in R&D by 2020. More successful R&D means Europe or Ireland or France or Malta can become the next Silicon Valley. PhD students will conduct niche research in state universities. The private sector will flock to these institutions of excellence and the rising tide of this "Smart Economy" will float all ships.
The reality, however, is different. Many Irish second level students, like their European counterparts, either dismally fail or choose not to study higher-level science subjects. Universities that need to secure funding enrol more and more international students in their PhD programmes. International students then return home taking their Doctorates with them. And even in this age of education inflation where third and fourth level education is a must, Europe’s academics are often slow to leave the halls of academia and get their hands dirty in the private sector.
Governments willing to use state funding to prop up R&D have also failed to address what will happen if the research is unsuccessful or a Chinese company files a patent for the same new technological advancement just one week before a Dublin University.
Can a state, shouldering the social welfare payments of the unemployed construction and manufacturing forces, pay down more to start again from scratch?
The real smart economy is less about traipsing behind catchy phrases and more about political will for a change.