Education: The Key to Sustained Competitive Advantage

The quality of the Irish secondary educational system is a tribute to the high standards and dedication of the religious orders that have provided education for the vast majority of Irish youth for decades. Respect for knowledge and wisdom is ingrained in the Celtic cultural tradition. Access to secondary education for all is relatively recent; until 1966, quality secondary schools were tuition-based and reserved for children from the middle class. The system remains highly competitive and only those students gaining excellent scores in the Leaving Certificate may enter university. The Irish university system is primarily focused upon developing a large pool of workers for the Innovation Economy: 60% of university graduates major in science, engineering, or business studies. The IMD World Competitiveness Report ranks Ireland number one in Europe for quality of education.

The government has made technological literacy a priority at every level of the educational system, from introduction of multimedia PCs in every school and provision of Internet access to every child and teacher, to the $35 million funding of MediaLab Europe, which is modeled on the MIT MediaLab and specializes in multimedia, digital content, and Internet technologies. Bill Riley, public affairs manager at Intel described to us the great advantage the Irish education system provides for Intel Ireland and how the focus of the education system has shifted to support a technological knowledge-based economy.

Bill Riley

The general education is very good; the quality of the technical graduates we get is very, very good. There just aren't enough of them. When we first came to Ireland 10 years ago, we had two sources for knowledge workers. Ireland had been exporting graduate engineers for the previous 25 years , so we immediately had a world-wide population of qualified semiconductor engineers willing to return to Ireland. We also had a large stream coming out of the universities; 50% of them would have gone to the U.S. or the U.K., or maybe to Germany or Holland. When we arrived on the scene it was a major factor in choosing Ireland versus going to England or Scotland, where there already was a semiconductor industry.

This is historically the island of saints and scholars. While Ireland has produced a sizeable number of Nobel Prize winners in literature, we haven't produced many Nobel Prize winners in science. So, we're clearly trying to shift the system in a direction more focused on hard science.

The Irish government continues to show the same foresight it did in the 1980s, when its strategy was to attract corporations in the information technology field to drive economic growth. Now that Ireland is no longer a low-wage economy, the next step is to move up the value chain, which means fostering research and innovation. With this objective in mind, the government is making over $2 billion available for education and research in biotechnology and ICT, a budget to be administered by the newly created Science Foundation Ireland.

The turnaround in Ireland's economic fortunes over the past 15 years is a striking example of how a region can generate wealth by creating a macro-economic environment favorable to foreign direct investment. The Irish have attracted corporations from high-tech industries to build an economic fabric of high added value manufacturing and service industries that will eventually drive innovation among indigenous companies. This induces not only massive increases in real living standards for the population of the region, but also radical cultural change.

However, this significant change could not have happened without a major commitment by the organized labor unions to make a fundamental shift in their part of the social contract. This process has not been easy and it entails significant risk by the unions in the future role they will play in Ireland's economic development. It is to that story that we now turn .