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University of south-east can be key driver of economic growth

Issued : Thursday 17 April, 2008

It is a great pleasure for me to be invited to give the 2008, Michael O'Brien Memorial Lecture. This annual lecture is a fitting tribute to Michael O'Brien, who contributed so much to the Labour movement, and to Waterford. I know that his family and friends cherish this opportunity to honour his memory, and to advance the causes for which he stood.

May I also say that I am delighted to be asked to give a lecture on the campus of WIT. We live in an era of sound-byte politics, and highly adversarial political debate, when politicians sometimes risk generating more heat that light. So, I welcome opportunities, such as this one, to take a little more time than I would usually have, to open up a discussion, and to engage with you about issues that are of importance to our country.

I have been asked to speak about 'Education and Sustainable Employment in the South East'. I will take that brief quite literally. I will start by firstly, talking about education in general, and how well Ireland is doing in the educational arena. Secondly, I want to say a few words about sustainable employment in the south east - about what needs to be done to promote prosperity and opportunity in this region. And then, thirdly, I will try to bring the two discussions together to draw some conclusions.

Labour is passionate about education. We always have been. Our vision of society is that of a collective of talents, working for the mutual benefit of each other, and for the generations to come. We seek to build a society where each individual can grow to the fullness of their unique human potential, something which is only possible when we work in collaboration with each other.

Education is the key which unlocks the full potential - social, civic, ethical and economic - of the human person. For this very reason, universal education - available to all, for the benefit of all - is at the heart of Labour's vision of society.

Only an education system that is truly universal will allow us to harness the talents of all of our people.

In the past forty years, education has brought about a revolution in Irish society. It has fundamentally altered the way in which our economy functions and the opportunities which are open to our citizens. A fundamental shift has occurred, whereby educational qualifications rather than property inheritance largely determine life-chances.

The educational revolution, started at post-primary level, but soon expanded to third level. Between 1998 and 2004, for example, admission rates for third level increased by 11 per cent. Most significantly, the proportion of students from the semi and unskilled backgrounds going to college increased from 23 per cent to over one third, while the number of students from a skilled manual background almost doubled to 60 per cent. I am proud to say that the decision of Labour's Niamh Bhreathnach to abolish third level fees was a vital part of that process.

The growing diversity in the third level sector, with high-performing Institutes of Technology such as this one, played a role in opening up opportunities. They also fed the Celtic Tiger boom. The attractiveness of a young well-educated and English speaking workforce should not be underestimated. The ESRI has estimated that higher levels of education added at least one per cent to economic growth each year in the 1990s.

If anything, though, that seems something of an underestimate. It is hard to imagine how the boom could have taken place at all, without sustained investment in education, which enhanced the educational profile of the population as a whole. As the world changes, and ever greater emphasis is put on the 'knowledge economy', the importance of education, as the source of both personal and national prosperity, cannot be overstated.

But education is more than an economic investment. Education, in its broadest sense is the process through we, all of us, but particularly the young, learn about the world - how it functions, how to cope with it, how to interact with it, and how we can contribute to it.

It is a central function in any society that allows people to develop their potential, and to grow as individuals. How we educate ourselves and our young people affects the very tenor of our civilisation and the quality of our being.

Education is also essential to dissent, and dissent is something which is essential to any prosperous modern democracy. Our political freedom is built on our right to express opposing views. To challenge the status quo and to demand the creation of something new and better. Without that kind of critique, Ireland would not have made the transition from being a closed, insular conservative society, to being the modern open European society that it is today.

Dissent is also important for prosperity. Joseph Schumpeter coined the phrase 'creative destruction' to describe entrepreneurial capitalism. Economic growth comes from people having new ideas, and the energy and freedom to bring them into being.

Education, then, is at the heart of Labour's project. It is the basis on which we create real fairness in our society. It is the progenitor of prosperity, and the avenue through which we provide our people, of all ages, the means to fulfil the enormous human potential that is within every person.

That potential is economic, but it is also social, cultural, artistic, sporting - in other words it reaches into every aspect of life.

As a country, we regularly celebrate the quality of our education system. But are we in danger of believing our own propaganda? How well does Irish education actually perform?

Let's start at the bottom. After all, primary, secondary and tertiary education are the building blocks of the knowledge economy and a flourishing society - remove one and it all comes tumbling down.

When it comes to solid foundations, Ireland's education system compares poorly to some of our more successful European neighbours. The seeds of success at school are sown early. Unfortunately, until we have universal pre-school provision, these seeds will continue to depend on family income.

Ireland has no public pre-school provision to speak of. In the OECD-wide survey of pre-school in 2002, they could not even find a graph small enough to chart the 0.007 per cent of GDP Ireland was spending on early childhood education. The situation has not changed significantly since then.

This false economy costs us dearly. Studies have shown that investment in universal pre-school is returned up to seven times over. Pre-school gives children the tools to learn, and helps them to get the most out of their crucial primary school years.

The decisiveness of early childhood education in educational success is stark. Indeed, one leading academic has noted that the skills which help us to learn are developed very early in life, largely before formal schooling begins.

The absence of pre-school provision partly explains why educational disadvantage is still one of the most persistent legacies in Irish society, handed on from generation to generation. For example, the child of early school leavers is 23 times more likely to live in consistent poverty than the child of university graduates.

Indeed, early school leaving as a whole has remained stubbornly at around 18 per cent since the early 1980s. In some parts of the capital, that figure rises to almost 60 per cent. Every year, about 1000 children do not even make the transition from primary to second level education.

Would these children agree that we have the best education system in the world?

Some progress has been made, in the very recent past, in building on Labour's initiatives to tackle inequity in education, such as Early Start and Giving Children an Even Break.

But overall school funding, particularly at primary level, falls shamefully short of what is needed.

Irish primary schools still only receive enough in core funding to cover half of the cost of running a school. One in four children are in classes of thirty or more. Many schools are badly in need of refurbishment or proper extensions - projects which have been put on hold while the Department of Education tries to remedy its failure to provide enough school places for a growing population.

Just solving one of these problems - the serious deficit in day-to-day funding of primary schools - would cost around €82 million per annum. This is less than one third of what the Government gave back to big developers in a tax loophole last year. Could priorities be any clearer than that?

At second level, at least, the picture is more positive. Secondary education is better funded and, for the moment at least, there is no a shortage of school places. But there are considerable challenges, particularly if Ireland aspires to be a high-tech economy, with skilled, well-paid jobs.

For example, of the Leaving Cert class of 2007, only 6,710 students scored grade C or higher on the Honours Maths paper. The problem is that Grade C in higher Maths is the minimum standard for entry to a lot of science, engineering and technology courses at third level. Moreover, one in ten students failed Maths at some level. Only seven per cent of students get honours in Physics.

These figures are extremely worrying. It is not simply the knock-on effect on science and technology courses at third level, and our subsequent supply of highly skilled workers. It is also that young people are excluding themselves, or being excluded, at an early age, from careers in growing industries.

This potential roadblock to our economic development is ample evidence - as though any were needed - that engineers and scientists do not appear in third level lecture theatres fully-formed. The education system has to be treated as an integrated whole, with consideration not just given to R&D funds, but also where those researchers are going to come from. This is just one reason why, in the long term, it is as important that we invest in early childhood education and primary school as well as third level.

That said, third level education has been, and will continue to be, the powerhouse of our economy. Yet, funding for third level has failed to keep pace with the expansion in student numbers. Part-time students have to shoulder tuition fees. And the cost of studying for a degree still acts as an obstacle to aspiration. Hardly a recipe for expanding our pool of high-performing graduates.

Education policy must take into account the multiple purposes of higher education. It is a site for learning, for debate, and for dissent. It is the birthplace of ideas, innovation and research. It fuels our economy. And it acts as a stimulus for all of these things in the wider society of which it is part.

Which brings me to the second element of the title of this lecture - sustainable employment in a region like the south-east.

For some years now, such debate as there has been about enterprise policy has had an air of unreality about it. Yes, of course, there has been important work going on, and yes, of course, there have been interesting and thoughtful reports published, particularly by FORFAS and the Enterprise Policy Group. A view has emerged, which I strongly support, that Ireland needs to move up the value chain, bringing more focus to bear on higher value-added activities.

It is also true, however, that the pace of economic growth has been so rapid, that there has been little sense of hard decisions being required. The enterprise agencies, such as the IDA and Enterprise Ireland, have been shifting their strategic focus, working to operationalise the idea of moving up the value chain, but the driving force behind the economy has been a demand led boom which has been providing cover for any number of sins of the supply side. Now, the clock has run out, the demand-led boom has run into difficulties, and we are back to looking hard at real issues in enterprise policy

We are seeing significant numbers of jobs being put at risk because costs and competitiveness were not properly managed during the boom years.

Enterprise policy has a first cousin called regional policy. Here, there has also been an even greater air of unreality. Yes, there has been a demand for balanced regional development, and there has been Government lip-service to that goal. But here again, the pace of economic growth has covered up for a myriad of sins.

Despite all the economic growth of the past two decades, the most recent county-level CSO data for disposable income per capita, show marked inequalities across the State. While income in Waterford itself is just below the national average, disposable income per capita in Wexford is nearly 11% below the national average, the same is true of Kilkenny, and in Carlow the figure is 12%. One also has to question how meaningful the national average is in that context. The more salient fact is that income per head in the South East as a whole is almost 20 per cent below the Dublin level.

As one might expect, the picture is even starker when we look at productive activity. Again, using the South East region as an example, gross value added per person in 2005 in the South East region was 26% below the national average, and not much more than half of the Dublin level. A similar pattern is to be found to a greater or lesser extent in other regions, indicating a post-boom Ireland with great inequalities across regional economies.

Indeed, while it is hard to get a good statistical picture, one of the more worrying aspects of the down-turn in construction employment is the fact that some regions are more heavily dependent on construction employment than others. I am afraid to say that some communities will face real hardship as a result.

This uneven spread of prosperity is hardly surprising, when you consider the policy context. A national development plan was published, years in advance of a national spatial plan. The ink was barely dry on the spatial plan when it was essentially set at nought by the Government's decentralisation programme, which was virtually perpendicular in its design to the spatial strategy.

Regionally-based groups have brought considerable pressure to bear on Government, but the reaction of official Ireland suggests that they see regional policy almost exclusively as a form of special pleading. Indeed, regional policy is often described in terms of 'spreading prosperity' as though economic activity could be moved around from the top-down.

This way of thinking means that whatever commitment might have existed to balanced regional development is unlikely to survive the downturn. Balanced regional development will be seen by some policymakers as a form of redistribution that we can ill afford in more difficult times. The social partners can be expected to return to the type of bargaining that they are good at - steadying the ship in difficult times. I am concerned that the kind of long-term thinking that regional policy requires will be put on the back-burner again.

The problem with all of this is that it views regional development as something that trickles down from the national level. It does not look to regional economic development to be a source of national economic dynamism. It is blind to the possibility of trickle up.

Ireland is a small economy, and of course, we have to think in terms of the national economy. But it is also true that economists are increasingly recognising that it is cities and regions that compete in the world economy, as much as, if not more than, national economies. And at a time when we in Ireland must look anew for sources of economic dynamism and productivity growth, we should also be thinking of Ireland as a set of regional economies. If we can build dynamic regional economies with strong platforms of competitive advantage, then we can start to generate 'trickle up', as well as trickle down. In other words, we can and should look to regional economies as sources of growth in national income.

The ingredients for regional economic success have been widely discussed. They include a modern physical infrastructure. In many cases the development of clusters of firms in particular industrial sectors that develop network economies. A system of training that meets the needs of local firms.

Ultimately, regional economies will thrive when they develop a virtuous circle whereby the availability of high quality employment and educational opportunities, attracts people to and retains people in, the region, who in turn create demand for new services, and are also innovators and entrepreneurs themselves. It is that self-reinforcing process, as distinct from a vicious circle of people leaving to find opportunity elsewhere, which will form the basis for sustainable employment in this region, and in other regions across Ireland.

Third level institutions are an essential driver of that process. Universities are at the centre of the regional system of innovation. They are important in attracting industry to a region, and in persuading young people to stay in the region. Their research capacities are sought after by firms, and the presence of a university is a vital element in attracting firms to invest in the region.

Over time, their research and teaching activities can develop to meet the specific needs of the regional economy - where there is a cluster of firms in one particular sector, you will typically find that the university has developed an expertise in research in that sector. Universities are also an important source of direct employment, and they add to the cultural and artistic infrastructure which is part of the overall package which attracts people to the region.

That is why Labour has been a strong supporter of the concept of a university of the South East. We see it as an essential part of any strategy to grow the economy of this region. Last year, in our manifesto for the 2007 General Election, we committed ourselves to a multi-campus university, with its hub in WIT, but also building on other centres of scientific and cultural excellence in the region. It is clear from the Port report that WIT has the potential to grow from a high performing Institute of Technology to University Status.

For example, the report notes that:

"WIT has an academic maturity and activity profile [...] which overlaps with institutions in the Irish university sector and in other Western countries";

that "WIT fulfils many of the broader roles of a university especially in terms of its support to regional economic and cultural development";

and that "it has the governance, management and strategic planning capability required for a university [...] and an asset base to permit future development."

I believe that the question of university status for WIT should be considered on its own merits, and in the context of the needs of this region.

If we want to grow and develop as a knowledge economy, then there are issues in our education system that must be confronted: pre-school provision, educational disadvantage and literacy, second level completion, the teaching of maths and the take-up of science. The engineering graduate of today is not the product simply of her university years, but of an educational process that begins at pre-school. If we are to build a fairer and more prosperous country, then there is a serious agenda of educational reform that we need to address at all levels. At third level, we need to promote greater connections between the academy and the economy, but we must not loose sight either of the vital role of dissent and original thinking to both the economy and society.

Secondly, as the great boom of Celtic Tiger Ireland comes to an end, we must look afresh as regional economies, not simply from a redistributive perspective, but as a real and viable source of productivity growth.

Thirdly, it follows then, that we need strong educational structures at regional level. It is widely accepted that regional economies need strong third level institutions to facilitate economic growth. University research is an important source of ideas for industry, and the teaching role of the university is important in supplying skilled and qualified people for the regional economy. The university is also a vital cog in the virtuous circle of which I spoke, of people staying in the region, who generate new economic activity, which in turn makes the region more attractive to others and so on. It is at the centre of the regional system of innovation.

It also follows that the University of the South East must stand at the apex of a strengthened educational system, from pre-school upwards. While the university is a central aspect of the development strategy, we must not loose sight of the other aspects of the educational system that feed into it. I would go further and say that the university will have an important role in promoting excellence at all levels of education in the region.

Fourthly, as this audience will be aware, university status brings with it as many responsibilities as privileges. It demands the provision of a wider range of subjects, and while it should be conscious of its role in the regional economy, it should also be conscious of its role in society. It should be a nursery of critique - economic, social and political. It should be a centre of innovation in all things.

I must confess to some disappointment at the level of critique that is emerging from the modern Irish academy. There are many aspects of the Irish experience over the past decade which would have merited far greater comment and protest from academics. As far as progressive social commentary goes, the Church, for all its troubles, has been far more prominent than the Universities. Where we might expect dissent, we have found a culture of contentment, and an unwillingness to rock the boat.

There is too, a worrying trend in the way that some third level institutions have defined their mission. Third level education is a vital driver of the economy, but that is not all it is. Indeed, it may be that those which add most to the economy are also those that consciously promote the old-fashioned ideas of liberal education. Yes, we need a commercial focus, but we cannot forget the core elements of what had made university education so sought after in the first instance.

Cardinal Henry Newman, who played an important role in an earlier phase of the development of the University Sector in Ireland, wrote the following:
I have been insisting [ ....] first, on the cultivation of the intellect, as an end which may reasonably be pursued for its own sake; and next, on the nature of that cultivation, or what that cultivation consists in. Truth of whatever kind is the proper object of the intellect; its cultivation then lies in fitting it to apprehend and contemplate truth.
This process of training, by which the intellect, instead of being formed or sacrificed to some particular or accidental purpose, some specific trade or profession, or study or science, is disciplined for its own sake, for the perception of its own proper object, and for its own highest culture, is called Liberal Education; And to set forth the right standard, and to train according to it, and to help forward all students towards it according to their various capacities, this I conceive to be the business of a University
The end of the economic boom means that there are hard decisions to take at national level. But it also provides an impetus and an opportunity for fresh thinking and new directions. Making the commitment to a University of the South East would be one such decision.

Such a university would stand at the apex of the educational structures that we must aspire to for the region. It would sit at the centre of the regional system of innovation. It would be a key driver of economic growth, and a centre of cultural energy. It is a demanding, but also an existing project and one which Labour is committed to supporting.