Speech by Dr Michael P. Mortell
President, University College, Cork
at the Conferring of Diplomas in the Faculty of Arts
Friday, 24 July 1998 at 12.30 p.m.
 
Investment in Education

I would like to say a few words on Ireland post 1999 i.e. when we came into a new era of funding from the EU and the present regime of structural funds runs out.

We can expect a significant reduction in the overall EU support to Ireland. We can also expect that the government will have to keep tight control over public spending to stay within the constraints imposed by the rules of monetary union.

Ireland today is very different to the Ireland of just 10 years ago. We now have an economy growing at 7 or 8% p.a. over a number of years - the highest in Europe; our unemployment rate is falling and is now below the European average; our interest rates are at a longterm low and are expected to fall further by the end of the year; and we are showing for the first time a fiscal surplus. All this was unimaginable just ten years ago in the aftermath of the severe budgetary cuts of the McSharry era when UCC had to suddenly reduce the number of staff. And yet it is only 10 years ago.

The question that should exercise policy makers is what investment strategy is required now so that today’s performance by Ireland can be sustained over the coming 5 to 10 years; particularly what is the strategy required in the context of reduced EU supports.

I am not going to give an economic analysis - I wouldn’t even know how to start to do it. But I can point to some reasons which I think have led to our present success, and draw some conclusions from those for the future. And I will, of course, focus them on the third level education sector.

The number of students in universities has been consistently growing for nearly forty years; but with a particularly high growth rate over the past decade. In this decade numbers in UCC, for example, have increased from 6,500 to 11,000. I can clearly recall in 1993 and 1994 at conferrings, such as we have here today, talking to the new graduates about the opportunities that Europe, not Ireland!, held for them - "We are the young Europeans" was

the IDA slogan of the day. Large proportions of our engineering and computer graduates

were going to Phillips in Holland and Siemens in Germany to get jobs. Ireland was supplying some of the skills shortfall in those countries. And we asked ourselves why the jobs for those highly skilled people weren’t here in Ireland?

That was less than five years ago. Then Ireland got the fundamentals of the economy right - stable currency, low inflation, borrowing under control. The IDA got the investment rolling in, based on a plentiful supply of a well-educated, highly skilled and flexible workforce - just at the time when a scarcity of this critical element was appearing in other markets.

The longterm strategy of an educated workforce paid off. All the moaning and groaning about an oversupply of graduates, and could the country afford the cost, (the word investment was seldom used) is now forgotten. The plentiful supply of graduates, both in Ireland and those who had gone abroad, now became the seed corn to drive forward Ireland’s industrial revolution.

The conclusion to draw is that in the knowledge era the fundamental resource is an educated workforce.

This understanding is, in my view, fundamental to Ireland’s future. We have to continue to invest - and I emphasise invest - and to a greater extent than ever before in the education of our people - young and old. That is the key to sustained prosperity.

IBEC, the Employer’s group, are not a group to normally advocate an increase in public spending. But they see Employment and human resource development as one of four key priority areas for investment of public funds over the next five years. Between the years 2000 and 2006, they advocate an investment of £1.12 billion in the third level sector in the area of science and technology.

It is now being realised that the third level sector is increasingly where most of Irelands public sector R+D is done. As this is the case, the highest standards must be maintained in education and research ie international standards. And so Irish students must be educated, and Irish researchers operate, in modern facilities with up-to-date equipment. The facts show that Ireland’s third level capital expenditure is among the lowest in the OECD, and the spend on basic research has now reached £2.5m out of a total science budget of nearly £800m - a miniscule sum, at 0.3% of the total. My conclusion is that: The Celtic Tiger, driven by high-tech ambitions, is grossly underinvesting in its key resource.

To quote from the Fitzpatrick Report to IBEC

"Overall, the level of state investment in science and technology education and research is inconsistent with the increasingly properous European economy which Ireland has become. If we wish to maintain industrial and job creation strategies that have a strong emphasis on science and technology industries, and if we wish to remain a modern and progressive economy, much greater resources must be put into this vital area".

In Britain they do seem to have learned something about where the future lies. Last week they announced that over the next three years they will invest an extra stg£1.1 billion to provide modern facilities for research and teaching.

That is the world in which we in Ireland and in Irish Universities have to compete.