Productivity growth has been trending down for some time, although the recent surge in knowledge-based capital by multinational enterprises will lift productivity. The diffusion of innovation to smaller national firms is limited by weak linkages with multinationals. Public support to business R&D should be rebalanced towards direct support.
- Enhance R&D spending and innovation. Rebalance innovation support towards direct grants. Introduce a Research Technology Organisation focussed on SME needs.
- Strengthen competition in non-manufacturing sectors. Introduce the competition-enhancing and cost-reducing provisions outlined in the Legal Services Regulations Act.
- Reduce fees and waiting times for licences and permits required to start and operate business, by fully rolling out the Integrated Licence Application Service.
- Expand the remit of the National Competitiveness Council into a productivity-focussed body.
Source: OECD May 2017 Economic Outlook database
NCC Study on Productivity (2012)
DJEI Enterprise 2025 (2015)
Productivity - enhancing institutions
The council was established by Government in 1997. It is an independent, non-statutory body, which monitors national competitiveness and reports to the Taoiseach (Prime Minister) and the Government, through the Minister for Jobs, Enterprise and Innovation on key competitiveness issues facing the Irish economy and offers recommendations on policy actions required to enhance Ireland’s competitive position. Generally, definitions of competitiveness are either focused on (short term) costs (i.e. market share, macro imbalances etc.), or on (medium-to-long term) productivity performance. The competitiveness framework currently applied by the NCC represents a pragmatic approach that balances both definitions of competitiveness.