The Myth Of The Smart Economy

Brian Cowen and company seem quite enamored with the term ’smart economy’ these days, chalking everything from Máire Geoghegan-Quinn’s European Commission portfolio to more jobs in the bookie’s up to the government’s dedication to all sorts of high-tech wizardry. In fact, if you were to ask a member of the government how they plan to bring Ireland’s economy back up from its knees in the coming years, you’re virtually guaranteed to hear the phrase smart economy along with its fellow buzz-term ‘green economy’ firmly lodged in their first sentence. This should be heartening to hear; a focus on high-tech, export oriented industries promises much more stable, long-term growth prospects for the coming decade than the national property bubble that we relied upon for the current one. Unfortunately, while our cabinet members have certainly learnt how to say the words smart economy, I don’t think any of them seem to have realised what they actually mean.

You might expect a government with such an attachment to the notion of Ireland being a high-tech hub to have some sort of record of positioning the country as an international leader in the field over the past decade. The reality as it turns out, is quite the opposite. It’s not just that we’re not at the top of the international league tables on this, we’re actually, in a word, shit.

The quality of broadband provision in a country is an important indicator of technological advancement, but most people are well aware of how poorly we rank in that regard (if not, see here), so I won’t deal with that today. Instead, I’m going to look at the World Economic Forum’s Global Information Technology Report, which is released annually and ranks 134 countries on a wide variety of IT-related measures. The headline statistic (and pretty much the only one that you’ll hear reported in the media) is the Networked Readiness Index, in which Ireland ranks 23rd. This doesn’t sound too bad (although certainly isn’t as high as a ’smart economy’ would want to be), but this overall statistic takes into account quite a number of criteria that are only indirectly related to IT, such as ‘judicial independence‘, ‘property rights‘, etc. Essentially, we get extra points for not being a tinpot dictatorship.

Fortunately, the WEF breaks the stats down on a country by country basis, so we can see exactly how the government’s record compares on the real IT issues. Some of these are frankly shocking. Take ‘Internet access in schools‘, for example, where we’re ranked a very poor 44th. We dropped 6 places on this ranking from 2008 to 2009, and we’re now behind Thailand, Lithuania and Malaysia. We can hardly say that we’re equipping our children to take part in a future smart economy if we can’t even provide schools with basic internet access.

If you’re wondering why our schools have such poor broadband, maybe the next ranking will give you an indication. In ‘Importance of ICT to government vision of the future‘, we rank 46th, which is a drop of an entire 12 places from 2008. Among the countries to overtake us in the past year are the Dominican Republic, Mauritius, and Kazakhstan. That’s not to mention Gambia and Burkina Faso, who were already ahead of us. The WEF calculate this ranking on the basis of a survey of business executives worldwide, and they don’t seem all that convinced that repeating the term smart economy over and over again constitutes a plan for the future.

Another category that’s based on a survey of executives (ie the people who decide whether Ireland is a smart economy worth investing in or not), is ‘Government prioritization of ICT‘. Unlike the previous category, this is based on what the government is doing now, not what they plan to do in the future, and the results are even worse. In 2009 we ranked 68th, a drop of no less than 16 places from the year before. To put that in perspective, Gambia ranks over 50 places above us, and there are another 8 african countries that manage to prioritize IT more than our government does.

The last category I’ll bring your attention to is ‘Government success in ICT promotion‘, where we rank 66th. This also represents a drop of 16 places from 2008, during which time we’ve been overtaken by such countries as Vietnam, Colombia, Uganda and Kenya. Think about that last one for a second. In the time between the 2008 edition of the report being compiled (late 2007) and the 2009 edition (late 2008), Kenya had to deal with the aftermath of a rigged presidential election, where widespread ethnic violence killed 800 people, displaced 600,000 and brought the country to the verge of civil war. And amongst all that, Kenya’s government still managed to be more successful in promoting IT than Ireland’s.

And that’s the reality of the situation. For all the talk and all the hype, a country that we’re over 70 times wealthier than and is a hair’s breadth away from civil war is still more successful in promoting a smart economy than we are. It kind of puts Brian Cowen’s platitudes in perspective, doesn’t it?