From dozy cat to Celtic Tiger in 20 years - and Australia can do it, too

What's the problem here? Over the past 10 years Australia has had what can only be described as a glut of reports, commentaries and government policy documents highlighting the gap between what is supposedly needed by industry and a major shortfall in the local take-up of excellent Aussie ideas from universities and research institutions. We have had endless proposals to deal with the deficiencies in the amount of overall expenditure on research to bring us into at least a middle-ranking position among that of developed nations. But to no avail; our relative position against other developed countries simply keeps slipping and the match between what industry says it needs and what the universities produce seems no better.

Invariably, those of us concerned with Australia's research and development performance have looked to government to solve the problems of poor funding and pick-up of research outputs. Government has responded with additional funding for applications of research, tax incentives and so on but it's nowhere near enough. Yet we remain pathetically optimistic that research and innovation will become such a high priority that the amount of government support and programs will change the current depressing situation. In my view it hasn't - and it won't.

The fact that, even in an age of unprecedented prosperity, research and innovation are not funded adequately suggests that nothing will change at government level for a very long time. I believe change will come only when the community demands it and threatens the hold on power of whomever is in government at the time. And I believe we must face the fact that the problem lies not simply with government and the lack of visionary leadership, although that's a major factor, too. The difficulty we face is also a product of community and business ignorance of the critical role of education, research and development for economic advancement.

So how do we engender a valuing of research and development and recognition that it is the keystone of prosperity in an age when knowledge, not the resources we dig from the ground, determines how we fare economically?

One way to find answers is to look at other societies that have been successful in making the shift to being knowledge economies.

One country that in this respect has surprised the world (and itself, come to that) is Ireland, which went from being a sleepy protected agricultural economy to an export-driven industrial economy in about 20 years.

Growth rates went from 3.5 per cent in the early '90s to eight per cent in the late '90s - outperforming all other EU countries. The numbers at work rose by a staggering 45 per cent over 12 years, with an average increase of jobs of three per cent per year. Unemployment dropped from 17 per cent in the 1980s to less than four per cent in 2001.

For the phenomenon that was labelled the 'Celtic Tiger' to occur required some important contributing factors that by good fortune prevailed at the crucial time. These included the sustained US economic boom and availability of EU funding for infrastructure development. But there were also areas where conscious, bold decisions by politicians and business leaders on matters within their control paid dividends in terms of fuelling the growth. These factors included creating a favourable environment for foreign investment through low corporate tax rates, vigourous and creative promotion of Ireland as a good place to locate and a strong macroeconomic environment with strong public finances.

And there was also the long history of Irish investment in education since the 1960s, which was an essential element in the growth. From the '60s, no matter what government was in power, there was no faltering in public spending on education, even in face of huge unemployment figures and a bleak economic outlook.

Why did the Irish continue to be generous in funding education during those very difficult days in the '70s and '80s? The cynics used to claim that it was to prepare young Irish men and women for the emigrant ships and ensure that at least some would not have to work in menial jobs in England, US and Australia. If economic rationalism had prevailed in Irish universities, areas such as medicine and engineering would have been curtailed as the output of graduates far exceeded demand. Nor would there have been a massive investment in the development of computing technology courses. As it happened, the adopted countries of the graduates of these courses did benefit from the expertise. But in the long run it was to Ireland's benefit because with the emergence of Ireland's 'Tiger' economy the graduates returned home, enriched by the experiences of living and working internationally. They were key leaders of the sustained social and economic development of their native land in the 1990s.

A second factor that influenced the continuation of Irish investment in education in the lean years was the existence of a fundamental respect, even awe, for people who have had the benefit of education - especially tertiary education. This goes back to colonial times when the masses were excluded, by policy, from even basic educational opportunities. Education was historically something to be fought for and valued. I recall the way I hid my university scarf under my coat as I made my way on the bus to university lectures in Dublin in the early '60s; I did not want to draw attention to the fact that I was one of the privileged attending university, thereby being the cause of envy.

There is little evidence of an attitude of envy of those in tertiary education among our Australian-born population, although the patterns of university enrolment of local non-native-English speaking students and international students suggest that some communities value education very highly. Perhaps when this current generation assumes leadership positions we will see priorities change sufficiently to bring about a shift in government thinking about the absolute necessity for a well-educated populace.