The Republic of Ireland’s industrial and enterprise strategies will have to evolve in the future to adjust to changing political, economic and technological realities.
One constructive step that the Irish government can take to future proof its economy is to renew its focus on innovation policy with a view to building a world class innovation system. Technological change and innovation have long been of fundamental interest to economists because of the belief that sustainable long-run economic growth depends on the ability of the economy to produce and diffuse new innovations.
It is unwise to conflate innovation with R&D or to treat innovation as a linear process. Yet it is notable that the Republic invests significantly less in innovation inputs than do other similar small open economies. While the Republic is making progress in building up its innovative capacity, its capacity remains weaker than in other small advanced economies.