Ireland’s economy is now showing encouraging signs of recovery from the financial crisis, but more must be done to reinvigorate growth and create the jobs that will get the country back to full health, according to the OECD.
These are the key conclusions of the Economic Survey of Ireland and a new report: Local job creation: How employment and training agencies can help. Both identify employment and social inclusion issues as vital to Ireland’s continuing rebound from the crisis, its prospects of growth and the wellbeing of Irish people.
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Angel Gurría, secretary-general of OECD, said: "What’s needed today is a strategic agenda for more inclusive growth that promotes job creation and social equity by harnessing the power of entrepreneurship and innovation."
While the unemployment rate recently began to decline, joblessness remains a serious concern, according to the report. More than 13% of the labour force remains unemployed, with more than 60% out of work for more than 12 months, among the highest rates in the OECD.
The youth unemployment rate is 28.6%, while the number of young people emigrating continues to mount. At 11.3%, Ireland has the OECD’s share of 15 to 19 year olds who are neither employed nor in education or training (NEETs), only Turkey and Italy.
The OECD is working closely with the Department of Social Protection to design a national action plan to implement the Youth Guarantee in Ireland, agreed at EU level under the country’s recent EU Council presidency.
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By GlobalDataFiscal adjustment should focus on social equity and environmental protection. Further pension reforms and reductions in tax expenditures could lower distortions to growth and improve equity. Exports remain the main drivers of growth, but a gradual recovery of domestic demand is expected. Overall, the economy is well poised to benefit from a pick-up in activity of its main trading partners.
Ireland should seek to build on past success in attracting innovative high-tech multinational companies. Improvements to the business environment would help spread innovation and dynamism to the domestic SME sector. Barriers to entrepreneurship are relatively high in some areas. License and permit regulations could be made less restrictive by lowering costs and reducing waiting times. Improving access to finance for SMEs will be a key challenge.
The survey recommends consolidating the 170 budget lines and 11 major funding agencies into two groups – one dealing with science and basic research, and another with applied research and innovation. It also recommends better aligning higher education with innovative companies, lowering costs for small cap Initial Public Offerings, and centralizing legal processes for transferring intellectual property rights.
Given that Ireland’s CO2 emissions, waste generation and use of fertilizers are among the highest in the OECD, the report also suggests that taxes and user fees be used to help the country transition to a greener model of economic growth.
