The current world-wide campaign of IDA Ireland, The Irish Mind, with its tagline of Knowledge is in our Nature, sells international investors an image of a flexible and agile Irish mindset.  This theme brands Ireland as particularly suited for creative and innovative ventures founded on distinctiveness.  It recognises that imagination, intuition and inspiration, in other words, self-knowledge, is as central as science and technology to the innovation process. 

It may seem paradoxical, but the evidence is that in a world of global markets, rapid transportation, and high-speed communications, local cultures and places are becoming more, not less important.  Sustainable competitive advantage lies in difference captured by special places and shared values, resources that are unique or too difficult for others to imitate.

A sense of place represents an emotional attachment to a particular geographical and cultural space, a connection embedded in relationships and social networks.  There is a dynamic interaction between a sense of community, civic culture, creativity and innovation.  Social capital is generated by feelings of belonging and trust, a sort of glue holding a community together.  Communities with strong social capital tend to be happier places to live, with positive implications for employment and learning.  Such places are especially well-equipped to attract and keep the most creative people, thereby generating a high quality of life. 

Contemporary Ireland is badly in need of the driving vision that characterised the three decades before Independence, a period which spawned the GAA.  The Irish Revival was an exhilarating era of pioneering spirit, cultural cohesion, prodigious idealism, self-help and self-discovery, or to use a modern expression, national innovation.  The Revival encompassed a range of initiatives all relating to a common theme: an awakening interest in Irish identity, broadly defined.  The GAA and organisations such as the Gaelic League, the Co-operative Movement and the Irish Literary Theatre, were cut from a similar cloth.  Common to all was a sense of place and pride, both at national and local level.  Overriding all else was the sense of being uniquely Irish, possessors of a proud history and endowed with a rich culture.

The GAA fostered patriotism and rootedness through creating highly charged, local sporting contests that captured the emotions, especially of young people, adding colour and excitement to rural social life.  It promoted a robust form of Irish identity through teamwork and co-operation, deeply rooted in a hierarchy of local communities and conducive to cultural self-knowledge and self-reliance.  Today, even with the GAA’s relative affluence, this sense of identity, attachment to one’s native place, and grassroots democracy, persists.   The Association remains a locally rooted, grassroots community-centred organisation, dependent on volunteerism, and based on democratic principles of governance. 

In attempting to foster a sustainable competitive advantage, Ireland could benefit by drawing on the inspiration and ideals of Revival movements, especially the GAA.  It is fascinating to consider where such a marriage of capability, innovation, culture, identity, and sense of place might lead.  Combining creativity and a self-help ethos could produce development that is rooted in place while socially, economically and environmentally sustainable; a nation globally competitive while distinctively Irish.  By marrying the global with the local, Ireland has a great opportunity to forge a unique development path, one other countries might emulate.

No nation can be truly innovative if its people do not know and appreciate who they are, where they come from, and where they are trying to go.  People grounded in their own culture appreciate diversity and the cultural values of others with whom they must co-operate.  While remaining open to outside influences, they learn to identify difference and appreciate distinctiveness.  They absorb many different ideas, yet are not dominated by globalised cultural influences.  This helps generate an innovative mind frame.

Policies that recognise the nature and feelings of a people provide a powerful and inimitable competitive advantage.  Ireland’s strength lies in a coherent approach founded on distinctiveness, difference and national identity.  This country’s wisdom and self-knowledge give it breadth, purpose and confidence, critical components in generating a prosperous innovation society.  Inspired by GAA principles, such a society could lead to an Ireland that is self-reliant and utterly unique while eminently cosmopolitan, well positioned to compete in the turbulent global economy.

Foinsí uathúla le buntáistí iomaíochta thar cionn is ea acmhainní cultúrtha na hÉireann.  Ní dearcadh cumhach ná saonta é seo.  Go deimhin, cé gurb é Seán Lemass an duine a bhí freagrach, níos mó ná aon pholaiteoir eile, as Éire a oscailt do thrádáil agus infheistíocht idirnáisiúnta, thuig sé go maith an tábhacht a bhaineann le sainiúlacht.  Chreid Lemass gurb iad tréithe dúchasacha a spreagann pobal chun obair ar son dul chun cinn tíre.  Is é an tuiscint céanna a bhí ag an CLG óna laethanta tosaigh.  Tá sé fós fíor gur tríd a bheith fréamhaithe i gcultúr, i traidisiún agus i mórtas cine is ceantair a chruthaítear an deis is fearr atá ann chun sochaí rathúil iomaíoch a bhaint amach d’Éirinn.  

_______________________

Finbarr Bradley (Fionnbarra Ó Brolcháin) has been a professor of finance at a number of Irish universities.  He set up and was first Director of the Irish-medium centre, Fiontar, at DCU.  He was also a faculty member at NUI Maynooth and UCD.  He is co-author of the book Capitalising on Culture, Competing on Difference [Blackhall Publishing, 2008].

Published in ‘The Irish Review’, Volume 36, Number 1, Winter 2007.

Finbarr Bradley
UCD Smurfit School of Business, Dublin

tel: +353-1-7168827
email: finbarr.bradley@ucd.ie

Introduction
The EU Commission, through the Lisbon Agenda, is attempting to make Europe the most competitive knowledge-based economy in the world. In Ireland, a key public policy objective is to develop a knowledge-based or network society based on cheap inputs of information. Innovation along with the generation and application of knowledge, especially in information technology and bioscience, is seen as key to achieving these goals.

Until recently, little attention or financial resources were devoted to making science and technology the driver of Irish development. Now under the National Development Plan, a vast quantity of money, some €2.5 billion between 2000 and 2006, is being spent on research and development (R&D). State agency Science Foundation Ireland (SFI), is committing considerable resources to the development of R&D centres in Irish third level institutions to promote innovation and thereby in the long-term higher economic growth.

In agriculture, EU structural reforms are designed to decouple subsidies from production, promote sustainability in land use and the diversification of rural economies. At the same time there are major public concerns about balanced regional development, ecosystem damage, animal welfare, food safety and social cohesion. It appears likely that those countries that use innovation as a foundation for achieving profitability in agriculture and food processing while satisfying the increasing quality requirements of the consumer will have the most successful rural communities in years to come. Yet the innovation capacity of Ireland, both North and South, to support sustainable rural development is characterised by fragmentation, lack of critical mass, discontinuity and little overall cohesion.

This paper asserts that the present innovation strategy pursued by the State, namely concentrating substantial resources to science and technology R&D, in the natural sciences, information technology and engineering, underestimates the contribution of the social sciences and humanities to the goal of achieving a knowledge society. This ignores, for example, how environmental and cultural values play a central role in the quality of life and well-being in communities. There is far more potential, in particular, to obtain an invigorated rural Ireland if the ideas that inspired the Irish Revival or Renaissance in the thirty or so years prior to the foundation of the State are central to the creativity agenda.

The Irish Revival
Matthews points out that the Revival is often wrongly seen as an exclusively cultural revival characterised by a backward-looking Celtic spirituality, nostalgia for Gaelic Ireland and obsessive anti-modern traditionalism.¹ Yet as Kiberd puts it, the Revival:
..…achieved nothing less than a renovation of Irish consciousness and a new understanding of politics, economics, philosophy, sport, language and culture in its widest sense… the exponents of the Irish Renaissance shaped and reshaped an ancient past, and duly recalled it, giving rise to an unprecedented surge of creativity and self-confidence among the people.²

The Revival witnessed a host of economic, cultural, social and sporting self-help initiatives such as the Co-operative Movement, the Gaelic League, the Abbey Theatre and the GAA. These national movements were inspired by the relationship between culture, confidence, self-help and the development process. The founding principle of the Gaelic League, for instance, was that the Irish could only achieve their true potential in the widest sense through self-confidence, self-reliance and self-respect fostered by speaking their own language.

While the social, political and technological context today is clearly a world apart from that of the Revival, the two periods are similar in one key respect. In both, creativity offers the basis for Irish development to reach its full potential. The national spirit and self-help ethos that was the Revival’s hallmark resulted in a range of innovative social and economic ventures. Yet, its guiding theme linking national identity, community, culture, character, creativity and economic development rarely feature nowadays in public policy analysis of the knowledge society. Instead, the emphasis is on growing a so-called ‘enterprise culture’ stressing competencies, work practices, individual entrepreneurial skills and risk-taking attitudes.

It is notable how closely related national identity and the network society are in Finland, a country we in Ireland are often urged to emulate. Castells and Himanen assert that cultural identity and a strong national sentiment appear to be essential components of the information society there.³ The Finns see no inconsistency in aiming for a dynamic integration in the global economy while also strongly affirming their culture, unique language and national identity. No matter how many study trips Irish civil servants and politicians take to Finland to study that country’s economy and society, they never seem to appreciate on their return how cultural factors might also perhaps be similar drivers of Irish innovation.

Community and Creativity
Personal responsibility, moral courage, self-reliance, national feelings that breeds enterprise, a sense of citizenship and overall welfare were the driving forces behind the development vision of Plunkett, AE and the Co-operative Movement. The absence of an ethic of citizenship, in the relationship between individuals as well as between individuals and the State, is one the largest social problems now facing Ireland. Policies pursued over many decades, the predominance of economic over social goals, are largely the reason for this.

True development, and indeed the practice of economics itself, is not primarily about commercial enterprises, business, money or markets. Its focus is far broader than that and is mainly about the provision or protection of qualities. Economist Thomas Michael Power argues that economic welfare is not just the bundle of market commodities consumed within a locale. A clean environment, good schools, and a host of other non-market ‘qualities’ add to or subtract from both individual and community welfare and the quality of life.⁴

Creative individual activity, such as searching for new ways to improve a community, organising people and resources, within a supportive and challenging context, is the key to a vital, thriving local economy. Communities place themselves in a much better position to improve individual lives by re-establishing the importance of community itself, emphasising values and appreciating how limited a contribution the commercial part of the local economy makes to overall well-being and prosperity. They need to appreciate the potential a broad range of co-operative, non-commercial, while yet economic ventures, can make in this regard.

A common misconception, actively promoted by professional economists, often employed by private vested interests, is that qualitative or non-commercial aspects of our lives are non-economic and retard a community’s development. Concerns about the preservation of natural areas, wildlife, the quality of the air or water or the social character of communities are often thought of as non-economic, aesthetic, moral or even political concerns. With this perspective, trade-offs or balancing economic progress and ‘non-economic’ features such as cultural heritage, ways of life and special landscape are viewed as inevitable. Nothing could be further from the truth. In fact, policies that attempt through informed debate to discover approaches to development that promote both money and non-money values simultaneously, offer the best opportunity for a community to improve the general well-being of its citizens.

Science, Culture and Place
A major deficiency of the Revival and a crucial missing element was the exclusion of a more significant role for science, especially natural history undergoing great vibrancy at the time, as an important element in defining Irish culture. By not appreciating the powerful contribution that scientific thinking and endeavour could make to the Revival, it undoubtedly laid the seeds for the erosion of a sense of place, the degradation of the natural environment and the weakening of civic culture in Ireland as the country underwent industrialisation and became structurally integrated with a global capital and technology infrastructure.

The Revival passed up a wonderful opportunity, by not adding a broader scientific dimension to the concept of culture, to put in train a multi-dimensional or more integrated path to development than the one subsequently pursued by the State. If science had played a central role in the Revival, it could have resulted in a more enlightened attitude to a range of issues such as planning, the environment and rural development. As a consequence the country is less prepared to face the implications of moving to a more sustainable state, more necessary than ever given the EU’s emphasis on sustainability as a core objective in rural development.

Science as defined by Dorinda Outram is ‘the history of the human encounter with the natural world’ and an integral component of culture.⁵ Natural history involves an obvious environmental and local component and could have fitted well into a broader concept of Irishness within the Revival movement. Some like Plunkett,⁶ AE,⁷ Evans⁸ and Praeger⁹ saw that uniting diverse groups in a common purpose, renewing regional consciousness and forging of the relationship of people with the land as essential. Attis,¹⁰ Johnston¹¹ and Wilson Foster¹² argue that the architects of the Revival, since many of its premises were anti-scientific, excluded science. Yet Plunkett and AE were among the few who did realise the potential of science in development. AE, for instance, as Allen illustrates, celebrated the empirical achievements of scientists like Kelvin and Tyndall, and regarded Anglo-Ireland with its contribution to science as the central modernizing tendency in Irish culture.¹³ His multicultural ethic was based on the argument that uniformity of culture was bad for creativity and that it is the conflict of cultures and ideas that bring about intellectual vitality.

As Viney argues, due to the early isolation of the Irish from cultural forces that shape present-day ecological sentiments in Europe, the attitude of the clergy and ‘the biological treachery of the famine’, utility remains the benchmark of the Irish attitudes to nature and the environment.¹⁴ Since the Enlightenment, humanity has been progressively distanced from the rest of nature while science has separated objective truth from subjective morality. A great challenge for post-modern society resides in their reintegration, especially in Ireland where we sit at the bottom of the EU in our environmental performance. As Patrick Sheeran points out, a bizarre aspect of this country is that a lack of concern for design and aesthetic quality go hand in hand with a preoccupation with place.¹⁵ Yet the latter appears to have little to do with tending, cultivating or enhancing the material environment. Ireland’s shocking image is that of a country where illegal burning of rubbish is common and pockmarked throughout by a network of giant illegal landfills. This is the antithesis of a knowledge society, which is centrally concerned about place, values, culture and quality.

Education for Innovation
Stirling points out fundamental flaws in the approach now common in the education of business and technology professionals.¹⁶ This is based on a managerial or mechanistic paradigm, overlaid by a utilitarian market philosophy. Students often fail to see connections and patterns whereas in an ecological or whole-systems view of the world, the emphasis is on relationships. Thinking should be systematic rather than linear, integrative rather than fragmentary, concerned with process, emphasising dynamics rather than cause-effect and pattern rather than detail. It should be fundamentally concerned with recognising wholeness. A change of educational culture towards the realisation of human potential and the interdependence of social, economic, and ecological well-being would be transformative and constructive. It would engage the student in true learning rather than the present transmissive methodology that concerns itself mostly with the transfer of information, which is merely instructive and imposed. As Tobin Hart points out, a new kind of education is needed which includes the education of the mind and the heart, balances intuition with the analytic, focuses on character and community, and cultivates wisdom rather the mere accumulation of facts.¹⁷

The academic structuring of knowledge into separate disciplines is one of the main barriers to nurturing an innovative culture while fostering academic diversity and promoting individual creativity within Irish universities. The perspectives of the humanities, of disciplines such as anthropology, geography, linguistics, psychology and sociology, are crucial if we are to arrive at any comprehensive sense of, as Cronin puts it, ‘who we are and who we might be’.¹⁸ A liberal education is of particular benefit in a technological world and interdisciplinary studies are essential if a culture of innovation and creativity is to be developed in the Irish third level sector. Integrated programmes drawing on the arts, humanities, science and technology, can play a crucial role in this respect.

The world appears now to be on the brink of a new industrial revolution, which will transform our notions about business and lead to a fundamental shift from the purchase of goods to the delivery of quality services. This will entail a new perception of value reducing the importance of material acquisition as a measure of affluence and stressing the continuous receipt of quality, utility and performance to promote well-being. Intangible assets such as creativity, imagination, ideas, emotions, place and community will largely determine value in the knowledge society. Rather than the traditional product-oriented economy we are entering into an era of service and flow, of networks and relationships, where patterns, processes and context are crucial. Innovations that minimise the use of materials, support biodiversity and increase resource productivity will play an increasingly important role.

In a knowledge society, the sustainable or evolutionary organisation will engage in the design of products, services and processes to create a future that includes prosperity and the healthy co-evolution of human and natural systems. To develop an innovation culture, business schools, for instance, should be radically re-designed so that value, rather than knowledge transfer, is placed at the centre of the pedagogical approach. Students will then receive a better appreciation of the often-conflicting relationships between individual, community and market values, crucially important for those involved in rural community ventures.

Students need to think holistically, work in multidisciplinary groups, cope with change and develop systems and products that are sustainable and caring of nature and humanity. The more practice and experience students have of contacting and exploring their inner emotional world the more confidently they can creatively deal with change and be open to new possibilities. Sustainable innovations will increasingly reflect not balance but integration so students should grasp the concept of value through integrating the economic, environmental and social impacts of decisions. They should learn how to do more and better with less, designing products and services on industrial ecology models that mimic biological behaviour in order to minimise waste. A key challenge is to help them appreciate that a trade-off between economic, social and environmental goals is not always inevitable and that the fundamental aim is to enhance all three simultaneously through innovation.

A radical change in the education paradigm used in scientific, technological and professional education is necessary to assess student performance for this kind of learning. Traditional testing by means of examinations should be the exception rather than the rule. Evaluation should move from its present emphasis on testing knowledge of facts and jargon to instead, wherever possible, assessing how students put knowledge to practical use. Rather than requiring students to remember facts and information given them by lecturers, students would learn to create and share value largely defined themselves based on the outcome of discussion and reflection within their learning commuity. In other words, the students’ own values and interests, along with those of their fellow-students, lecturing staff, the university itself and the wider society in general should form the basic dynamic of situations in which different stakeholders learn the essence of what it is to say compete, co-operate and trade. It is only by being placed in practical situations, such as engaged in projects of interest to local enterprises and communities, and required to make decisions rather than passively ‘taking’ courses that transformative learning can occur.

Conclusion
It is essential that Ireland develop a whole-system or holistic approach to development and prosperity if what Downey and Purvis call a knowledge-based multifunctional agriculture sector, a ‘living countryside’ and a high quality of life are to be achieved in rural Ireland.¹⁹ The sentiments of AE appear to be just as relevant today as they were when written in 1917:

All these energetic people are conspiring to build factories and mills and to fill them with human labour, and they believe the more they do this the better it will be for Ireland. They talk of Ireland as if it was only admirable as a quantity rather than a quality. They express delight at swelling statistics and increased trade, but where do we hear any reflection on the quality of life engendered by this industrial development.²⁰

A new vision of the development process is critical if we are to move to a knowledge society in this country. Pride in place, traditions and heritage along with a new emphasis on sustainability, the natural world, biodiversity and quality of life should form the bedrock for this vision. To help achieve this, the State should link its science, technology and innovation policies to those of cultural renewal and sustainability. Spending on R&D alone is not sufficient to generate an innovation culture. If the social context is ignored, the billions now devoted to R&D will not lead to a knowledge society, especially one appropriate for rural Ireland. Knowledge is more than just codified facts and know-how. Its most valuable characteristics are its tacit elements, networks of human interaction and the intangible processes embodied in relationships. A true innovation culture must be primarily founded on a spirit of self-reliance, relationships of community and trust, a sense of place, tradition, and civic engagement. Using the Revival as a guide, it might prove fruitful to explore in depth how values such as identity, civic culture and community, usually ignored in public policy discussions, could play a more central role alongside science and technology in helping achieve the goal of the Irish knowledge society.

Understanding the logic behind the Revival a century ago could help us construct a multicultural Ireland that is global yet also possesses a deep sense of place. Surviving and prospering in a multicultural world requires individuals to understand and appreciate their own cultural values. Moreover, being able to place one’s own roots in a cultural, historical and social context is necessary to appreciate the values and traditions of others. Successful intercultural encounters require that individuals believe in their own values so that they can really appreciate diversity and the cultural values of the others with whom they have to cooperate. If not, they become alienated persons, lacking a sense of identity, or sense of self as well as an enterprise spirit. As Verhelst argues, self-reliance must be understood as an act of emancipation from all harmful forms of dependence.²¹ For each person or local community, it is a question of preserving or reclaiming liberty and, ultimately, identity. Self-reliance in economic activities and political decisions depend on the existence of a cultural base as foundation. It is a community’s culture, wisdom, values, traditions and knowledge that justify confidence and give it breadth, the ideal preparation for developing a truly prosperous knowledge society.

Notes and References

1 P.J. Mathews, Revival: The Abbey Theatre, Sinn Féin, The Gaelic League and the Co-operative Movement (Cork: Cork University Press in Association with Field Day, 2003).
2 Declan Kiberd, Inventing Ireland: The Literature of the Modern Nation (UK: Vintage, 1996), pp. 3 & 641.
3 Manuel Castells and Pekka Himanen, The Information Society and the Welfare State: The Finnish Model (Oxford: Oxford University Press, 2002).
4 Thomas Michael Power, Environmental Protection and Economic Well-Being: The Economic Pursuit of Quality (Armonk, New York: M.E. Sharpe, 1996), p. 3.
5 Dorina Outram, ‘Negating the Natural: Or Why Historians Deny Irish Science’, The Irish Review, 1 (1986), 45-49.
6 Horace Plunkett, Ireland in the New Century (London: John Murray, 1904).
7 George Russell (AE), The National Being (Dublin: Maunsel & Company, 1917).
8 E. Estyn Evans, The Personality of Ireland (Dublin: Lilliput Press, 1992).
9 Robert Lloyd Praeger, The Way that I Went (Dublin: Hodges Figgis, 1937).
10 David Attis, ‘Science and Irish Identity: the Relevance of Science Studies for Irish Studies’ in P.J. Mathews (ed.), New Voices in Irish Criticism (Dublin: Four Courts Press, 2000).
11 Roy Johnston, ‘Science in a Post-Colonial Culture’, The Irish Review, 8 (1989), 70-76.
12 John Wilson Foster, ‘Natural History in Modern Irish Culture’, Chapter 8 in Peter J. Bowler and Nicholas Whyte (eds.), Science and Society in Ireland: The Social Context of Science and Technology in Ireland 1800-1950 (Belfast: Institute of Irish Studies, 1997).
13 Nicholas Allen, George Russell (AE) and the New Ireland, 1905-30 (Dublin: Four Courts Press, 2003).
14 Michael Viney, ‘Woodcock for a Farthing: the Irish experience of nature’, The Irish Review, 1 (1986), 58-64.
15 Patrick Sheeran, ‘Genius Fabulae: The Irish Sense of Place’, Irish University Review, 18 (1988), 191-206.
16 Stephen Stirling, Sustainable Education: Re-Visioning Learning and Change (London: Green Books, 2001).
17 Tobin Hart, From Information to Transformation: Education for the Evolution of Consciousness (New York: Peter Lang, 2001).
18 Michael Cronin, ‘The Unbidden Ireland: Materialism, Knowledge and Interculturality’, The Irish Review, 31 (2004), 3-10.
19 Liam Downey and Gordon Purvis, ‘Building a Knowledge Based Multifunctional Agriculture and Rural Environment’, in Charles Mollan (ed.), Science and Ireland – Value for Society (Dublin: Royal Dublin Society, 2005), pp. 121-139.
20 Russell (AE), op. cit., p. 71.
21 Thierry G. Verhelst, No Life without Roots: Culture and Development (London: Zed Books, 1990).

Published in Special Issue of ‘Studies’, Summer 2007 on ‘Quality of Life’

Frank Allen & Finbarr Bradley

The case for investment in high capacity public transport has engaged public interest in Ireland in recent years to an extent unusual for a European country. Increased employment and population, especially in urban areas such as Dublin, Galway and Cork, have resulted in greater traffic congestion and longer journey-to-work times for large numbers of commuters. Beneficiaries of Ireland’s increased material prosperity may wonder if several hours’ commuting time is an inevitable consequence of this prosperity or if an alternative model of transport policy could offer a less car-dependent life style. Many people making the daily commute to urban areas have experience of a higher quality of life elsewhere in Europe before returning to live in Ireland or before emigrating here. Concern about the impact of long-distance commuting on individual well-being has recently been reinforced by the recognition of the environmental impact of high car-dependency. People have not been surprised to find that a pattern of commuting that they do not regard as sustainable from a personal point of view may not also be sustainable from an environmental perspective.

Learning from Luas
The launch of passenger service on Dublin’s Luas light rail scheme in 2004, after many years of discussion and planning, has given residents in the areas served by Luas a sense of the benefits offered by high capacity public transport. Few investments in public infrastructure were scrutinised so carefully or for so long by policy-makers and by the wider public. The first three years’ experience of passenger service suggest that the public scrutiny of the balance of cost and benefits that would be delivered by Luas may have ignored or at least underestimated many important benefits that are evident now that the system is in operation. Some of the most significant benefits that have been delivered suggest that high quality public transport, especially when combined with appropriate land-use planning, can offer a quality of life for individuals rooted in stronger communities that is more sustainable than the alternative model of car-dependent commuting. This in turn has implications for how we evaluate major projects and the risks of making transport decisions in isolation from other aspects of planning. It also points to the risk of making decisions primarily according to economic criteria. The impact of Luas on the communities it serves offers an opportunity to study how improvements can be achieved in the quality of people’s lives and their capacity for growth and learning, aspects that are rarely included in formal evaluation of infrastructure projects.

Luas took a long time to plan and even to agree on its scope. This may not be too surprising considering that it was the first attempt since the nineteenth century to initiate a completely new rail transport system in Ireland. Prior to Luas, the last major investment in rail was the development of Iarnród Éireann’s DART in the 1980s, which was also controversial. It is worth noting that Government investment in both DART and Luas has been consistently opposed by most Irish economists who specialise in transport economics. The grounds for this opposition have usually centred on the argument that rail in Ireland does not offer an adequate benefit to cost ratio. While economists acknowledge the central role that urban rail plays in providing mobility elsewhere in Europe, many argue that the density of population in urban Ireland does not justify the large capital investment in rail here.

Limits of Analysis
The focus on cost-benefit analysis, as applied by economists, has gained public acceptance as the key criterion to be used in evaluating the worth of transport project and indeed whether the project in question merits exchequer funding at all. The limited range of benefits that are included in the standard cost-benefit analysis methodology may not be widely understood. For example, only benefits that are directly attributable to the project and that can be expressed in monetary terms are included in the evaluation. For a transport project such as Luas, the main benefits included are a monetary value attributed to the savings in journey time gained by travelling by Luas rather than by other mode of transport. Smaller values are included for savings in journey time for other road users and for the likelihood of fewer accidents on the highway to the extent that these changes can be directly attributed to reduced congestion brought about by Luas. While the environmental benefits resulting from passengers transferring from car to Luas are widely recognised, these benefits have until recently not been included in the standard cost-benefit analysis, partly due to lack of consensus among economists as to how their money value should be estimated. A monetary value for reduction in emissions due to passengers transferring from car to public transport is now included in the calculation but represents a very small proportion of the estimated benefits.

For a Luas line to achieve a high benefit to cost ratio, it would need to have high passenger numbers in the peak commuting time when there is congestion on city streets. The very high passenger numbers on the Luas Red and Green lines since passenger service began in 2004 have indeed resulted in a high ex-post benefit to cost ratio and by these standards of conventional economic analysis, Luas is thereby deemed a success.

For most observers, the benefits of Luas extend well beyond high passenger numbers during peak commuting periods. In fact, it is the success of Luas in attracting high passenger numbers at the time of day traditionally regarded as off-peak that has attracted most attention among public transport specialists internationally. The savings in journey time realised in the off-peak period is necessarily more limited and therefore contributes little to economists’ calculation of benefits in the standard analysis. The popularity of Luas for people going shopping at weekends, for entertainment in the evening or other non-commuting purposes has resulted in Luas being a financial success, allowing it to earn financial surpluses on operations and maintenance within its first year of operations. This financial success is exceptional for public transport in Ireland and for rail projects internationally, where exchequer subventions for transport operations are common.

But this analysis still suffers from a focus on benefits (and costs) that can be expressed in money. For many Dublin residents, the success of Luas has been that it provides substantially improved access for people with disability or for groups who have suffered other social exclusion. High Luas passenger numbers in the off-peak have improved the social and economic vitality of city centre neighbourhoods throughout the day and evening. When Luas management carried out qualitative research with Luas passengers, attention was drawn to the tendency of Luas passengers to strike up conversations with strangers at stops and on trams. Perhaps using light rail adds to a sense of community that travelling by car or even walking along a street cannot match.

Most important of all, there is a clear pattern of urban development emerging within short distances of existing and proposed Luas stops that is less car-dependent and more environmentally sustainable than the urban sprawl that is taking place elsewhere. This pattern of urban development creates greater opportunities for people to interact with neighbours, encourages social and economic activity locally and creates stronger communities. The standard cost-benefit analysis that includes only the direct monetary effects of investment in a piece of infrastructure and then focuses largely on savings in journey time, neglects these critically important attributes of high capacity transport.

Policy-makers responsible for authorising investment in public transport have in recent years recognised the need for a multi-criteria analysis of transport investment. The Department of Transport commissioned Goodbody Economic Consultants (2005) to develop an appraisal manual that encompasses the benefits and costs of transport projects, whether these have money values or not. This welcome initiative needs wider acceptance among economic commentators. In particular, it is necessary to emphasise that benefits that are not amenable to monetary evaluation should not be seen as merely supplemental to the economist’s cost-benefit analysis. Criteria such as integration with sustainable land-use planning, benefits to the environment and greater social inclusion for vulnerable individuals are central to strengthening communities. They should therefore be key factors in analysing infrastructure proposals.

Limits of Economics
A rail project not only contributes to the economic development of the communities it serves but is also an instrument of wider social change. It is worth exploring whether or not the conventional approach is appropriate for considering infrastructure which has a significant societal impact. Although based on sound technical principles and widely-accepted procedures, by attempting to quantify everything using a monetary yardstick, cost-benefit analysis fails to adequately take account of deeper values and relationships that permeate people’s lives. These values ultimately matter most to members of a community. Derived conceptually from the formal analytics of economic science, cost-benefit analysis treats human behaviour as showing universal characteristics within an individualistic, rational-choice, utility-maximising framework regardless of cultural or social context. In this world, community or society is an atomised one, populated by self-interested individual decision-makers rather than a dynamic, interactive and complex social sphere founded on the relationships among people.

Decisions on infrastructure projects should therefore also address how the project will affect shared values such as the sense of community, neighbourliness or the potential for nurturing integrated manageable communities. It is these qualities that determine the capacity of a locality over time for creativity, vitality and sustainability. A challenge for policy-makers is to recognise the limits of economic quantification and that the valuation of intangible qualities requires a broader approach if the development of dynamic, innovative and healthy communities is to be fostered.

The Bigger Picture
An approach to evaluating infrastructure projects along a range of criteria, both those amenable to monetary evaluation and otherwise, is consistent with some of the key guiding themes coming to the fore in public debate on Irish development. Some of the themes that are gaining recognition include sustainability, quality of life, social cohesion, well-being and cultural diversity. In its Strategy 2006 Report entitled People, Productivity and Purpose, the influential policy-making body, the National Economic and Social Council (NESC), attempts to find a new shared understanding of the Irish economy and enrich the account of how Irish economic, social and environmental factors are related in what it terms a ‘successful society’. This society is one in which individuals, families, enterprises, associations and communities can flourish and in which the public system enables them to achieve their changing goals. Low-quality social and environmental standards limit the ability to achieve a dynamic knowledge-based economy. In the past, there was a sense that economic reality set limits to Ireland’s social and environmental possibilities. Now it appears likely that the medium and long-term strength of the economy depends on social capital. The natural and built environment is also being regarded as crucially important as an integral part of economic activity, social relations and the quality of family and individual life.

While the movement towards globalisation of markets and economies gets much of the attention, Paul Krugman (1996) argues that the economies of modern cities show that the process of localisation is even more dominant. An increasing share of the workforce, for instance, produces non-tradable services that are sold only within the same metropolitan area. However, this does not necessarily imply a loss of national or regional competitiveness. As NESC itself believes, we need to escape from the usual refrain that Irish prosperity is virtually all created in the export, mostly foreign-owned sector, with the rest of economic activities, such as services, merely a recycling of that value. Accepting this view suggests that our goal should not just be to maximise productivity, as conventionally measured, in the non-traded sectors but that other objectives such as quality neighbourhoods must also be considered vital.

Innovative Communities
The late Jane Jacobs, iconic activist and author of the classic The Death and Life of Great American Cities (1961) believed that short-sightedness and intellectual arrogance characterised the field of US urban planning. She held that flawed assumptions, such as that an empty street was safer than a crowded one or that the car represented progress over the pedestrian, damaged modern cities. She argued that ideas should come from experience, not the other way around. Through first hand observation, she studied how neighbourhoods operate within the larger organism of the city or why some remain impoverished while others regenerate themselves.

The nature of community that we aspire to today is a departure from the model of suburban living which involves travelling to the city centre to work in an office or to a distant industrial estate to engage in manufacturing activity. Best practice in land-use and transport planning today recognises that the worlds of work, recreation, learning and residence are not so segregated. We aspire to live and work in diverse communities where interaction and communication with others in the community contributes to a sense of place that is innovative and conducive to learning. Richard Florida (2002) in his best seller, The Rise of the Creative Class, notes that creative people are attracted by the qualities of a community, its diversity and lifestyle, while this in turn attracts enterprise, the reverse of the traditional direction. What’s there (that is, the natural and built environment), who’s there (that is, the diverse kinds of people) and what’s going on there (that is, the vibrancy of activities) are what attract these individuals. Creative places provide an integrated eco-system where all forms of creativity, artistic and cultural, technological and economic, can take root and flourish. The analytical approach to evaluating transport and land-use decisions needs to reflect this changed aspiration. We need to update our conventional cost-benefit analysis that is based on measuring the monetary cost of commuters travelling to remote offices and factories at peak commuting hours and attempting to shorten this journey time.

Place is becoming the central organising dimension for the new economy and society. Unlike earlier approaches to planning where reducing the cost of business or grouping companies in industrial estates away from central urban areas were seen as the way to stimulate development, attraction of human capital to special places is what increasingly ensures competitiveness. Clusters of related activities that take advantage of local knowledge, relationships and motivation are of particular benefit and it is these that offer competitive advantages in the global economy. Places that in future can reach out to, attract and keep as community members the most creative people and organisations will have the highest quality of life. These places will be multi-culturally diverse, sustainable and unique.

Some conclusions
Decisions in relation to infrastructure can define the communities we will live in for generations to come. It is important that major decisions in relation to transport are not made in isolation from policies about land-use and without a vision of the urban space we hope to create.

Ireland’s recent prosperity has resulted in an increase in employment and population that could not have been imagined as recently as the early 1990s. The increased prosperity has created the need for rapid development of infrastructure but it has also allowed us to afford the large capital investment in rail systems that will last for generations. In the Dublin area, some communities have experienced urban sprawl and high traffic congestion while some other communities have benefited from a high capacity rail system. These offer alternative models of how our urban areas can develop.

Conventional economic analysis focuses on factors that are amenable to monetary valuation and does indeed assist policy-makers to assess how value for money can be achieved when choosing between alternative investments that are similar in nature. However, investment decisions that have such a profound impact on the quality of life for current and future generations should not be based solely on factors that can be estimated in money terms.

The appropriate choices of mobility and the pattern of urban development depend on our vision of the communities we aspire to live in and see prosper. Contemporary concern about the environment and quality of life encourages us to consider what pattern of community development is sustainable and what land-use and transport policies support such development. A community that nurtures creativity is likely to be based on local relationships and not one characterised by commuting long distances for employment, education and recreation. Our decision-making methodology needs to reflect the changing aspirations for these communities. It is indeed an exciting challenge.

Frank Allen is Chief Executive of the Railway Procurement Agency, which is the infrastructure provider for Luas. Finbarr Bradley is a visiting professor at the UCD Smurfit School of Business.

Bibliography
Florida, R. (2002) The Rise of the Creative Class (New York: Basic Books).

Goodbody (2005) Transport Project Appraisal Manual (Dublin: Goodbody Economic Consultants in Association with Atkins and Mazars).

Jacobs, J. (1961) The Death and Life of Great American Cities (New York: Vintage Books/Random House).

Krugman, P. (1996) Pop Internationalisation (London: MIT Press).

National Economic and Social Council (2005) NESC Strategy 2006: People, Productivity & Purpose (Dublin: NESC).

(co-written with James J. Kennelly): ‘Ireland in the New Century: An Opportunity to Foster an Ethic of Sustainable Enterprise’, Sustainable Development, John Wiley & Sons, 13, 2005, pp. 91-101.

James J. Kennelly (Skidmore College, USA) and Finbarr Bradley (National University of Ireland, Maynooth, Ireland)

ABSTRACT
Ireland’s economy has undergone enormous change over the past decade, with rapid development accompanied by increasing pressures upon the natural environment. One element of this process has been the development of an ‘enterprise culture’ within Ireland. In this paper, we argue that Ireland is uniquely advantaged to build upon this enterprise culture, and to develop a ‘sustainable enterprise culture’ that is more consistent with the principles of sustainable development. Indeed, we see this as a unique opportunity to further the development of Ireland in an economically, ecologically and socially sustainable manner. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.

A sustainable society is one that can persist over generations, one that is far-seeing enough, flexible enough, and wise enough not to undermine either its physical or its social systems of support (Meadows et al., 1992, p. 209).

Introduction
DEVELOPED ECONOMIES HAVE TYPICALLY GONE THROUGH RELATIVELY PREDICTABLE STAGES: FROM agrarian societies, through industrialization and eventually on to service and ‘knowledge-based’ economies. The Republic of Ireland, however, is an exception.¹ From a largely pastoral society that seemed stuck in the 19th century until nearly the end of the 20th, Ireland only recently emerged ‘overnight’ as a full-fledged post-industrial, knowledge economy. In doing so it earned the sobriquet of ‘The Celtic Tiger’, and was looked upon as a salutary example of a successful national development strategy based upon full and open participation in global markets. Yet Ireland remains ‘the European country that has been the biggest beneficiary of globalisation and the one that is most ambivalent about those benefits’ (Friedman, 2001, p. A23).

The reasons for Ireland’s rapid (although long-delayed) economic development remain the focus of considerable study (Clinch et al., 2002; Mac Sharry and White, 2000; O’Hearn, 2000; O’Higgins, 2002; Sweeney, 1998), as scholars scour the Irish wirtschaftswunder for lessons. Certainly there is no lack of
purported success factors. A sampling includes economic liberalism (O’Hearn, 2000), tightened public finances, substantial inflow of foreign direct investment, social partnership (wage restraint tied to payroll tax reductions), EU structural fund transfers for infrastructure projects, a highly skilled and modestly paid labour force and, finally, a general embrace of the dictates of global competition. Indeed, the Financial Times (9 January 2002) rated Ireland as the most ‘globalized’ nation in the world. Yet, amidst this heady success, concerns have arisen that such rapid economic development has had negative impacts upon the natural environment, social equity and community and traditional values. Indeed, to some critics, globalization, and by extension much of the recent thrust of Irish development efforts, runs clearly counter to the dictates of sustainable development.

Does this stage of Irish economic development represent but the first step of a sequence that will insure sustainable prosperity for the Irish nation, and the final realization of the finest aspirations of the founders of the Irish State? Or is it, to paraphrase Yeats, a ‘rough beast’ destined to gut the nation of its natural and social capital, even while it embeds Ireland ever more deeply in the global economy? Promoters and critics have dramatically different views. This paper attempts a balanced assessment of the recent Irish development experience, using as a lens the principles of sustainable development. We believe that the recent experience of Ireland can serve to highlight a unique set of national characteristics that may prove to be an ideal laboratory in which to test sustainable development. In the first part of the paper, we briefly examine the Irish development experience since independence in 1922, through the long decades of economic failure, and into the dizzying success of the past decade and a half. We then assess the mixed evidence regarding the effect of Ireland’s economic success upon the nation socially, culturally and environmentally. Finally, we introduce the argument that Ireland, by virtue of its particular demographics, history, development trajectory, current focus on ‘enterprise culture’, and singularly effective ‘branding’ as a ‘green’ society, is possessed of a unique opportunity to foster an ethic of both biophysical and social (as well as economic) sustainability.

Economic Development in Ireland

Traditionally, Ireland was a pastoral economy, exporting live cattle and dairy products such as butter to its primary trading partner, England, even after independence in 1921. But with the accession of the Fianna Fáil Party to power in 1932, Ireland embarked upon a very different, and enduring, development track, embracing a policy of protectionism and hostility to foreign direct investment (FDI). Ireland, of course, was not alone in this; most countries adopted such policies, to ride out the global depression. Yet in Ireland, this policy endured long after most other countries had discarded it.

There were reasons for this. One was that the government was in the midst of nation building (Lee, 1989), attempting to build an Irish nation into a modern, but distinctly Irish, state. This ‘vision’ of Irish nationhood, with its notions of ‘frugal self-sufficiency’, was prominently displayed in Eamon de Valera’s often-quoted St. Patrick’s Day radio address to the nation in 1943:²

That Ireland which we dreamed of would be the home of a people who valued material wealth only as the basis for right living, of a people who were satisfied with frugal comfort and devoted their lives to the things of the spirit - a land whose countryside would be bright with cosy homesteads, whose fields and villages would be joyous with the sounds of industry, with the romping of sturdy children, the contests of athletic youths and the laughter of comely maidens, whose firesides would be forums for the wisdom of serene old age (de Valera, quoted by Lee, 1999, p. 71).

Although the term ‘sustainable development’ had been yet to be coined, the vision seems quite consistent with it. Unfortunately, as Lee (1989) rightly notes, while de Valera had a vision, he had not a clue how to achieve it. Protectionism did not work, growth was anaemic and Ireland sank deeper into economic stagnation. This economic malaise carried over into other dimensions of national life: emigration, a symbol of national disgrace and hopelessness, continued to run high, and even cultural life was moribund, with the best and brightest in the creative arts going into self-imposed exile, or reduced to fighting censorship at home.

This vision of an Irish nation, speaking the Irish language, politically and economically independent and accepting a ‘frugal self-sufficiency’, was not, in spite of modern notions of economic man, a necessarily unattractive one; it was apparently shared by most Irish people (Lee, 1989). Unfortunately, the policies put in place to achieve it simply did not work. Finally, in the early 1960s, the government did an about face. The dismantling of trade barriers began, FDI was not only permitted but even aggressively courted and the nation gradually began to find its economic legs. This period culminated in 1973 with Ireland’s entry into the EEC, a move that changed Ireland’s economic fate profoundly, and for the better.

Although Ireland had now turned its economic face outward, it was not immune from the complications of participation in the global economy. At various points in the late 1970s into the 1980s, Ireland faced default on its loans, a staggering public debt and public spending that was out of control. There was considerable talk of an IMF bailout, with its attendant, and unpleasant, financial medicine and social side-effects. It was at this time that Irish political parties achieved the unexpected. Working together, they agreed upon a joint programme to get public finances back on track, cut spending, reduce taxes and control (wage) inflation through ‘social partnership’. Many observers credit this unprecedented partnership, born perhaps of desperation, with the genesis of the ‘Celtic Tiger’ economy. Combined with other attributes such as Ireland’s well educated, technically skilled, English-speaking and relatively low-priced workforce, and its advantaged location as an export platform for shipments to other EU countries, this contributed to a surprisingly rapid turnabout in Irish economic fortunes.³ Ireland successfully ‘reinvented’ itself. From an economy with ‘the statistics of a third-world country’ (Mac Sharry and White, 2000, p. 356), Ireland had by the new millennium developed into the fastest growing developed economy in the world.

Economic success was nothing short of phenomenal, with evidence of vigorous growth everywhere. GDP grew at double-digit rates, unemployment declined, new housing completions and the number of registered vehicles doubled, there was a large trade surplus, tax revenues swelled the government’s coffers, living standards improved and the national mood evolved into one of affluence and prosperity. Even in 2003, as the Irish economy slowed after the collapse of the hi-tech sector (to which the Irish economy is strongly exposed) and the trauma of 9/11, the economy appeared surprisingly robust. Certainly, after the boom of the past decade, anything short of a complete bust might be considered a success.

‘Enterprise Culture’ or ‘Sustainable Enterprise’ in Ireland?

The mounting evidence of rapid economic development also highlighted a fundamental shift in the economic, social and physical landscape of Ireland. Some suggest that the psychic landscape underwent a similar shift. Ireland today claims to have an ‘enterprise culture’, characterized by entrepreneurship and national competitiveness, and with imagination, courage and self-confidence as key components.

Yet, many observers have drawn attention to major institutional deficiencies in Ireland that prevent the creation of an enterprise culture that is truly sustainable. Keating and Desmond (1993) see this as due to the inadequacies of the cultural values of its entrepreneurial establishment. Lee (1989, p. 635) points to the lack of institutional structures to foster integrated thinking. As he puts it, ‘fragmentation of mind is potentially even more damaging than fragmentation of function’ and ‘is particularly subversive of the national interest in a small retarded country’.

Indeed, what is lacking in Irish enterprise culture, but would probably characterize an appropriate national framework for development, is the sort of integrated thinking characteristic of most definitions of sustainable development. Gladwin et al. described sustainable development as ‘biospherically compatible and socially equitable improvement in the quality of life. The three components of this definition are inextricably connected, as none of them is attainable in the absence of the other two’ (1995b, p. 36). This broader and more inclusive notion of development, that encompasses environmental, social and community, as well as economic dimensions, is or should be a hallmark of a sustainable enterprise culture. Gladwin et al. (1995a) further suggest that a new, integrative paradigm is needed to generate sustainability in practice. Indeed, sustainability represents a fundamentally different way of envisioning human progress. It shifts human values and visions and societal rules from economic efficiency toward social equity, from individual rights to collective responsibilities, from separation to interdependence, from exclusion to equality of opportunity, from luxury to necessity, from short-term to longer-term thinking and from growth that benefits a few to genuine human development that benefits all. To believe that sustainability of this sort can be achieved by mere tinkering at the margins of public policy strains credulity. It will require a far deeper and more radical process of moral transformation.

Much of the public debate in Ireland on what constitutes an enterprise culture lacks this broader conception of sustainability. The chief executive of Enterprise Ireland, the agency charged with promoting enterprise, asserts in the work of Curran and Hayes (1998), for instance, that ‘creating wealth is what entrepreneurship is all about’. Yet entrepreneurship is increasingly seen internationally as a broader concept, which attempts to integrate the economic, environmental and social impacts of business decisions. The key future challenge will be to grow enterprises to enhance all three simultaneously. A sustainable enterprise culture will try, for instance, to encourage business to maximize eco-friendly resource productivity, by doing more and better with less, or redesigning products and services on industrial ecology models that mimic biological behaviour in order to produce zero waste. Sustainable innovations and the companies that nurture them will increasingly reflect not balance in economic, social and environmental dimensions but integration so that the design of products and services can achieve all three together. As Nattrass and Altomare (1999) illustrate through the operations of a company such as Ikea, successful, dynamic and leading edge companies will incorporate a new type of whole system perspective to improve the triple bottom line, their so-called profits, people and planet.

In the 21st century, the sustainable or evolutionary corporation will engage in the design of products, services, processes and systems to create a future that includes prosperity and the healthy co-evolution of human and natural systems. Research shows that highly innovative countries tend to give a priority to sustainability. Moreover, enterprising capacities that far transcend traditional concerns with narrow, short-term profit maximization will offer great opportunities. 21st century entrepreneurship would extend into community work and care, urban renewal programmes, heritage activities and social and cultural activities in the widest sense. The National Centre for Social Entrepreneurs in the US and the School for Social Entrepreneurs in the UK are exciting examples in this regard and offer templates of great value to a country such as Ireland.

There are signs of hope, nevertheless, especially in the realization by mainstream economists in Ireland of the need to increasingly address environmental concerns. Clinch et al. (2002), for instance, identify policies that will help Ireland achieve an acceptable rate of economic growth consistent with optimizing quality of life. McCoy and Scott (2002) focus on how market-based policies such as eco-taxes on pollution, subsidies for environmentally beneficial activities and tradable permits can limit the damaging effects on natural systems of the negative externalities of unfettered operation of the market. We believe a true enterprise culture can only properly take place in Ireland within a framework that draws equally heavily on the country’s historical and social context. A vital relationship with the past, genuine self-confidence and openness to other cultures are necessary. Such a philosophy is resolutely modern, outward looking and committed to excellence. What is needed is a coherent ethos based on identity within a multi-cultural European context. This spirit is best captured in the word ‘venture’, derived from the French word ‘adventure’, which in its original meaning implied autonomy, risk, discipline and a sense of adventure. This integrating vision is essential to foster a sense of national creativity or, to use its contemporary equivalent, entrepreneurship.

Environmental Performance in Ireland: Mixed Evidence

Cad a dhéanfaimid feasta gan adhmad?
Tá deireadh na gcoillte ar lár
Now what will we do for timber?
With the last of the woods laid low . . .
(Trans. Thomas Kinsella)⁴

The evidence regarding Irish environmental performance is, at best, mixed. Environmental issues often seem to be at the periphery of societal and commercial concerns. The prevailing environmental mindcast suggests that environmental protection is an ‘either/or’ proposition . . . a false dichotomy between further economic growth and better protection of the environment. Nevertheless, the government has unreservedly endorsed the ideal of sustainability in order

to insure that economy and society in Ireland can develop to their full potential within a well-protected environment, without compromising the quality of that environment, and with responsibility towards present and future generations and the wider international community (Department of the Environment, 1997, p. 25).

The Taoiseach (Prime Minister) noted that sustainable development is ‘fundamental to my vision of this country moving ahead, providing a high quality of life in a dynamic economy’ (in McDonald, 2002b). Regarding global warming, Ireland is a signatory to Agenda 21, and has recently ratified, along with other EU member states, its commitments under the Kyoto Protocol. Under the agreement, the U agreed collectively to reduce its emissions of greenhouse gases by 8% by 2012 (compared to 1990 levels).

As part of this, Ireland is permitted to increase its emissions by some 13% over the same period. There have been more tangible successes as well. There has been a dramatic improvement in Dublin’s air quality due to a shift from coal to natural gas and an aggressive and successful policy of banning the marketing, sale and distribution of bituminous coal. Damage from silage spills has been reduced so that the ubiquitous fish kills associated with highly toxic silage are now largely a thing of the past, due to an information campaign and grants for proper silage storage.

The development of the Irish Environmental Protection Agency (EPA) must also be considered a success, given its well staffed organization, suitable legislative mandate, budget and clear brief. Even though industrial output has increased substantially during the boom, there have been substantial reductions in most emissions for those companies brought under the EPA’s Integrated Pollution Control Licensing system. Other initiatives include increasing insulation standards for new home construction, a programme to develop alternative energy sources such as offshore wind farms, labelling of new automobiles for fuel economy and CO2 emissions and development of exclusive lanes for buses and bicycles (McDonald, 2002a). Many of these, however, may reflect a ‘catch-up’ approach to what other developed economies have done long ago.

The Green Party in Ireland has shown surprising strength with voters, having increased its representation in the Irish Dáil (Parliament) from two to six seats, making it the fourth largest party in the Dáil. Its proposal to establish a Department of Sustainable Development, and its manifesto, which is ‘genuinely infused with the principles of quality of life, sustainability and environmentalism’ (An Taisce, from McDonald, 2002c, p. 9), are important reminders that there is a core of support for dramatic environmental efforts in Ireland.

An Bord Pleanála, the National Planning Board, has had a ‘perceptible shift … towards sustainable development’ (McDonald, 2002e, p. 4), against the interests of ‘Ireland, Inc.’. It has consistently taken a ‘tough’ line on one-off housing (the building of single family, unattached homes in rural areas), even refusing permission for the President of Ireland to build a lakeside house in County Roscommon! Despite these positive signs, the preponderance of evidence is more troubling. Although both environmental data, and associated metrics for their analyses, have rightly been described as being in an ‘impoverished state’ (World Economic Forum, 2002), early attempts at empirical analyses of legitimate, detailed and comparable environmental and social data are beginning to bear fruit. The Environmental Sustainability Index (or ESI, developed by researchers at Yale and Columbia Universities, in association with the World Economic Forum) reflects an effort to measure progress toward achieving environmental sustainability on the part of some 142 countries around the world. The ESI tracks some 20 ‘indicators’ of environmental sustainability, each of which is built upon a number of variables, utilizing some 68 different data sets.5 The ESI attempts to measure the relative success of nations in achieving sustainability in five primary categories:

• environmental systems (Ireland is ranked 37th in the world)
• reducing environmental stresses (ranked 135th in the world)
• reducing human vulnerability (ranked 13th in the world)
• social and institutional capacity (ranked 17th in the world)
• global stewardship (ranked 91st in the world).

Although the researchers quite explicitly state that ‘no country can be said to be on a sustainable environmental path’ (World Economic Form, 2002, p. 1), cross-national comparisons may offer policy makers food for thought as they contemplate their progress, or lack of it, regarding long-term sustainable development. Although Ireland’s performance on these indicators is hardly the worst, at (overall) 37th out of the group of 142 countries, it offers scant grounds for satisfaction. The ratings, in fact, are sobering. Although Ireland rated highly in certain categories, such as ‘social and institutional capacity’ (reflecting the well developed programmes, processes and capabilities embedded in its social and economic institutions) and ‘reducing human vulnerability’ (reflecting its economic growth and new affluence), its rating on ‘reducing environmental stresses’ reflects Ireland’s current challenge to sustainability.

Ireland has had the (somewhat dubious) advantage of having a very, very late start on stressing its natural environment. This, coupled with its still low population density, has allowed some time, some slack, between the onset of increased pressures on the environment and the more obvious manifestations of their negative impacts on the natural environment. Nevertheless, the signs are growing.

Overall air quality throughout the country has deteriorated, even though from 1990 to 1998 the rate of deterioration was less than the rate of GDP growth. Housing and transportation issues continue to bedevil the nation. There have been substantial increases in traffic congestion and housing prices, so that between 1990 and 1998, while GDP increased by 61% and the volume of industrial production more than doubled, vehicle numbers increased by 50% and house prices doubled. The Irish have gone ‘roads-mad and seem prepared to spend hundreds of millions of euro indulging in this communal insanity’ (McDonald, 2002d). The pace has been frenetic, and the lack of planning abysmal. The tendency has been to provide additional capacity to foster additional development and suburbanization. When compared with the EU average, an unusually high percentage of Ireland’s rivers, 67% in 1997, can be classified as unpolluted. This, however, reflects a decrease from 77% in 1990. The general issue of waste management has taken centre stage, with rapid growth in all categories and the quantity of waste increasing in line with GDP growth. Ireland has become a consumer culture, and the maladies associated with it are coming home to roost.

Ireland’s National Development Plan 2000-2006 (NDP) (Department of Finance, 2000) is the official blueprint for public policy during a seven-year planning period mandated by the EU, and reflects the priorities of the nation in further developing all aspects of its infrastructure: from roads, to education, to transport. The current NDP is consistent with trends in Irish public policy, which are driven by the goal of achieving efficiency dictated by market needs and tempering this through public controls to persuade people to behave properly. Privatizing state enterprises, championing individualism and stimulating the dominance of an entrepreneurial culture in the country while setting up a comprehensive regulatory structure to oversee players in this competitive environment are key elements of the policy. In its essence, the NDP reflects a development strategy driven primarily by self-interest, dependent upon laws to guide behaviour and various legal remedies to punish wrongdoing. It reflects widespread faith in the ‘importance of a long-term, consistent strategy for economic development’ (Cassidy, 2001), and the belief that the country’s recent economic successes can be largely ‘traced back to the adoption in the 1950s and 1960s of an outward-looking development strategy appropriate for a small open economy’ (Cassidy, 2001, p. 2).

The NDP itself is set within the context of a relatively rosy economic picture. Ireland’s economy appears poised, at least over the medium term, to continue to outperform many of its EU neighbours. Over £40 billion (in 1999 prices, reflecting a rise of 27% over the previous 5 years) of public, EU and private funds will be spent over the period 2000-2006 to implement what the plan assesses first and foremost as ‘the development needs of the country’. The predominant idea is that if macroeconomic stability can be maintained, infrastructure development substantially completed and national productivity increased, Ireland will have ‘arrived’ at a place from which it will have the relative leisure to address other non-economic issues. As Cassidy (2001, p. 2) states, ‘If the economy can enhance and produce close to its productive potential, the opportunity will present itself to address the distributional and ‘quality of life’ concerns which have emerged as a by-product of the recent rapid period of growth’. This ought to raise questions. Foremost among them: need social and environmental issues wait? Are they to be addressed as an afterthought, or a nuisance? Are social and environmental issues to be treated as disconnected from the economic policies of the country? Will they be attended to as part of a sequential, trickle-down process? A review of the NDP offers no grounds for optimism. Indeed, social and environmental issues proceed at a pace of their own, and will not so neatly wait their turn. The Heritage Council, for example, has estimated that there is currently in Ireland an unprecedented rate of destruction of archaeological monuments, with a staggering 10% of all such monuments being destroyed each decade.

Given the rapid economic growth in Ireland over the past decade, emissions of greenhouse gases in Ireland have already increased by 24% over 1990 levels, and seem poised to increase even further (McDonald, 2002a). In order to meet its commitments under the Kyoto Protocol, and its EU ‘burdensharing’ agreement, Ireland will now need to actually reduce its greenhouse emissions over the next decade if it is to meet its target of 8% over 1990 levels (McDonald, 2002a). It is difficult to see how this will be accomplished, given current circumstances. ‘On a per capita basis, Ireland’s emissions are outstripped only by those of the US, Canada and Australia’ (McDonald, 2002d, p. 14) and ‘we are in the worst position as regards climate change and energy dependency of all EU countries’ (McDonald, 2002a, p. 6).

If one accepts the views of An Taisce (the National Trust for Ireland), there is little cause for celebration with regard to the environmental policies of the primary political parties in Ireland. An Taisce calls them, for the most part, ‘apple pie’. ‘If ‘commitments’ are so nebulous in the manifestos, how much less stringent are they likely to be when watered down in the practical politics of the legislative process and the vagaries of our lackadaisical national enforcement ethos’ (An Taisce, 2002, in McDonald, 2002c). Emer O’Siochru, Chairwoman of the Dublin Agenda 21 committee, says ‘Our country has got less sustainable if you consider poor water quality, loss of fertile earth, the carbon gas emissions and unsustainable building patterns. We have ignored the Kyoto agreements and the Government won’t do anything to protect the environment if it impedes economic growth. The Government says that Comhar (The National Sustainable Development Partnership) is their answer . . . but it is just a talking shop, well away from where the real action is’ (Thompson, 2002, p. 56). Only one thing is certain: the stresses on Ireland’s natural environment, and on its social cohesion, are going to grow.

Ireland’s Unique Opportunity

The Celtic Tyger is a flaming beast, a mystery spirit that could charge this land with new vitality while not destroying its priceless past. But it is not just an economic spirit. It signals a profound change of lifestyle and values. And it’s not only full of promise, it’s loaded with dangers. It’s a profound mystery that can’t be understood fully or directed and controlled - all the more reason to approach it with caution and respect, not with hubris and naïve optimism (Moore, 2001).

Over 100 years ago, Horace Plunkett and other leaders of the co-operative movement in Ireland used the slogan ‘better farming, better business, better living’ to inspire farmers to join together for their common interest. It is an anthem that even today might be used to wave the flag of sustainability. Less crisply, Hawkens et al. (1999) have written that

Today, the central issues for thoughtful and successful industries - the two being increasingly identical - relate not to how best to produce goods and services needed for a satisfying life - that’s now pretty well worked out - but rather to what is worth producing, what will make us better human beings, how can we stop trying to meet non-material needs by material means, and how much is enough … for now and all time to come that there is no true separation between how we support life economically and ecologically.

Ireland, we contend, possesses a unique opportunity to move from an ‘enterprise culture’ to a ‘sustainable enterprise culture’, and to reframe the terms, understanding and achievement of sustainable development in that country. We base this upon Ireland’s historical and present day advantages: its current economic success and financial resources; its small, homogeneous, well educated and relatively enlightened population; its strong sense of national identity evidenced in its history, culture, language and heritage; its unparalleled association with the colour ‘green’ and its reputation as a bucolic land of ‘40 shades of green’, and the beneficial ‘country of origin’ effects that may proceed from that, and finally the fact that Ireland’s current enterprise culture itself, if reframed and expanded, provides an ideal platform from which to achieve a more environmentally, socially and economically sustainable quality of life for the Irish people. We discuss these advantages as follows:

Favourable Economic Conditions

Given the continuing, and surprising, robustness of the Irish economy, one may ask ‘If not now, when?’. Ireland is no longer a third-world country. Even though the ‘Celtic Tiger’ economy may be over, an apparent ‘soft landing’ has been achieved. Long-term investments in sustainability may be politically easier to achieve in an atmosphere where financial exigencies are less extreme.

Favourable Demographics

It bears remembering that Ireland is a small, island nation, with a population of just less than 3.9 million. The population (even with recent inward immigration) is homogeneous, well educated and increasingly liberal in its orientation, and at least sensitive to environmental and community, as well as economic, issues.

National Identity as Competitive Advantage

Even as it joins ever more fully the global economy, there are still few countries on which the hand of history lays so heavy on the land. For instance, the view, articulated by de Valera in his dream speech and shared by most of the founders of the modern Irish state, of an Ireland of ‘frugal self-sufficiency’ could have been an (admittedly hazy) depiction of what a ‘sustainable’ Irish nation might look like! One must wonder if somewhere at the core of an Irish national identity, this abstract, dreamy vision of an Ireland of small homesteads, indigenous industry and concerns for other than the material still lingers.

The ‘Emerald Isle’ Effect

If any nation can lay claim to the colour ‘green’, it is Ireland. The nation has a huge incentive to preserve its ‘brand equity’ and maintain the image of Ireland as a green, bucolic land. Certainly, an Ireland that preserves its ecological endowment maintains its critically important tourism industry. This ‘green’ and ‘clean’ image also affects Ireland’s important food industry, as it strives to sell in international markets (Clinch, 2001).

Enterprise Culture

Ireland’s current notion of a dynamic ‘enterprise culture’, if expanded and reframed, is quite compatible with a ’sustainable enterprise culture’. Entrepreneurship in the face of a multitude of environmental opportunities may help build a national prosperity that is wealth enhancing, equitable, ecologically sensible and sustainable.

Internal Demands

Ireland’s recent economic fortunes are strongly linked to the highly skilled and specialized, and often rare, talent that drives the high-tech sector (IT and financial services). To such workers, ‘quality of life’ issues may loom large. As noted by Clinch (2001, p. 6), ‘as societies get richer, it is precisely the “nonmarket” aspects of life that become increasingly valued’. Ireland’s increasingly skilled workforce
demands, and expects, a very high quality of life. Sustainable development, itself, is about enhancing
just this quality of life.

External Demands

Ireland is compelled to respond to various EU directives, and has signed the Kyoto Accord on greenhouse gases, and the Gothenberg Protocol on emissions of sulphur dioxide, nitrogen oxides and ammonia. As Clinch (2001) notes, ‘environmental policy in Ireland is driven mainly by international agreements on global warming and acid precursors, and by European Union legislation across a range of imperatives, from emissions, quality of waste water to conservation of habitats of European significance’ (p. 45).

Summary

The Irish nation appears well positioned to take serious steps along the road towards a truly sustainable economy and society. As a ‘late bloomer’ (economically), Ireland has been spared the worst excesses of industrial development, and has leap-frogged into its present knowledge-based prosperity. The recent experience of Ireland serves to highlight a unique set of national characteristics that may prove to be an ideal laboratory in which to test sustainable development. With a reframed and expanded understanding of a sustainable enterprise culture, fully adapted to an Irish context, and an eye to its own history, culture and ethos, the nation has been presented with what may be a formidable opportunity. As a small nation with a homogeneous and well educated population, relative prosperity, a founding vision not inconsistent with modern notions of sustainable development, a ‘green’ heritage and various internal and external pressures that argue for environmental responsibility and sustainability, there may indeed be no better opportunity anywhere. Ireland, by virtue of its own peculiar national attributes, is possessed of a unique opportunity to foster an ethic of biophysical and social (as well as economic) sustainability.

¹ We refer, throughout this paper, to the 26 counties of the Republic of Ireland rather than to the entire island of Ireland. The six counties that constitute Northern Ireland are a part of the United Kingdom.
² de Valera dominated Irish politics for most of Ireland’s first 50 years as a nation, first as a leader of the Irish War of Independence, then as politician, Prime Minister and finally President.
³ Not everyone, however, agrees with the usual explanations. Ó Gráda (2002), for instance, suspects that many of these reasons have been ‘oversold’ and exaggerated, and that the Celtic Tiger period will be ‘remembered mainly as the interlude when Ireland made up all the ground it had lost and became a ‘normal’ European economy’.
^;4 These lines are prominently displayed, and indeed have supplied the name, for the Irish environmental organization, Feasta.

References

Cassidy M. 2001. The Irish economy: recent experience and prospects. Paper presented at the Martindale Conference on International Business and Finance Ireland - Open for Business, 2001.
Clinch JP. 2001. Reconciling Rapid Economic Growth and Environmental Sustainability in Ireland, The Statistical and Social Inquiry Society of Ireland, Barrington Medal Lecture, 2001.
Clinch P, Convery F, Walsh B. 2002. After the Celtic Tiger: Challenges Ahead. O’Brien: Dublin; 14.
Curran R, Hayes D. 1998. Ireland’s Entrepreneurial Elite. Blackhall: Dublin.
Department of the Environment. 1997. Sustainable Development: a Strategy for Ireland. Government Publications: Dublin; 25.
Department of Finance. 2000. National Development Plan. Government Publications: Dublin.
Friedman TL. 2001. The Lexus and the shamrock. The New York Times 3 August: A23.
Gladwin TN, Kennelly JJ, Krause T. 1995a. Shifting paradigms for sustainable development: implications for management theory and research. Academy of Management Review 20(4): 874-907.
Gladwin TN, Krause T, Kennelly JJ. 1995b. Beyond eco-efficiency: towards socially sustainable business. Sustainable Development 3(1): 35-43.
Hawken P, Lovins AB, Lovins LH. 1999. Natural Capitalism: the Next Industrial Revolution. Earthscan: London.
Keating P, Desmond D. 1993. Culture and Capitalism in Contemporary Ireland. Avebury: Aldershot.
Lee JJ. 1989. Ireland 1912-1985: Politics and Society. Cambridge University Press: Cambridge.
Lee JJ. 1999. A sense of place in the Celtic Tiger? In Are We Forgetting Something? Bohan H, Kennedy G (eds). Veritas: Dublin; 71-93.
Mac Sharry R, White PA. 2000. The Making of the Celtic Tiger: the Inside Story of Ireland’s Boom Economy. Mercier: Cork; 356.
McCoy D, Scott S (eds). 2002. Green and Bear It? Implementing Market-Based Policies for Ireland’s Environment. Economic and Social Research Institute: Dublin.
McDonald F. 2002a. Ireland ratifies Kyoto treaty on climate change. The Irish Times 1 June: 6.
McDonald F. 2002b. Ahern outlines ‘vision’ for future of State. The Irish Times 29 May: 3.
McDonald F. 2002c. ‘Apple pie’ hopes flavour policies on environment. The Irish Times 16 May: 9.
McDonald F. 2002d. Transport planning is on the road to nowhere. The Irish Times 18 April: 14.
McDonald F. 2002e. Board’s 25 years of planning judgments. The Irish Times 19 March: 4.
Meadows DH, Meadows DL, Randers J. 1992. Beyond the Limits: Confronting Global Collapse - Envisioning a Sustainable Future. Chelsea Green: Post Mills, VT; 209.
Moore T. 2001. In the eye of the Tyger. The Irish Times 28 July: 60.
Nattrass B, Altomare M. 1999. The Natural Step for Business: Wealth, Ecology and the Evolutionary Corporation. New Society: Gabriola Island, BC.
Ó Gráda C. 2002. Is the Celtic Tiger a paper tiger? Quarterly Economic Commentary Spring: 51-62.
O’Hearn D. 2000. Globalization, ‘new tigers,’ and the end of the developmental state? The case of the celtic tiger. Politics and Society 28(1): 67-93.
O’Higgins E. 2002. Government and the creation of the Celtic Tiger: can management maintain the momentum? Academy of Management Executive 16(3): 104-121.
Sweeney P. 1998. The Celtic Tiger: Ireland’s Economic Miracle Explained. Oak Tree: Dublin.
Thompson S. 2002. Can’t we do better? The Irish Times 6 April: 56.
World Economic Forum. 2002. 2002 Environmental Sustainability Index: an Initiative of the Global Leaders of Tomorrow Environment Task Force, World Economic Forum. World Economic Forum: Geneva.

Biography

James J. Kennelly (corresponding author) is based at the Department of Management and Business,
Skidmore College, 815 North Broadway, Saratoga Springs, NY 12866, USA.
Tel.: +1 518-580-5108
Fax: +1 518-580-5118
E-mail: jkennell@skidmore.edu

Finbarr Bradley is based at the Department of Economics, National University of Ireland, Maynooth,
Co. Kildare, Ireland.
Tel.: +353-1-7084569
Fax: +353-1-7083934
E-mail: finbarr.bradley@may.ie

(co-written with James J. Kennelly): ‘Ireland’s New Century: The Opportunity for an Alternative Vision of Development’, Radharc, A Journal of Irish Studies, Glucksman Ireland House, NYU, 4, 2003.

The Celtic Tyger is a flaming beast, a mystery spirit that could charge this land with new vitality while not destroying its priceless past. But it is not just an economic spirit. It signals a profound change of lifestyle and values. And it’s not only full of promise; it’s loaded with dangers. (Moore, 2001)

Introduction
One hundred years ago this year, Sir Horace Plunkett generated a storm of controversy in Ireland when his book, ‘Ireland in the New Century’, was published (Plunkett, 1904). The book called on Irish Catholics to overcome their “defects”, including a lack of moral courage, initiative, independence and self-reliance, and through their own efforts to foster economic development and progress in the country. He pleaded with them to work together with Irish Protestants for the common good, to jointly go about the work of national regeneration, and for what he called the “dawn of the practical” in Ireland. This pursuit of economic interests would pull them together, and overshadow and eventually make irrelevant differences in creed, station and politics.

When Plunkett published his book, it was an uncommonly hopeful time in the history of the nation. It was the era of the Irish Renaissance, a time of re-discovery and re-creation. The Gaelic League was at its zenith, having successfully campaigned to make the Irish language a compulsory subject at the National University of Ireland. Yeats had discovered Celtic mythology and history, sent John Millington Singe “to the west” to learn the authentic language of the people, and with Lady Gregory was preparing to embark upon a national theatre with the opening of the Abbey Theatre in Dublin.

Plunkett himself was a most unlikely revolutionary. He was a member of the Anglo-Irish aristocracy, Protestant, Unionist, an MP, the founder and first Secretary of the Department of Agriculture, a card-carrying capitalist and finally, the father of the co-operative movement in Ireland. For his pains, the press and the church excoriated Plunkett for his views on Irish development. In the wake of the tumult that the book generated, he compromised the success of the co-operative movement, and eventually lost his leadership of the Department of Agriculture and Technical Instruction. Yet, it could be argued that what Plunkett advocated, namely economic development as human development, powered by the initiative of the people, while admittedly taking a long time to achieve, was realised in the period of unprecedented growth and outward prosperity generated by the recent “Celtic Tiger” era in Ireland.

We maintain in this paper, however, that a truly sustainable enterprise society has not yet been achieved in Ireland. The country has certainly caught up with the rest of Europe measured in purely economic terms. However, alongside the enormous positive consequences, there are significant negative implications of the Irish approach to development. We argue that Post-Tiger Ireland is at a crossroads, possessing without doubt the capabilities and means to make good on the vision of Horace Plunkett. The fundamental question for policy-makers, however, is whether they have the vision to move the country from promoting growth to focusing on the sustainable management of Ireland’s human and non-human resources. The country possesses a unique opportunity to follow a development path consistent with its identity, heritage, aspirations and the capabilities of its people. It would therefore be truly a tragedy if its leaders failed to now grasp the opportunity to guide it to realise its true potential.

Ireland (1922-1960): Vision without Capability
Parnell came down the road, he said to a cheering man:
‘Ireland shall get her freedom and you still break stone.’
(Yeats, 1938)

Traditionally, Ireland was a pastoral economy, exporting live cattle and dairy products, primarily butter, to its primary trading partner, England. After nearly eight hundred years of English domination, Ireland remained economically dependent on its former master long after political independence in 1921. Although Ireland remained a basically laissez-faire, free-trade oriented economy for the first decade after independence, the combination of the global depression and the accession of the Fianna Fáil Party to power in 1932 put Ireland on a very different development track. Fianna Fáil’s vision of economic development was, in light of subsequent developments, most interesting. Given the party’s domination of government for the next fifty years, it was also an enduring one. It embraced a policy of protective tariffs to foster indigenous industry, permitted only minority foreign ownership of direct investments, and was dependent upon small Irish farmers (many of them at close to subsistence levels) for a substantial portion of its political support. Ireland, of course, was not alone in pursuing such a policy; most countries adopted similar approaches, at least defensively, in order to ride out the global depression. It is clear now, however, that the widespread adoption of such protectionist policies, widened, deepened and lengthened the Great Depression itself, while also having disastrous consequences for Ireland.

Although its economic policies were confused, there was little doubt of the guiding vision of the first Dáil, the Free State and then the Republic of Ireland. This “vision” of Irish nationhood, with its notions of “frugal self-sufficiency”, was prominently displayed in Éamon de Valera’s often-quoted St. Patrick’s Day radio address to the nation in 1943¹ :

That Ireland which we dreamed of would be the home of a people who valued material wealth only as the basis for right living, of a people who were satisfied with frugal comfort and devoted their lives to the things of the spirit - a land whose countryside would be bright with cosy homesteads, whose fields and villages would be joyous with the sounds of industry, with the romping of sturdy children, the contests of athletic youths and the laughter of comely maidens, whose firesides would be forums for the wisdom of serene old age.
(Quoted in Lee, 1999)

This vision of an Irish-speaking, nation, politically and economically independent, rejecting a narrow materialism and contented with a “frugal self-sufficiency” was not, in spite of modern notions of economic man, a necessarily unattractive one; it was apparently shared by most Irish people. Unfortunately, the policies put in place to achieve it simply did not work. The result was decades of a moribund economy, chronic unemployment, and the shame of the emigrant boat, that social relief valve endorsed by none but accepted, seemingly, as inevitable by all.

It was the capability to enact that grand vision that was lacking. As pointed out by Daly, the government, in the early years of the Free State, was awash in the task of “nation-building”.

The fledgling Irish state therefore inherited a confused baggage of ideals: a desire to protect rural society and its values and to stabilize the rural population; a vision of industrial development minus the evils of capitalism, materialism, and urbanization; a desire to redress previous disadvantages suffered by Irish businesses; an expectation of material progress without state welfare provisions; the restoration of the Irish language and culture. (Daly, 1992)

This task, to build an Irish nation into a modern state, from an Irish people emerging from nearly eight centuries of political domination and not even a dim memory of nationhood, was no small challenge. However, as Joe Lee (1989) has pointed out, de Valera had scarcely a clue as to how to achieve it. The policy of industrialisation behind high trade barriers did not work, growth was anaemic, and Ireland sank deeper into economic malaise. This stagnation carried over into other dimensions of national life: emigration, a symbol of national disgrace and hopelessness, reinforced a profound sense of national inferiority, a tolerance for mediocrity, an acceptance of shoddiness, and a fatalism that would hardly spark an economic resurgence. Lee (1989) writes, “it is difficult to avoid the conclusion that Irish economic performance has been the least impressive in Western Europe, perhaps in all Europe, in the twentieth century. It must count as one of most striking records in modern European economic history.” Even cultural life was tainted, with the adventurous, the best and brightest in the creative arts going into self-imposed exile, or reduced to incessant fighting with the censors at home. Although the Irish market was too small to support industries of any economically efficient size or scope, a drive to promote industrialisation was the order of the day. Busteed described the challenge as follows,

. . . a nation condemned to peasant specialisation in farming is doomed to be a nation of hewers of wood and drawers of water . . . Ireland’s hope then rests in making the greatest possible effort and in carrying the heaviest possible burden to promote industrialisation. (Busteed, 1930, p. 188)

The burden, however, was even heavier than many were prepared to, or able to, pay. The Irish continued to vote with their feet.

Ireland Today: Capability without Vision
In the early 1960’s, under the leadership of Sean Lemass, who had ironically been the architect of much of the now discredited protectionist legislation, Ireland began to open the door economically. Tariffs and other trade barriers were reduced, foreign direct investment (FDI) was not only allowed but also aggressively courted, and the country gradually began to find its economic legs. This period culminated in 1973 with Ireland’s entry into the EEC, a move that changed Ireland’s economic fate profoundly, and without a doubt for the better.

Although Ireland had now turned its economic face outward, it was scarcely immune from the vagaries of the global economy. Ireland contended with a variety of crises throughout the 1970’s and 1980’s, including near default on its loans, a staggering burden of public debt, and out of control government spending. It was at this time that Irish political parties achieved the unexpected. Working together, they agreed upon a joint programme to get public finances back on track, cut spending, reduce taxes, and control (wage) inflation through “social partnership”. This unprecedented partnership is credited by many with setting the foundation for the “Celtic Tiger” economy of the second half of the 1990’s. Combined with Ireland’s well educated, technically skilled, English speaking, and relatively low-priced workforce, and its advantaged location as an export platform for shipments to other EU countries, these contributed to a surprisingly rapid turnabout in Irish economic fortunes. Ireland was “reinvented”. It was no longer an economy with “the statistics of a third-world country” (MacSharry & White, 2000). By 2000, it had developed into the fastest growing developed economy in the world.

Evidence of vigorous growth was everywhere. GDP grew at double-digit rates, unemployment declined to the lowest point ever recorded, new housing completions and the number of registered vehicles doubled, there was a considerable trade surplus, tax revenues swelled the government’s coffers, living standards improved, and the national mood evolved into one of affluence and prosperity. The mounting evidence illustrated a fundamental shift in the economic, social and physical landscape of Ireland. The psychic landscape underwent a similar shift.

Although the reasons for Ireland’s rapid (although long-delayed) economic development remain the focus of considerable study (for instance, O’Hearn, 2000; O’Higgins, 2002; Sweeney, 1998), there is no lack of purported success factors. As the old saw goes, ’success has many fathers, while failure is an orphan’. A sampling of possibilities includes economic liberalism, tightened public finances, substantial inflow of foreign direct investment, social partnership (wage restraint tied to payroll tax reductions), EU structural fund transfers, a highly-skilled and modestly paid labour force and, finally, a general embrace of the dictates of global competition. The ultimate result is in no doubt: the Financial Times (January 9, 2002) recently rated Ireland as the most “globalised” nation in the world.

Dark Side to the Tiger
Yet, amidst this heady success, concerns have arisen that such rapid economic development has had negative impacts upon social equity, a sense of community, traditional values and the natural environment. Indeed, to some critics, globalisation, and by extension much of the recent thrust of Irish development efforts, runs counter to the dictates of sustainable development. Even as the “Celtic Tiger” grew at an unparalleled rate, the numbers of those living at the margins of society continued to increase, and the stresses upon Ireland’s natural environment wreaked enormous damage. In the face of such aberrations, the very nature of progress and the value systems inherent in Irish society are increasingly called into question (Kirby 1997). Many wonder in fact whether the particular type of development policies pursued by successive governments, will lead to equality and sustainable prosperity appropriate for the country. Such thinking is consistent with a deepening realisation internationally that high GDP growth, and the accelerating social and environmental impacts associated with it, is not necessarily matched by a proportional improvement in the human condition (Bronk, 1998). Indeed, to some sceptics, measures of GDP are only one dimension, reflecting “hard” measures of quantity over “softer” measures of quality. GDP, after all, includes the depletion of the natural resource base as an income item, ignores questions of distribution, excludes all non-monetary exchanges, and counts social and environmental calamities (pollution cleanup, costs of dysfunctional families and communities, prisons and law enforcement, etc.) as legitimate products that, summed together, provide a ‘quality of life’ metric. Yet, to critics such as Daly & Cobb (1994), Douthwaite (1992), Robertson (1999) and Schumacher (1993), GDP may be as reflective of what is lost by a community as of what is gained.

Environmental issues seem to be at the periphery of Irish policy-makers’ concerns. The prevailing mind cast suggests that environmental protection is an “either/or” proposition . . . a false dichotomy between further economic growth and better protection of the environment. The Environmental Sustainability Index, (or ESI, developed by researchers at Yale and Columbia Universities, in association with the World Economic Forum) reflects an effort to measure progress toward achieving environmental sustainability on the part of some 142 countries around the world. The ESI tracks some 20 “indicators” of environmental sustainability, each of which is built upon a number of variables, utilising some 68 different data sets. The ESI attempts to measure the relative success of nations in achieving sustainability in five primary categories:

• Environmental Systems (Ireland is ranked 37th in the world.)
• Reducing Environmental Stresses (Ranked 135 in the world.)
• Reducing Human Vulnerability (Ranked 13th in the world.)
• Social and Institutional Capacity (Ranked 17th in the world.)
• Global Stewardship (Ranked 91st in the world.)

Although Ireland’s performance on these indicators is hardly the worst, at (overall) 37th of the group of 142 countries, it offers scant grounds for satisfaction. Overall air quality throughout the country continues to get worse. There have been substantial increases in traffic congestion, and housing prices, so that between 1990 and 1998, while GDP increased by 61% and the volume of industrial production more than doubled, vehicle numbers increased by 50% and house prices doubled. The Irish have gone “roads-mad and seem prepared to spend hundreds of millions of euro indulging in this communal insanity” (McDonald, 2002). The pace has been frenetic, and the lack of planning abysmal. The tendency has been to provide additional capacity to foster additional development and sub urbanisation. When compared to the EU average, an unusually high percentage of Ireland’s rivers, 67% in 1997, can be classified as unpolluted and there has also been a rapid growth in all categories of waste.

Ireland’s National Development Plan: 2000-2006 (NDP), the official blueprint for public policy during a 7-year planning period mandated by the EU, reflects the priorities of the nation in further developing its infrastructure such as roads, education and transport. The current NDP is consistent with trends in Irish public policy, which are driven by the goal of achieving efficiency dictated by market needs and tempering this through public controls to persuade people to behave properly. Privatising state enterprises, championing individualism and stimulating the dominance of an entrepreneurial culture in the country while setting up a comprehensive regulatory structure to oversee players in this competitive environment are key elements of this approach. In essence, the development strategy is driven primarily by self-interest, dependent upon laws to guide behaviour and various legal remedies to punish wrongdoing.

The NDP is set within the context of a relatively rosy economic picture. Ireland’s economy appears poised, at least over the medium term, to continue to outperform many of its EU neighbours. Over £40 billion (in 1999 prices, reflecting a rise of 27% over the previous 5 years) of public, EU and private funds will be spent over the period 2000-2006 to implement what the Plan assesses first and foremost as “the development needs of the country”. The predominant idea is that if macroeconomic stability can be maintained, infrastructure development substantially completed, and national productivity increased, Ireland will have ‘arrived’ at a place from which it will have the relative leisure to address other non-economic issues. As Cassidy (2001) states, “If the economy can enhance and produce close to its productive potential, the opportunity will present itself to address the distributional and ‘quality of life’ concerns which have emerged as a by-product of the recent rapid period of growth”. This ought to raise questions. Foremost among them: Need social and environmental issues wait? Are they to be addressed as an afterthought, or a nuisance? Are social and environmental issues to be treated as disconnected from the economic policies of the country? Will they be attended to as part of a sequential, trickle-down process? A review of the NDP offers no grounds for optimism. Indeed, social and environmental issues proceed at a pace of their own, and will not so neatly wait their turn. The Heritage Council, for example, estimated that there is presently in Ireland an unprecedented rate of destruction of archaeological monuments, with a staggering 10% of all such monuments being destroyed each decade (Irish Times, April 27, 2000). One thing is certain: the stresses on Ireland’s natural environment, and on its social cohesion, will continue to worsen.

Sustainable Development
Gladwin, Kennelly & Krause (1995) define sustainable development as “biospherically compatible and socially equitable improvement in the quality of life. The three components of this definition are inextricably connected, as none of them is attainable in the absence of the other two”. This broader and more inclusive notion of development, that encompasses environmental, social and community, as well as economic dimensions, is or should be a hallmark of a sustainable enterprise culture. They further suggest that a new, integrative paradigm is needed to generate sustainability in practice. Indeed, sustainability represents a fundamentally different way of envisioning human progress. It shifts human values and visions and societal rules from economic efficiency toward social equity, from individual rights to collective responsibilities, from separation to interdependence, from exclusion to equality of opportunity, from luxury to necessity, from short-term to longer-term thinking, and from growth that benefits a few to genuine human development that benefits all. To believe that sustainability of this sort can be achieved in Ireland by mere tinkering at the margins of public policy strains credulity. It will require a far deeper and more radical process of moral transformation.

Much of the public debate in Ireland on what constitutes an enterprise culture lacks this conception of sustainability. Entrepreneurship is increasingly seen internationally in a broad conceptual manner, attempting to integrate the economic, environmental and social impacts of business decisions. The key future challenge will be to grow enterprises that enhance all three elements simultaneously. A sustainable enterprise culture will try, for instance, to encourage business to maximise eco-friendly resource productivity, by doing more and better with less, or redesigning products and services on industrial ecology models that mimic biological behaviour in order to produce zero waste. Sustainable innovations and the companies that nurture them will increasingly reflect not balance in economic, social and environmental dimensions but integration so the design of products and services can achieve all three together. In the 21st century, the sustainable or evolutionary corporation will engage in the design of products, services, processes, and systems to create a future that includes prosperity and the healthy co-evolution of human and natural systems. Research shows that highly innovative countries tend to give a priority to sustainability. Moreover, enterprising capacities that far transcend traditional concerns with narrow, short-term profit maximisation will offer great opportunities to those who respond to the challenge. 21st century entrepreneurship will extend into community work and care, urban renewal programmes, heritage activities and social and cultural activities in the widest sense. This is Ireland’s great opportunity to rethink its present approach to development.

Hopeful Signs
There are signs of hope, especially in the realisation by mainstream economists in Ireland of the need to increasingly address environmental concerns. Clinch, Convery and Walsh (2002), for instance, identify policies that will help Ireland achieve an acceptable rate of economic growth consistent with optimising quality of life. McCoy and Scott (2002) focus on how market-based policies such as eco-taxes on pollution, subsidies for environmentally beneficial activities and tradable permits can limit the damaging effects on natural systems of the negative externalities of unfettered operation of the market.

Ireland is a signatory to Agenda 21, and has recently ratified, along with other EU member-states, its commitments under the Kyoto Protocol on Global Warming,. Under the agreement, the EU agreed collectively to reduce its emissions of greenhouse gases by 8% by 2012 (compared to 1990 levels). As part of this, Ireland is permitted to increase its emissions by some 13% over the same period.

There have been more tangible successes as well. There has been a dramatic improvement in Dublin’s air quality due to a shift from coal to natural gas and an aggressive and successful policy of banning the marketing, sale and distribution of bituminous coal. Damage from silage spills has been reduced so that the ubiquitous fish kills associated with highly toxic silage are now largely a thing of the past, due to an information campaign and grants for proper silage storage. International observers hail Ireland’s recent introduction of a tax on plastic bags as a prime example of the way to use monetary incentives to cut back on consumer waste.

The development of the Irish Environmental Protection Agency (EPA) must also be considered a success, given its well-staffed organisation, suitable legislative mandate, budget and clear brief. Even though industrial output has increased substantially during the boom, there have been substantial reductions in most emissions for those companies brought under the EPA’s Integrated Pollution Control Licensing system. Other initiatives include increasing insulation standards for new home construction, a programme to develop alternative energy sources such as offshore wind farms, labelling of new automobiles for fuel economy and CO2 emissions, and development of exclusive lanes for buses and bicycles. Many of these, however, may reflect a “catch up” approach to what other developed economies have done long ago.

The Historic Opportunity
Ireland, we contend, possesses a unique opportunity to reframe the terms, understanding, and achievement of sustainable development. We base this upon Ireland’s historical and present day advantages: its current economic success, its small, well-educated and relatively enlightened population; its strong sense of national identity evidenced in its history, culture, language, heritage and reputation as a bucolic land of “40 shades of green”. Ireland’s current enterprise culture itself, if reframed and expanded, provides an ideal platform from which to achieve a more environmentally, socially, and economically sustainable quality of life for the population.

Even as it joins ever more fully the global economy, there are still few countries on which the hand of history lays so heavy on the land. The view articulated by de Valera in his dream speech and shared by most of the founders of the modern Irish state, of an Ireland of “frugal self-sufficiency” could be interpreted as a depiction of what a sustainable Irish nation might look like. One wonders if somewhere at the core of an Irish national identity, this abstract dreamy vision of an Ireland of small homesteads, indigenous industry, and concerns for other than the material, still lingers.

Ireland’s current notion of a dynamic enterprise culture, if expanded and reframed, is quite compatible with a sustainable enterprise culture. Entrepreneurship in the face of a multitude of environmental opportunities may help build a national prosperity that is wealth enhancing, equitable and ecologically sensible. The country’s recent economic fortunes are strongly linked to the highly skilled and specialised, and often rare, talent that drives the high-tech sector (IT and financial services). To such workers, ‘quality of life’ issues loom large. As noted by Power (1999) and Clinch (2001), as societies get richer, it is precisely the ‘non-market’ aspects of life that become increasingly valued. Ireland’s increasingly skilled workforce demands, and expects, a very high quality of life. Sustainable development, itself, is about enhancing just such a quality ethic.

The Irish nation appears well positioned to take serious steps along the road towards a truly sustainable economy and society. As a “late bloomer” (economically), Ireland has been spared the worst excesses of industrial development, and has leap-frogged into its present knowledge-based prosperity. With a reframed and expanded understanding of a sustainable enterprise culture, fully adapted to an Irish context, and an eye to its own history, values, and ethos, the nation has been presented with what may be a formidable opportunity. As a small nation with a relatively homogeneous and well-educated population, relative prosperity, a founding vision not inconsistent with modern notions of sustainable development, a “green” heritage, and various internal and external pressures that argue for environmental responsibility and sustainability, there may indeed be no better opportunity anywhere. Ireland, by virtue of its own peculiar national attributes, is possessed of a unique opportunity to foster an ethic of biophysical and social (as well as economic) sustainability.

Over one hundred years ago, Horace Plunkett and other leaders of the co-operative movement in Ireland used the slogan “better farming, better business, better living” to inspire farmers to join together for their common interest. It is an anthem that even today might be used to wave the flag of sustainability. Thomas Cahill in his book, ‘How the Irish Saved Civilisation’ (Cahill, 1995) illustrated how Ireland, standing at the periphery of Europe, over a thousand years ago collected and preserved the wisdom and culture of the known world, bringing it back to a dark continent. Can Ireland again be a light for a dark age? We believe so. The country has the opportunity to marry the practical idealism of Plunkett, the vision of de Valera and the pragmatism of Lemass to the significant capabilities it now possesses. Our hope is that the “Irish Renaissance” of a hundred years ago can still be echoed in the new millennium.

Published in Radharc/A Journal of Irish Studies, Glucksman Ireland House, NYU, Vol. 4, 2003

References

Bronk, R. 1998. Progress and the Invisible Hand. London: Little, Brown & Company.

Busteed, 1930???????

Cahill, T. 1995. How the Irish Saved Civilisation. London: Hodder & Stoughton.

Cassidy, M. 2001. The Irish economy: Recent experience and prospects. Paper presented at the Martindale Conference on International Business and Finance: Ireland-Open for Business, March 7-9, 2001.

Clinch, J.P. 2001, Reconciling Rapid Economic Growth and Environmental Sustainability in Ireland. The Statistical and Social Inquiry Society of Ireland, Barrington Medal Lecture, May 2001.

Clinch, P., Convery, F. & Walsh, B. 2002. After the Celtic Tiger: Challenges Ahead. Dublin: The O’Brien Press, p. 14.

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¹ deValera dominated Irish politics for most of Ireland’s first 50 years as a nation, first as a leader of the Irish War of Independence, then as politician, Prime Minister, and finally President.
² Not everyone, however, agrees with the usual explanations. Ó Gráda (2002), for instance, suspects that many of these reasons have been “oversold” and exaggerated, and that the Celtic Tiger period will be “remembered mainly as the interlude when Ireland made up all the ground it had lost and became a ‘normal’ European economy”.
³ The ESI publishes all the underlying data upon which the variables are based, an exercise in transparency intended to allow for necessary critical review.

A Liberal Education Fosters a True Enterprise Culture

Finbarr Bradley & James Kennelly

The recently published Report of the Enterprise Strategy Group asserts that the quality of education will determine Ireland’s success in advancing its enterprise policy. Yet the Report’s recommendations concerning education are noteworthy for their narrowness. In a section entitled “Skills, Education and Training” (the order of words is surely intended), the Group articulates a view of the higher-education sector that is “adaptive and responsive” to ensure that skills are “developed in time, in sufficient quantity and to the required quality.” This seems like an efficient production process, but does not sound like education, particularly the education required for Ireland’s knowledge economy. It is also likely to be counterproductive.

It is clear to us, as educators linked to enterprise on both sides of the Atlantic, that the integration of transaction-based global markets with commercial relationships founded on integrity and trust is leading increasingly to the need for individuals equipped with different competencies and skills. Intangible assets such as ideas, emotions, a sense of place and community will determine successful ventures. Emphasis will shift from the purchase of goods to the delivery of services, stressing the continuous receipt of quality and performance. Executives of the future must learn to discern patterns, understand relationships among complex phenomena, recognize connections and, above all, think in multidimensional terms.

We suggest a radical approach to nurture Irish enterprise: increased emphasis on the old-fashioned model of a liberal education! What are the hallmarks of a liberal education? They include analytical thinking, comprehending and embracing complexity, effective communication skills, cross-cultural sensitivity and room for the imaginative play of one’s intellectual faculties. A liberal education is consummately interdisciplinary, problems are approached in new and exciting ways, and solutions are creative, innovative, and unexpected. To develop an enterprise spirit, students should be exposed to innovative artists such as poets and musicians as much as to scientists and engineers.

The Enterprise Strategy Group is correct: education is the key. But it is education in the broad sense, not a narrow view of specialised training in a functional field that will create the entrepreneurial, imaginative and risk-taking global managers that Irish enterprise sorely needs.

The most successful organizations in the future will be those that can balance financial goals with social and environmental responsibilities. The absence from the Report of the enormous potential of environmental-driven ventures is not surprising. It indicates a mindset that sees expenditure on the environment, be it pollution abatement, waste reduction or habitat protection, as a cost rather than an investment. It is little wonder the Report fails to see any commercial opportunities within the area of sustainable development, now widely recognised as the single largest commercial opportunity the world will ever know.

This comes to the heart of the true role of education in enterprise creation. A key recommendation in the Report is that “the enterprise sector should play an increased role in the governing bodies of higher education institutions.” The inference is that the presence of business professionals, and indeed the imperatives of business, will mete out to the stuffy world of higher education a well-needed kick that will encourage it to ‘train’ more, better and more ‘useful’ graduates. The Report, however, fails to recognize where the real challenge in enterprise education lies. This is to insure that the soul of an educational institution is founded on values and value creation in the broadest meaning of these terms. Nurturing the spirit of social entrepreneurship, in this respect, will make as powerful and effective a contribution to Irish society as its commercially driven counterpart. Institutions that clearly articulate a socially desirable mission and deliver this through appropriate structures will supply graduates with the requisite enterprise education and skills.

Over a century ago, the Irish Renaissance bred a new pride in national heritage, literature and language. It is no surprise that it also possessed an alternative vision of Irish development. A core element of this vision, articulated by Horace Plunkett in the co-operative movement and Douglas Hyde in the Gaelic League, was that the Irish nation, through a determined policy of self-help and a regeneration of the national character, needed to take primary responsibility for its own economic performance. This stood in stark contrast to the more orthodox idea that Ireland need only fit itself into the commercial empire of Great Britain. Today, in the midst of a commercially driven Irish Renaissance, one might legitimately ask if it is possible to foster a place in the global economy in a manner most appropriate for Irish society.

Prof. Finbarr Bradley is a faculty member of the Economics Department at NUI Maynooth and Prof. James Kennelly is Chairman of the Management & Business Department at Skidmore College, Saratoga Springs, New York.

The State is shortly to be provided with a unique opportunity, writes Prof Finbarr Bradley and Prof James J. Kennelly.

In a review of industrial policy to be published shortly, the Tánaiste’s Enterprise Strategy Group will reportedly advocate radical approaches to stimulating an innovative culture in this country.
Changes will be recommended in the allocation of grant aid to encourage Irish firms to conduct research, innovate and advance along the value chain.

Measured in purely economic terms, Ireland has by now not only caught up with but also surpassed much of the rest of Europe. Yet most Irish accept that the past approach to development has had negative implications for social equity, community, so called “traditional values” and the natural environment. The dominant logic appears to be that if the economy can produce close to its full productive capacity and the country’s infrastructure is sufficiently upgraded, the opportunity to address distributional and quality-of-life concerns will present itself. Ireland will have “arrived” at a place from which it will have the leisure to address non-economic issues. This ought to raise questions. Foremost among them, do social and environmental issues need to wait?

Are they merely an afterthought, or a nuisance, to be treated as disconnected from the economic policies of the country? Will they be attended to only as part of a sequential, trickle-down process? The best-known measure of economic output, Gross Domestic Product or GDP, does not measure the quality of our lives. There is a deepening realisation internationally that high GDP growth, and its accelerating social and environmental by-products, are rarely matched by a proportional improvement in human well-being.

GDP, after all, includes natural resource depletion as an income item, ignores questions of distribution, excludes all non-monetary exchanges, and counts social and environmental calamities (pollution clean-up, costs of dysfunctional families and communities, law enforcement, etc) as legitimate products.

This country’s economic fortunes are strongly linked to the highly-skilled, specialised, and often rare talent that drives the high value-added tech sector.

To such workers, quality-of-life issues loom large. As societies get richer, it is precisely the “non-market” aspects of life that are valued. Ireland’s increasingly skilled workforce demands, and expects, a very high quality of life. Sustainable development is about enhancing just such a quality ethic. Issues like carbon taxes, renewable energy, waste charges, recycling, climate change, water quality and transport policy feature in much of the debate both here and overseas about ways to enhance quality-of-life.

Companies that nurture sustainable innovations engage in the design of products, services, processes, and systems to create a future that includes the healthy co-evolution of human and natural systems.
Sustainable entrepreneurship is an attempt to integrate the economic, environmental and social impacts of business decisions, and the real growth opportunities in the future will exist for enterprises that enhance all three elements simultaneously.

Highly innovative countries such as Finland and Denmark tend to give a high priority to sustainability as a guiding theme. Such an enterprise culture encourages businesses to maximise eco-friendly resource productivity, do more and better with less, and redesign products and services on industrial ecology models that mimic biological behaviour in order to produce zero waste.

Enterprising capacities that far transcend traditional concerns with narrow, short-term profit maximisation will offer exceptional opportunities to those who respond to the challenge.

21st-century entrepreneurship, in the widest sense, will extend into community work and care, urban renewal programmes, heritage activities and social and cultural activities.

Agriculture and rural development in Ireland will depend on entrepreneurial ventures producing not only a range of high-quality food products but also a broad range of “green services” like valuable landscapes and rural amenities.

Entrepreneurship in the face of a multitude of environmental opportunities can help build a national prosperity that is wealth enhancing, socially equitable and ecologically sensible. We are well positioned to take serious steps along the road towards a truly sustainable economy and society. As a “late bloomer” economically, the country has been spared the worst excesses of industrial development, and has leap-frogged into its present knowledge-based prosperity. With a reframed and expanded understanding of development and enterprise culture, fully adapted to an Irish context, we have been presented with a formidable opportunity.

This country possesses a unique opportunity to follow a development path consistent with the identity, heritage, aspirations and capabilities of its people. The question is whether we have the vision, and the will, to move from promoting a narrow concept of growth and enterprise to focusing on the sustainable management of Ireland’s human and non-human resources. Failure to grasp this distinctive opportunity would truly be a tragedy.

Prof Finbarr Bradley is a faculty member of the Economics Department, NUI Maynooth and Prof James J. Kennelly is chairman of the Management and Business Department at Skidmore College, Saratoga Springs, New York.

© 2004 The Irish Times

 Published in ‘Studies’, Spring 2004

Governance and Policy in Ireland: Essays in honour of Miriam Hederman O’Brien, edited by Donal de Buitleir and Frances Ruane, Dublin: Institute of Public Administration, 2003, pp.177.

This book, containing eleven essays, celebrates Dr. Miriam Hederman O’Brien’s long and distinguished career in public service.  Over the years, she chaired an array of bodies including the Commission on Taxation, the Broadcasting Complaints Commission, the Forum on Youth Homelessness and the Commission on Health Funding.  She also served on public and private boards such as the Irish Centre for European Law, NESC and banking group AIB.  She was Chancellor of the University of Limerick and has been an active promoter of cultural matters in the country. 

The book is divided into two parts and the writers were chosen for their expertise in areas in which Dr. Hederman O’Brien has an interest or made a contribution over the past five decades.  Essays in the first part revolve around the theme of governance and cover topics such as Europe, social partnership, the civil service, freedom of information, the media and judicial review.  The writers are Pat Cox, Peter Cassells, Paul Haran, Dermot Keogh, Peter Feeney and Sir Brian Kerr.  The second part is devoted to public policy areas in which Miriam Hederman O’Brien has made a particular contribution, namely health services, higher education, arts and culture, taxation and homelessness.  The authors in this part are Ruth Barrington, Thomas Mitchell, Patricia Quinn, John Kay and Peter McVerry. 

The book’s strength is that individuals with widely different perspectives analyse topical public policy issues.  An attractive feature is that the essays while forward-looking also take past and present developments into account.  For instance, former ICTU General-Secretary, Peter Cassells, points out that the environment in which social partnership now operates has changed dramatically so the agenda needs to adapt and expand.  Paul Haran, Secretary-General of the Department of Enterprise, Trade and Employment, suggests that while the forces of change are reducing the scope of public administration, they are paradoxically increasing the relative importance of the public service in improving national welfare.  Peter Feeney of RTE argues that the huge readership share held by non-Irish newspapers limits political communication while Ruth Barrington of the Health Research Board examines serious shortcomings in the governance of the health services and suggests various means of improvement.

The breadth of topics covered in the book illustrates Miriam Hederman O’Brien’s involvement in many fields.  The editors maintain that they deliberately set out not to assess the quality of her contribution or perspectives on issues.  This may be the book’s shortcoming.  It might have added more to its primary objective of contributing to contemporary discourse and future policy if the honoree, or some other individual, had responded briefly to each essay.  This way, further analysis could have been developed or ideas challenged, thereby enriching the debate and clarifying issues for the reader. 

The views offered, for instance, by Professor Thomas Mitchell, former Provost of Trinity College Dublin and now Academic Chairman of private online third-level education provider, Hibernia College, is a case in point.  Dr. Mitchell believes that in their teaching role Irish universities should change to meet the challenge of private sector providers.  Yet, he appears to see no need for innovative responses in the arena of basic research.  He asserts that the State achieves the best result by locating research in stand-alone university centers.  It could be argued that Ireland, because of its small size, should not attempt to build up a capability in basic research within a single university except in a few niche specialisms.  To stimulate research in other areas, State support might be conditional on universities developing mechanisms to avoid duplication, and to encourage richer inter-institutional links and new forms of partnership between industry and third level institutions.

A book that contains essays with titles as diverse as ‘Citizenship and the Irish Freedom of Information Revolution’, ‘Homelessness and Exclusion’ and ‘Whither the Arts Council?’ would benefit if all its strands were brought together.  A concluding section written by Dr. Hederman O’Brien might perhaps have given the reader a sense of what motivates her to become involved in diverse projects.  A common thread appears to be the relationships between money, values and quality of life.  Patricia Quinn, for instance, sees the Arts Council as having a value-adding role in society while Peter McVerry focuses on the fundamental value society itself should place on the individual.  The hardest part of being homeless, he says, is living every moment with the knowledge that you are not considered valuable: “To be considered of so little value is to have your dignity undermined or taken away”. 

At a time when tribunals reveal many episodes of public and private corruption in Irish life, it is refreshing that this book with its emphasis on values is published to honor a prominent individual.  This is a testimony to Dr. Hederman O’Brien’s tireless contribution to the common good.   

Finbarr Bradley

People Power?  The Role of the Voluntary and Community Sector in the Northern Ireland Conflict, by Feargal Cochrane and Seamus Dunn; Cork: Cork University Press, 2002, pp.194.

Civil society displays fundamentally different characteristics in a divided rather than united community, yet still has enormous potential to affect the quality of everyday life.  Much has been written about the political negotiations that led to the 1998 Good Friday Agreement in Northern Ireland but less attention has been paid to the involvement of community workers and non-governmental peace/conflict-resolution organisations (P/CROs).  Following in the tradition of Fionnuala O’Connor’s landmark contribution, In Search of a State: Catholics in Northern Ireland (1993), Cochrane and Dunn’s research operates at the so-called track-two level highlighting the distinct contribution voluntary action can make to effect change but away from television cameras and newspapers.

The research, part of the International Study of Peace Organizations project funded by the Aspen Institute in Washington DC, examined organisations in areas of emerging peace processes.  The authors were responsible for the Northern Ireland element which also involved similar studies of South Africa and Israel/Palestine and a brief comparative perspective is also provided.  It appears that the sector in Northern Ireland was not as effective in driving political change as in South Africa but played a more central role than in Israel/Palestine.  The different context, resources and levels of trust between the conflicting parties are crucial in this regard. 

Ten community development organisations were selected for analysis based on criteria such as orientation, structure, size and location.  Some P/CROs approach their work on a cross-community basis, others have an inter-community orientation while single-identity groups confine themselves to one community.  The thought-provoking profiles of activists illustrate motivations ranging from religious beliefs for those in Quaker House, gender interests for those in Women Together for Peace and single-issues such as preventing punishment attacks for those in FAIT.  The research shows that the common understanding and approach that bring people together initially do not always survive the intensity of debate and activism to achieve the organisation’s goals.  For example, The Peace Train formed in response to continual IRA blowing up of the Belfast/Dublin railway line, ironically suffered ‘more difficulty managing conflict within the organization than in dealing with opposition from the paramilitary groups it was established to confront’. 

An evolution typically takes place which can eliminate the ‘gifted amateurs’ involved initially but with limited time or interest in developing formal structures.  These are replaced by professional administrators often leading to tension with the original founders.  The reader may wonder what exactly constitutes a voluntary organisation when it eventually becomes staffed by paid professionals?   This broader question, which is relevant to any discussion of the voluntary sector’s contribution to effecting change in society, was probably beyond the scope of the current research.

The book offers an excellent and balanced treatment of the political, social, economic and cultural background to the conflict.  Driven by political and cultural grievances since Partition, nationalists developed a far more cohesive sense of community.  Having regarded themselves as socially and culturally superior to their neighbours, the Protestant working class now had to come to terms with a strange and confusing reality.  With an underdeveloped sense of community, it needed to play ‘catch up’ with Catholics and re-evaluate its relationship with the unionist political élite.  

Most P/CROs in Northern Ireland spend significant time and organisational effort in  developing funding opportunities, usually short-term in nature.  This is not an uncommon problem for the voluntary sector in general but certain ethical and credibility dilemmas arise where groups challenging State policies and actions are themselves effectively ‘bank rolled‘ by the State institutions they oppose so vigorously.  Political funding from the International Fund for Ireland (IFI) poses a potential conflict for radical loyalist groups since this could be viewed as an inducement to accept policies with which they disagree.  It would be useful to examine also whether any attempt has been made to link the level of or continuation of funding to the effectiveness of voluntary groups.  Innovative partnerships between the public, private and community/voluntary sectors hold the key to real change in society and it would have been fruitful to explore what new forms of relationships are possible.  The book suggests that the British Government may have been undemanding in terms of assessing the voluntary organisations’ performance and this is probably best understood in the complex political environment in which they all operated. 

The authors argue that measuring the impact of P/CRO groups is extremely difficult in practical terms.  The approach they take is to give a qualitative assessment of their impact over the last thirty years of political conflict.  While there could be an understandable tendency to oversell the importance of the P/CRO sector in driving major political change, it is to the credit of the authors that they do not do so.  While impressed with the drive and commitment of individuals and organisations, they believe the activities of the P/CRO sector were not of fundamental importance to the peace process itself.  Arguing that mere existence of the sector was beneficial epitomizes the ‘woolly liberalism and well-meaning but ultimately ineffectual culture for which the sector has rightly been accused’.  They conclude that the real dynamics behind political process lay not in the ‘good works’ of individuals within the community development sector but in the balance-sheet mentalities of the protagonists to the conflict.  The most important event in this regard  was when the Gerry Adams and the republican leadership decided to reposition Sinn Fein politically.  The pressure applied by the P/CRO sector was at best marginal.  Voluntary work is process-driven rather than outcome-driven and primarily involves consensus-building rather than engineering a particular solution or deal. 

It is clear that the sector has encouraged many individuals, particularly the likes of David Ervine and Billy Hutchinson on the loyalist side, to come out of their communities and actively engage in the political process.  It has played a major role in building dialogue and peace within a deeply divided society and enormous gratitude is due to those people who have devoted time and energies at great personal cost to these endeavours.  This book gives them the attention, respect and credit they rightly deserve.    

Frank Allen & Finbarr Bradley

Published in Special Issue of ‘Studies’, Winter 2002 on ‘Racism & Community’

The Potential of Public-Voluntary Partnerships for the Delivery of Quality Social Services

Frank Allen & Finbarr Bradley

Introduction

A commitment to meaningful partnership between different social groups has become a central plank in Irish public policy and is generally thought to have contributed to greater economic prosperity and a less adversarial approach to achieving shared goals.  Institutional forms of partnership such as in the Partnership for Prosperity and Fairness (PPF) and Public-Private Partnerships (PPPs) are central elements of the National Development Plan 2000-2006.  In these new structures, the definition and scope of social partnership has been extended beyond the traditional wage negotiations among business, trade union and farmer representatives with the Government acting as facilitator.  In particular, the voluntary sector is now officially regarded as one of the key pillars of social partnership, to give voice to the concerns of unemployed, disabled and other disadvantaged citizens. 

While formal recognition of the voluntary sector’s distinctive voice in contributing to public policy is relatively new, the Government’s willingness to delegate responsibility for the delivery of essential social services to voluntary groups is well-established.  It is fair to say that the Government, and indeed society at large, has not adequately remunerated the voluntary sector or worked with it as a partner in striving to attain critical social goals.  With the contribution of the voluntary sector in the policy area now firmly established, it is timely to consider how structures to encourage and reward genuine partnership at the grass-roots level could also be developed. 

In the capital infrastructure area, a consensus has emerged that PPPs are an appropriate mechanism for the delivery of projects that would traditionally be seen as the sole responsibility of the public sector.  Projects are now underway to award long-term concessions to private operators to design, build, and maintain infrastructure projects including schools, roads and waste-water treatment plants.  It is argued that bringing together the state and private parties in formal relationships results in greater innovation in the design of projects, more long-term commitment and greater clarity about the respective roles of the parties paying for and delivering specified services. 

The goals of PPPs in capital infrastructure are no less relevant in delivering ‘soft’ public services such as in health, education and community services.  Voluntary bodies who have long been responsible for meeting some of the most challenging community needs in inner cities may wonder what is new about private agencies designing and implementing projects to meet needs that have not been adequately addressed by the State.  Most voluntary organisations express satisfaction with the level of financial support that the State has provided for projects in recent years but are less pleased with the process involved and with the period of commitment.  Few private sector operators would accept the type of ad hoc arrangements or haphazard evaluation processes the State often subjects volunteer groups to when funds are sought for projects of real public benefit.  Is it time for voluntary bodies to seek a partnership process that adequately compensates them for their contribution and enhances their capability to deliver services in the most professional manner?

The purpose of this article is to argue that voluntary agencies that deliver public services and State agencies that fund them should consider entering into formal agreements similar to those now being negotiated with private parties in the case of capital infrastructure projects.  A clear benefit would accrue from the negotiation process where both parties would be required to clarify their respective goals and responsibilities relating to the contracted services.  During the implementation phase, the voluntary agency could concentrate on providing the service itself and not have to worry about repeated applications for funding subject to the uncertainty of continued support.  From the State’s perspective, it gets a deliverer ‘close to the action’ and a clear benchmark against which the performance of the voluntary agency can be measured.  As long as original commitments are being honoured, the State agency has the assurance that the service is being provided properly over the period of the agreement.  Such Public-Voluntary Partnerships (PVPs), as we label them, would bring the benefits of innovation, flexibility and long-term planning to the voluntary sector widely recognized as beneficial in the provision of capital infrastructure by the private sector.

How PPPs Work

The basic idea behind a PPP is that while the public sector retains ultimate responsibility for providing a service, actual delivery becomes the responsibility of a private party under a long-term agreement or ‘concession’.  The concessionaire builds a project on behalf of the State and is paid by means of performance payments over a lengthy period.  As a result, the emphasis switches to measuring and rewarding superior performance rather than ownership of assets.  As an example, the Department of Education and Science has granted a concession to a company to build five new second-level schools in Dunmanway, Shannon, Clones, Ballincollig and Tubercurry.  The Concessionaire is responsible for designing the school buildings within requirements set out by the Department.  It will then maintain the schools for a 25-year period and be responsible, at its own expense, for maintenance, painting, landscaping and general upkeep.  The Department will retain ownership of the assets at all times and will pay the Concessionaire a semi-annual fee to recover the cost of construction and maintenance over the concession period.  The level of these fees was established by competitive tender in 2000 and will be adjusted only for inflation or if the Department changes the definition of requirements as set out in the concession.  If the schools show physical defects at any stage over 25 years, either because of poor design or inadequate maintenance, the performance fees paid to the Concessionaire will be deducted.  If performance penalties exceed an agreed level, the Department will be free to terminate the contract and seek to replace the concessionaire for the unexpired period of the concession.  This PPP structure creates a clear incentive for the private party to design and maintain the buildings to the highest levels.  It gives the Department assurances about the quality of accommodation over 25 years, for the schools in question.  Lastly, it allows teachers and school management to concentrate on the educational aspects of their work rather than lobbying local politicians to secure funding for replacing broken windows and the like. 

Contrast the clear definition of responsibilities and long-term planning involved with building these five schools through PPP contracts with the more ad hoc arrangements that a voluntary agency is likely to face if it seeks Department of Education support for child-care facilities for refugees and asylum-seekers.  Usually the project would have begun on the voluntary agency’s own initiative and in borrowed premises.  The Department may recognise the promoters’ commitment in initiating a worthwhile project and would be receptive to requests for financial support.  It is likely however that actual commitment of cash support would be on a year-to-year basis and may not be confirmed until very close to the beginning of the school year.  The experience of voluntary agencies is that the decision-making period is not characterised by detailed negotiations about the design of the project resulting in agreement on the specific objectives to be achieved.  On that basis the promoters would have a clear indication of Government policy relating to the area of need and could further develop that or other projects accordingly.  Rather, Government Departments tend to make decisions on when to grant support to a project and wait for another application a year later.  As the agencies are generally pleased to receive the funding and are certainly not asking for Departmental inspectors to come and measure their performance, this system of financing is regarded as acceptable to all parties.  Its limitations are that it does not encourage genuine partnership between public and voluntary parties in designing and implementing projects and it does little to foster best practice in meeting educational and other needs.

The concept of PPPs is relatively new to Ireland but is well developed internationally, particularly in the UK where they have been used longest and where most commentators appear convinced that they represent good value for money and stimulate innovation.  Hundreds of contracts have been signed across a wide range of sectors such as transport, hospitals, prisons, water treatment facilities and schools (Infrastructure Journal, 2000).  Similarly in continental Europe, PPP projects are commonplace.  Examples include a high-speed rail project to connect Amsterdam with Antwerp and a comprehensive road building programme in Portugal.  In Ireland, under the National Development Plan, provision has been made for PPP funding in roads, waste management, public transport and water services.

The perceived benefits of PPPs over traditional procurement approaches are that the private sector guided by the profit motive is more innovative and cost-effective in the provision of public services.  By transferring risk (and correspondingly, reward) to the private sector, PPPs ensure that issues like design and construction will take the ‘whole life’ of the asset into account.  The public gains access to a range of private sector skills that lead to more flexibility, responsibility and higher quality provision of services.  Incentives are created that lead to greater efficiency since payment is tied to performance throughout the life of the contract.

Current Debate on PPPs

There are limitations in the use of PPPs.  For instance, an initial learning curve means that it often takes a long time to establish proper structures and to negotiate individual deals.  PPPs also sometimes fail to deliver value for money since public sector personnel find it difficult to manage and implement the difficult process involved.  This may be because their experience is in defining policy rather than in supervising detailed operations.  Projects in the area of information technology have posed particular problems since it is difficult in the case of unproven technology to write contracts outlining exactly where responsibilities between each party lie.  Even with these limitations, the evidence on PPPs is generally positive and they undoubtedly offer significant potential for the public sector to deliver a range of quality services in innovative, less expensive and more exciting ways.   

The use of the private sector in the delivery of health and education services is now well established in the UK.  The National Health Service (NHS) buys more than £1.2bn of care a year from the private and voluntary sectors (Financial Times, June 26, 2001).  Over twenty local education authorities have contracted out, or are contracting out, their school management services.  To date, however, a distinction has been made between core and ancillary services.  There is, for example, hardly any private sector involvement in school teaching, regarded as a core education activity whereas the education and training of prisoners is allowed since this is viewed as an ancillary activity to the core aim of detaining offenders.  Similarly, while managing hospitals using a PPP structure is common, the UK Government has ruled out allowing the private sector to provide clinical services or employ clinical staff such as doctors and nurses in current plans for privately managed fast-track surgery centres.

This too may be changing although private involvement is moving more rapidly in education than in health services.  An influential UK think-tank, The Institute for Public Policy and Research (IPPR), argues in a recent report that the private sector should be allowed to provide almost any public service from teaching to hospital care (IPPR, 2001).  There is, it says “no coherent rationale“ for the different types of services that are currently provided privately and those regarded as off-limits.  It argues that the government should promote greater diversity of provision, whether by public, private or voluntary deliverers.  This would permit, for instance, one public sector body to sell its skills to another public sector body.  For the voluntary sector, it could mean that the State might commission key social services from sources there rather than provide these services themselves.  In Ireland, the range of areas that PPP projects cover is expanding rapidly.  Initially most were in roads, water treatment and waste management but recent initiatives in the area of education, social and mixed housing development indicate an increased realisation of how a broad range of welfare objectives can be achieved through a PPP approach. 

While the issue of PPPs may occasionally be controversial in the UK, at least it is the subject of debate among the social partners.  There is acceptance that this partnership model makes sense in certain sectors and the issue often boils down to how the rewards and risks should be shared among the parties.  In Ireland this debate has not yet started and the State may be missing exciting opportunities to help it achieve social policy objectives in an effective manner.     

Is the Situation Sustainable?

There are many examples of social services in Ireland, especially in the areas of addiction, homelessness and social deprivation that are being provided by voluntary agencies and religious orders.  The implications for those in need would be catastrophic should the Simon Community, the Society of St. Vincent de Paul and the Salvation Army withdraw from providing accommodation for homeless people.  With a few notable exceptions, work is now being done by paid staff, supplemented by volunteers or with a volunteer board.  Some services are highly dependent on an increasingly aged cohort of individuals in religious orders who attempt to satisfy a patchwork of needs by acting in an unofficial capacity as surrogates of the State.  The current situation may not be sustainable since as membership in these orders declines, they will have to withdraw more and more from the direct provision of these essential services.  This, in fact, has been happening over recent decades as nuns, for instance, enter retirement age. 

We do not intend to imply that there is only a meaningful role for religious or voluntary organisations where there is failure by the State to fulfil its obligations.  In essence, their role is valuable in itself since the dignity of humans is enhanced and the bonds of community strengthened when individuals are willing to contribute to others’ welfare for no monetary reward.  Nor should the approach we take be seen as criticism of the dedication of many public sector employees.  Rather, we believe the roles of the public and voluntary sectors are complementary and that both parties would benefit immeasurably if new forms of partnership were created that would permit a longer term perspective than is the case at present.  

Ultimate responsibility for these services could properly be regarded as resting with the State which has been receiving them ‘on the cheap’ through these intermediaries.  Yet their critical role is rarely recognized in the level and nature of State support.  They lack funding security, relying on voluntary subscriptions and special promotional campaigns to bolster their resources.  Financial allocations by the State are often determined in a manner that relies on the political skills, maneuvering and contacts of the organizations’ executives.  From the State’s perspective, by funding voluntary groups in this way, it does not get the degree of oversight that would be reasonable considering the level of funding provided.  There is seldom a direct link, moreover, between the operations of a voluntary group and the mission of the funding State social services agency.   Rather than seeing voluntary groups as strategic allies or partners in tackling issues of public need, the State itself sometimes duplicates the same service.  A fresh approach to partnership with the voluntary sector could offer an infusion of new blood, perspectives and operating methods.  Public-Voluntary Partnerships or PVPs that draw from experience to-date of PPPs suggest an exciting approach with enormous potential.

Structuring a PVP

PPPs, for provision of physical infrastructure, are designed to encourage innovative design, reward performance according to the results achieved, and adopt a long-term perspective.  All these can best be achieved by private developers striving to earn a long-term return.  PVPs can similarly be structured but in this case to encourage innovative solutions to social problems from people who have most relevant grass-roots experience.  PVPs would recognise the existing long-term commitment to the individuals and communities being served.  The ethos of voluntary agencies is to show dedication to the people being served that goes far beyond what could reasonably be expected from paid employees.  Nevertheless, the conceptual framework underlying PPPs and their development to-date offers a wonderful opportunity to those engaged in social ventures to learn and apply in the case of the embryonic PVP structures.

A good place to explore how PVPs might operate in practice is a report commissioned by the Department of the Environment and Local Government (2000).  This envisages different models of partnership to meet specific needs and contains general guidance with regard to the selection of projects, the management of the process and other actions to facilitate implementation.  It presents a Route Map on the main stages in the development and implementation of a PPP, including project identification, appraisal, management, stakeholder consultation, the tendering process and performance measurement.

This development of a comprehensive set of procedures would provide an ideal learning tool for State agencies contemplating PVPs.  These obviously face a different set of circumstance reflected in their remit, operational needs, public demand and indicators of performance.  A PVP would be founded on the principle that a project consistent with the mission of the State agency be identified and an output specification determined.  Then, to achieve value for money, a competitive process ideally involving a number of voluntary or community groups would set in train.  Some groups might even co-operate, build consortia or involve private sectors partners with special expertise in particular aspects of the work.  Once negotiations are completed and the winning bid is determined, a detailed partnership process would be put in place embedded in a legal contract containing such items as performance indicators and payment terms.  Just as in PPPs, the winning bid may not necessarily be the lowest cost but the proposal that offers the best value in meeting the State’s objectives over the long term.  

The delivery of education and health services to Travellers provide examples of how the above could operate in practice.  The State might set as performance criteria the percentage of Traveller children of a certain age who remain in school, their educational achievement or the reduction in the drop-out rate over a number of years.  For health services, in order to close the gap between the Traveller community and those with a corresponding income in the general community, performance criteria might include the actual take-up as well the quality, geographical spread and range of services provided. 

An explicit link between the amount of funds allocated by the State and quantifiable targets would be set on an ex ante basis.  The contract with the voluntary agency would define the time period for the programme, probably not less than five years, be renewable should certain targets be met but also have scope for termination if minimum objectives are not being achieved.  Along the way, a series of milestones or progress reports would be required so that a sense of working together to achieve shared goals, and indeed the discipline that comes from striving to meet targets, should ensure the programme remains on track.    

The great advantage of the above process, as opposed to the present top-down approach is that it gives both the State and the voluntary group ‘ownership’ which helps build a working partnership that is sensitive to developments on the ground.  Rather than losing touch over time, the voluntary group is likely to maintain a continuing capacity for adjustment, innovation and renewal associated with changes in local demand for its services.      

Implications

The healthy condition of the State’s coffers in recent years meant there has been little concern about the availability of resources for voluntary sector activities.  The real dilemma for those involved in the sector has been that the cash received has been provided on an ad hoc or short-term basis and no long-term planning or agreement of objectives takes place.  In particular, little strategic discussion or analysis has been conducted regarding which tasks are best handled by the State and which should fall within the remit of the voluntary sector. 

The use of PVPs offers hope that the manner in which different aspects of work in the social arena might be conducted in the future will change in fundamental ways.  As the table over illustrates, the proper design of PVPs could lead to the development of clearly defined, agreed and shared policy objectives resulting in a dynamic and performance-related culture in voluntary organizations. 

The absence of a spirit of partnership means that the appropriate discipline that accompanies the setting of joint goals and operating in tandem is often not present.  Moreover, the State as it gets more experience of the PVP model, can use it to tackle the most challenging and resource-hungry social endeavors, such as night shelters catering for chronic drug abusers.  A criticism often levied at voluntary organizations is that they shy away from the most difficult projects, leaving the State ‘carrying the can’.  Under a properly functioning PVP approach, even such ‘hard cases’ can be properly funded leading to the provision of an appropriate level of quality professional services.  

Conclusions 

The common good demands that we find new explanatory models, forms of cooperation, and indeed of language itself, to help build social cohesion in Ireland today (Riordan, 1996).  The reduction in the number of people prepared to devote their time to voluntary and community activities is of real concern.  Yet much of the most exciting research in politics and economics in recent years is based on the realisation that human behaviour is not motivated exclusively by material self-interest.  Charity, altruism and volunteerism testify to the key roles that emotions, trust and commitment play in community life (Frank, 1988 & Ridley, 1997). 

Transparent, competitive and accountable procedures consistent with overall social policy point the way for harnessing the enthusiasm and commitment of volunteers, the pragmatism of the marketplace and the responsibilities of the State in responding to a wide range of social service needs.  There is a need for a new vision of how the State, private and voluntary/community sectors can work together as partners to enhance the concept of civil society in Ireland.  The debate has until now, however, largely taken place at a macro level addressing issues such how social partnership should work or how the benefits of a booming economy can be shared among the different social partners (Reynolds and Healy, 1999).  While discussion on these issues is necessary and invigorating, for those at the coal-face practical innovations that properly finance, regulate and support charities may prove more fruitful. 

The real challenge is to develop appropriate structures such as PVPs to provide guidance to voluntary agencies so they can concentrate on their underlying mission and achieve results.  The State in turn can provide the type of financial incentives and regulatory framework it uses to stimulate private initiative in other activities.  A real opportunity now exists to create in Ireland a spirit of social entrepreneurship and activities as rich and as fruitful to society as is now credited to entrepreneurs engaged in private sector endeavours.  

Frank Allen works in infrastructure finance in the International Financial Services Centre, Dublin and Finbarr Bradley is a former Professor of Finance at Dublin City University (DCU).

References

Department of the Environment & Local Government (2000), ‘A Policy Framework for Public Private Partnerships’, Report by PriceWaterhouseCoopers, 14 April.

Frank, Robert H. (1988), ‘Passion within Reason: The Strategic Role of the Emotions’, W.W. Norton.

Institute for Public Policy Research (2001), ‘Building Better Partnerships’, Final Report of the Commission on Public Private Partnerships, June.

PFI Statistics: Signed Deals in the UK (2000),  Infrastructure Journal, November.

Reynolds, Brigid & Sean Healy (1999), ‘Social Partnership ina New Century’, CORI Justice Commission, March.

Riordan, Patrick S.J. (1996), ‘A Politics of the Common Good’, Institute of Public Administration.

Ridley, M. (1997), ‘The Origins of Virtue’, Penguin. 

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Book Chapter: Published in ‘The Heritage of Ireland’ by Neil Buttimer, Colin Rynne & Helen Guerin (eds.), Collins Press, Cork, 2000.

Investment Decision-Making and Heritage Management

by

Frank Allen
Finbarr Bradley

Introduction
Decisions about where resources are to be invested and what returns should be expected are not just the preserve of business managers in a commercial environment. Just as individuals decide whether to spend money now or later or how time should be allocated to one activity or another, people with responsibility for heritage management at any level must also make investment decisions. Investment managers would be considered negligent if they did not fully assess alternative opportunities, recognise market, credit and other risks associated with proposed projects, and take into account the timing of expected returns. The theory of finance and best market practice are essential tools in deciding whether to invest in a particular project and in projecting returns.

Heritage managers may have responsibility for less tangible resources and the returns are not as easily quantifiable as is the case for investment decision-making based exclusively on market-place criteria. Nonetheless, professionals in heritage management also need to be aware of the principles that underlie exclusively commercial investments, both for use in evaluating their own projects and in influencing market-based decisions. Put another way, those charged with heritage management must be aware of the cost of promoting initiatives that may run counter to satisfying market demands.

The distinction between decisions based solely on market rather than non-market criteria may not always be such a useful one as commercial investments almost always have an impact on the community in which they are located, just as most investments related to supporting or developing a community’s heritage should respond in some way to market considerations. Consider, for example:

• What restrictions should a planning authority impose on exploring for minerals in an area of archaeological or ecological significance and what would be the additional cost of compliance for the mining company?
• How many regular viewers does an Irish language television station need to attract to justify continued financial support?
• Does the construction of an interpretative centre, attracting more visitors to a location, enhance the heritage value of that location or could it lead to its destruction?

While the main focus of this paper is on how investment decision-making techniques can be an aid to professional heritage management, the limitations of such techniques should also be recognised. Heritage cannot be measured solely in terms of tourist numbers or potential for commercial development. Most people would recognise that a community is poorer if species of fish that swim in its rivers become extinct or if historic place-names for fields and hills are forgotten. However, such a loss is not quantifiable and financial analysis may at best, estimate the cost of preserving such aspects of its heritage.

The following section outlines the basic principles of investment decision-making. We then consider how those principles can be modified to accommodate broader concerns, such as those relating to heritage. The application of financial theory and practice to accommodate the needs of the broader community of stakeholders rather than just maximising the financial return to shareholders is now reasonably well-established, particularly as it relates to environmental issues. We will present examples of how the same approach can be used to enhance our understanding of the “value” of natural, man-made and cultural resources that are the responsibility of heritage management. We will also consider how economists regard the role of heritage in development, especially in the area of tourism. While the focus of the chapter is on how professionals in heritage management approach specific investment, both public and private, we will also suggest directions to improve broader policy-making.

Value
Finance concerns itself with assigning a monetary value to an asset. In some cases, an asset can be easily valued by reference to a market: the value of shares in AIB can be estimated with reference to quotations on the Irish Stock Exchange; quantities of copper or gold are easily valued by reference to the previous day’s quote on the London Metals Exchange; or the value of a typical apartment in Dublin today can be reasonably estimated by the price paid recently for a similar property.

Other assets are more difficult to value as the product is not standardised or there is not a market to provide a recent quote. It is easy to recognise the importance of sentiment and taste in determining the price for an asset and in explaining why that value can fluctuate so much over time. While these more subjective factors can be important in all asset valuation, their importance increases in estimating the value of items that are not traded. For example, no price might be high enough to tempt a family to sell its heirlooms although the items may have limited commercial or practical value to others. In a similar sense, it would be hard to imagine any price high enough to compensate the Irish people adequately for the loss of the Book of Kells or the destruction of the Rock of Cashel. Asset valuation almost inevitably requires a combination of analytical and subjective valuation in varying measures.

Investment Decision-Making
In considering investment decision techniques, it is useful to focus initially on commercial aspects, putting aside for later broader community considerations. In assessing new investment opportunities, financial analysts routinely prepare cash flow projections using different scenarios and “discount” these projections in order to obtain today’s value. It is important to realise that an investor would prefer to have £1,000 today rather than in a year’s time, even if only he or she could put that £1,000 in a bank account and earn interest for the year. Cash flow projections for any investment must therefore be discounted using a factor that takes into account investors’ preference for money today rather than in the future, and for the uncertainty associated with projections not being realised. Future returns that are subject to high risk are discounted at a high discount rate whereas the projected income from a government bond, for example, would be discounted at a low discount rate. In the case of an individual investment, much analysis is devoted to estimating the appropriate discount factor but for our purposes, we can use an interest rate that a bank would charge for a loan. Those interested in a comprehensive treatment of basic finance concepts should consult texts such Ross, Westerfield and Jaffe (1995) or Copeland and Weston (1992).

We consider in Box 1 a simple example to illustrate a number of different techniques for financial valuation named net present value (NPV), discounted cash flow (DCF) and internal rate of return (IRR), respectively.

Box 1

NPV, DCF and IRR

Suppose an investor is evaluating the desirability of a commercial project, say a new hotel overlooking the source of the Lee at Gougane Barra, Cork. The investor must estimate the initial cost of acquisition, the continuing operating costs, and with greatest uncertainty, the level of revenues that can reasonably be expected to be earned from guests. Investors estimate these future cash flows by carrying out market analysis, researching the performance of hotels in similar locations and applying their business acumen.

Our investor has prepared cash flow projections and believes that the new hotel can earn revenues of £500,000 in year 1, £1 million in year 2 and so forth as set out in the table below. He/she has also estimated the operating costs and after initial losses, while the business is being established, it will offer a steady income of £500,000 a year. These earnings can be projected forward indefinitely but the investor has decided that once the project has reached a steady level of profitability, he/she would prefer to sell. He/she estimates that hotel could be sold for £20 million at the end of the sixth year. Having considered the return he/she can earn on investing in other ventures with similar levels of risk, 12% is regarded as an appropriate discount rate. By using a technique called discounted cash flows (DCF) , in other words finding the present value equivalent of future money (at a compounded rate of 12% a year), we estimate the present value today of those cash flows to be £11,190,000. If our investor can acquire the hotel for less than that amount, and is confident that the cash flow projections are reasonable, he/she should invest. If for example, the hotel can be bought today for £10 million, the net present value (NPV) will be £1,190,000. This is the profit the investor will earn from the hotel project rather than by investing money elsewhere at 12%.

In ‘000s	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6
Revenues	£500	£1,000	£1,200	£2,000	£2,000	£22,000
Costs	-£700	-£700	-£1,000	-£1,500	-£1,500	-£1,500
	-£200	£300	£200	£500	£500	£20,500
Discount Factor	0.893	0.797	0.712	0.636	0.567	0.507
Present Value of Future Cash Flows	-£179	£239	£142	£318	£284	£10,386
Net Present Value (NPV)	£11,190

Investors often like to think of projects offering a return. It follows from our analysis above that an investment of £11,190,000 would offer a return of 12%. Buying the asset for less than that amount would offer a higher return so an initial investment of £10 million would offer an internal rate of return (IRR), of a little over 14%. This can be calculated by finding what discount factor should be applied to the projected cash flows to get a present value of £10 million.

These techniques are very useful in assessing the profitability of proposed investments and in comparing one opportunity with another. However, their limitations are also obvious. The degree of uncertainty associated with cash flow projections is considerable: anticipated profits may not materialise or profitability may exceed initial expectations. Investors recognise these limitations in financial models but find the discipline of projecting cash flows and comparing one investment opportunity with another in an analytical way very useful in reaching a decision.

More significantly in the context of heritage management, standard finance techniques are useful only in evaluating inflows and outflows that have cash value. Clearly, in the example cited, the site of the hotel had a value before a developer considered building a hotel there. However, the enjoyment of that resource by walkers, day-trippers and local residents is not easily quantified. It follows therefore that the possible loss of that resource if a hotel is built on the site is not included in the investor’s cash flow analysis.

While financial models may not be very useful in assessing the value of resources that do not have intrinsic commercial value, they may help in estimating the cost of their protection. Preserving the site of our hotel in its original state would result in the private investors foregoing their net present value or well-being as described above and perhaps result in the community losing other benefits such as jobs created by the project. Finance helps us to quantify those losses, to some extent, and thus the value the public places on the heritage resource.

Public Perspective
Extending the decision framework on heritage projects to the public realm requires analysts to take society or the community as a whole into account rather than just private goals and profitability. Cost-benefit analysis is used to assess the net social advantage or disadvantage of undertaking a project. Its underlying theory and practice is outlined in Zerbe Jr. and Dively (1994). The technique is similar to the NPV and IRR methods discussed previously but social valuations rather than market prices are used. If proper cost-benefit analysis is performed on a heritage project, a positive result ensures that the project will be socially efficient. In other words, undertaking it and assuming that the outcome matches projections, it will confer a net benefit on society. Just as accepting only positive net present value projects leads to a company’s value or shareholder wealth increasing over time, public sector projects whose benefits outstrip costs should lead to a net improvement in society.

The example in Box 2 illustrates public commitment of resources to a project designed to preserve natural heritage under threat from modern agriculture techniques. Detailed analysis of expenditures on ensuring the continued survival of the corncrake in Ireland can be used to assess resources society is willing to pay to ensure the side effects of progress are counterbalanced to some extent.

Box 2

Corncrakes

The Corncrake, more often heard than seen, has long featured prominently in Irish country life. Stories of corncrakes’ warning song from throughout the country attest to the bird’s historical presence all over Ireland. However, changing agricultural practices, and especially increased mechanisation in mowing, have threatened the survival of the corncrake in Ireland as in other European countries. The 1993 Birdwatch Ireland/Royal Society for the Protection of Birds (RSPB) Corncrake Census recorded 174 singing male corncrakes in Ireland, a decline of over 80% since the previous survey in 1988. The decline continued further in 1994, with just 129 recorded. Following increases in 1995 and 1996, corncrake numbers fell from 184 in 1996 to 148 in 1997. The remaining national population was found to be concentrated in four main areas: the Moy Valley in County Mayo; the Shannon Callows in the midlands; North Donegal; and the Erne Catchment area in County Fermanagh. Extinction in face of the inevitable modernisation of agricultural practice appeared to be the corncrake’s fate.

Conservation measures introduced on a phased basis appear to have reversed the decline in corncrake numbers. A Corncrake Conservation Project and Grant Scheme funded by the Irish Government’s Heritage Service and by the RSPB offers an interesting example of how market forces can be influenced to accommodate the needs of heritage management.

The Scheme offers farmers with corncrakes on their land grants of £80 per hectare (Shannon Callows) or £120 per hectare (Mayo and Donegal) to delay mowing their land until August 1, after corncrake chicks have been hatched. A further £20 per hectare is paid to farmers who opt to mow fields from the centre outwards, to allow young corncrakes to escape under the cover of grass. A tiered Late Cover Grant Scheme was also offered in the Shannon Callows. A number of farmers were offered a grant of £110 per hectare to delay mowing until August 15 or £150 per hectare to delay mowing until September 1.

The co-operation of farmers, government agencies, NGOs and local media has been critical to the success of the conservation efforts. Participation in this voluntary scheme is high with over 80% of eligible farmers in the Shannon Callows opting to take part. According to the BirdWatch Ireland Annual Report (1997), the total cost of the Scheme in 1997 was Shannon Callows (£57,560), Mayo/West Connaught (£17,062) and Donegal (£17,356). The position of the corncrake in Ireland remains very fragile but their numbers have increased since introduction of the conservation scheme. Strong interest and support for the scheme have shown that market requirements and heritage considerations can be reconciled at modest cost. Careful planning and consultation with all interested parties succeeded in reaching consensus on the “value” to the community of protecting the habitat of an endangered species.

One useful classification in cost-benefit analysis is to make a distinction between projects that are privately beneficial and those that are socially beneficial. In privately beneficial projects, the economic benefits are directly obtainable by individuals, groups or firms and are larger than the associated costs or benefits of alternative uses. In the case of socially beneficial projects, the net benefits to society are large or positive, although no one individual may easily capture these benefits.

Defining precisely the correct decision-making focus, quantifying goals and objectives, examining alternatives and their consequences and the risks associated with all the possible outcomes are critical in public project appraisal work. Extending net present value analysis to take into account social benefits and costs is also essential. Because of the difficulty of such appraisal, comprehensive cost-benefit analysis is not extensively practiced in Ireland except by industrial development agencies such as IDA Ireland and by those evaluating certain projects dealing with the environment and forestry.

In the case of public sector projects, it is not only more difficult to define in operational terms the interests of decision-makers, but also to agree on how to satisfy the often-conflicting objectives of various interested parties. Some argue there may not necessarily be conflict between maximising shareholder value and satisfying the goals of all relevant parties, or stakeholders. The Shell Company’s recent contribution to this debate (1998) is noteworthy in this regard. It argues there is no evidence of a fundamental conflict between sustainable value creation and long-term shareholder value creation. For value creation to be sustainable. a company must acknowledge and manage the full range of relevant economic, social and environmental costs associated with its activities. It suggests adding together indicators based on three components of value added, namely, economic/market, environmental and social, in order to track a company’s total net value added over time.

For the heritage management professional, applying cost-benefit analysis is especially complex because of the need to quantify benefits and costs that often have no market or monetary values. Attributes such as landscape, wildlife and amenity areas must be assessed although their intangible benefits are not traded in any market-place and private property rights may not exist. The environment, for example, is often treated as a free good except perhaps where comprehensive environment impact statements are required.

It is useful in cost-benefit analysis to segregate the value of a project into two components, one that uses market prices and the other non-market prices to value resources. The net present value framework can be used to discount cash flows in the former case. Where market prices do not exist other approaches are necessary. Valuation is especially difficult where existence values are high, reflecting what the public believe something is worth having ‘in existence’ even if not everybody actually receives direct benefits from it. For example, knowing landscape of special natural characteristics will not be disturbed by development might be valued highly by individuals even if they themselves never intend visiting it in person. In addition, people derive value from the potential availability of a resource at some future stage. By not exploiting some element of the country’s physical heritage now, this presents a valuable option which may be exercised later.

From a valuation point of view, heritage shares many characteristics of protected areas such as national parks, scientific reserves, wildlife sanctuaries, natural monuments and landmarks. Dixon and Sherman (1990) provide a comprehensive analysis of methods to assess benefits and costs. They make the distiction between individual preferences which are expressed by market prices and those may may be inferred from experimental methods such as surveys.

Distinctions also need to be made between situations where market prices exist and those where they do not. In the latter case, classified by economists as market imperfections, surrogate or shadow prices may be used. These are prices paid for a closely associated good or service traded in the marketplace. To the extent that it is difficult to obtain a perfect substitute, adjustments often have to be made. Hedonic pricing techniques attempt to measure how the prices of market goods are influenced by non-market effects. For instance, valuation can be based on the effect of a heritage centre on property prices in the vicinity. Travel-cost methods are based on assessing the expenditures people are willing to commit to reach a heritage area in order to indicate its value to society.

If market or surrogate market prices cannot be obtained, it may be possible to question people directly about how they would react to the possible loss of part of their heritage. Willingness to pay for inprovement or willingness to accept compensation for damage to heritage can measure social benefits of some proposed action. Contingent valuation methods are based on asking individuals how much payment would be required to keep them at an certain initial level of satisfaction if the item under analysis were removed. Estimates can also be obtained by means of techniques based on simulated bidding or trade-off games. These type of approaches are now sometimes applied by US courts for environmental damage assessment.

In this country, it would have been intriguing if during the debate surrounding the establishment of TnaG (refer Box 3), such techniques were used to gauge the Irish public’s assessment of the value they placed on nurturing the Irish language. For instance, various scenarios linking the number of potential Irish speakers in the future to different levels of expenditures might suggest how serious the public really is about saving the language.

Box 3

Teilifis na Gaeilge (TnaG)

The Irish Government’s decision to provide resources for the development of an Irish-language television station offers an interesting example of how a decision to invest public money for heritage-related projects can expose differing views as to the value of such investment.

Irish speakers, both in Gaeltacht areas and elsewhere, have long complained about the inadequacy of Irish-language television programming. While RTE has broadcast some very high quality Irish language programmes over the years, their range has tended to be limited and hours of broadcasting minimal. Irish speakers have argued that as television has adopted an increasingly important role in contemporary life and that as the choice of programming otherwise available has broadened, there had been little development in Irish language broadcasting. The Government accepted the argument that an Irish-language television station could contribute to the survival of Irish as a vernacular. It was also thought to respond to the demands of children in Irish-medium education and a wider Irish-speaking community. Financial resources were provided for a new television station and TnaG went on air in 1997.

The decision to finance TnaG proved to be controversial before its launch and has remained so since then. This is despite apparent community goodwill towards the Irish language and generally favourable reviews for much of TnaG’s programming. Does this mean that TnaG has not been a success? It may be that in establishing TnG, the promoters were not sufficiently clear in the objectives and standards set for the station. This makes its performance difficult to measure and may also be the source of some of the controversy.

TnaG is criticised for its low “ratings” or numbers of viewers. The declining numbers of people for whom Irish is a vernacular or who can speak Irish fluently both makes it inevitable that Irish-language television viewers will be limited in number but also provides the basis for public support. If such programming had mass market appeal, it could derive greater financial support from associated advertising. On the other hand, if very few people watch TnaG, it cannot be thought to achieve its objectives. This argues strongly for the investment to have been justified on the basis of a defined and market and quantified targets set for market penetration. The discussion on TnaG in the Irish media was an argument about whether an Irish-language television station would be a white elephant. An alternative approach would have been to debate whether provision of Irish-medium television would respond to the real needs of communities and families who are endeavouring to maintain Irish as a vernacular, and whether the goodwill of the wider community towards Irish is sufficient to make the financial contribution necessary. Such a debate could have established performance standards by which the investment would be measured and forced people to realise that if heritage has an emotional value to them, it may also require a financial investment for its preservation.

As an alternative to attempting to assess benefits directly, it is sometimes possible to measure the costs that would be imposed if items or areas of heritage were converted to some other, perhaps commercial, use. Rather than attempting to measure the benefits of some action (such as protecting a natural heritage area), opportunity-cost approaches can be used to assess income foregone by protecting it from development. One could attempt to value the benefits of the best alternative use of land (say for housing) rather than trying to capture directly the benefits of a natural heritage area.

Policy Implications
There are essentially two different philosophical views on how heritage should be valued. One perspective is that heritage has intrinsic worth to a community or society apart from any potential it has to generate commercial revenues. The general view of economists, on the other hand, is that the value of heritage hinges on the benefits generated through its exploitation, say through enhanced tourism and leisure prospects. Accordingly, items of heritage are really only special if they are able to tap into or satisfy consumer demand. The role of heritage in stimulating tourism and thereby contributing to economic growth is used to indicate its net contribution to the welfare of society.

Culture and heritage are cited as major contributory factors stimulating Irish tourism. It is difficult, nevertheless, to grasp exactly what is meant by either term in official tourism reports. There is little doubt but that state tourism policy as it impacts heritage is largely driven by what might be described as a ‘utilitarian’ approach. Objectives such as maximising the profit of firms providing goods and services to tourists or generating an optimal level of direct and indirect tourist expenditures seem to supersede non-commercial considerations. The language used illustrates this way of thinking: heritage like any tourist ‘product’ must be branded, marketed or developed to garner as much as possible of tourist expenditures. Markets are prioritised in terms of spending power; those not making an adequate contribution must be abandoned in favour of more lucrative niches.

Economic indicators such as the contribution of tourism to the balance of payments, employment created, value-added and tourist numbers are used to track performance over time. In 1997, for example, total tourist spending in the Republic amounted to £2.8 billion, of which foreign tourists spent £2.1 billion. It accounted for 5.3% of exports, 6.3% of GNP and 8.8% of all jobs. It is not sufficient, moreover, to measure direct expenditures by tourists and employment created in the tourist industry to assess economic impact. Various other indirect economic effects result in employment creation in organisations serving the tourism sector and their multiplier effect must be calculated (as discussed by Eoin O’Leary elsewhere in this book).

Commentators who emphasise heritage’s positive value to the quality of life of a community regard the dominant role of economic objectives as flawed since they believe it not only underestimates the true worth but can lead to actions which result in losses to future generations. Moreover, little research has been conducted on the precise role of motivation in driving heritage tourism. More than half of overseas visitors, for example, are estimated to include a visit to at least one place described as of natural, cultural or historical interest during their stay. According to Bord Fáilte (1992), 60% of all overseas originating holidays taken in Ireland are classified as car touring/landscape and culture enjoyment. These tourists are probably motivated by an interest in heritage, running the gamut from none to very enthusiastic. The key challenge in analysing heritage tourism is attempting to link market segments with actual desires or motivations of tourists. A study might throw up some interesting results and policy implications. For instance, shifting policies to attract those with an educational or specialist cultural motivation might in the long-term prove more attractive. The key policy issue is time perspective and the trade-off between the perceived needs and tastes of present and future generations. Often, decisions are undertaken in order to satisfy present-day sectional interests which may not prove beneficial when evaluated in hindsight.

Various reports written by Bord Fáilte (for example, 1992 & 1996) exemplify a economics-led or short-term oriented perspective. According to the Bord, its objective is ‘to increase the level of economic activity in Ireland through increasing demand within the tourism sector’. Specifically, it sets out to create additional employment, attract foreign earnings, increase the level of value added, generate increased exchequer earnings and contribute to an improved regional distribution of income.

Under the Operational Programme for Tourism (1998), an unprecedented £652 million, 56% of which (£369 million) contributed by the EU, will be invested in Irish tourism between the years 1994 and 1999. In addition to support given to the product development of heritage projects, a total of £125 million is targeted at natural and cultural tourism in order, as the Programme states, to ‘make Ireland’s heritage and culture more accessible and attractive to overseas visitors’.

National/Regional Cultural activities (e.g., the National Museum) account for £71 million, while £27 million each is designated for National Monuments and Historic Properties (e.g., Castletown House) and the Natural Environment (e.g., Grand and Royal Canal extensions). The Programme leaves little doubt where its priorities lie. Money is spent for ‘further improving our tourist product to fill gaps in the market’ and to achieve this, ‘the product will be sold with sophisticated aggression on the world market’.

It is no surprise that other non-commercial considerations for supporting heritage or cultural appreciation are often overwhelmed by the Bord’s desire to achieve economic objectives. As a result, heritage projects, worthwhile supporting in themselves perhaps, because of their intrinsic significance or community benefit, often find it difficult to receive public funding if they cannot be justified using economic criteria. The reverse also holds true. Areas of special heritage value or historical significance may in the long-term prove to have far more attractive benefits if conserved but may be damaged in the short-term because more attractive private gains can be achieved through exploitation. While sustainability is now the catch-phrase in official tourism policy, an enhanced level of public debate is needed on whether narrow economic goals should play such a dominant role without proper assessment of the long-term implications for community life.

Conclusion
Investment decisions in heritage management possess all the complexity of purely commercial investment decision-making but with the added dimension of responsibility to protect resources that almost by definition, cannot adequately be valued by solely commercial criteria. That responsibility is exercised not only on behalf of a community that must be consulted and educated about the resources’ intrinsic worth but is also exercised in trust for past and future communities.

Decision-making techniques and practices that are well established for commercial investment can provide a useful framework for decisions relating to heritage management albeit accompanied by those caveats we have discussed. The limitations of financial models for dealing with uncertainty and in contexts where markets do not assign a value to an asset are well recognised. It follows that even with greater sophistication in analytical methods, such an approach will always result in a partial, although still useful, analysis.

Decisions relating to heritage management inevitably require policy-makers to make choices regarding what is worth preserving, what objectives are to be achieved, and what benefits people are willing to forego today to preserve a community’s heritage for future generations.

The challenge for professionals in heritage management is to use analytical tools from a range of disciplines, such as economics, finance and accounting, to improve the sophistication of decision-making in a non-commercial environment. There is a clear need for further refinement of financial models for such uses. The need to modify decision-making tools to cater for the special needs of the Irish context is also apparent.

The Government’s decision to develop an integrated national plan for the management of our national heritage offers an ideal opportunity to look again at trade-offs the community needs to make in preserving its heritage. These trade-offs must be made in deciding how much resources should be directed at heritage rather than other areas as well as the allocation of funds among various heritage categories.

In recent decades, Ireland has received generous EU support to develop heritage related projects. As the level of financial support available from the EU is substantially reduced in years to come, we are likely to face more debate on the choices we must make as a community. Our hope is that an enhanced degree of sophistication in investment analysis will facilitate this debate. The key issue is how we as a society integrate the democratic process with such analytical techniques in order to make decisions that prove optimal for this and future generations.

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