Socioeconomic Assessment AIT-LIT Consortium

Socio-Economic Assessment of AIT-LIT Consortium Final Report â&#x20AC;&#x201C; 14 December 2020

Table of Contents Executive Summary .............................................................................................................. 4 1.

Socio-Economic Assessment of AIT-LIT Consortium ..................................................... 9 1.1

Introduction ............................................................................................................. 9

1.2

Clarity of Purpose ................................................................................................. 11

1.2.1

International Dimension ................................................................................. 11

1.2.2

Demographic Factors..................................................................................... 11

1.2.3

Economic Need and Impact ........................................................................... 12

1.2.4

Enterprise Need and Impact .......................................................................... 12

1.2.5

Social Context................................................................................................ 12

1.2.6

Rural Economy and Society ........................................................................... 13

1.2.7

Urban Development ....................................................................................... 13

1.2.8

Climate Change ............................................................................................. 13

1.2.9

Impact on TURN Recommendations .............................................................. 13

International Lessons ................................................................................................... 14 2.1

European Commission study ................................................................................ 14

2.2

Case studies of socio-economic impacts .............................................................. 15

2.3

Case studies of mergers ....................................................................................... 16

2.4

References for this section.................................................................................... 17

Demographic Context .................................................................................................. 18 3.1

Sphere of Influence ............................................................................................... 18

3.2

Total Population .................................................................................................... 20

3.3

Age Groups........................................................................................................... 20

3.4

Education Levels .................................................................................................. 22

3.5

Labour Force ........................................................................................................ 22

3.6

Social Groups ....................................................................................................... 24

3.7

Industrial Sectors .................................................................................................. 25

3.8

Settlement pattern................................................................................................. 26

3.9

Commuting flows .................................................................................................. 29

3.10

Diversity ................................................................................................................ 29

3.11

Disability ............................................................................................................... 30

3.12

Overall demographic issues for the TU ................................................................. 30

Economic Need and Impact ......................................................................................... 31 4.1

Economic Overview .............................................................................................. 31

4.2

Regional Economic Performance. ......................................................................... 34

4.2.1

Output Per Person ......................................................................................... 35

4.2.2

Incomes in the Regions ................................................................................. 38

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4.2.3

Employment ................................................................................................... 40

4.2.4

Summary ....................................................................................................... 42

4.3

Education and Economic Growth .......................................................................... 43

4.3.1

Overview........................................................................................................ 43

4.3.2

Education and Economic Growth in Ireland. .................................................. 44

4.3.3

The Graduate Premium ................................................................................. 45

4.4

The Economic Impact of LIT and AIT. ................................................................... 47

4.5

The Economic Impact of Brexit and Covid-19 ....................................................... 51

4.5.1 Brexit and the Irish Economy............................................................................... 51 4.5.2 Covid-19 and the Irish Economy ......................................................................... 53 4.5.3 Brexit, Covid-19 and the Economic Outlook ........................................................ 57

4.6.

Conclusions .......................................................................................................... 59

4.7

References for this section.................................................................................... 60

Social Context .............................................................................................................. 64 5.1

What is “social”? ................................................................................................... 64

5.2

Pobal Index of Deprivation .................................................................................... 65

5.3

Stakeholder engagement ...................................................................................... 68

5.4

Learners in the under-represented groups ............................................................ 70

5.4.1

Access Programme........................................................................................ 70

5.4.2

Apprenticeships ............................................................................................. 72

5.4.3

Flexible Learning ........................................................................................... 73

5.5

Education & Training Boards ................................................................................ 74

5.5.1 5.5.2 6.

Current collaboration...................................................................................... 74 Future TU .......................................................................................................... 75

Enterprise Context ....................................................................................................... 76 6.1 Regional Enterprise Overview ................................................................................... 76 6.2

Agency Assisted Enterprise. ................................................................................. 79

6.3

Local Enterprise Offices ........................................................................................ 81

6.4

Regional Enterprise Plans..................................................................................... 82

6.4.1

The Midland and Mid West Regional Enterprise Plans ................................... 83

6.5

Enterprise and the new Midlands/ Mid West Technological University .................. 85

6.6

The AIT-LIT Consortium – a Strategic Opportunity................................................ 88

6.7

Sectoral Opportunities for the new Technological University ................................. 90

6.7.1

Transition to a Low Carbon Economy ............................................................ 90

6.7.2

Advanced Manufacturing ............................................................................... 91

6.7.3

The Digital Economy ...................................................................................... 92

6.7.4

Developing Workforce Skills and Talent ......................................................... 92

6.7.5

Tourism and Place-Making ............................................................................ 93

6.8

Conclusions .......................................................................................................... 94

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6.9

References for this section.................................................................................... 95

Climate Action .............................................................................................................. 97

Urban Development ................................................................................................... 101

Rural Economy and Society ....................................................................................... 106 9.1

The Policy Context .............................................................................................. 106

9.1.1

Rural Development Policy in the EU ............................................................ 108

9.1.2

Rural Development Policy in Ireland ............................................................ 109

9.2

Rural Development Priorities in the Midlands and Mid West ............................... 112

9.2.1

Transition to a Low Carbon Economy .......................................................... 113

9.2.2

Revitalising Towns and Villages ................................................................... 115

9.2.3

Tourism, Heritage and Place-Making ........................................................... 118

9.3

Conclusions ........................................................................................................ 121

Case Study 1: Connemara West, Letterfrack, Co. Galway............................................. 124 Case Study 2: Dunhill Ecopark, Dunhill, Co. Waterford. ................................................ 124 Case Study 3: Ludgate Hub, Skibbereen, Co. Cork. ...................................................... 125 9.4 10.

References for this section.................................................................................. 125 TURN Report.......................................................................................................... 127

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Executive Summary 1. Socio-Economic Assessment Athlone Institute of Technology (AIT) and Limerick Institute of Technology (LIT) plan to merge into a Technological University (TU). Both institutes already have well-established programmes with significant regional impact. The emerging vision of the new TU is of a partnership of institutes with several ingredients: non-competing, academically complementary, similar size, similar values and regionally focused. The added value of the new TU has been identified as consolidating areas of expertise and growing transdisciplinary areas. This report aims to review the socio-economic environment of the new TU and to give policy guidelines on the response of the TU to this environment. 2. International Lessons International lessons can valuably be drawn from three sources: reports by the European Commission, research into the socio-economic impact of universities and studies of higher education mergers. The new TU should embrace a broad-brush approach to regional economic development, looking across the full spectrum of possible impacts of the university in its area. The “narrative with numbers” approach is valuable, including both quantitative and qualitative indicators. Also, working through a cooperation network of internal and external stakeholders, through economic, social and cultural themes, offers much possibility. 3. Demographic Context This demographic chapter concludes that the new TU will benefit from an increased population size of over 830,000, with potential for critical mass and economies of scale. This population catchment also represents a microcosm of Irish conditions, although with distinct regional and local variations. The new TU therefore has significant possibilities to offer a diverse range of teaching and research programmes, reflecting Irish conditions but uniquely focused on the specific needs of the area. The new TU should adopt teaching & learning and research & innovation policies appropriate to the demographic setting. As the share of population with third-level education is lower than the national average, there are opportunities for second-chance education and mature learning. With significant unemployment levels and low proportions in the higher-order skills, the TU must focus on programmes with a potential development impact. Outreach and engagement programmes will be especially relevant with the high proportion of rural population. 4. Economic Need and Impact Irish economic fundamentals were essentially in a sound position at the outset of 2020, having recovered from the great financial crash of 2008/2009. Education, especially tertiary education, has played a central role in building a strong and resilient Irish economy. Persistent differences in Ireland’s regional economic performance highlight spatial disparities which are mitigated by redistributive fiscal measures. Brexit, whether on FTA or WTO terms, will have disruptive impact on Ireland’s trade and will reduce national output in the coming decade. The Covid-19 pandemic has resulted in a major economic shock nationally and internationally, requiring State intervention on an

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unprecedented scale to offset falling household expenditure. Recovery is likely to start in 2021 but the effects on unemployment and the labour market, and on sectors such as aviation and tourism, are likely to persist in the medium to long term. Structural changes, notably the transition to the digital economy and the shift to remote working and service delivery, are likely to be accelerated as a result of the pandemic recession. Demand for higher education and upskilling/reskilling is likely to increase in the aftermath if the pandemic, creating opportunities for higher education institutions. Enterprises are also likely to seek more collaboration with the higher education sector on research, development and innovation projects as they adapt to the challenges of the post-pandemic economy. Constraints on public expenditure are set to resume in the medium term as the State looks to reduce its debt to national income ratio, creating pressure on higher education budgets. Increased uncertainty will be a defining feature of the economic policy environment for the foreseeable future. 5. Social Context “Social context” is taken to embrace two elements: the system of engagement with stakeholder groups and the system of reaching learners in the under-represented groups through non-traditional programmes. The new TU should establish a “stakeholder register”, listing the active stakeholders currently engaged with the TU, with regular updates. Two benefits could arise from this exercise. Firstly, it focuses the TU on the active stakeholder network and helps to bring the network into the mainstream of the organisation. Secondly, the register leads on to questions about potential stakeholders. The register could thus support a discussion around strategic aspects of stakeholder engagement. The new TU should also: •

Strengthen the beneficial features of the present Access system. Ideally, the new TU should offer fresh mechanisms to enhance and reinforce the social contribution of Access to the life of the university. The “caring ethos” of the teaching culture of both institutes is recognised by stakeholders. The new TU must maintain that caring ethos in its new structures.

•

Position itself to offer solutions to the new apprenticeship programme.

•

Promote Flexible Learning as the “open door” of the TU to many types of enterprises and communities who might not normally engage with higher education.

•

Accelerate the streamlined progression of students from the Education & Training Boards to the TU. The ETBs acknowledge the “dynamic flexibility” of their relationship with the institutes. This system of dynamic flexibility must continue in the new TU.

6. Enterprise Context Analysis shows that there is scope to increase enterprise activity and employment in the Midlands and Mid West regions, consistent with regional enterprise planning and

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spatial/economic strategic objectives. Sectoral opportunities identified in the two regions include the transition to a low carbon economy; advanced manufacturing; the digital economy; developing workforce skills and talent; and tourism and place-making. Interviews conducted for this study with the enterprise sector concluded that AIT and LIT are flexible in responding to the needs of the enterprise sector for education, training and RDI support, with a speed of response that meets the changing demands of their industry partners. The AIT-LIT Consortium has the opportunity, with the formation of the new Technological University, to intensify its engagement with enterprise by, for example: •

Scaling up RDI activities to build higher-value linkages with enterprise agency clients Collaborating more closely with the enterprise sector to identify new and emerging niche skills and to support effective skills matching in the two regions Furthering developing its distributed campus network and remote working facilities, and enhancing its flexible learning delivery platforms Re-energising enterprise start-up activity in the two regions and promoting enterprise clusters

• • •

Barriers to enhanced enterprise engagement identified during the preparation of the Socio-Economic Assessment will need to be addressed, including: • • •

Rebalancing the research/teaching workload of academic staff to increase RDI capacity in the new TU Increasing the status of applied research so that it is accorded equal esteem with basic research across the HEI sector, reflecting the importance of applied research to enterprise development Resolving contractual issues for non-academic staff engaged in RDI enterprise support activities in the new TU

A pathway to enhanced enterprise engagement for the AIT-LIT Consortium as its transitions to the new TU is the “Mission-Oriented Approach” developed by the Institute for Innovation and Public Purpose at University College London, which suggests: • • • •

Setting a clear direction for engagement with enterprise with realistic, time-bound targets Challenging researchers and innovators to deliver new initiatives as the new TU begins to form Connecting across sectors and disciplines to forge new partnerships for problemsolving Encouraging a bottom-up approach to facilitate diverse projects and multiple solutions

7. Climate Action Already, AIT and LIT are engaged in climate action initiatives, and this provides a basis for further work by the new TU, including renewable energy, agriculture, buildings, enterprises and the circular economy The new TU should set out its own “climate action plan” within the national framework. This would help the TU focus attention on those specific areas where the TU has special strengths and to help it concentrate on those opportunity areas where its contributions can have the greatest impact.

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8. Urban Development The National Planning Framework to 2040 aims to develop cities and towns of sufficient scale and quality to compete internationally and to be drivers of national and regional growth, investment and prosperity. Limerick is one of the main cities of Ireland and Athlone is a growth centre astride the centre of Ireland. Both centres have ambitious plans. The new TU should see its mission as embracing these objectives. 9. Rural Economy and Society The Midlands and Mid West are rural regions and can be classified as “low density economies” in contrast with the higher density urban areas of advanced economies. “Rural Policy 3.0” highlights the importance of an integrated, multi-sectoral approach to rural development and differs from more traditional, centralised rural policies. Rural areas differ both within and between countries and can be classified according to their proximity to, or distance from, functional urban areas. Rural policy in Ireland, with its emphasis on inclusive and sustainable locally-led rural and community development, is consistent with OECD and EU best practice. In the Midlands and Mid West rural development priorities can be summarised as: • • •

Transitioning to a Low Carbon Economy; Revitalising Rural Towns and Villages; and Tourism, Heritage and Place-Making

Transitioning to a low carbon economy is a priority for both the Midlands and Mid West as net energy producers. The Just Transition agenda provides a pathway for the exit from carbon-based energy and is especially relevant in the Midlands following the accelerated exit from peat. The growth of remote working and service delivery provides both regions with the opportunity to regenerate their rural towns and villages in the post-Covid environment. Tourism, heritage and culture are potential drivers of economic activity and employment in rural areas of the two regions, notwithstanding the adverse impact of the Covid-19 pandemic on these sectors. Opportunities for the AIT-LIT Consortium and the new TU to promote development in the rural areas of the Midlands and Mid West include: • • •

Supporting the Just Transition agenda, for example by partnering with Bord na Móna in a Green Energy Park/Campus project Providing education, training and infrastructure to grow remote working and service delivery in rural areas Supporting local areas to develop their landscape, heritage and cultural/creative assets to make them more attractive places to live, work, invest and visit

Social enterprise provides the AIT-LIT Consortium with a vehicle to engage with local communities in the two regions and to deploy their education and training and RDI capabilities for effective rural economic and social development. 10. TURN Report The report by the Technological Universities Research Network examines the needs of the future TUs and how TUs could most effectively achieve their sectoral and national

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objectives and the supports that would be required for them to do this. Among key recommendations relevant to the new TU are research development strategy and digital infrastructure strategy. Research development strategy should ensure parity of esteem with other universities, creating a level playing field across the regions. The new TU should also exploit research development strategy to identify key “regional themes” to which the research should respond, with two examples: collaboration with enterprise to address the differing research needs and possibilities experienced by enterprises. Also, natural environment, including agriculture, restored boglands, forests, vegetation, rivers, lakes, climate, air, ecology, energy, ecosystems is a basis for development. Research strategy should deliver international knowledge to meet regional needs, with appropriate recognition for applied research, including research action at national and international levels. The new TU should also exploit digital infrastructure as a tool to “reach out” to external stakeholders in the economic and social sectors

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Socio-Economic Assessment of AIT-LIT Consortium

1.1

Introduction

The National Strategy for Higher Education to 2030 published in 2011, identified that Ireland needed a “network of outward facing institutions that are ready and empowered to respond to a varied set of challenges while building on their international reputation of strength and excellence”. One of the key strategic recommendations that emerged was that the higher education system should be strengthened by the development of regional clusters of collaborating institutions and by institutional consolidation, resulting in a smaller number of larger institutions. Performance criteria for these amalgamated institutes would focus on “their distinct mission, and, based on demonstrated strong performance against mission-relevant criteria”. The strategy envisaged that if the to be amalgamated institutes of technology demonstrated significant progress against stated performance criteria, that some could apply for redesignation as Technological Universities. The Technological University programme was further refined and developed through Towards a Future Higher Education Landscape, (February 2012), Technological Universities Act 2018, and the HEA Technological Universities – Proposed process in respect of an application to become a Technological University, 2018. As of May 2020, there are currently two designated technological university and three consortia engaged with the process to become designated as technological universities: • • • • •

TU (Technological University) Dublin, designated January 2019 Munster Technological University (MTU), designated May 2020 Technological University for the South-East Ireland (TUSEI), consisting of Waterford Institute of Technology and Institute of Technology Carlow Connacht Ulster Alliance (CUA), consisting of Galway-Mayo Institute of Technology, Institute of Technology Sligo, and Letterkenny Institute of Technology. AIT-LIT Consortium, consisting of Athlone Institute of Technology and Limerick Institute of Technology.

The designation process is set out in Towards a Future Higher Education Landscape:

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1.1.1

AIT-LIT Consortium

In October 2019, the Athlone Institute of Technology (AIT) and the Limerick Institute of Technology (LIT) confirmed that they would merge to form a Technological University with a clear regional focus on collaboration with local partners, but with a national and international outlook. Both institutes are already well established with strong programmes in teaching & learning and research & innovation, generating significant regional impacts on which the future TU can build. AIT (4,800 full-time students) has faculties in Business & Hospitality, Engineering & Informatics and Science & Health. LIT (5,200 full-time students) has schools in Art & Design, Applied Science, Engineering & Technology and Business & Humanities. Innovation support is active in both institutes. AIT and LIT also have substantial programmes in research, flexible learning and apprenticeship. The emerging vision of the new TU is of a partnership of institutes with several ingredients: non-competing, academically complementary, similar size, similar values and regionally focused. For example, on the indicators of disadvantaged students and distance travelled, the profiles of AIT and LIT are remarkably similar. Student capacity is likewise similar for both institutes. The locations of their feeder schools are geographically contiguous, complementing each other. The strategies of both institutions are well aligned, both emphasising equality, diversity and inclusion, together with relevant, contemporary and high-quality provision, combined with research capacity, engagement and student experience. The added value of the new TU has been identified as consolidating areas of expertise and growing transdisciplinary areas. In January 2020, LIT and AIT announced the project management structure to deliver the new TU with the AIT-LIT Consortium led by two project directors, one appointed from each institution: • •

Terry Twomey, Vice President Academic Affairs & Registrar, LIT Dr. Niall Seery, Vice President Academic Affairs & Registrar, AIT

The new management structure supported by Professor Tom Collins, the project facilitator, is responsible for developing the work packages required for the application process including a business case and opportunity analysis. These work packages include teaching and learning, research and innovation, and professional services. 1.1.2

AIT-LIT Consortium Socio-Economic Analysis Assignment

In June 2020, the AIT-LIT Consortium tendered for services to undertake a baseline socioeconomic assessment as part of the next phase of the application process for Technological University (TU) status under section 29 of the Technological Universities Act. The objectives of the assignment were to: •

Develop a social, economic and demographic profile of the region or regions to be served by the new TU

•

Project the main likely developments in these three domains over the coming decade

•

Identify the main components and participation patterns in further and higher education in the TU hinterland

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•

Identify the specific current contribution of the two Institutes in education provision in the hinterland

•

Assess current provision of enterprise support in the hinterland- specifically in relation to knowledge transfer, start-ups and innovation.

•

With particular reference to the TURN report, assess the likely impact of TU designation on this contribution in the coming years, particularly in terms of critical mass and enhanced research capacity.

1.2

Clarity of Purpose

Following the completion of the tendering process Shannon International Development Consultants Ltd. (SIDC) were appointed to undertake the assignment. The initial phase of the project focused on Clarity of Purpose. The AIT-LIT Consortium restated their requirement that primarily the assignment was a study of need, not a study of impact and should be mindful of the following: • • • • • •

What needs are not being met by the HE sector? The needs of the new TU Region are the ‘prism’ for study. How well served is the new TU Region by current national strategies? Examine cross-regional issues and over-arching visions. Review how enhanced research capacity could impact on regional creativity? A ten-year horizon

The overarching project objective was to remain to review the socio-economic environment of the new TU and to give policy guidelines on the response of the TU to this environment. Based on the Clarity of Purpose phase of the project the agreed Workstreams were: 1.2.1

• • • • •

European Commission study on impact of universities on regional development; Case studies of the impact of individual universities in UK. Europe and United States; Case study of the socio-economic impact of a merger of HEIs; Policy guidelines on the international lessons which can be applied to the new TU. RUN-EU Programme

1.2.2

•

International Dimension

Demographic Factors

Definition of catchment area of the new TU with map: Mid West (Clare, Limerick, Tipperary North and South), Midlands (Westmeath, Offaly, Laois, Longford) plus adjacent areas of influence in South Roscommon and East Galway (using Municipal District Boundaries from the Census of Population). Review of data from the 2016 Census about this area (distinguishing Mid-West, extended Midlands, total TU area and national average: − Age levels − Labour force − Socio-economic groups − Educational levels − Occupational groups − Industrial groups − Disability − Migration and ethnicity

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• •

− Population projections to 2030/35 Graduate retention levels in the regions? Policy guidelines on the implications of these patterns for the new TU

1.2.3

• •

•

Economic outlook for Ireland, EU and the world economy Review of current expenditure of AIT-LIT Consortium, about €140m; estimation of current downstream impacts into the regional economy – direct, indirect and induced; multiplier effects; earnings of graduates; regional output and incomes; link between education and economic growth Discussion of the implications of this; how the TU can add value in economic impact greater than AIT and LIT working independently; policy guidelines for the future TU on how to maximise downstream impacts of expenditure.

1.2.4

•

• • •

•

Enterprise Need and Impact

Regional context: Review of the Regional Enterprise Strategies prepared by the Dept of Enterprise for the Mid West and Midlands Regions; interviews with the authors of these two strategies; interviews with the two Enterprise Ireland and two IDA directors for the Mid West and Midlands; interviews with four LEOs (Limerick, Clare, Westmeath and Offaly). Interviews with heads of research and heads of enterprise in AIT and LIT. Discussion on actual and potential impacts on enterprise. Companies: Interviews with sample of companies and development of case studies (6 companies, 3 from each including MNCs, SMEs and start-ups). Apprenticeship programmes: interview with SOLAS in Limerick and Athlone; interviews with heads of apprenticeship in AIT and LIT: − Failure of Enterprise to engage with the programme − Application of Earn and Learn model at multiple levels with HE. Skillsets – availability and gaps Policy guidelines on how the new TU can do more with enterprise Covid-19 and Brexit

1.2.5

•

Economic Need and Impact

Social Context

Review of POBAL maps for the catchment of the new TU which set out an index of deprivation by small areas using census and other data in the following classifications: − Extremely affluent − Very affluent − Affluent − Marginally above average − Marginally below average − Disadvantaged − Very disadvantaged − Extremely disadvantaged Interviews with Local Development Companies on their current linkages with AIT/LIT and possible future linkages with the AIT-LIT Consortium, such as: Ballyhoura, Clare, Laois, Longford, Tipperary, Offaly, PAUL (Limerick), Roscommon, West Limerick. Interviews with heads of Education & Training Boards in Limerick and Westmeath. Potential for enhanced outreach services via LDCs and ETBs? Interviews with heads of access in AIT and LIT on current and future programmes, such as transition to higher education and flexible learning.

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•

Policy guidelines on how the new TU can improve access to higher education from the under-represented groups.

1.2.6

• • •

Review of national and regional plans for rural development, which aim to improve quality of life in diverse rural communities, valuing them as dynamic, resilient and outward looking areas of potential Tourism and Hospitality sector Policy guidelines on how the new TU could contribute to this objective.

1.2.7

•

Climate Change

Public policy aims to enhance climate resilience and to accelerate a transition to a low carbon society. The focus is on supporting communities to do this, through sustainable employment in green enterprise and re-training workers. The role of natural capital and ecosystem services in achieving this is substantial. Policy guidelines on how the TU can contribute to the Just Transition challenge

1.2.9

• •

Urban Development

Review of national and regional strategies for urban growth, which focuses on creation of healthy and attractive places to live, work, visit, invest and study in. Emphasis is on quality development, regeneration and compact growth, building on the network of towns and villages, counterbalancing growth in the Dublin area. Policy guidelines on how the new TU can contribute to this.

1.2.8

•

Rural Economy and Society

Impact on TURN Recommendations

Digital and capital infrastructure investment Research capacity building

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International Lessons

Recommendations The new TU should embrace a broad-brush approach to regional economic development, looking across the full spectrum of possible impacts of the university in its area. The “narrative with numbers” approach is valuable, including both quantitative and qualitative indicators. Also, working through a cooperation network of internal and external stakeholders, through economic, social and cultural themes, offers much possibility

International lessons can valuably be drawn from three sources: reports by the European Commission, research into the socio-economic impact of universities and studies of higher education mergers. 2.1

European Commission study

The report of the Joint Research Centre of the European Commission “A Regional Innovation Impact Assessment Framework for Universities” (Brussels 2018) provides the context. This aimed at the improvement of ‘innovation performance’ to promote university modernisation and enhance the positive effect these organisations can have on their regional innovation systems. The assessment framework incorporates four strands: • • • •

Education and human capital development; Research, technological development, knowledge transfer and commercialisation; Entrepreneurship and support to enterprise development; Regional orientation, strategic development and knowledge infrastructure.

Here the outputs and impacts of the university system are tracked across several variables: knowledge creation, leadership, knowledge infrastructure, social environment, human capital, transfer of know-how, technological innovation and capital investment, leading to beneficial impacts of capacity for development, regional creativity, business start-ups, productivity gains, business innovation, and spending impacts. The approach is focused on "narrative with numbers", in which indicators of the innovation performance of universities are contextualised and supported qualitatively. This “narrative with numbers” recommendation is potentially significant for the new TU. It focuses attention on both quantitative and qualitative indicators as guidelines for the future: The regional innovation impact assessment profile should feed into a university level case study, a so-called “narrative with numbers”, in which indicators of the innovation performance of universities are contextualised and supported qualitatively. This evidence base could be supplemented with information on recently observed impacts or descriptions of specific pathways. Universities can also describe “how” they have a positive impact on their regional innovation ecosystem, potentially beyond what is captured by the available performance indicators For the new TU, this “narrative with numbers” approach is enlivening and liberating. It invites the TU to look at both quantitative and qualitative indicators and view its economic impacts in that wider context

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This framework is illustrated following. Contributions of Universities to Regional Economic Development

Source: Joint Research Centre, European Commission 2.2

Case studies of socio-economic impacts

There is no single impact methodology “off-the-shelf” for economic, social and cultural aspects but the issue is topical and has been addressed by several initiatives. A study of the impact of the University of Birmingham “Our Impact: the economic, social and cultural impact of the University of Birmingham (prepared by London Economics, 2016) looked at impacts of teaching, learning, research and exports and calculated the financial and employment impact by the university to the surrounding region. The report concluded that one in fifty jobs in Birmingham depend on the university. In the United States the study “Economic and Social Impact Analysis” (University of Southern California, 2017) reported a substantial effect over three areas: direct, indirect and induced, measured in terms of employment, wages, output and tax revenues. The study concluded that the university generates $8 billion in economic activity, benefiting Los Angeles, the region and the state of California In Portugal a study “Polytechnic Institutes in Portugal: research on the impact of twelve institutes on the local economy” (University of Leiden, 2019) examined the regional impact of HEIs. The economic impact of an HEI extends over direct, indirect and induced effects. Impacts were reported to be significant, ranging among the individual institutions from 1% to 10% of gross domestic product in their respective regions In Spain, the report “Socio-economic impacts of Catalan public universities and research development and innovation in Catalonia” (ACUP, 2016) explored economic impacts of the

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universities, including multiplier effects and geographic distribution. They also examined wider socio-economic development, including knowledge transfer, innovation, internationalisation and entrepreneurship. Social impacts included training for specific groups, disability services, development cooperation, volunteering, learning in the community, culture, health, sport, gender and other issues. However, critique of impact assessments has been given by at least one commentator. “Local Economic Impact of Universities” by Balázs Kotosz (2013) reports that local impact studies of third-level institutions are often a political tool to persuade legislatures of the importance of investment in higher education. Rigorous methodology and conservative assumptions are therefore crucial. The lesson for the future TU is clear. Socio-economic assessment is a useful tool for policy formation and policy development, but care should be taken if it is used for organisational justification. 2.3

Case studies of mergers

A number of studies have looked at the merger experience with HEIs “Mergers from Higher Education – Lessons from Theory and Experience” by Julia Eastman and Daniel Lang (Toronto, 2001) looked at two mergers in Canada: Dalhousie University/Technical University of Nova Scotia and Ontario Institute for Studies in Education/University of Toronto. They concluded that motivations are crucial – in some cases merger objectives are for mutual growth, while in other cases bankruptcy/bail-out may be the issue. Culture and governance are key. Also, whether the separate institutions are originally complementary to each other, or competitive, is a key factor. Lessons for the future TU are relevant here. Discussion with key actors in Athlone and Limerick confirmed that the existing relationships between the two institutions were noncompeting and complementary. This suggests an excellent foundation for the future institution. “Experiences of a Merger” by Jessica Ohman (2011) examined experiences of administrators in merged community and technical colleges in Kansas. The findings confirmed the importance of leadership, communication, culture, collaboration and integration in the merger process. “Mergers in higher education institutions: a proposal of a novel conceptual model” by Łukasz Sułkowski, Justyna Fijałkowska, Małgorzata Dzimińska (2019) looked at the merger of three universities in France: Joseph Fourier University, Pierre Mendès-France University and Stendhal University, forming the Université Grenoble Alpes, as well as general international experience. They produced the conceptual framework shown following. The framework is interesting in that it draws attention to the fluid and dynamic elements of HEI mergers, and their interaction with the external environment. The framework introduces seven elements that surround the HEIs: economic, demographic, social, cultural, scientific, technological and global. Within this wider context, key forces are in play: internal stakeholders, external stakeholders, competitors, public policy and cooperation networks. These forces work through processes of strategy, structure and culture. The value of the framework is that it offers a productive way of thinking about the socio-economic impacts of merging HEIs.

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Conceptual Model of Universities’ Mergers

Source: Sułkowski, Fijałkowska, Dzimińska 2.4

References for this section

Joint Research Centre: “A Regional Innovation Impact Assessment Framework for Universities” (European Commission, Brussels 2018) London Economics: “Our Impact: the economic, social and cultural impact of the University of Birmingham (University of Birmingham, 2016) University of Southern California: “Economic and Social Impact Analysis” (USC, 2017) Oliveira, Pedro and others: “Polytechnic Institutes in Portugal: research on the impact of twelve institutes on the local economy” (University of Leiden, 2019) Association of Catalonian Public Universities: “Socio-economic impacts of Catalan public universities and research development and innovation in Catalonia” (ACUP, 2016) Kotosz Balázs and others: “Local Economic Impact of Universities” (Graz, 2013) Ohman, Jessica: “Experiences of a Merger” (University of Colorado, 2011) Sułkowski, Łukasz; Fijałkowska Justyna; Dzimińska Małgorzata: “Mergers in higher education institutions: a proposal of a novel conceptual model” (Managerial Finance, (2019)

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Demographic Context Recommendation The TU should adopt teaching & learning and research & innovation policies appropriate to the demographic setting. As the share of population with third-level education is lower than the national average, there are opportunities for second-chance education and mature learning. With significant unemployment levels and low proportions in the higherorder skills, the TU must focus on programmes with a potential development impact. Outreach and extension programmes will be relevant with the high proportion of rural population.

This section examines the demographic framework for the new Technological University (TU). This wider context provides some policy guidelines for the future TU. For this, much useful information is available from the National Census of Population (2016) conducted by the Central Statistics Office (CSO). Key issues reviewed include: • • • • • •

Sphere of influence Total population Age groups Education levels Labour force Social groups

• • • • •

Industrial sectors Settlement pattern Commuting flows Diversity Disability

The population structure is an important starting point for the exercise. The Census of Population provides a full coverage of demographic trends with comprehensive accuracy. However, the most recent census was 2016, so the subsequent chapter 4 on Economic Need and Impact updates and complements this through other data on incomes, output and labour force. In terms of wider socio-economic context, the two chapters should therefore be read together. This demographic chapter concludes that the new TU will benefit from an increased population size of over 830,000, with potential for critical mass and economies of scale. This population catchment also represents a microcosm of Irish conditions, although with distinct regional and local variations. The new TU therefore has significant possibilities to offer a diverse range of teaching and research programmes, reflecting Irish conditions but uniquely focused on the specific needs of the area. 3.1

Sphere of Influence

The sphere of influence of the TU embraces both the Mid West region of Clare, Limerick, Tipperary (North & South) and the Midland region of Longford, Westmeath, Offaly and Laois. Athlone is located on the western rim of the Midland region, so its catchment extends westwards, and this can be included by incorporating parts of Roscommon (Athlone and Roscommon Municipal Districts) and Galway (Ballinasloe Municipal District in the statistics. This is illustrated in the two following maps.

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This area on the map is obviously not an administrative boundary, rather a population catchment or market area. It is ‘fuzzy’ at the edges, and partly shared with other institutions, partly overlapping with the spheres of influence of Higher Education institutes in Galway, Sligo, Dublin, Waterford, Carlow and Cork. But it does highlight the geographic focus of the future TU and the census data for the areas mentioned can be used as a profile of the demographic character of the TU’s sphere of influence. This area is a conservative definition of the sphere of influence and relates to the area where LIT and AIT are relatively dominant. The impact of the Institutions is not only regional, but national with the AIT-LIT Consortium touching the borders of 15 other counties. In addition to the counties already in its sphere of influence. This highlights how the Limerick-Athlone corridor straddles the centre of Ireland, with potential long-term accessibility to a substantial proportion of the national population.

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3.2

Total Population

The total population of the area served by the new TU is over 830,000, comprising over 470,000 in the Mid West and almost 360,000 in the extended Midlands. The TU population comprises over 17% of the national population (4.8m). For the new TU this extended area is especially significant. Institutes of Technology were established originally to serve the educational needs of individual regions. While this gave the Institutes of Technology their essential regional focus, it may have restricted some in being primarily focused on one region. The wider catchment of 830,000 brings critical mass and economies of scale to the TU, an added strength above and beyond the sum total of two separate Institutes of Technology. This wider sphere of influence will allow the TU to offer a wider range of teaching, learning and research specialities than possible for individual Institutes of Technology.

Total Population

Table 3.2.1 Population Mid West

Extended Midlands

Total TU

473,269

359,660

832,929

Source: CSO Census of Population, 2016 3.3

Age Groups

The patterns of age groups distributed over four twenty-year cohorts suggest some significant patterns. The TU area in age structure broadly mirrors the national average, but with some variations. The Midlands has a higher proportion of under-20s than both the Mid West and national average. This may be because parts of both Laois and Westmeath are within the outer commuting area of Dublin and have attracted young commuter families over past years. Both the Mid West and Midland have lower shares of the 20-30s than the national average, perhaps caused by the influence of Dublin attracting this age group. As a result of both factors, the Mid West has a higher share of over 60s than the Midlands or the national average.

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From the viewpoint of the new TU, the overall picture is clear. The combined sphere of influence reflects the national profile in age groups, but this contains within it significant disparities and contrasts. Thus, the need is to cater for both younger and older age groups, with the pressing requirement for visionary and imaginative programmes to respond to the needs of different age categories. In summary, while the age profile follows the national average, there will be opportunities for the TU to adopt specific approaches mirroring regional needs.

Age Groups

Table 3.3.1 % population by age Age Group

Mid West

0-19 27.7 20-39 25.3 40-59 26.9 60+ 20.2 Total 100.0 Source: CSO Census of Population, 2016

Extended Midlands

Total TU

National

29.5 25.5 26,5 18.5 100.0

28.4 25.4 26.7 19.5 100.0

27.5 27.8 26.3 18.4 100.0

Projecting forward, looking at the younger single ages in the census suggests the following for the full TU area: • •

Numbers aged 17 in 2016: 11,346 Numbers aged 17 in 2030 (aged 3 in 2016) 11,970

Assuming nil nett migration and nil mortality of today’s three-year olds, the numbers of school leavers in the TU area in 2030 can be expected to be broadly the same as 2016. In 2018, the combined entry of full-time students to both LIT and AIT was about 2500, indicating a ‘market share’ of around 22%. From the viewpoint of the new TU, numbers of school leavers are likely to be stable into the future. But increases in educational participation will play an important role. According to the report “Projections of demand for full time third level education 20182040” (Department of Education 2018) 65% of second level leavers in Ireland currently transfer directly to third level, with an increasing upward trend.

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There is therefore substantial potential for the TU to enlarge intake due to increasing rates of participation in third level. As a result, increasing participation among under-represented groups, socially disadvantaged, lower-income groups, mature learners, part-time students and international students offer significant possibilities for the new TU. 3.4

Education Levels

At the educational levels, both the Mid West and Midlands have lower than average share of population who have completed third level education. This may be due to concentration of third level graduates in the Dublin area with higher proportions than most other regions. Conversely the Mid West and Midlands have correspondingly higher levels of those with primary, post-primary and certificate-level education. Two issues are clear from this for the new TU. The need for the regions to produce a higher volume of third level graduates is key. Improving the numbers with third level education is a fundamental instrument of regional development and the data gives this task added urgency. In addition, the data suggests a sizeable number in the population without third level education, highlighting the potential for participation in the TU by mature learners and secondchance students. The potential contribution of the TU to making impacts in this aspect is promising

Education Level Achieved

Table 3.4.1 % of persons over 15 years by highest level of education achieved Education level achieved

Mid West

None 1.8 Primary 11.9 Post-primary 48.5 Certificate/apprenticeship 12.2 Third level 25.6 Total 100.0 Source: CSO Census of Population, 2016 3.5

Extended Midlands

Total TU

National

2.2 13.1 49.4 12.1 23.2 100.0

1.9 12.4 48.9 12.2 24.6 100.0

1.7 11.5 44.7 11.6 30.4 100.0

Labour Force

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The labour force in the Mid West and Midlands broadly mirrors the national profile, but with some differences. Unemployment rates are higher than the national average in both cases, although markedly so in the Midlands. The implications for the TU is to put the focus of the new institution firmly in the agenda of regional development, ensuring its teaching and research boost both the expertise and creativity of the regional population. Labour Force

Table 3.5.1 Labour Force Indicator

Mid West

Total labour force 220,988 % at work 86.1 % looking for first regular 1.5 job % unemployed 12.5 Source: CSO Census of Population, 2016

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Extended Midlands

Total TU

National

167,568 84.4 1.6

388,566 85.3 1.5

87.1 1.4

14.0

13.1

11.5

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3.6

Social Groups

Reflecting the previous data, population by social group in the TU area reflects lower proportions in the professional and managerial/technical groups, and higher proportions in the manual occupations. The priority of the new TU must be to improve the skills profile across the social groups.

Social Groups

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Table 3.6.1 Population by social group Social group

Mid West

Professional 7.4 Managerial/technical 26.2 Non-manual 17.4 Skilled manual 14.5 Semi-skilled 11.4 Unskilled 4.0 Others 19.2 Total 100.0 Source: CSO Census of Population, 2016 3.7

Extended Midlands

Total TU

National

5.9 25.8 17.8 15.4 11.6 4.0 19.5 100.0

6.8 26.0 17.6 14.9 11.5 4.0 19.3 100.0

8.1 28.1 17.6 14.1 10.5 3.6 18.0 100.0

Industrial Sectors

The numbers employed by industrial sector reveal further patterns. Both the Mid West and Midlands have higher proportions employed in manufacturing than the national average, particularly the Mid West, but lower proportions in commerce and trade, possibly illustrating the concentration of this sector in Dublin. The manufacturing concentration arises from past trends of industrial development. Other sectors broadly follow the national pattern. Overall the TU area is a mixed economy, with no single sector especially dominant. For the TU, this means its teaching and research should reflect these multi-sectoral patterns, ensuring that its contribution is relevant across the spectrum of economic sectors.

Employment by Sector

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Table 3.7.1 Employment by sector Sector

Mid West

Agriculture, forestry, fishing 7.6 Building 5.0 Manufacturing 15.1 Commerce & trade 20.2 Transport and communications 6.6 Public administration 5.1 Professional services 23.6 Other 16.7 Total 100.0 Source: CSO Census of Population, 2016 3.8

Extended Midlands

Total TU

National

7.2 5.9 13.9 20.7 5.9 6.7 23.4 16.4 100.0

7.4 5.4 14.6 20.4 6.3 5.8 23.5 16.6 100.0

4.4 5.1 11.4 23.9 8.5 5.3 23.5 17.8 100.0

Settlement pattern

The pattern of settlement displays several features. Limerick city dominates the urban structure, substantially larger than other towns. Apart from Limerick, there is a series of strong towns with county significance, such as Ennis, Portlaoise, Athlone, Mullingar and Tullamore, with the smaller county-level towns of Longford, Nenagh. Portarlington, Edenderry, Ballinasloe and Newcastle west all over 6,000 population. Apart from these, there are 12 other towns over 2,000 population. Thus the urban structure features several sizeable centres, well distributed around the TU area, attractive locations for investment and services. However, in spite of that feature, the rural population dominates, with 60% of the TU area population living outside towns of over 2,000. Athlone has a particularly strong locational role. Its position in the Midlands gives it a wide catchment area, both actual and potential, extending to counties Westmeath, Offaly, Longford, Laois, Galway, Roscommon and beyond. This grants Athlone a strategic centrality above and beyond its size relative to other towns. Also, the large comparative size of Athlone, in contrast to the rural areas and small towns surrounding it, gives it a key importance. There are significant consequences for the new TU. The population in the TUâ&#x20AC;&#x2122;s catchment is relatively dispersed over 27 towns and rural areas. Given the potential for mature and secondchance students in the population, thus suggests opportunities for the TU to reach out to other centres away from Limerick and Athlone with delivery of learning programmes specifically addressed at local needs and working through local intermediary bodies. The existing centres at Thurles, Clonmel and Ennis would play an important role in this regard. Similarly, Athlone has substantial outreach and engagement programmes throughout its region, such as science projects in schools, engineering competitions, undergraduate research, third level taster workshops for schools, engineering workshops, software awareness and others. In addition, Athlone has developed a new programme of â&#x20AC;&#x153;Learning Gatesâ&#x20AC;? in co-working centres around the Midlands.

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Towns Over 6,000 Population

Population by Size of Settlement

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Table 3.8.1 Settlement pattern in TU area Centre

Population Population over 6,000

Limerick Ennis Portlaoise Athlone Mullingar Clonmel Tullamore Longford Shannon Nenagh Portarlington Thurles Edenderry Ballinasloe Newcastle West

94,192 25,276 22,050 21,349 20,928 17,140 14,607 10,008 9,729 8,968 8,368 7,940 7,359 6,662 6,619 Population 2,000-6,000

Roscommon Carrick on Suir Roscrea Tipperary Mountmellick Killaloe/Ballina Cahir Clara Moate Kinnegad Kilrush Edgeworthstown

5,876 5,771 5,446 4,979 4,777 4,116 3,593 3,336 2,763 2,745 2,719 2,072

Total population in towns over 2,000

329,478

Population outside towns of 2,000

503,541

Total

832,929

Source: CSO Census of Population, 2016

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3.9

Commuting flows

The map following shows the commuter catchments to main towns of persons travelling to work, school or college. The relatively dominant positions of both Limerick and Athlone are immediately evident. Limerick as the third largest city sits astride the Mid-West between Cork and Galway catchments. Athlone, although of relatively smaller size, has a very strategic impact on the midlands and is shown to play a dominant role on the centre of Ireland as a key urban centre. The implications for the TU are that both Limerick and Athlone are major centres for their areas of influence and the TU needs to build its programmes into this geography.

Source: CSO Census of Population, 2016 3.10

Diversity

Nationally, about 11% of the population are non-Irish nationals, a proportion reflected in the TU area. For the new TU this represents a healthy diversity in its population area, with possibilities for a substantial range of programmes reflecting the varied needs of its potential students. Table 3.10.1 % of population non-Irish national Mid West 10.7

Extended Midlands

Total TU

National

11.7

11.2

11.6

Source: CSO Census of Population, 2016

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3.11

Disability

Proportion of people with disability mirrors the national average at 13%, although the Mid West has the higher proportion, probably reflecting its older age structure. For the TU this emphasises the priority to cater for a wide range of needs and capabilities, with issues around access and inclusion. Table 3.11.1 % of population with disability Mid West 14.4

Extended Midlands

Total TU

National

12.9

13.7

13.5

Source: CSO Census of Population 3.12

Overall demographic issues for the TU

The new TU will benefit from an increased population size of over 830,000, with potential for critical mass and economies of scale. This population catchment also represents a microcosm of Irish conditions, although with distinct regional and local variations. The new TU therefore has significant possibilities to offer a diverse range of teaching and research programmes, reflecting Irish conditions but uniquely focused on the specific needs of the area. This NASA map of Ireland by night illustrates how the new TUâ&#x20AC;&#x2122;s sphere of influence contains extensive rural areas interspersed by a network of small towns.

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Economic Need and Impact

Recommendation Nationally, the overriding need is for a better balanced pattern of spatial development in order to avoid excessive reliance on the Dublin region while other regions perform below their potential. Regionally, the need is for greater connectedness between the growth centres of Limerick City and Athlone and their wider catchment areas, enabling local communities in the Midlands and Mid West to participate more fully in the growth and development of their regions. The new TU can help to meet these needs through developing the skills base and human capital of the Midland and Mid West regions. Focusing on higher vocational, technical, technologically-based and professional skills will be central to this objective. The new TU can also meet regional needs by acting as a research and innovation hub for enterprise in the Midlands and Mid West. Building research intensity and capacity in the new TU will develop a key regional asset, delivering targeted research activities that will strengthen the competitiveness of enterprises in both regions.

In this section we will review and discuss: • • • •

Ireland’s recent economic performance. Economic output and incomes in the Midland and Mid-West regions. The role of education in driving Ireland’s economic growth. The economic impact of AIT and LIT.

The purpose of this section is to highlight the key elements of Ireland’s recent economic performance and the role of education in driving and sustaining economic growth. The analysis will also show the disparity in economic performance between different Irish regions with particular focus on the Midland and Mid-West regions. This economic overview begins with a “Pre-pandemic” approach to analysing the economic context for this report. Later in the section we will look at the economic impact of Brexit and Covid-19 and the challenges that these two shocks create for the Irish economy. This approach will enable us to look at the trajectory of the Irish economy prior to the pandemic and the anticipated Brexit shock so that we identify its underlying dynamics. The analysis then goes on to look at differences in regional economic performance and outcomes with particular emphasis on the Midland and Mid West regions. We will also review the role of education in stimulating economic growth in Ireland and the economic impact of the Institutes of Education in Athlone and Limerick. Recovering from the pandemic and dealing with the aftermath of Brexit will be a slow and uncertain process but it will be influenced by the underlying strengths of the Irish economy and its ability to respond to major economic shocks. This section will explore some of these strengths and the factors underlying the resilience of the Irish economy. 4.1

Economic Overview

The Irish economy recovered strongly from the global financial crash of 2008-2009. Economic growth resumed again in 2010 after 2 years of falling national output and by 2019 Ireland was growing at an annual rate of almost 6%. Similarly, the unemployment rate fell from a high of

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15.9% of the labour force in 2011 to around 5% in 2019. The fall in unemployment also led to the end of involuntary emigration and a resumption of new inward migration by 2019. Table 4.1.1 summarises the main economic indicators for Ireland up to the end of 2019:

Table 4.1.1 Economic Indicators: Ireland 2015-2019 2015

2016

2017

2018

2019

GDP (% change on previous year

25.1

3.7

8.1

8.2

5.8

Consumer Price Index (% change on previous year)

-0.3

0.3

0.5

Unemployment Rate (% of labour force)

8.4

6.7

5.8

Balance of Payments (% of GNP)

5.8

-5.2

0.6

13.6

-0.9

General Government Debt (% of GDP)

76.8

73.9

67.8

63.6

57.8

Source: ESRI Ireland’s recent economic growth rates compare favourably with those of other advanced economies. Table 4.1.2 shows the growth rates achieved in the EU and the OECD member states over the same period: Table 4.1.2 Economic Indicators: GDP 2015-2019 2015

2016

2017

2018

2019

2020 (f)

OECD Area

2.54

1.84

2.71

2.31

1.69

-9.29

Non- OECD

3.95

4.26

4.55

4.39

3.54

-6.11

Euro Area

2.1

1.8

2.5

1.9

1.3

-8.3

EU 27

2.3

2.1

2.7

2.1

1.5

-8.3

World

3.27

3.09

3.66

3.39

2.66

-7.6

Sources: OECD; ECB; EU Commission The most striking feature of Ireland’s recent economic performance was the exceptionally high growth rate recorded in 2015. This has been the subject of much debate as the 25.1% rise in GDP was unprecedented by Irish and developed economy standards. The growth rate in national output was far in excess of the rates at which both employment and domestic economic activity grew in 2015. Both the OECD and the CSO, Ireland’s official statistics agency, issued explanatory notes about the unusually high 2015 Irish growth rate. They attributed the high growth rate to a series of once-off factors such as an increase in aircraft imports (for the aircraft leasing industry) and a number of corporate restructurings which saw a large increase in Ireland’s capital assets compared with 2014. The large increase in Ireland’s GDP in 2015 had the beneficial effect of reducing the country’s Government debt to GDP ratio as well as the primary effect of adding to national productive capacity. However, as the OECD noted, it also made it more difficult to interpret economic developments appropriately. In Ireland’s case the appropriate interpretation of the country’s economic performance between 2010 and 2019 is one of sustained growth in employment

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and real economic activity. This performance is particularly striking when the country’s participation in an EU-IMF Financial Assistance Programme between 2010 and 2013 is taken into consideration. Ireland’s recovery from the 2008-2009 recession was driven initially by a significant improvement in its cost-competitiveness as its unit labour costs fell. It was also supported by multinational enterprises in sectors less sensitive to cyclical fluctuations such as pharmaceuticals and medical devices. After 2015 the recovery was maintained by rising domestic demand, including business investment and household consumption. Ireland also benefited from the reforms carried out throughout the decade including greater fiscal sustainability, more prudent banking policies and enhanced labour market activation measures, according to the OECD. As a result, Ireland was in a stronger and more sustainable economic position at the end of the decade than it had been for some time. In its Summer 2019 Economic Statement the Department of Finance concluded that the Irish economy was approaching full employment was operating close to its full potential. It warned of the dangers of “over-heating” and of avoiding the “dangerous imbalances” of the not-toodistant past. The Department argued that in 2019/2020 the Irish economy was on a more sustainable growth path than was the case during the “bubble period” leading up to the global financial crash of 2008/2009. Comparing “Then and Now” the key differences in 20152019 from the 2004-2008 period were: • • • • •

Wages and personal consumption were growing more slowly and sustainably. Credit growth had fallen significantly as a result of changing (i.e. more conservative) banking policies. Household debt had fallen from 147% of national income in 2009 to 77% in 2017. Dependence on the construction sector fell from 10% of total employment in 20042008 to 5.7% in 2015-2019. The public finances were strengthened by reducing current spending and building up fiscal buffers.

The Department concluded that the Irish economy would grow at a slower rate of 3.3% in 2020 and revert to its potential growth rate of 2.2% to 2.5% from 2021 to 2024. The main external risks to this economic outlook at that time were identified as those arising from: • • • •

A disorderly Brexit which could reduce Irish GDP by 3.5% in the short term and 5% in the longer term. Continuing tensions around international trade. Slow growth in Ireland’s key export markets. Changes in international tax rules which could affect Ireland’s competitiveness.

The main internal risks were identified as those arising from the overheating of the economy as the share of construction activity increases, imbalances in tax revenues are created and pro-cyclical fiscal policies return. These forecasts are broadly in line with those of the ESRI and the Central Bank of Ireland in the months before the outbreak of COVID-19. The Central Bank was more optimistic in its forecast for 2020, expecting real GDP growth of 4.8%. Both institutions agreed with the Department of Finance about the risks to future growth of a disorderly Brexit and the uncertainties around the future international trading environment. Nevertheless, they concluded that strong domestic demand, driven by consumer spending and investment, would continue to support growth in the Irish economy.

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Private sector forecasters largely concurred with their public sector counterparts at the outset of 2020. At the start of the year KBC Bank was forecasting growth of 3% in Irish GDP for 2020, falling to 2.2% in 2021. IBEC, the employers’ representative body, estimated growth in 2019 at 6.0% and was forecasting 3.1% growth in 2020. IBEC identified labour market capacity and infrastructure constraints as the main internal factors inhibiting Ireland’s economic growth prospects in 2020 and beyond. It is clear that prior to the outbreak of COVID-19 the Irish economy was operating at or near its full capacity after recovering from the recession that followed the great financial crash of 2008/2009. The economy was set to grow at its potential rate of 2.0% to 2.5% annually in the early years of the new decade as the high growth phase of 2011 to 2020 was replaced by more sustainable economic expansion. While there were external and internal risks that might precipitate another recession, the consensus was that the Irish economy was strong enough to withstand external shocks and to manage its internal policy regime so as to avoid any further severe downturn in its economic performance. Later in this report we will examine the impact of the COVID-19 pandemic on Ireland’s economic performance in 2020 and its effects on the country’s future growth prospects. The economic impact of the pandemic has been severe and its negative consequences for economic growth in Ireland and globally will continue into the immediate future. However, the analysis in this section shows that the Irish economy entered the current downturn from a position of relative strength and has the potential to return to its long-term growth path in the aftermath of the pandemic. We will also address the other major threat to economic growth in Ireland over the coming years. A “disorderly” Brexit has been mentioned in this section as a significant external threat to Ireland’s economic growth. However, even an “orderly” Brexit has potentially disruptive effects on our future growth prospects and we will examine these in more detail later in the report. The analysis above dealt with the Irish economy’s performance at the national level. In the next part of the report will focus on the regional dimension of the Irish economy and the relative performance of the Midland and Mid-West regions in particular. 4.2

Regional Economic Performance.

We have seen in Section 3.1 that Ireland’s economic growth has been robust and sustained in the decade from 2010 to 2020. However, this strong recovery from the 2008-2009 global recession has not been uniform across the country. The ESRI, in its Quarterly Economic Commentary Winter 2019 note that: “Some parts of the country have grown significantly faster than others and … in general, there has been a divergence rather than convergence in regional economic growth during this period [2007 – 2019]”. (Emphasis and italics added). The authors state that regional economic disparities represent a significant challenge for Irish policymakers. A key element of the Government’s response to regional disparities is set out in the Project Ireland 2040 – National Planning Framework which aims to avoid a “business as usual” scenario which would see the continued dominance of Dublin and the Mid East in the Irish economy at the expense of the rest of the country. The National Planning Framework sets a high level objective of the continued growth of Dublin, our main international competitive city, accompanied by growth in the other Irish regions through a strategy of “focused development” based around the four main urban areas (including Limerick) and key regional centres and towns (including Athlone).

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The CSO produces two principal datasets which illustrate the extent of regional economic disparities in Ireland, output person and per capita incomes. We will summarise the key features of each of these measures of regional economic performance in the next two sections. We will also briefly look at employment and unemployment trends in the regions before summing up the main conclusions from our regional economic analysis. 4.2.1

Output Per Person

The first indicator of regional performance is Gross Value Added (GVA) per person, which is a measure of economic output at regional level similar to Gross Domestic Product (GDP) at national level. The Irish GVA data have similar limitations as GDP as a measure of economic well-being and are subject to annual fluctuations due to once-off events such as corporate restructuring, the relocation of asset ownership and transfers in patent ownership. While the absolute levels of GVA should be treated with caution, the data provide a good measure of the relative performance of regions over time. Table 4.2.1 shows the trend in regional GVA over the period from 2010 to 2018: Table 4.2.1 GVA Per Person 2010 to 2018 (â&#x201A;Ź) Region

2010

2012

2014

2016

2018 (p)

Northern & Western

22,752

24,329

22,842

23,456

23,000

Border

19,092

19,620

18,676

18,882

21,792

West

26,021

28,474

26,510

27,483

24,063

Eastern & Midland

39,066

39,117

46,041

58,051

70,104

Dublin

51,251

52,415

62,930

77,005

96,518

Mid East

23,976

22,057

24,990

36,971

37,058

Midland

18,976

18,677

18,657

21,424

27,561

Dublin plus Mid East

42,010

42,112

50,054

63,419

76,335

Southern

31,343

34,327

35,198

62,027

72,760

Mid West

27,484

29,478

26,283

South East

22,200

22,761

26,353

31,767

34,528

South West

39,695

44,861

46,919

State

33,489

34,809

38,165

53,073

62,293

Source: CSO. Data for the Mid West and South West suppressed for reasons of confidentiality after 2014. The data show the wide disparity in regional output per person in Ireland. The lowest level is in the Border region with 35.5% of the national average while Dublin has the highest output per head at 149.6% of the State average. It should be noted that the absence of data for the Mid West and South West after 2014 limits the usefulness of this dataset to some degree. However, the data follow an established pattern of growth being concentrated around the main cities of Dublin and Cork, with Limerick and Galway also acting as economic drivers in their

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regions. It is worth noting that the index for the Southern NUTS 2 region, which includes the Mid West and the South West, increased significantly from 92.2% of the national average in 2014 to 124% of the average in 2018. The most plausible reason for this rapid increase in the Southern regionâ&#x20AC;&#x2122;s share of national output is that it is linked with the growth of 26.3% in Irelandâ&#x20AC;&#x2122;s GDP in 2015. As discussed in section 3.1, this unprecedented rise in national output, which was not accompanied by any corresponding increases in domestic activity, was due to a number of once-off factors. These included the relocation of aircraft leasing assets, a rise in the number of corporate inversion deals and the transfer of international IP to Irish based subsidiaries. These activities, which had little impact on real economic activity in Ireland, were associated mostly with a small group of multinational enterprises, some of which appear to be located in the South West and Mid West regions. The CSO, in order to protect the confidentiality of the contributing companies, suppressed some of the data that would previously have been published (CSO 2016). Accordingly, we do not have data for the Mid West and South West regions after 2014. Table 4.2.2 below shows the same data in index form with the State average as the base: Table 4.2.2 Index of GVA Per Person 2010 to 2018 (State = 100) Region

2010

2012

2014

2016

2018 (p)

Northern & Western

67.9

69.9

59.9

44.2

36.9

56.4

48.9

35.6

35.0

West

77.7

81.8

69.5

51.8

38.6

Eastern & Midland

116.7

112.4

120.6

109.4

112.5

Dublin

153

150.6

164.9

145.1

154.9

Mid East

71.6

63.4

65.5

69.6

59.5

Midland

56.7

53.7

48.9

40.3

44.2

Dublin plus Mid East

125.4

121

131.2

119.5

122.5

Southern

93.6

98.6

92.2

116.9

116.8

Mid West

82.1

84.7

68.9

South East

66.3

65.4

69.1

59.8

55.4

South West

118.5

128.9

122.9

100

100.0

Border

State Source: CSO.

Data for the Mid West and South West suppressed for reasons of confidentiality after 2014.

The GVA data prior to 2015 show that Dublin and the South West have consistently outperformed other Irish regions in the level and growth of output per head. This reflects the strength of both regional economies and the fact that Dublin and the South West, particularly Cork City and its surrounding area, have attracted more multinational enterprises than other regions. The 2012 Census if Industrial Production indicates that about 63% of all output produced by multinationals in Ireland was produced in Dublin and the South West regions.

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The GVA data also show changes in the performances of the Midland and Mid West regions over the period 2010 to 2018. The Midland region had the lowest GVA per capita in the State in 2010, marginally below the Border region. By 2018 the Midland region had improved its position relative to the rest of the country and had a higher level of GVA per capita than either the Border or West regions. However, its per capita output had fallen from 56.7% of the national average to 41.1% over the same period of time. Part of the explanation for the performance of the Midland region in the GVA statistics is the relatively low share of foreign owned (i.e. multinational) enterprises producing its industrial output. The most recent Census of Industrial Production showed that 78.5% of gross output in Ireland was produced by multinational enterprises in 2017. The corresponding figure for the Midlands was 34.7%. In contrast with the Midland region, the Mid West was the third highest ranking region in Ireland in GVA per capita in 2010 after Dublin and the South West. By 2014, the last year for which data are available, it had fallen marginally behind the West and South East regions. More significantly, the gap between the Mid West and Dublin and the South West had widened. It is not possible to evaluate the Mid West’s current position relative to other regions in the absence of data, but the trend since 2010 has not been positive. The 2012 Census of Industrial Production showed a high dependence on foreign owned enterprises in the Mid West, where they accounted for 75.5% of industrial output and 56.7% of employment. Table 4.2.3 below shows Ireland’s GVA per capita data as a proportion of the EU average over the period 2010 to 2018. The data show a similar pattern among the Irish regions relative to the EU average as the national figures of GVA per person. It is worth noting that in 2010, as the recession following the 2008/2009 great financial crash was at its peak, Irish output per person was 130% of the EU average. Four Irish regions, Dublin, the South West, Mid West and West had per capita GVA above the EU average. By 2018 Irish output per head had increased to 178% of the EU average with the Dublin, Mid East, South East and Southern regions all recording higher GVA person than the EU average. In Dublin’s case the difference had widened to 266.3% of the EU average by 2018 which indicates the extent to which Dublin is by a substantial margin the dominant Irish region in generating economic activity. The Midland region recorded output person of 73.7% of the EU average in 2010 and had slipped only marginally to 73.2% of the average in 2018. This indicates that the region maintained its position relative to the rest of the EU between 2010 and 2018 while its position relative to the Irish national average declined over the same period. The Mid West had fallen below the EU average by 2014, the latest year for which data are available, having recorded GVA per capita 106.7% of the EU average in 2010. It is also noteworthy that the West region had fallen from 101% of the EU average in 2010 to 69.3% in 2018.

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Table 4.2.3 Index of GVA Per Person 2010 to 2018 (EU28 = 100) Region

2010

2012

2014

2016

2018 (p)

Northern & Western

88.3

91.6

81.4

78.2

68.9

Border

74.1

73.8

66.6

62.9

63.3

West

101

107.2

94.5

91.6

69.3

151.7

147.2

164.1

193.6

189.6

Dublin

199

197.3

224.3

256.8

266.3

Mid East

93.1

89.1

123.3

103.9

Midland

73.7

70.3

66.5

71.4

73.2

Dublin plus Mid East

163.1

158.5

178.4

211.5

211.2

Southern

121.7

129.2

125.4

206.9

220.7

Mid West

106.7

85.7

93.7

South East

86.2

168.8

93.9

105.9

104.9

South West

154.1

167.2

136

177

178

Eastern & Midland

State

130

131

Source: CSO. Data for the Mid West and South West suppressed for reasons of confidentiality after 2014. In summary the output data show the extent to which Dublin, followed by Cork and the South West, are the most productive regions in Ireland. There are differences in the productivity of the Midland and Mid West regions, with the Mid West achieving levels 30 to 40 percentage points above the Midland average. This can be partly explained by the greater prominence of multinational enterprises in the industrial economy of the Mid West, particularly in the LimerickShannon urban area. 4.2.2

Incomes in the Regions

Measuring economic output is only one way of evaluating a regionâ&#x20AC;&#x2122;s performance and position in a countryâ&#x20AC;&#x2122;s spatial hierarchy. Data in incomes are not subject to many of the distortions associated with GVA and are also available at county level. The CSO publishes data on disposable incomes per head in each county which adjust primary incomes for transfers and taxes. The data refers to the county in which people reside rather than where they earn their income. The county income data show a much closer dispersion of disposable incomes around the national average than the data on economic output. However, income disparities have been growing since the outset of the global financial crisis and incomes in Dublin continue to exceed those in the rest of the country. In 2018 Dublin, Wicklow, Kildare, Meath and Limerick all had disposable incomes per head above the national average while Cork, Tipperary, Laois, Westmeath and Louth were just below the average. The closer dispersion of county incomes around the national average compared with the pattern of regional GVA reflects the substantial resource transfer from Dublin and the South

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West to other regions i.e. from the most productive regions to the less productive ones (Morgenroth 2010). This shows that the Irish fiscal system works in a progressive manner to reduce regional disparities. However, as Morgenroth notes, Dublin received a higher share of public capital investment than other regions in the period before the great financial crash. Looking at the Midland and Mid West regions, the effects of this redistribution can clearly be seen. The Midlands recorded per capita disposable income that was 83.8% of the national average in 2018 whereas the region’s GVA per person was 37.5% of the State average. Per capita income in the Mid West was 96.7% of the national average in 2018 which was 12 to 17 percentage points above its GVA per person share in the 2010 to 2014 period. Table 4.2.4 Disposable Income per person 2010 to 2018 (£) Region/ County

2010

2012

2014

2016

2018 (p)

Northern and Western

17,317

16,464

16,003

16,792

17,804

Eastern and Midland

19,181

18,930

19,263

21,224

23,869

Dublin

20,114

20,193

20,823

23,005

25,497

Midland

16,854

16,302

16,104

16,828

20,287

Laois

17,441

16,327

16,318

16,946

21,007

Longford

16,828

16,609

16,013

16,610

19,466

Offaly

15,947

15,655

15,529

16,175

19,131

Westmeath

17,188

16,717

16,457

17,396

21,013

Mid West

18,224

18,246

18,003

19,553

20,947

Clare

17,828

16,706

16,282

17,588

19,107

Limerick

18,760

19,951

19,501

21,329

23,061

Tipperary

17,857

17,321

17,464

18,857

19,677

State

18,482

18,071

18,169

19,660

21,495

Source: CSO In the Midland region Westmeath is the county with the highest level of disposable income per capita, followed by Laois, Longford and Offaly. In the Mid West, Limerick is the highest income county, followed by Tipperary and Clare. At €19,107 per person Clare’s disposable income is less than that of the four Midland counties while Tipperary sits in the middle of the Midland counties in terms of income per head. Both the Midland and Mid West have a higher average share of transfers in their total household income (20.7% and 21.1%) than the State average (18.4%), while both regions pay less tax as a percentage of household income (28.5% and 28.3%) than the State average (29.3%). This is an example of how the Irish fiscal system works to transfer resources between regions.

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Table 4.2.5 Disposable Income per person 2010 to 2018 (State=100) Region/County

2010

2012

2014

2016

2018 (p)

Northern and Western

93.7

91.1

88.1

85.4

82.8

Eastern and Midland

103.8

104.8

106

108

111.0

Dublin

108.8

111.7

114.6

117

118.6

Midland

91.2

90.2

88.6

85.6

94.4

Laois

94.4

90.3

89.8

86.2

97.7

Longford

91.1

91.9

88.1

84.5

90.6

Offaly

86.3

86.6

85.5

82.3

89.0

Westmeath

93.0

92.5

90.6

88.5

97.8

Mid West

98.6

101.0

99.1

99.5

97.5

Clare

96.5

92.4

89.6

89.5

88.9

Limerick

101.5

110.4

107.3

108.5

107.3

Tipperary

96.6

95.8

96.1

95.9

91.5

State

100

100.0

Source: CSO

The incomes data show counties converging and diverging over different periods of time. Convergence occurred between 2001 and 2010 but since 2011 county incomes have tended to diverge again. The effects of the 2009/2010 recession appear to have worked their way through the Irish economy throughout the past decade, with counties and regions and regions recovering at different rates. The Midland and Mid West regions are an example of this, with divergence occurring after 2010 but convergence re-emerging in 2018 due to higher income growth in the Midland counties. 4.2.3 Employment The third indicator we use to analyse regional performance is employment. Table 4.2.6 below shows the labour force, numbers employed, and the unemployment and participation rates for Ireland and the Midland and Mid West regions in the first quarter of 2008 before the onset of the great financial crash:

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Table 4.2.6 Labour Force key indicators 2008 to 2019 State

2008 (Q1) 2,260

2011(Q3) 2,173.70

2019(Q4) 2,471.70

2,146.40

1,845.60

2,361.20

15.1

4.7

63.5

60.4

62.3

Labour Force ('000)

131.8

126.4

140.7

In Employment ('000)

125.2

101.7

134.3

19.6

4.5

62.9

59.5

183

185.5

226.9

173.2

154

215.8

Unemployment Rate (%)

5.4

4.9

Participation Rate (%)

61.5

62.3

58.2

Labour Force ('000) In Employment ('000) Unemployment Rate (%) Participation Rate (%) Midland

Unemployment Rate (%) Participation Rate (%) Mid West* Labour Force ('000) In Employment ('000)

Source: CSO * Includes Tipperary SR after 2016 The data show that in early 2008 the national unemployment rate was 5% of the labour force which is considered to be at or near to full employment. The Midland region unemployment rate was the same as the national average at 5% while the Mid West was marginally above this level at 5.4%. Both the Midland and Mid West regions had labour force participation rates below the national average, with the Mid West rate 2 percentage points lower. Unemployment in Ireland peaked at 15.1% of the labour force in the third quarter of 2011. This was also the case in the Midland and Mid West regions which recorded peak unemployment rates above the national average. The Midland region was particularly impacted by the recession with a peak unemployment rate some 4.5 percentage points above the national average while the regionâ&#x20AC;&#x2122;s labour force participation rate fell by almost 5 percentage points from the first quarter of 2008. The Irish economy had returned to near full employment by the fourth quarter of 2019 when the national rate fell to 4.7% of the labour force. By this time the Midland and Mid West regions had unemployment rates similar to the national average with the Midland region marginally below the national level. Both regions had lower labour force participation rates lower than the national average, however, with the Mid West some 4 percentage points below the average rate for the country. The Mid West participation rate had fallen by 4 percentage points since the third quarter of 2011. This fall followed the incorporation of South Tipperary into the Mid West region in 2016. The trend in the Midland and Mid West unemployment and labour force participation rates relative to the national average suggests that both were slower than other Irish regions to recover from the 2009/2010 recession. The lower labour force participation

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rates in the Midland and Mid West regions following the recovery suggest that there may be longer term effects in some areas their labour force as a result of the last recession. Projections of future labour force growth show the Midland and Mid West regions increasing at a similar rate as the national labour force in the long term. The ESRI projections show the national labour force growing by 32% between 2016 and 2040 with the Midland and Mid West regions growing slightly faster at 34% each. These projections were prepared by the ESRI in 2018 for the National Development Plan 2040. 4.2.4 Summary The Irish pattern of regional development largely follows the trends describes by Morgenroth (2015) which can be summarised as follows: • • • • •

The period of recovery after 2010 followed the longer run trend towards greater regional divergence with the Dublin and South West regions achieving higher output growth than the rest of the country. This long term trend towards greater regional divergence in regional economic performance was established in the 1995-2007 period and has continued since 2010. The higher growth rates of the two main Irish city-regions of Dublin and Cork are consistent with international trends towards urban-led growth in areas with high employment densities (“agglomerations”). There are positive spill overs from this pattern of urban-led growth for “commuter regions” such as the Mid East, Midlands and South East which benefit from the jobs created in the urban centres of Dublin and Cork. The trend towards urban agglomerations of economic activity and jobs is consistent with greater national economic efficiency and policy should focus on ensuring that their wider hinterlands benefit from the economic dynamism of the urban centres.

These conclusions are consistent with current research and thinking on spatial economic development. For example, Moretti and Glaeser are widely cited as authoritative sources of evidence-based policy analysis in spatial development. Their work focuses on the role of agglomerations and large urban centres in driving regional and national economic growth in an increasingly globalised and competitive world. They highlight the importance of education in reinforcing modern urban-led economic development in advanced knowledge-based economies. We will examine this linkage further in the next section. The World Bank also noted the tendency towards greater density, shorter distances and fewer divisions across borders in its 2009 World Development Report on “Reshaping Economic Geography”. The National Planning Framework (NPF) recognises greater divergence in the economic performance of Irish regions in the years following the great financial crash but sets itself the task of achieving greater spatial equality following Ireland’s recovery. The NPF acknowledges the need to keep the Dublin region at the forefront of international competition for mobile investment but the “Potential of other regions must be harnessed” to avoid excessive regional imbalance and “Each part of Ireland needs to provide the opportunity for focused development.” The national policy focus has therefore moved towards enabling each region to realise its economic potential rather than accepting growing spatial divergence. The Midland and Mid West regions have capacity to raise labour force participation rates towards the national average without creating pressure on their labour markets. They also have the challenge of raising productivity levels towards those of more productive regions in order to realise their economic potential in line with national policy objectives. We will explore further how this can be achieved in the following sections of this report but the conclusion from the analysis in this section is that there is capacity to raise output and productivity in both regions in the years ahead.

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4.3

Education and Economic Growth

4.3.1

Overview

The link between economic growth and education has been the subject of a vast empirical literature as outlined in the OECD report on “Tertiary Education for the Knowledge Society – Volume 1” which summarised the results as follows: “The improvement in human capital has been one of the key factors behind the growth process of the past decades in all OECD countries”. The OECD research emphasises the role of tertiary, or post-compulsory, education which seems to be more important for economic growth in more developed countries while primary and secondary education are more important for growth in less developed countries. The literature on education and growth points to four key areas where tertiary education drives economic growth: • • • •

Countries with higher average years of education tend on average to grow faster. OECD countries which expanded their higher education sector more rapidly from the 1960s experienced faster growth. Education is important through its effects on productivity i.e. it raises the productive capacity of an economy. There is some evidence that education positively affects physical investment in the economy which in turn further increases growth rates.

The mechanism through which tertiary education drives economic growth is through developing new technology and innovation: higher levels of education increase a country’s capacity for innovative research and its ability to acquire and adopt new technology. Research has demonstrated the “Symbiotic relationship between a country’s successful industries and its universities” according to a paper by Wolf and the strength of countries in various different sectors (for example pharmaceuticals and software engineering) is closely related to the areas in which they possess centres of university excellence. An extensive literature survey for the Centre for Higher Education Transformation in South Africa by Pillay concluded that higher education makes a significant and positive contribution to economic growth. An important channel of the contribution is through technological absorption whereby higher education contributes to developing new technologies and innovation through research and also assists in their diffusion throughout the economy by raising skill levels. Tertiary education raises GDP directly through a productivity effect and by increasing the speed at which a country absorbs new technology and innovation. Pillay also cites work by the World Bank on the knowledge economy which highlights the links between higher education, the knowledge economy and a country’s competitiveness. In advanced economies there is increasing emphasis on the role of higher education in building and sustaining a country’s competitiveness. For example, the Browne report on “Securing a Sustainable Future for Higher Education” in the UK also highlighted the link between higher education and innovation and pointed out that: “Employing graduates creates innovation, enabling firms to identify and make more effective use of knowledge, ideas and technologies. Internationally successful businesses employ high levels of graduates, and ‘innovative active enterprises’ have roughly twice the share of employees educated at degree level than those that are not active in innovation”.

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Future economic growth will be driven by high performing, high added-value sectors and success will depend on a country’s high-level skills. The authors of the Browne report were concerned that the UK was at a competitive disadvantage in the global skills race because of its “Inadequately educated workforce” and pointed to the dangers of it falling into a low skills equilibrium, producing low specification, low cost goods and services which would lead to lower living standards in the longer term. This point was developed further in a study of the relationship between graduates and economic growth across countries by Holland et.al. completed in 2013 for the UK Department of Business Innovation and Skills which concluded that: “There are …. externalities to education that have wider macroeconomic benefits over and above what can be directly observed through wage premia. If the HE sector in the UK were to expand towards the size in the US, this could be expected to raise the level of productivity in the UK by 15-30 per cent in the long-run.” There is also increasing emphasis on the quality of a country’s education system in addition to the “quantity” of schooling it delivers. In a paper asking, “Will more higher education improve economic growth?” Hanushek emphasises the role of cognitive skills in human capital formation as opposed to just measuring the number of years of education. His modelling of the effects of education on economic growth uses knowledge of science and mathematics as a proxy for cognitive skills. He notes that while it is the case that countries with higher skill levels invest more in years of schooling, education is a cumulative process in which “later learning always builds on earlier learning”. He argues that differences in growth rates across different countries can be mostly explained by skills formation during schooling. He concludes that economic growth is highly related to the knowledge capital of a country and includes cognitive skills in his measurement of knowledge capital. 4.3.2

Education and Economic Growth in Ireland.

Irish experience since the 1960s supports the link between higher educational attainment and economic growth. The publication of the OECD report “Investment in Education” in 1965 was followed by a continual expansion of the education sector at second and third levels in particular in subsequent decades. Ireland was a relative latecomer to the expansion of higher education in post-war Europe for a variety of cultural, social and economic reasons. These are documented by Daly in her book on reshaping the Irish economy and society between 1957 and 1973 which also explores the economic and social forces behind Ireland’s drive to improve educational attainment levels after publication of the OECD report. FitzGerald (2019) provides an overview of the link between education and economic growth in Ireland in recent decades. Summarising the results of a number of studies he concludes that: “The failure to follow the rest of Northern Europe in investing in education immediately after the Second World War was an important factor in Ireland’s poor economic performance in the 1950s, 1960s and 1970s. However, a range of studies have concluded that the rising stock of human capital in Ireland has played a very important role in the economy’s rapid growth in recent decades, especially since 1990.”

One of these studies suggests that higher educational attainment contributed 0.6% to 0.8% to the growth rate of the Irish economy between and 1980 and 2010. Another concludes that the growth bonus may have been more than double this rate, i.e. 2% per

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year, between the shorter period from 1990 and 2010. Ireland’s level of educational attainment compares favourably with the rest of the EU and this is reflected in the productivity statistics discussed in the previous section. FitzGerald describes the three channels through which investment in human capital – i.e. in higher educational attainment - impacts on the wider economy by: • • •

Raising the productivity of the individual and hence of the economy as a whole. Increasing labour force participation rates, especially among females. Reducing the probability of becoming unemployed.

Each of these channels contributes to economic growth by making the labour force more productive and increasing the supply of labour in the Irish economy and are directly linked to investment in education and human capital. As the levels of educational attainment in Ireland have increased in recent decades, a further benefit of past investment in education is evident from the numbers of returning graduates in the Irish labour force. Census data from 2011 and 2016 show that about 28% of graduates living in Ireland are returned emigrants. There is now an established pattern of Irish graduates who emigrate after completing college returning to Ireland after spending a number of years overseas. Barrett and Goggin examined the impact of returning skilled migrants to Ireland and found that they earned a wage premium of about 7% compared with graduates who remained in Ireland after graduating. The premium is higher for those with post-graduate degrees and for those who travelled further than the UK and the EU. Barrett and Goggin describe the process of graduates emigrating and subsequently returning to Ireland after enhancing their skills as one of human capital formation which ultimately benefits the Irish economy. Thus, the traditional view of graduate emigration as a “brain drain” has been replaced with the newer concept of “brain circulation” where graduates move between countries in response to changes in the demand for skilled labour. FitzGerald notes that this process is not a feature of the Northern Ireland labour market where graduates leave the country never to return to a greater extent than is the case in the Republic. This is a drain on human capital formation in the North and there are fewer opportunities than in the Republic for skilled graduates to return home. Unlike the rest of Ireland, Northern Ireland is suffering from a “brain drain” as its economy is insufficiently developed to attract its graduates back to the country after they have emigrated. 4.3.3

The Graduate Premium

The graduate “premium” refers to the higher earnings of third level graduates relative to those workers without a third level education. The premium can be regarded as a measure of the difference between the earnings of a skilled worker and those of an unskilled worker and has been widening in most developed economies in recent decades. The wage premium is a feature of the labour market in Ireland. McGuinness, Bergin et.al. studied educational attainment and earnings in Ireland between 1994 and 2009 and found that there were “Steady to rising premiums to post-secondary qualifications for both sexes” during this period. The Indecon “Independent Assessment of the Economic and Social Impact of Irish Universities” published in 2019 estimated that in Ireland the lifetime graduate premium for the holder of a primary degree and working until age 65 would be €106,000, net of taxation and discounted to 2018 prices. A postgraduate degree would generate an additional €40,000 in lifetime earnings while a PhD would result in a premium of €116,000 relative to the basic

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primary degree. These findings were consistent with research in the UK which estimated a graduate premium of €101,000 for the Russell Group of 24 universities. The HEA Graduate Outcomes Survey for the Class of 2018 found that there was an earnings differential of just under 5% in the annual earnings of university graduates compared with graduates of Institutes of Technology. Applying this differential to IoT graduates suggests that their lifetime earnings premium would be in the order of €101,040 using the Indecon estimate as a baseline. This is a similar order of magnitude to the lifetime graduate earnings premium of the Russell Group universities. The CSO also publishes estimates of the Irish graduate earnings premium using data from the Census of Population. The CSO data have the further advantage of being available by county and by type of qualification from No Education/Primary Education to postgraduate degrees. Table 4.3.2 below compares the median earnings of the holders of honours and postgraduate degrees with those whose highest level of educational attainment is upper secondary. In the table we compare the counties of the Midland and Mid West regions with the State average: The data show that the graduate premium for holders of an honours degree is below the State average for those working in each county of the Midland and Mid West regions other than Limerick. This suggests that the demand for skilled (i.e. graduate) labour is higher in Limerick, the main urban centre and the area with the greatest concentration of economic activity in the Mid West and the Midland regions. This also holds true for the premium associated with a postgraduate degree where Limerick is again the only county above the national average. However, there are significant premiums for postgraduate degree holders working in Westmeath and Offaly, both of which are just below the national average. After this overview of the private returns to higher education in the form of the graduate premium we will now examine another approach to measuring the impact of third level institutions on the national economy with specific reference to the Institutes of Technology in Athlone and Limerick. Table 4.3.1: Median Earned Income Premium per person by County of Work 2016 Honours Degree (€)

% of State

Postgraduate Degree (€)

% of State

Laois

15,021

84.1

23,633

87.7

Longford

15,939

89.2

23,647

87.7

Offaly

15,548

87.1

26,236

97.4

Westmeath

15,511

86.9

26,548

98.6

Clare

17,101

95.8

25,073

93.1

Limerick

19,677

110.2

30,760

114.2

Tipperary

16,557

92.7

25,548

94.8

State

17,852

100

26,938

100

Region/County: Midland

Mid West

Source: CSO and authors’ calculations.

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4.4

The Economic Impact of LIT and AIT.

We can estimate the economic impact of Higher Education Institutions such as LIT and AIT in a number of different ways. One approach is to use the concept of the expenditure multiplier which measures the effect of expenditure by HEIs on national economic output. This enables us to quantify the economic impact of a euro spent by a HEI on both output and employment at the national level. However, this is only a partial estimate of the full economic and social impact of the HEI as it does not capture the human capital, R&D (research and development) and entrepreneurial impacts generated by a third level institution. It also does not measure the broader non-economic impact of the HEI on social policy objectives such as greater inclusion, equality of access and public wellbeing. With these caveats in mind we can estimate the impact of LIT and AIT on Irish economic output using conventional multiplier analysis. This methodology is well established in studying the economic impact of HEIs and in the Irish context it has been used to estimate the impact on national output of HEIs (Universities and IoTs) and research institutions associated with HEIs such as Lero (software), CRANN (Adaptive Nanostructures and Nanodevices), and AMBER ((Advanced Materials and BioEngineering Research). These studies use input-output analysis to assess the “knock-on” or “multiplier” effect of spending by HEIs on the wider Irish economy. The approach was used extensively in the UK to estimate the impact of HEIs on national and regional economic output and was adapted by researchers for Irish third level institutions. The concept behind this analysis is straightforward and centres on the direct, indirect and induced effects on national output of spending by HEIs. This can be illustrated as follows:

Direct

• Economic Impact of expenditure on goods and services by HEI

Indirect

Induced

• Economic impact of expenditure by suppliers of goods and services to HEI

• Economic Impact of expenditure by HEI employees on goods and services through subsequent rounds of spending

The research defines Type 1 output multipliers as including direct and indirect impacts, while Type 2 multipliers capture direct, indirect and induced impacts. The convention in economic impact studies of HEIs is to use Type 2 multipliers and to estimate them using input-output tables. Input-output analysis is used to capture the impact of an injection of spending, for example an increase in Government or consumer expenditure, across different sectors of an economy. The results of the analysis are used to calculate the multiplier, or knock-on, effects of the initial spending injection on the economic system. In Ireland, research by Zhang, Larkin and Lucey (2015) estimated the economic impact of 7 Irish universities and 14 Institutes of Technology on national output using the 2011 CSO input– output tables. They estimated Type 2 multipliers and employment multipliers for each institution using a similar methodology to that employed by researchers to estimate the impact of HEIs in the UK. The authors also stated the limitations of their approach:

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“We are conscious that a narrow economic focus on the ‘impact’ of higher education is partial and incomplete. The social, personal and cultural benefits both economic and other of a thriving and effective higher education system are not amenable to easy metrification and are not captured here”. Zhang, Larkin and Lucey state that their aim is to capture the high-level macroeconomic impact of HEIs which does not include key effects of third level education, such as skill enhancement, which have significant downstream economic and social benefits, but which are difficult to measure. With these constraints in mind the authors nonetheless conclude that input-output analysis enables them to answer the question “Does the economy receive more than one euro’s worth of economic activity for every euro it spends on higher education in Ireland?” The interesting feature of the Zhang, Larkin and Lucey research is that it estimates Type 1 and Type 2 multipliers for each university and IoT in Ireland and compares them with results obtained by UK researchers. Type 1 multipliers (direct and indirect impact) were uniformly higher in the universities (1.27) than in the Institutes of Technology (1.1) and were similar in size to those obtained by the UK research. However, of more interest are the Type 2 multipliers which were broadly similar in size between the Institutes of Technology and the universities. Letterkenny Institute of Technology had the highest Type 2 multiplier (4.25) while Dun Laoghaire Institute of Art, Design and Technology had the lowest (3.62). The results suggest that spending by Institutes of Technology have a strong impact on their local economies via household expenditure. The Type 2 multipliers for LIT and AIT were similar at 4.02 and 3.98 respectively. This means that each euro of expenditure for LIT generates gross output of 4.02 euros in the Irish economy while each euro of expenditure for AIT generates 3.98 euros in national output. The Institutes of Technology in Munster and Leinster have similar multipliers as LIT and AIT; Tralee IT is 4.02, Cork IT is 3.97, Waterford IT is 4.07, Carlow IT is 4.03 and Dundalk IT is 3.99. Table 4.4.1 summarises the multipliers for the Institutes of Technology and universities in rank order:

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Table 4.4.1 Type 2 Multipliers for Irish HEIs IoTs

Multiplier

Universities

Multiplier

Letterkenny

4.25

DCU

4.17

GMIT

4.09

TCD

4.17

Waterford

4.07

UCD

4.14

Blanchardstown

4.05

UCC

3.86

Carlow

4.03

NUIG

3.79

Limerick

4.02

NUIM

3.74

Tralee

4.02

3.63

Dundalk

3.99

Dublin IT

3.99

Athlone

3.98

Cork

3.97

Sligo

3.96

Tallaght

3.96

IOADT 3.62 Source: Zhang, Larkin and Lucey "The Economic Impact of Higher Education Institutions in Ireland". [Note: The research was published before the new Dublin Technological University was established so the Dublin Institutes of Technology are shown separately.] The LIT and AIT Type 2 multipliers are higher in comparison with universities in their regions and catchment areas: UL has a Type 2 multiplier of 3.63, NUI Maynooth a multiplier of 3.74, while NUIG and UCC have multipliers of 3.79 and 3.86 respectively.

Zhang, Larkin and Lucey also estimated Type 2 employment multipliers as part of their research. These show the impact on employment of each EUR1 million of HEI expenditure. The employment multiplier for AIT was estimated at 8.04 and for LIT at 7.8. The employment impact of the Institutes of Technology is generally higher than that if the universities, again due to their greater impact on household expenditure. The corresponding employment multipliers for NUI Maynooth and UL are 4.45 and 4.91 respectively. We can apply the Type 2 output and employment multipliers from this research to estimate the economic impact of LIT and AIT. Using the 2017/2018 financial statements of both Institutes of Technology we can derive their expenditure on Staff Costs and Operating Expenses and apply the output and employment multipliers to indicate their impact on the Irish economy. These estimates are for illustrative purposes only and are not definitive statements of the actual economic impact of both Institutes of Technology. They do, however, provide an indication of their economic impact. Table 4.4.2 summarises the results:

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Table 4.4.2 Estimates of Economic Impact - LIT and AIT 2018. Employment Multiplier

Output Impact (€'000)

Jobs Supported

LIT

7.8

232.235

451

AIT

8.04

186.324

376

418.469

827

LIT + AIT

Sources: LIT and AIT Annual Reports; Zhang et. al. for multipliers.

We can see from the table that the estimated combined impact of LIT and AIT on the Irish economy is a contribution of €418.5 million in economic output while they support 827 jobs in addition to their own FTE count. This output and employment has obvious benefits for the regional economies of the Mid West and Midlands and also generates revenue for the Exchequer in direct and indirect taxation. We estimate that AIT’s economic impact accounts for about 2.4% of the Midland region’s economic output as measured by Gross Value Added (GVA) in 2018. The corresponding figure for LIT is about 2.1% of output in the Mid West in 2014, the latest year for which GVA data are available in that region. This high-level analysis of the two institutions supports the conclusion of Zhang, Larkin and Lucey that Irish higher education institutions: “Provide the public exchequer with “value for money” in that they have strong gross economic outputs and generally strong net economic outputs and are commensurate, if not slightly superior in specific instances, with their UK counterparts”. The authors qualify the results if their analysis with a number of caveats including the economic impacts which are difficult to measure and which are mentioned above. These include the exclusion of students’ expenditure from their modelling, although the effects here are relatively modest based on UK evidence; the absence of any comment on the quality of the education provided by different institutions, although there is indicative evidence that specialist institutions may provide different results than more comprehensive ones; and the limitations of the 2010-2011 input-output tables for Ireland which reflect an economy in transition from the financial crash of 2008. Other Irish studies of the economic impact of higher education institutions support the conclusions of the Zhang, Larkin and Lucey research. A study by Lenihan, Mulligan and PerezAlaniz of the UL Kemmy Business School estimated the economic impact of Lero, the Irish software research centre using similar input-output analysis techniques. The Lenihan study found that over a 13-year period from 2005 to 2018 the Type 2 multiplier for Lero was 5.25. That is every €1 invested in Lero by public agencies and industry partners contributed €5.25 to the Irish economy. The employment multiplier was estimated at 10.51 and Lero is estimated to have generated 2,678 jobs in the Irish economy over the period 2005-2018. The CRANN/AMBER economic impact evaluation also used an input-output analysis methodology covering a 10-year period from 2007 to 2016. It estimated a Type 2 multiplier of 4.69 for this period and an employment multiplier of 12.80. The employment multiplier is higher than that of the HEIs and Lero and is attributed to a particularly high ratio of funding to headcount in both centres. These results show higher multipliers for Lero than for Irish HEIs and those estimated in UK studies. Lenihan et al acknowledge that research centres such as Lero are not directly

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comparable with HEIs which are larger institutions and carry out functions in addition to research including teaching, administration and other services. However, there are enough similarities between research centres and HEIs to allow a reasonable comparison to be made. The approach described in this section enables us to estimate the high-level impact of HEIs such AIT and LIT while recognising that their economic and social impact is much wider than their direct effect on economic activity and employment. The analysis complements the discussion of the graduate premium in the previous section which mostly captures the private returns to a third level education. The two approaches give a useful indication of the extent to which higher education creates benefits for individual citizen and the wider economy. 4.5

The Economic Impact of Brexit and Covid-19

In section 4.1 above we concluded that at the beginning of 2020 a “disorderly” Brexit was one of the main risks to the Irish economy in the short to medium term. The advent of the Covid19 global pandemic in the first quarter of 2020 has added an additional risk to the outlook for the Irish and global economies as the immediate effects of the initial shock make their way through the economic system. In this part of the report we will examine the impact of Brexit and Covid-19 on the Irish economy, recognising that their main effect is to raise the level of uncertainty around the economic outlook domestically and internationally. The Covid-19 pandemic has had an immediate impact on economic performance in 2020 while Brexit will impact economic growth in 2021, when the United Kingdom leaves the European Union’s Single Market and Customs Union. The two external shocks will combine to impact Ireland’s economic prospects in 2021 and subsequent years and will move the Irish economy on to a different growth trajectory than was envisaged at the beginning of 2020. Before considering the outlook for 2021 and beyond, we will review the principal economic effects of Brexit and Covid-19 separately, drawing on the latest research from the Department of Finance, the Central Bank of Ireland and the ESRI. Each of the three institutions underline the high levels of uncertainty in estimating the economic impact of both phenomena and this caveat also applies to our analysis. 4.5.1 Brexit and the Irish Economy The UK formally exited the EU in January 2020 but remains a member of the Single European Market and the European Customs Union for a transitional period to 31 December 2020. The economic effects of Brexit on the Irish economy will become apparent in 2021 and future years and will depend to a large extent on the arrangements for future trading relationships agreed by the EU and UK before the end of the transitional period. A “disorderly” Brexit would mean that future trade between Ireland (and the rest of the EU-27) and the UK would take place on World Trade Organisation (WTO) terms. According to the Department of Finance, this would “Involve varying degrees of tariffs on goods, as well as the possibility of both non-tariff barriers (customs declarations, delays at ports, etc.) and disruption to supply-chains, many of which are characterised by a ‘just-in-time’ nature”. An “orderly” Brexit, in contrast, would involve an agreement between the two parties for full or partial access to each other’s markets with fewer tariff or non-tariff barriers impeding the flow of trade. It should be noted that even in a scenario where the EU and UK reach an agreement on their future trading relationship, the flow of goods and services between them will still be adversely impacted due to the UK’s exit from the Single Market and Customs Union and the regulatory requirements resulting from its exit.

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Estimating the economic effects of the two scenarios (“Deal” of “No Deal”) is compounded by the impact of the Covid-19 pandemic on the baseline year, i.e. 2020, for forecasting to 2021 and future years. We saw that at the outset of 2020 the Irish economy was operating at near full capacity and at almost full employment. Following the outbreak of the pandemic the economy is no longer operating at full employment levels as it faces a major shock to its external trade with the advent of Brexit. Accordingly, economic forecasters have had to adjust their previous estimates with the new “baseline” scenario based on the EU and UK reaching a trade agreement before end of the transition period. In a “No Deal” scenario GDP growth in the short term would be 3 percentage points below the baseline forecast, due to the additional disruption to trade resulting from tariff and non-tariff barriers. The UK tariff regime was published in May 2020 and in general terms provides for higher tariffs on agri-food products and relatively lower tariffs on manufactured goods. This has implications for Irish exports to the UK which have been declining as a share of overall exports in recent decades. Irish goods exports to the UK currently stand at around 10% of total exports according to Central Bank estimates. However, agri-food exports are more dependent on the UK market, with 38% of Irish exports in the sector destined for the UK. In sub-sectors such as beef production, this percentage is even higher. The Irish Government’s Brexit readiness plan estimates that the UK tariff regime will add between €1.35 billion and €1.5 billion to the cost of Irish exports. Lawless and Daly (2020) estimate that, assuming that these tariff costs are fully passed through into product prices, Irish food and beverage exports to the UK could be reduced by up to 75%, while overall Irish exports to the UK would fall by 4%. The impact of Brexit is therefore going to fall disproportionately on the agri-food sector in the event that a trade agreement is not reached between the EU and the UK before the end of 2020. But even in the event of an agreement, trade between Ireland and the UK will be adversely impacted by Brexit by non-tariff barriers (NTBs), with a resultant loss of output in the Irish economy. These NTBs would include compliance with regulatory formalities, such as customs inspections, and the collection of VAT and excise duties. The cumulative effect of NTBs would be to create additional costs for Irish exporters, making them less competitive in the UK market. Irish imports will also be impacted by the imposition of tariffs and NTBs following Brexit. The UK accounts for about 22% of Ireland’s imports of goods, according to the Central Bank. Many of these imports are intermediate goods which Irish companies use as inputs for their production processes as part of transnational supply chains. The Irish sectors with the highest level of exposure to UK intermediate goods imports are textiles manufacturing, and advertising and market research. Other sectors such as wholesale and retail and some traditional manufacturing activities are also relatively exposed to the higher cost of imports associated with Brexit. Consumer prices may also increase as a result of higher import costs, depending on exchange rate movements and companies’ willingness to absorb these costs in their margins. Trade in services, especially financial services, between Ireland and the UK will also be impacted by Brexit as the UK loses its “passporting” rights for its financial services firms operating in the EU after 31 December 2020. The future trading relationship for financial services between the EU and the UK will be the subject of ongoing negotiations but Ireland is again relatively exposed to restrictions in services trade with 37% of its financial services exports destined for the UK. In total, about 16% of Irish services exports are to the UK market. Mitigating these negative effects of Brexit is the prospect of additional FDI flows into Ireland as a result of the UK’s decision to leave the EU. The Central Bank notes that there is some evidence of increased FDI inflows in the financial services sector, as a number of London based firms have relocated to Dublin since 2016. There may further opportunities for attracting

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FDI to Ireland that would otherwise have located in the UK in the coming years but it is difficult to forecast the extent of any increased inward investment at this stage of the Brexit process. Prior to the outbreak of the Covid-19 pandemic, a number of ESRI economists (Bergin et.al. (2019)) modelled the longer term impact of Brexit on the Irish economy. Their work provides an indication of the “underlying” economic effects of Brexit absent the pandemic, although it is clearly now the case that both shocks are inextricably linked in forecasting future economic trajectories. The ESRI modelled “Deal” and “No Deal” scenarios, consistent with our summary of the possible outcomes. The results show that after 10 years in a “Deal” scenario, where the EU and the UK reach a trade agreement, real output in Ireland would be 2.6% lower than in a situation where the UK remained in the EU. In a “No Deal” scenario real output would be 5% lower. The authors highlight the impact of this loss of output on the Irish economy when they conclude that “The magnitude of each of these shocks is considerable and will have negative effects throughout the economy on the household sector, the labour market, firms and the public finances”. It should be noted that there is a great deal of uncertainty about the impact of Brexit on trade and FDI, especially during the immediate period of transition to whichever new trade and regulatory regime is finally agreed. However, the longer term perspective provides an indication of the magnitude of the impact that Brexit is likely to have on the Irish economy. It should also be noted that, even in the event of a Brexit on WTO terms without a trade agreement, the longer term outlook for EU-UK trading relationships remains fluid. Over time there is a possibility of new free trade arrangements being agreed by both parties which would reduce tariffs and trade frictions and restore trade flows towards their previous levels. However, the prospect of such agreements remains uncertain and in the immediate future Ireland faces significant disruption to its trading regime as a result of Brexit. 4.5.2 Covid-19 and the Irish Economy The Covid-19 pandemic has taken a severe toll on the Irish economy in 2020 with the introduction of public health measures at the end of the first quarter restricting economic activity across a range of sectors. An ESRI economist describes the pandemic as representing “The most severe, and rapid, disruption to the Irish and international economies in the postWorld War Two era” (O’Toole (2020)). Ireland emerged from a strict and lengthy “lockdown” period (relative to other countries) in June and July, while in the meantime “Consumer spending fell by nearly one quarter (in cumulative terms) and the COVID-19-adjusted unemployment rate peaked at just over one in every three workers” (ibid). The IMF describes the public health restrictions introduced across the world in March and April 2020 as “The Great Lockdown” and highlights the “Deep wounds” to the global economy inflicted by the pandemic recession. Economic recovery began in the middle of 2020 as countries began to reopen and release some of the constraints on consumer spending. Governments throughout the world, including the United States, China, the UK and the EU, took extraordinary measures to support economic activity and employment in their countries with exceptional levels of fiscal transfers to enterprises and workers impacted by the recession and the application of more accommodating monetary policies. Better than expected growth in the middle of the year led to an upward revision of economic forecasts for 2020 in October compared with those prepared in June, but the IMF is still expecting a fall in global economic activity of 4.4% for the year. Current expectations are that global growth will resume in 2021, with the world economy expanding by 5.2%. These forecasts are extremely uncertain, however, with the IMF noting that the pandemic continues to spread and that further partial lockdowns are being introduced in some countries.

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The IMF notes that the recession following the outbreak of the Covid-19 pandemic is very different from previous recessions. The difference is that in previous recessions the services sector tended to suffer relatively smaller declines in growth than manufacturing, which has traditionally taken the brunt of global economic downturns. On this occasion the Covid-19 public health restrictions introduced to slow the transmission of the virus, coupled with behavioural changes, have combined to impact negatively on services sectors that rely predominantly on face-to-face interactions, such as wholesale and retail activities, hospitality, the arts and entertainment which have seen greater contraction than manufacturing. The International Labour Organisation estimates that in the second quarter of 2020 the reduction in the number of hours worked globally was the equivalent of a loss of 400 million full-time jobs. Table 4.5.1 below summarises the economic growth forecasts of the main international institutions for 2020 and subsequent years:

Table 4.5.1 Impact of Covid-19 Pandemic on International Economies 2020

2021

2022

European Central Bank: Euro Area GDP Euro Area Unemployment Rate

-8.0% 8.5%

5.0% 9.5%

3.2% 8.8%

IMF: Global Economy GDP Advanced Economies GDP Emerging Economies GDP Advanced Economies Unemployment Rate

-4.4% -5.8% -3.3% 7.3%

5.2% 3.9% 6.0% 6.9%

…. …. …. ….

OECD: World GDP -4.5% 5.0% G20 GDP -4.1% 5.7% OECD Area Unemployment Rate 9.2/10.0% 8.1/9.9% Sources: ECB; IMF; OECD Economic Forecasts September 2020

…. …. ….

Ireland is a small open economy reliant on export-led growth and is particularly exposed to changes in the global economic and trading environment. However, as the Central Bank notes, Irish exports have proved particularly resilient to the fall in global demand. In the second quarter of 2020 when there was an estimated 19% fall in trade-weighted global demand, Irish exports fell by only 0.2%. Reflecting the unique nature of the pandemic recession mentioned above, exports of goods increased by 7.6% while services exports fell by 8.1%. Most of the growth in goods exports came from pharmaceuticals and computer processors, while services exports would have fallen even further without the growth of computer services exports. The Central Bank has noted the trend towards a small number of very high-value pharmaceutical products accounting for an increasing share of Ireland’s goods exports. This reflects the “dual” nature of the Irish economy, which is characterised by a strong, mostly foreign-owned export oriented sector and a larger group of mostly Irish-owned companies who focus mainly on the domestic market. As a result of Ireland’s strong export performance during the pandemic the country has experienced a relatively low contraction in economic activity

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compared with other EU countries and the UK, even as consumer spending fell by a quarter in the first half of 2020. The Department of Finance estimates that GDP in Ireland fell by 8% between the final quarter of 2019 and the second quarter of 2020, but this compares with declines of 20% to 25% of GDP in Spain, France, Italy and the UK over the same period. However, the strong performance of the export sector is in contrast to the domestic economy, where value-added in the construction sector fell by 40% in the first half of 2020 and by 75% in the arts, entertainment and recreation sector, the largest declines in any EU country or the UK. Table 4.5.2 shows the impact of the pandemic on output in different sectors of the Irish economy in the first six months of 2020:

Table 4.5.2 Annual Change in Sectoral Output Value Q2 2019 - Q2 2020 Manufacturing

17.1

Construction

-34.6

Distribution, Transport, Hotels and Restaurants

-32.0

Information and Communication

-4.3

Financial and Insurance Activities

-3.7

Real Estate Activities

-4.4

Professional, Admin and Support Services

-28.1

Public Admin, Education and Health

-0.2

Arts, Entertainment and Other Services Source: CSO

-67.9

The main impact of the pandemic-induced economic shock has been on the labour market. In April 2020, following the introduction of restrictive public health measures and the closures of businesses across the country, the unemployment rate rose to 28.2% of the labour force on a Covid-19 adjusted basis (i.e. assuming all claimants of the Covid-19 Pandemic Unemployment Payment would have qualified for jobseekers’ allowance/benefit). The impact of this unprecedented rise in unemployment on the domestic economy was mitigated by large-scale income transfers from the State. The Central Bank estimates that at the peak of the downturn, approximately 1.2 million people were in receipt of some form of income support – some 600,000 via the pandemic unemployment payment (PUP); 400,000 via the temporary wage subsidy scheme (TWSS) and 200,000 via the Live Register. The unemployment rate has fallen since the April/May period but it remains vulnerable to further restrictions, such as the “Level 5” measures introduced in October 2020. For the year as a whole the unemployment rate is expected to average between 15% and 17% of the labour force, which is a significant increase on the 5% rate recorded at the beginning of 2020, when

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Ireland was effectively at full employment. While unemployment is expected to fall in 2021 and subsequent years, it is subject to a high degree of uncertainty linked to the future path of the pandemic and the impact of Brexit. It is also worth noting that migration, which has been a mechanism for adjusting to economic shocks in the past, is constrained by the global nature of the pandemic, international travel restrictions, lower confidence levels and greater uncertainty. CSO data show that employment fell by 3.4% on an annual basis in the second quarter of 2020, bringing employment in the State back towards 2017 levels. This was largely due to movements out of the labour force, with the participation rate falling to 58.9% from 62.3% in the first quarter. Fourteen sectors experienced declines in employment in the second quarter of 2020, with accommodation and food services recording the largest fall of -29.6%. The Central Bank is expecting a further decline in employment levels in 2021 as the phasing out of the PUP and wage subsidy schemes lead to more redundancies. However, it expects employment to start growing again in 2022. The Labour Force Survey for the second quarter of 2020 shows that falls in employment have been greater amongst part-time, female and younger workers and those with secondary level or lower education attainment levels. Part-time employment in particular decreased by 16.1 per cent compared to 2.9 in full-time positions. The ESRI notes that while unemployment for the year as a whole is forecast to be around 17%, income tax receipts fell by just 1.4% in the year to August. This suggests that “Many who lost their jobs may have been outside the income tax net altogether or work in sectors that have a high proportion of low wage and/or part-time employment”. This is in marked contrast with employment in “tax rich” areas the of the economy such as manufacturing, ICT and financial services, many of which are in the FDI sector and less exposed to the worst effects of the pandemic recession. The Government’s counter-cyclical measures have been unprecedented in scale and are set to continue into 2021, offsetting the worst effects of the pandemic recession on the labour market. Nevertheless, as the Department of Finance notes, the rise in unemployment and fall in employment will leave longer term “scarring effects” on the labour market, leading to a mismatch between the skills of employees and the changing skills demands of employers. There is also the possibility that weaker investment will reduce the productivity of the capital stock over time. The spatial impact of the Covid-19 pandemic was analysed in a report prepared by the three Regional Assemblies (Eastern and Midland, Southern and Northern and Western). This report – “Covid-19 Regional Economic Analysis” – examined the level of exposure of regions, counties, cities and towns to the economic risks resulting from public health restrictions introduced to control the spread of the virus. The approach used in the report was to quantify the number of commercial units in a geographical area likely to suffer the greatest disruption as a result of the public health measures as a proportion of the total number of commercial units in that area. Commercial units in sectors that rely on high levels of face-to-face interaction or that are prevented from working remotely by the nature of their operations were considered to be exposed to the economic effects of the Covid-19 restrictions. The results of the analysis for the Midland and Mid West regions are summarised in Table 4.5.3 below, including countylevel exposure and the five most exposed towns in each region. The report also shows that Limerick City (44.9%) is less exposed than the national average while Athlone (52%) has a higher exposure.

Table 4.5.3 Regional Covid-19 Exposure Ratios Midlands

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Towns - Midlands

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Westmeath Longford Offaly Laois

51.0% 50.0% 47.8% 46.3%

Edgeworthstown Moate Mountmellick Edenderry Ballymahon

56.7% 54.1% 52.7% 52.2% 51.0%

Mid West Clare Limerick Tipperary

47.3% 50.4% 46.2% 46.1%

Towns - Mid West Ballina Cashel Newmarket-on-Fergus Annacotty Abbeyfeale

54.7% 53.6% 51.0% 51.0% 50.5%

46% State Source: The Three Regional Assemblies Ireland The analysis in the Regional Assemblies’ report is indicative of how the economic effects of the Covid-19 pandemic vary across sectors and geographical areas. The labour market effects provide further evidence of the wide differences in the way in which the pandemic impacts economic activity and employment across the economy. While it is difficult to draw definitive conclusions as the virus is still spreading nationally and internationally, there is a pattern emerging which suggests that younger workers and those with lower levels of educational attainment, sectors such as tourism and hospitality, and areas located outside our main urban centres, are the most adversely affected economically by the pandemic and related public health restrictions. The Department of Finance notes that in Ireland as elsewhere, the Covid-19 pandemic is almost certainly an economic “game changer”. This is because it is accelerating changes that were already becoming evident in the economy, such as the shifts towards electronic payments and online retail, and the greater incidence of remote working. These trends are driven in large part by technological advances and are likely to become permanent features of the post-pandemic world, changing fundamentally the ways in which goods and services are produced and traded. This will create opportunities as well as challenges in moving enterprises and workers into expanding areas of the economy while simultaneously supporting those in declining areas. 4.5.3 Brexit, Covid-19 and the Economic Outlook The combined effect of Covid-19 restrictions and Brexit on the Irish economy will become apparent in 2021 and the following years. In their forecasts for 2021 the Department of Finance, the Central Bank and the ESRI assume a Brexit on WTO terms (i.e. “no deal”) and that Covid-19 related public health measures will continue to affect economies throughout the world for the foreseeable future. Despite these cautious assumptions, each of these institutions forecasts a return to growth for the Irish economy in 2021, with the ESRI and the Central Bank expecting GDP to increase by 3.3% and 3.4% respectively. The unemployment rate is also expected to fall to between 8% and 10% of the labour force from its 2020 level of 15% to 17%. The prospect of a vaccine for Covid-19 receiving approval and/or a trade agreement between the EU and the UK would provide an additional boost to growth in 2021 and subsequent years, while also lowering the unemployment rate further. The main features of the forecasts are summarised in Table 4.5.4 below:

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Table 4.5.4 Economic Forecasts: Ireland ESRI GDP (% change) Unemployment (% of labour force) Central Bank GDP (% change) Unemployment (% of labour force)

2019 5.6

2020 -1.8

2021 3.3

16.8

9.9

6.1

-0.4

3.4

4.7

4.8

15.1

7.5

Department of Finance GDP (% change) 5.6 -3.5 1.7 Unemployment (% of labour 5 15.9 10.3 force) Sources: ESRI, Central Bank of Ireland, Department of Finance.

2022 ….

…. ….

A key factor behind these relatively optimistic forecasts is the extent of the fiscal stimulus that the Irish Government has provided for the economy in 2020 and is planning to continue in 2021. By October 2020 the Government had committed €24.5 billion to measures designed to offset the economic impact of the Covid-19 pandemic. In the Budget 2021 statement a further €17.75 billion of measures were announced for 2021, including an extension of the Employment Wage Subsidy Scheme (EWSS), or its equivalent, to the end of the year; a Covid Restrictions Support Scheme (CRSS) for businesses whose trade was significantly impacted or temporarily closed by Covid-19 restrictions; and a Recovery Fund of €3.4 billion to stimulate domestic demand and employment, including reskilling and retraining programmes. The Government’s stimulus measures will bring the general government deficit to 6.2% of GDP in 2020, the highest level since 2011, while the deficit for 2021 is projected at 5.7% of GDP. In order to manage the impact of the additional stimulus measures on the State’s fiscal position, the Government will set out in Spring 2021 a medium-term trajectory for eliminating borrowing within a multi-annual framework. More immediately, the Government will publish a National Economic Plan in November 2020 which will map out an economic pathway for the coming years, and for developing resilience in a post-Covid world. There will also be a review of the current National Development Plan (NDP) in 2021 which will result in a “Revised and more ambitious NDP for the next decade”. In addition, it is worth noting that following a commitment in the Programme for Government, an Inter-Departmental Working Group is developing a strategy for remote working and remote working service delivery. The Brexit and Covid-19 shocks have combined to move the Irish economy away from the growth trajectory that began early in the last decade and continued until 2019. This has necessitated unprecedented fiscal measures on the part of the Government, while increased uncertainty surrounds the future path of the Irish economy. The impact of Covid-19 has weakened the economy while the advent of Brexit, in whatever form, in 2021 creates further downside risks. Research by Daly and Lawless (2020) of the ESRI examined the risks of Covid-19 and Brexit on 57 sectors of the economy, creating an “exposure rank” for each shock from those sectors most severely affected to those that are relatively unaffected. They found limited overlap between the sectors exposed to the different shocks, and not very close connections between the sectors exposed to the shocks. Thus the combined effect of Covid-

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19 and Brexit extends across a wider range of sectors, but there are few interactions between these sectors that would magnify the impacts. The Central Bank note the impact of Covid-19 and Brexit in creating heightened economic policy uncertainty in Ireland during 2020, and that this uncertainty has a dampening effect on economic activity. The Bank notes that “By several measures, economic uncertainty has been at its highest level ever recorded during this pandemic”. An Economic Policy Uncertainty (EPU) index for Ireland, constructed for the website economicpolicyuncertainty.com supports the Central Bank’s contention, while the Global EPU reached its peak in April 2020. While the uncertainty index has fallen in the months since April, it remains at historically high levels. The main legacy of Covid-19 and Brexit, therefore, is likely to be greater uncertainty about future economic growth and the prospects for improving economic and social well-being in Ireland and our global partners. The Covid-19 recession and Brexit will continue to impact the Irish economy and society throughout the coming decade. The rise in unemployment and the sectoral shifts resulting from the two shocks will create additional demand for training and education, which will affect the AIT-LIT Consortium directly. Responsiveness and flexibility will be required throughout the HEI sector to cater for the additional learners seeking to reskill, to upskill and to embark on new career paths as the economy adjusts to the post-Covid 19 and post-Brexit realities. Equally, companies in all sectors will be looking to take advantage of the opportunities that the new economy will create and will look to the HEI sector to support their research, development and innovation activities. The applied research and innovation capabilities of the AIT-LIT Consortium will be a valuable resource in enabling enterprises to exploit these opportunities. Finally, it should be acknowledged that, following the unprecedented scale of the Government’s economic support measures in response to the pandemic, there will be continuing pressure on the public finances in the medium term as the economy rebalances. This will have implications for financing the HEI sector, which is a continuing challenge for policymakers and practitioners alike. Diversifying revenue sources and increasing productivity will remain important priorities for all HEIs, and the AIT-LIT Consortium will also have to deal with this challenge. 4.6.

Conclusions

In this section we reviewed Ireland’s recent economic performance and found that: • • • • •

The Irish economy recovered strongly from the 2008-2009 great financial crash and the post- crash global recession. At the end of 2019 Ireland was in a stronger, more sustainable economic position than it had been prior to the major recession that followed the events of 2008-2010 and the country’s participation in the EU-IMF Financial Assistance Programme. With the economy at close to full employment and operating at almost full capacity in early 2020 the outlook was for growth rates of 2% to 2.5% in the opening years of the new decade, reflecting the economy’s underlying growth potential. The strong national economic performance since 2010 was accompanied growing disparities in regional growth rates, with the Dublin and South West widening the gap with other Irish regions. The progressive nature of the Irish fiscal system moderated the effects of regional output differences to produce a more balanced regional distribution of disposable incomes.

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• • •

Education, and especially third level education, has been a key driver of Ireland’s strong economic performance in recent decades and remains vital for the country’s ongoing competitiveness. Reflecting the importance of third level education, higher education institutions (HEIs) contribute to national economic growth as producers of skilled workers with higher earning power than non-graduates, and as economic drivers in their regions. National policy is to enable Irish regions to achieve their economic potential and HEIs will play a central role in enabling them to convert potential into performance in a global marketplace which places a premium on education and skills.

The outlook for the Irish economy prior to the outbreak of the Covid-19 pandemic and the advent of Brexit was positive, reflecting its fundamental strengths built around an increasingly educated and skilled labour force. However, the advent of the Covid-19 pandemic and subsequent recession has moved the Irish economy away from its previous growth path, taking it into new and more uncertain territory. The prospect of a disorderly (i.e. WTO terms only) Brexit in 2021 has added to the uncertainty around Ireland’s future growth trajectory and the combined effects of the pandemic recession and Brexit have resulted in the Irish Government taking unprecedented measures to support domestic economic activity and employment. While the pandemic and Brexit will bring new challenges and risks, Ireland is well positioned to absorb these shocks and to return to its long-term sustainable growth path. The higher education system will be central to Ireland’s economic recovery from the twin shocks of Covid19 and Brexit and will be especially important in enabling its regions to realise their potential. The analysis in this section highlights some of the areas where the new TU can meet national and regional economic needs. Nationally, the overriding need is for a better-balanced pattern of spatial development in order to avoid excessive reliance on the Dublin region while other regions perform below their potential. Regionally, the need is for greater connectedness between the growth centres of Limerick City and Athlone and their wider catchment areas, enabling local communities in the Midlands and Mid West to participate more fully in the growth and development of their regions. The new TU can help to meet these needs through developing the skills base and human capital of the Midland and Mid West regions. Focusing on higher vocational, technical, technologically based and professional skills will be central to this objective. Raising regional productivity in the Midlands and Mid West will be essential for future economic in these regions, especially in the indigenous enterprise sector. A wider and deeper skills base will also make both regions more attractive for inward investment, especially by overseas companies, and will help to grow future jobs and incomes in the Midlands and Mid West, making for a better balanced pattern of spatial development in Ireland. The new TU can also meet regional needs by acting as a research and innovation hub for enterprise in the Midlands and Mid West. Building research intensity and capacity in the new TU will develop a key regional asset, delivering targeted research activities that will strengthen the competitiveness of enterprises in both regions. More and better innovation driven by the new TU will build more productive regions that can compete internationally for mobile investment and talent. In Section 6 we will explore the needs of the enterprise sector in the Midland and Mid West regions in more detail and identify specific areas where the new TU can make the contribute to making the sector more dynamic and productive 4.7

References for this section

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Athlone Institute of Technology Annual Report 2017/2018. Barrett, A.M., FitzGerald, J. and Nolan, B. (2000): “Earnings Inequality, Returns to Education and Immigration into Ireland”. CEPR Discussion Paper No. 2493. Barrett, A.M. and Goggin, J. (2010): “Returning to the Question of a Wage Premium for Returning Migrants”. ESRI Working Paper No. 337. Bergin, E., Economides, A., Garcia-Rodriquez, A. and Murphy, G. (2019): “Ireland and Brexit: modelling the impact of deal and no-deal scenarios”. ESRI Special Article, Spring 2019. Bergin, E., Morgenroth, E. and McQuinn, K. (2016): “Ireland’s Economic Outlook: Perspectives and Policy Challenges”. ESRI Macro Economic Forecasting. Byrne, S., Conefrey, T., McInerney, N. and Walsh, G. (2020): “Risks Facing the Irish Economy at the End of the Brexit Transition Period”. Central Bank Quarterly Bulletin Q4 2020. CRANN/AMBER (Centre for Research on Adaptive Nanostructures and Nanodevices/Advanced Materials + BioEngineering Research) (2016): “2007-2016 Impact Assessment Report”. CRANN/AMBER, Dublin. Central Bank of Ireland: “Quarterly Economic Bulletin”, various years. CSO (2016): “GDP increases significantly in 2015: Explanatory Note”. CSO: “Census of Industrial Production – Local Units, Regional and County Data”, 2012 and 2017 CSO: “County Incomes and Regional Accounts”, various years. CSO: “Labour Force Survey”, various years. Daly, J. (2020): “Covid-19 Regional Economic Analysis”. The Three Regional Assemblies. Daly, L. and Lawless, M. (2020): “Examination of the sectoral overlap of Covid-19 and Brexit shocks”. ESRI Working Paper no. 677. Daly, M. (2016): “Sixties Ireland; Reshaping the Economy, State and Society”. Cambridge University Press. Department of Housing, Planning and Local Government (2018): “Ireland 2040: Our Plan”. Department of Finance: “Budget 2021 - Economic and Fiscal Outlook”. Economic and Social Research Institute (ESRI): “Quarterly Economic Commentary”, various years. European Central Bank (ECB): “Economic Bulletin”, various years. European Commission: “Economic Forecasts”, various years. FitzGerald, J. (2019): “Investment in Education and Economic Growth on the Island of Ireland”. TEP Working Paper No. 0719, Trinity College Dublin. Glaeser, E. (2011): “Triumph of the City”. The Penguin Press.

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Hanushek, E. (2016): “Will more higher education improve economic growth?”. Oxford Review of Economic Policy, Volume 32, Number 4, 2016, pp. 538–552. Higher Education Authority, HEA (2020): “Graduate Outcomes Survey – Class of 2018”. Holland, D., Liadze, I., Rienzo, C. and Wilkinson, D. (2013): “The relationship between graduates and economic growth across countries”. BIS Research Paper No. 110, Department of Business Innovation and Skills, London. IBEC (2019): “Economic Outlook – Q4 2019”. Indecon International Economic Consultants (2019): “Indecon Independent Assessment of the Economic and Social Impact of Irish Universities”. Indecon/ The Irish Universities Association. KBC Bank (2020): “Economic Perspectives – Q1 2020”. Lenihan, H., Mulligan, K., and Perez Alaniz, M. (2018): “An Economic Impact Assessment of Lero-the Irish Software Research Centre, using Input-Output Analysis”. Kemmy Business School, University of Limerick. Limerick Institute of Technology Annual Report 2017/2018. McGuinness, S., Bergin, A., Kelly, E., McCoy, S., Smyth, E., Whelan, A. and Banks, J. (2014): “Further Education and Training in Ireland: Past, Present and Future”. ESRI Research Series No. 35. Moretti, E. (2012): “The New Geography of Jobs”. Mariner Books. Morgenroth, E. (2010): “The Regional Dimension of Taxes and Public Expenditure in Ireland”. Regional Studies 44, 06 (2010) 777-789. Morgenroth, E. (2015): “Two-Speed Recovery? Spatial Development in Ireland”. ESRI Research Note. Morgenroth, E. (2018): “Prospects for Irish Regions: Policies and Scenarios”. ESRI Research Series No. 70. OECD: “Economic Surveys: Ireland”, various years. OECD, Paris. OECD (2008): “Tertiary Education for the Knowledge Society – Volume 1”. OECD, Paris. OECD (2016): “Irish GDP up by 26.3% in 2015?”. OECD, Paris. O’Toole, C. (2020): “The lockdown tale of two economies in Ireland: How big tech and pharma bucked the trend”. ESRI Quarterly Economic Commentary, Autumn 2020, pp. 47-68. Pillay, P. (2011): “Higher Education and Economic Development Literature Review”. Centre for Higher Education Transformation. UCC (University College Cork) (2018): “The Economic and Societal Impact of UCC”. UCC. Wolf, A. (2004): “Education and Economic Performance: Simplistic Theories and their Policy Consequences”, Oxford Review of Economic Policy, Vol. 20, No. 2, pp. 315- 333.

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World Bank (2009): “World Development Report 2009 – Reshaping Economic Geography”. World Bank Group, Washington D.C. Zhang, Q., Larkin, C., & Lucey, B. M. (2017): “The economic impact of higher education institutions in Ireland: evidence from disaggregated input–output tables”. Studies in Higher Education, 42(9), 1601- 1623.

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Social Context

Recommendation Establish a “stakeholder register”, listing the active stakeholders currently engaged with the TU, with regular updates. Two benefits could arise from this exercise. Firstly, it focuses the TU on the active stakeholder network and helps to bring the network into the mainstream of the organisation, giving the network a central place in the culture and ethos of the TU. Secondly, the register leads on to questions about potential stakeholders. The register could thus support a discussion around strategic aspects of stakeholder engagement. The beneficial features of the present Access system should be strengthened in the new TU. Ideally, the new TU should offer fresh mechanisms to enhance and reinforce the social contribution of Access to the life of the university. The “caring ethos” of the teaching culture of both institutes is recognised by stakeholders. The new TU must maintain that caring ethos in its new structures. The TU should position itself to offer solutions to the new apprenticeship programme. Flexible learning should be promoted as the “open door” of the TU to many types of enterprises and communities who might not normally engage with higher education. Accelerate the streamlined progression of students from the Education & Training Boards to the TU. The ETBs acknowledge the “dynamic flexibility” of their relationship with the institutes. This system of dynamic flexibility must continue in the new TU. 5.1

What is “social”?

The “social” of socio-economic assessment needs definition and can mean many things. For example, socio-economic assessments of HEI impacts in other countries have included many aspects: training for specific groups, disability services, development cooperation, volunteering, learning in the community, culture, health, sport, gender and other issues. The “National Strategy for Higher Education in Ireland to 2030” (2011) states that links between HEIs and their local communities include educational, cultural, sports-related and civic activities. The strategy states that the relationship between the HEI and the community is particularly important in the context of the promotion and achievement of greater equality in higher education. Greater engagement and partnership between higher education institutions and community and voluntary groups offers significant potential to progress equality and community development and to further social innovation. Community education strategies have proven very effective in reaching out to non-traditional students and are purposely designed to build up and maintain resources within communities. Partnerships with community groups can contribute to the creation of an academic community engagement model that builds academic community partnerships to create long-term cultural and social change. The Technological Universities Act (2018) highlights the role of the TUs in developing and promoting strong social and cultural links, and links supporting creativity, between the technological university and the community in the region in which the campuses of the technological university are located. The Act also promotes effective relationships between TUs and organisations representing the social, creative and cultural interests of the community in the region in which the campuses of the technological university are located.

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For the purposes of this review we have therefore taken “social context” to embrace two elements: • •

5.2

The system of engagement with stakeholder groups; The system of reaching learners in the under-represented groups through nontraditional programmes. Pobal Index of Deprivation

Both engagement of stakeholders and working with under-represented groups must address a series of significant disparities and social differences within the population served by the TU. This is illustrated by the Pobal Index of Deprivation The Pobal Index of Deprivation (compiled by Trutz Hasse Consultants) is based on the Census of Population 2016 and shows levels of affluence and deprivation for over 18,000 small areas, illustrating how changing economic fortunes affect different parts of the country. The index uses eight categories of extremely affluent, very affluent, affluent, marginally above average, marginally below average, disadvantaged, very disadvantaged and extremely disadvantaged. The national map following illustrates these. At this national level, the differences show up in a general way, with the relative extremes (brown colour) of disadvantaged in places such as Mayo and Donegal contrasting with the advantaged areas (blue), especially around the outer suburbs of the main cities. The area covered by the Limerick/Athlone corridor, at this higher level, shows up as a mixed area incorporating both advantaged and disadvantaged districts, but not apparently at major extremes. However, it is at the local level in the subsequent maps that sharp differences emerge. In Limerick areas of extreme affluence and extreme disadvantage coexist in proximity to each other, a mosaic or patchwork of intense socio-economic contrasts. In Athlone similar contrasts are evident, but not so sharp as in Limerick. The role of the new TU in the social development of its area is clear from this data. Meeting the needs of disadvantaged groups and opening up higher education to under-represented groups will be an ongoing challenge. Social impact and diversifying the student population will be a core issue. This challenges the TU to engage with diverse stakeholders to improve access to higher education.

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Athlone

Limerick

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Limerick

Athlone

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5.3

Stakeholder engagement

“Stakeholders” are any individuals or groups who have an interest in an organisation. In the present study we focus on external stakeholders. They are the outside people who are impacted on by the TU. Looking at the definition in this way we can see two key classifications of stakeholders: active and potential. Active stakeholders are those with a conscious interest in the organisation and who are already engaged with it in some way. Potential stakeholders are those who are potentially impacted by the organisation and who have a potential interest in the organisation, even if they are not conscious of it. The important point in stakeholder engagement is to do two things: • •

Engage positively with those stakeholders who are already connected with the organisation. Reach out over time to some of those potential stakeholders who may not be so actively engaged at the present time.

We can indicate potential stakeholders, viewing them as those who are within the target groups of the TU as possible partners or clients. Stakeholders within the Mid West/Midlands area are included. There are obviously others elsewhere in the country who could be included. Also, no doubt there are other potential stakeholders within the area not listed here.

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Table 5.3.1 Active and Potential TU Stakeholders in the Mid West and Midlands Category

Number

County Councils Education & Training Boards Post-primary schools Industrial enterprises (IDA, EI-supported) Micro-enterprises (LEO-supported) Local Development Companies Community groups (registered in public participation networks) Chambers of Commerce Total

7 7 119 869 1,600 9 2,400 10 c. 5,000

While some groups are clearly described and listed, such as industrial enterprises and schools, others such as micro-enterprises and community groups are a substantial population and more difficult to specify. The new TU needs to think about a â&#x20AC;&#x153;stakeholder mapâ&#x20AC;? of the potential stakeholders. This could be a classification of the various groups under perhaps thematic headings helping the new TU evolve a strong perspective about stakeholder engagement.

Community Groups Enterprise

LDCs

ETBs

Schools

County Councils

Others Micro Enterprise

Within the general framework of the Stakeholder Map, the TU needs to develop a coherent stakeholder engagement strategy. This strategy must be from the ground up, working outwards from active stakeholder networks. Relationships with stakeholders sometimes arise from informal or personal contact between TU staff members and stakeholders. They may be based on local opportunities or specific challenges or short-term projects within temporary funding programmes. In other cases, they are part of the longer-term, formal or structured programmes of the organisation. Occasionally they grow from the enthusiasm and passion of staff, inspired by insights into the potential

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value of specific stakeholder groups. In other cases, they arise from official contractual arrangements. This mixture of formal and informal aspects makes stakeholder mapping a rich and complex exercise. But how to do it? One way would be to establish a “stakeholder register”, listing the active stakeholders currently engaged with the TU. Updated, say every two-three years, the register would list simple details like title of stakeholder, contact details and name/department of staff member involved. This type of information could be regularly updated at small administrative cost. Two benefits could arise from this exercise. Firstly, it focuses the TU on the active stakeholder network and helps to bring the network into the mainstream of the organisation, giving the network a central place in the culture and ethos of the TU. By providing a simple indicator of numbers of active stakeholders, the register would support the “what gets measured gets done” approach. Also, the listing would provide a framework to support staff in their engagement with active stakeholders, sharing information on who-is-talking-to-who and strengthening the quality and depth of the interactions. Secondly, the register leads on to questions about potential stakeholders. Are we missing somebody? Are there groups out there where the TU could more actively engage? Thus, the register could support a discussion around strategic aspects of stakeholder engagement – who are we not talking to, and why not? Key issues in this discussion are around the direction of the stakeholder engagement strategy. Should the strategy be specialised, focus on a small number of stakeholders, be highly targeted? The advantage of this strategy is that it would build on the skills of the TU, use scarce resources efficiently and add value in a concentrated way on those stakeholders who are most capable of using it productively. The disadvantage would be to miss out on perhaps longer-term opportunities, and the promise offered by building new relationships with potential stakeholders not presently engaged. Instead should the stakeholder strategy seek to be broad brush, generalist, all-embracing and inclusive? The advantage is that here the TU actively reaches out to engage many groups and helps to bring them forward along the path of the knowledge economy. The disadvantage is that here maybe the TU would be trying to do too much with too little and might dilute and disperse its impact. The key point is that a discussion needs to take place around the wide range of options in this area. The existence of the stakeholder register would facilitate this type of review. 5.4

Learners in the under-represented groups

The TU will have three primary mechanisms to link with these groups: The Access Programme, Apprenticeships and Flexible Learning. The significance of these is that numbers of school leavers will not change over the coming decade and that 60% of school leavers enter third level. So, the future growth in scale of the TU will come about through increasing the participation rate in third-level among school leavers, and also in attracting others such as mature learners, second-chance education, professional development and lifelong learning. These are the focus of Access, Flexible Learning and Apprenticeship programmes. This section has benefited from interviews with internal staff supplemented by interviews with external stakeholders

5.4.1

Access Programme

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The Access programme works to facilitate entry and participation in higher education by underrepresented students. Target groups include mature students, lower socio-economic groups, part-time students, disabled, travellers and lone parents. Access supports pre-entry by cooperating with Education & Training Boards, Youth Reach, community training centres, development groups, members of the public, second-level schools and independent PLC colleges. Key challenges are to raise awareness about access to third level and to increase personal confidence from potential students about entering the colleges and playing the fullest role in educational life. This role is significant given the relatively low levels of population who have completed third level in the TU area. Access also supports the College of Sanctuary which works with asylum seeks offering local gateways into education, from informal introductory approaches to more structured offerings relevant to the needs of the non-national groups. At post-entry level students benefit from student financial assistance, HEAR (Higher Education Access Route), DARE (Disability Access Route to Education) and other supports. Individual counselling by Access staff and peer mentoring by students are further positive features of the programme. Key strengths of the Access programme are the accessibility of the Institutes, personal contacts, face-to-face interactions and ongoing support to students. But administration costs and procedural requirements also impose constraints and are reported to lessen the potential time for personal connections with students. Detailed information demands from funding programmes are also reported to reduce opportunities for personal contact with students. According to data from the Higher Education Authority, more than 50% of students in AIT and LIT are from below average incomes. This highlights the impact of both institutes in securing access for less represented groups, while maintaining a balanced profile of the overall student population. The new TU will bring benefits in mutual support and collaboration between the Access programmes in the two institutions. Athlone has a rural hinterland which contrasts with Limerickâ&#x20AC;&#x2122;s more urban catchment area. This provides for complementary approaches where specifically urban and rural targeted programmes can be developed in tandem, each reflecting the different access challenges of different types of communities. However, the University title could potentially alienate some of the target group. The existing institutions have a highly inclusive culture, and this should not be weakened by perhaps a more formalised ethos of the new TU. The current access system benefits from the network of access officers in higher education institutions. This support structure is informal and substantially enriches the access programme in individual colleges. The new TU should build on and enhance this network, encouraging collaboration, partnership and sharing of experience. The present timetable system provides for balance of research and reading with a clear role for personal contacts between learners and teachers. The contribution of teaching and research staff in promoting the access agenda in their own everyday work is a central feature of both institutions and deserves to figure strongly in the new TU. The social connections with students, as well as their parents, is a feature of the existing Access system, encouraging positive teacher/lecturer relationships and providing a warm institutional ambiance for learners. Interviews were conducted with external stakeholders at primary level and post-primary level. The role of the Access Programme in facilitating awareness about third-level education to

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potential students and their parents was continuously emphasised. Actions by Access welcomed by the stakeholders included organising introductory visits to the campus for second-level students, support with preparation of CVs, mock interviews, support to disadvantaged groups, study clubs, access course for adult pre-entry learners, maths programme for schools and other initiatives. The central message from the stakeholders was that the driving force behind these measures was the ethos of caring of the Institutes, and that this ethos of caring must figure prominently in the new TU. It is important that this beneficial feature of the present Access system is not diluted in the new TU. Ideally, the new TU should offer fresh mechanisms to enhance and reinforce the social contribution of Access to the life of the university. 5.4.2

Apprenticeships

Apprenticeships will feature significantly in the new TU. The apprentice route to education is a key ingredient in engaging with the wider regional population who may not traditionally have looked to higher education. Apprenticeships are also a valuable tool whereby the TU will improve the skills level of the employed workforce. The “National Skills Strategy to 2025” (Department of Education & Skills, 2016) set out a key objective that employers will participate actively in the development of skills and make effective use of skills in their organisations to improve productivity and competitiveness. This has led to a new system of national apprenticeships whereby all new apprenticeships post-2016 are led by consortia of industry and education partners, leading to an award level of 5-10 in the National Framework of Qualifications, are 2-5 years in duration, minimum 50% on-the-job learning, flexible delivery, apprentices are employed under a formal contract of apprenticeship and the employer pays the apprenticeship for the duration of the apprenticeship (this is unlike the pre-2016 system where the state pays a training allowance to apprentices during their off-the-job training). This was reviewed recently by the report “Future FET – Transforming Learning – the national Further Education and Training (FET) Strategy” (Solas 2020). This report acknowledged that the new system had been initially successful in provoking interest in apprenticeship from a new generation but while pre-2016 apprenticeships have continued to expand rapidly, the pace of development in new post-2016 apprenticeship provision has lagged behind what was originally targeted. Policy priorities will therefore concentrate on issues like employer engagement, the appropriate funding model, the handling of off-the-job costs and the efficiency of duplication of management, governance and quality assurance resources across multiple providers. Both LIT and AIT are already active in the apprenticeship programmes, both pre-2016 and post-2016. LIT offer pre-2016 courses in motor mechanic, carpentry & joinery, electrical and fitters. Post-2016 apprenticeships are available in manufacturing engineering (certificate), industrial electrical engineering (Bachelors Degree) and manufacturing engineering (Bachelors Degree). AIT offer pre-2016 apprenticeships in motor mechanics, crafts, plumbing and heavy vehicle mechanics and post-2016 apprenticeships in polymer processing technology (Bachelors Degree). Both LIT and AIT are actively engaged with the relevant industrial consortia for the post-2016 programmes and very positive experiences have been reported.

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Looking to the future, the new TU will be able to build on a strong track record and base of expertise in the new generation of apprentices. The policy directions in the latest national review are particularly significant in several aspects. It may be that the new TU will be strongly positioned in any further reform. Improvements in employer engagement are being sought. Both AIT and LIT already have strong networks into the private sector and the new TU will be able to extend this to encourage still further employer engagement in support of the national apprenticeship policy. The national review also signals a re-look at funding models, so maybe employers will be given enhanced support in the costs of off-the-job training, generating further expansion of the new apprenticeships, But most important the national review is signalling concerns about duplication and multiplicity in the large number of training providers. Maybe in the future the national system will increasingly favour large-scale training providers with quality assurance. The new TU will thus be well placed to provide attractive solutions. 5.4.3

Flexible Learning

Programmes of flexible learning are already well developed in both institutions. In LIT, the programme of Professional and Flexible Learning provides training, continued professional development and education for individuals and industry. Initiatives include the Industrial Skills Academy, Springboard, ICT and Human Capital Initiative, with part-time programmes through the faculties of Applied Science, Engineering & Technology, Business & Humanities and Limerick School of Art & Design. In AIT the Faculty of Continuing, Professional, Online and Distance Learning works with individuals, corporates and communities. Courses are available in Applied Learning, Business Accounting & Law, Design Digital Media & Computing, Social Sciences Humanities & Languages, Science Quality and Health & Safety, Culinary Arts and faculty-specific programmes, as well as Springboard and ICT. All courses are certified. Interactions with industry are already significant. AIT are leaders of the Midlands Industry Group with strong linkages to regional enterprises. LIT have partnerships with the Limerick Engineering Forum, regional skills fora, Skillsnets groups and other networks. The flexible learning systems are typified by agility and flexibility, with a wide range of programmes across many types of business, in many cases specifically targeted at particular sectors, such as pharmaceuticals, medical technologies, design and culinary arts. Recent years have seen substantial growth in participation by learners and WIFI infrastructure is well established. Growth in online and blended learning has been substantial, even before Covid 19, and is likely to accelerate. Looking to the future of the TU, there is evidence of ‘critical mass’ in flexible learning as Limerick and Athlone complement each other in different types of programmes. Potential therefore exists for Limerick to offer some its programmes in the Midlands, and for Athlone to offer some programmes in the Mid West. Also, with the growth of online learning, the onset of the TU will facilitate the flexible learning programmes to grow in the national and international space. Flexible learning is also the primary vehicle for the TU to engage with the community groups and microenterprises and is already doing so. This is relevant in the context of engaging with “under-represented groups”. A challenge world-wide of higher education institutions connecting with enterprises is that the academic-enterprise linkages are frequently more active with stronger companies. Typically, enterprises which are large, or foreign-owned, or urban-based or high-technology are better able to engage with higher education institutions than enterprises which are small, or locally owned, or rural-based or low-technology. Flexible

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learning is the solution to this conundrum and should feature prominently in the agenda of the TU. This is illustrated in the chart following. Flexible learning is the â&#x20AC;&#x153;open doorâ&#x20AC;? of the TU to all sorts of enterprises and communities who might not normally engage with higher education.

5.5

Education & Training Boards

Education & Training Boards (ETBs) were established by 2013 legislation. ETBs are statutory education authorities which have responsibility for education and training, youth work and a range of other functions. ETBs manage and operate second-level schools, further education colleges, pilot community national schools and a range of adult and further education centres. There are four ETBs in the TU area: Laois Offaly, Limerick Clare, Longford Westmeath and Tipperary. The ETBs work closely with the relevant Institute of Technology in their area and they will have a prominent role in the new TU. Stakeholder interviews were conducted with representatives of the four ETBs, around two topics: current collaboration with AIT/LIT and their hopes for the future TU. 5.5.1

Current collaboration

Interaction between the ETBs and AIT and LIT was reported to be very considerable. The focus is on easy transfer of students from ETB programmes to Institute programmes. ETBs have Memorandums of Understanding with their Institute of Technology, a feature which the ETBs highly value. The Institutes are thus an important avenue for ETB students. The key is to maintain the pathway from Post Leaving Certificate (PLC) programmes to higher education. Students must see that pathway clearly. There is already very good cooperation in supporting that pathway between the ETBs and the Institutes, strengthening a natural linkage between the Institutes and PLCs. These progression pathways are from National Framework Qualifications (NFQ) level 5-6 in the ETBs to 7-8 in AIT/LIT. Examples of joint action include some apprenticeship programmes which are organised by the ETBs and delivered on Institute premises.

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Preparatory programmes were especially valued by the ETBs. These are programmes where post-primary students follow specific courses at level 5, and which lead on to equivalent level 6 in the Institutes. This makes transition from second- to third level as seamless as possible, and helps students make connection early with the Institute of Technology. For example, pupils in some cases are introduced to the relevant equipment at the Institute of Technology during their level 5 studies, leading on naturally to level 6. One impact of the preparatory programmes is in reducing drop-out at third level, as pupils are given preliminary teaching at second level in the subject which they will study at third-level. The ETBs are anxious to extend this approach in the new TU. One other example of collaboration was that the ETBs have enterprise engagement programmes working with local enterprises and business groups. The Institutes also work on enterprise engagement and cooperate with the ETBs in interaction with businesses, the Institutes from third level and the ETBs from second-level. ETBs also work with their Institutes in shared membership of local planning and advisory groups. Overall relationships between the ETBs and the Institutes were reported to be excellent. In particular, the ETBs value their long-standing relationships with the Institutes. The engagement by the Institutes was reported to be very positive. The ETBs want to maintain that dynamic. Communication has always been open, cemented by the positive network of informal contacts. The existence of this informal network was reported to be very helpful when practical difficulties with official programmes needed to be overcome. 5.5.2

Future TU

The future TU will bring fresh possibilities, with the introduction of a new university with significant investments in R&D and infrastructure. Similarities and complementarities of courses between AIT and LIT was reported to be excellent with future potential for joint action. The TU will bring opportunities to streamline student progression from the ETBs to the TU. For example, both currently offer level 6 programmes, and this can lead to confusion among potential students. There is a need for more simplified progression pathways from the ETBs to the TU, especially in the transition from PLCs to the TU. This calls for greater use of enhanced entry, with continuity in learning between ETB and TU. The effect of these types of policies will be to reduce the drop-out at third level. Areas for development include better synchronisation in course provision, especially in the current overlap of level 6 programmes by both ETBs and the Institutes. The TU will bring fresh opportunities for the co-design of programmes by the ETBs and the TU, particularly the expansion of preparatory programmes. One concern was how the onset of the university might make the new institution more distant from local communities. Will there be growth in bureaucracy and formal organisation, and will that impact on the fluid and dynamic relationship with the ETBs? Will future potential students be discouraged by the more official-sounding university than the present Institutes with their deep roots and informal connections to communities? One issue was that at present the four ETBs are each represented on the Governing Bodies of their respective Institutes. The 2018 Act specifies that only one representative will sit on the TU Governing Body to represent all four ETBs. This will call for new governance arrangements. A suggestion was put forward to have a single Memorandum of Understanding by the four ETBs with the TU, implemented through an executive working group of ETB/ TU staff.

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Enterprise Context

Recommendations Engage the enterprises of the Midlands and Mid West with ambitious statements of intent for the new TU â&#x20AC;&#x201C; for example, working towards a low carbon region, prospering in a postCovid world â&#x20AC;&#x201C; that show it can make a difference for their businesses. Set a clear direction for engaging with the enterprise sector with measurable and timebound targets. Identify ambitious but realistic RDI actions, challenging researchers and innovators to deliver what otherwise would not be attempted if the new TU did not exist. Connect actors in the private, public and third sectors across multiple disciplines and economic sectors by taking a problem-solving approach which promotes new partnerships and co-operative working â&#x20AC;&#x201C; for example, the sustainability agenda is not just about renewable energy but extends into transport, strategic design and digital technologies. Facilitate different trajectories to achieving the required outcome based on a bottom-up approach that encourages multiple solutions and is built on many and diverse projects.

In this section we will review the enterprise sector in the Midlands and Mid West regions and examine current engagement with the sector by AIT and LIT. We will also identify the strategic priorities for future enterprise growth and development in the two regions as articulated in their respective Regional Enterprise Plans. We conclude the section by identifying opportunities for the new Midlands/Mid West Technological University (TU) to align its enterprise engagement strategies with the objectives of the Regional Enterprise Plans and to shape the future trajectory of enterprise growth in the two regions. 6.1 Regional Enterprise Overview The CSO publishes data on the number of private enterprises in Ireland and the numbers of people engaged in those enterprises in its Business Demography series. The data cover the number of active enterprises in a given year as well the numbers of people engaged in those enterprises as employees and working proprietors. An advantage of this dataset is that it can be broken down by county based on the address at which the enterprise is registered for Revenue purposes. While this is not necessarily the same as where the business actually operates from, it is a useful approximation as Ireland does not have a comprehensive data source for business location.

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The following table shows the numbers of enterprises and persons engaged in the Midland and Mid West regions in 2010 and 2018 (the latest year for which data are available): Table 6.1.1 Number of Enterprises 2010 and 2018 2010

2018

% change

Midland

12,515

13,328

6.5

Mid West

22,951

24,371

6.2

State

242,692

270,344

11.4

Persons Engaged 2010 and 2018 2010 2018

% change

Midland

44,359

54,964

23.9

Mid West

96,202

117,281

21.9

1,270,475

1,607,911

26.6

State

Source: CSO Business Demography 2018 The data show that private business formation in the Midland and Mid West regions grew at a slower rate that the national average between 2010 and 2018. This was also the case for the number of persons engaged in those businesses as proprietors and employees over the same period. This would support the analysis in Section 4 where both regions were seen to be recovering more slowly from the 2008/2009 recession than other regions in the State. It is worth noting that the numbers of people engaged in private businesses in the Midlands and Mid West are below the level that would be expected based on the Labour Force Survey. For example, in 2018 the Midland region accounted for 5.6% of the Stateâ&#x20AC;&#x2122;s employed persons but only 3.4% of those engaged in private businesses. The corresponding figures for the Mid West are 9.3% and 7.3% respectively. This suggests that both regions are more dependent on non-private employment than the State as a whole. This point is supported by looking at the numbers of enterprises and persons engaged per 1,000 of the labour force in both regions and comparing them with the national average. This calculation shows that in 2018 both the Midlands (97.1) and the Mid West (109) had lower numbers of enterprises per 1,000 persons in the labour force than the State average (112.2). This was also true of the numbers of persons engaged in private businesses. The Midlands (400.6) and the Mid West (524.8) had lower rates of private employment per 1,000 persons in the labour force than the State average (667.2) in 2018. This provides further evidence of lower rates of private enterprise and employment intensity in the two regions compared with the national average. Table 6.1.2 Enterprises and Persons Engaged per 1,000 in Labour Force 2018 Midland

Mid West

State

Enterprises

97.1

109

112.2

Persons Engaged

400.6

524.8

667.2

Source: CSO and authors' estimates

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The size distribution of private enterprises in the Midland and Mid West regions is compared with the national average in Table 6.1.3. In this table we have used the CSO data to look at enterprises with fewer than 10 persons engaged (“Micro Enterprises”) separately from those with 10 to 249 persons engaged (“Small and Medium Enterprises”) and those with 250 or more (“Large Enterprises”). It is clear from the table that both regions have marginally more micro-enterprises and fewer small and medium sized enterprises than the national average. However, in terms of the number of persons engaged there are more significant differences between the two regions and the State as a whole, with both the Midlands and Mid West having more people engaged in micro and small and medium sized enterprises than the national average. The differences are particularly striking in the large enterprise sector which accounts for 8.8% of persons engaged in the Midlands while the corresponding figures for the Mid West and the State are 21.8% and 32.5% respectively. It appears that the Midland region is relatively more dependent on micro and small and medium sized enterprises than either the Mid West or the State as a whole. Table 6.1.3 Number of Enterprises in 2018 by Size (% of total) Micro (<10)

SME (10-249)

Large (250+)

5.8

0.2

Mid West

92.6

7.3

0.1

State

91.9

7.9

0.2

Midland

Persons Engaged in 2018 by Size of Enterprise (% of total) Micro (<10) SME (10-249) Large (250+) Midland

43.7

47.5

8.8

Mid West

33.8

44.3

21.8

State

25.7

41.8

32.5

Source: CSO Business Demography 2018 The CSO Business Demography data do not provide sectoral breakdowns at regional or county levels. The national sectoral profile shows that Services accounted for the largest share of both the numbers of enterprises and persons engaged in 2018. The Distribution and Industry sectors were the next most important sectors in numbers of persons engaged but both had proportionately fewer enterprises than the construction sector. The Construction sector had the highest growth in numbers of persons engaged in the five years between 2014 and 2018 at 45.5%, followed by Services (24%) and Industry (19%). Table 6.1.4 Enterprises and Persons Engaged by Sector in 2018 (State) % Enterprises

% Persons Engaged

Services

50.9

45.5

Financial Services Activities

3.2

6.6

Construction

21.3

Distribution

17.7

23.3

Industry

6.9

15.6

Source: CSO Business Demography

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The CSO data provide an overall picture of the private enterprise populations of the Midland and Mid West regions. However, the subset of more interest from an economic development viewpoint is the agency assisted enterprise population. This is discussed in the next part of the report. 6.2

Agency Assisted Enterprise.

The Department of Business, Enterprise and Innovation (DBEI) Employment Survey is an annual census of employment in companies assisted by the State’s economic development agencies, the IDA, Enterprise Ireland and Údarás na Gaeltachta. The data is presented in terms of the nationality of a company’s ownership rather than by the agency providing the support. This means, for example, that food and beverage and natural resources subsidiaries of overseas companies that are supported by Enterprise Ireland (EI) are classified as foreignowned firms although EI’s remit is in respect of indigenous enterprise. The Midland region had 322 agency assisted companies in 2017, of which 288 were assisted by Enterprise Ireland and 34 by the IDA. The Mid West had 548 assisted companies in 2018, 420 of which were assisted by Enterprise Ireland and 128 by the IDA. The Midlands therefore has a higher proportion of Enterprise Ireland client companies, which are typically Irish-owned enterprises, than the Mid West which has a higher percentage of IDA supported companies, which are mostly foreign-owned. Table 6.2.1 shows the composition of employment in agency assisted companies in the Midland and Mid West regions in 2019 and the total for the State in the same year: Table 6.2.1 Agency Assisted Employment 2019 Irish-owned

Foreign-owned

Total

Midlands

11,699

6,853

18,552

Mid West

19,265

24,775

44,040

State

217,969

257,536

475,505

Source: DBEI Annual Employment Survey 2019 The table shows that the Midland region had a lower percentage of its agency assisted employees in foreign-owned companies (36.9%) than the national average (54.2%) while the Mid West had a slightly higher percentage (56.3%). This is consistent with the data from the Census of Industrial Production discussed in Section 4 which shows the relatively low percentage of industrial production in the Midlands associated with foreign-owned enterprise. Results for the decade 2010 to 2019 show that employment in agency assisted companies increased by 50.6% in the State, representing a significant expansion of the sector. However, both the Midland (+45.2%) and the Mid West (+38.4%) regions recorded growth rates below the national average during the decade, with the Mid West 12.2 percentage points below the national growth level. In contrast, the Dublin region recorded growth of 64.2% in agency assisted employment between 2010 and 2019, a full 13.6 percentage points above the national average. Table 6.2.2 below shows agency assisted companies and employment in the Midlands and Mid West per 1,000 people in the labour force. We can see from the table that the Mid West share of agency assisted employment per 1,000 people in the labour force is similar to the State average but that the Midland region is below the national average. This suggests that there is scope for increasing the level of agency assisted employment in the Midlands.

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Table 6.2.2 Agency Assisted Companies and Employment per 1,000 in Labour Force 2019 Midland Mid West State Companies No. Employed

2.4

2.5

2.7

135.2

197

197.3

Source: DBEI Annual Employment Survey and authors' estimates. Companies are IDA and EI clients. At county level there is a good deal of variance in the numbers of people employed in agency assisted enterprises within the two regions. Westmeath in the Midlands and Limerick in the Mid West are the counties with the highest share of agency assisted employment in their respective regions. Laois and Tipperary have the lowest share of their regionsâ&#x20AC;&#x2122; agency assisted employment and the lowest growth in regional employment between 2010 and 2019. Agency assisted employment in Limerick and Longford grew at a higher rate than the national average between 2010 and 2019, while the other counties had lower growth rates than the State as a whole. Table 6.2.3 shows the numbers in agency assisted employment by county in 2019, the percentage share of each county in regional employment and the percentage growth in employment over the decade 2010-2019. Table 6.2.3 Agency Assisted Employment by County in Midland and Mid West Regions 2019 Number Employed

Regional Share (%)

% Change 2010-2019

Midland: Laois Longford Offaly Westmeath

1,890 4,164 5,430 7,068

10.2 22.4 29.3 38.1

35.5 60.7 38.4 45.2

26 51.1 22.9 100

22.1 74.3 6 50.6

Mid West: 11,471 Clare 22,504 Limerick 10,065 Tipperary 475,505 State Source: DBEI Annual Employment Survey 2019

Differences between counties can also be seen when we compare the share of agency assisted employment with each countyâ&#x20AC;&#x2122;s share of total employment in both regions. Using data from the Census of Population 2016 this comparison shows that Westmeath, Longford and Offaly in the Midlands and Limerick in the Mid West have higher shares of agency assisted employment than total employment in their regions. In contrast, Laois and Tipperary have lower rates of agency assisted employment than their shares of total regional employment would suggest. Clare has similar shares of both agency assisted and total regional employment, but agency assisted employment in the county grew more slowly in 2010-2019 period than in each of the counties in the Midland region. The Annual Employment Survey does not provide a sectoral breakdown of agency assisted employment by region or county. As was the case with the Business Demography data, we summarise the national profile in Table 6.2.4 below. The table shows that the majority of permanent, full-time employment in agency assisted Irish-owned companies is in the Industrial sector, while Services account for the majority of full-time permanent jobs in foreign-owned companies. The decade from 2010 to 2019 saw an increase in Services employment in both

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Irish- and foreign-owned companies and the sector now accounts for 45% of all agency assisted employment. Table 6.2.4 Agency Assisted Employment by Sector 2019 Irish-Owned

Foreign-Owned

Total

133,937

119,673

253,610

Primary Production

4,285

289

4,574

Services

79,747

137,574

217,321

Total:

217,969

257,536

475,505

Manufacturing & Other Industry

Source: DBEI Annual Employment Survey 2019 6.3

Local Enterprise Offices

The Local Enterprise Office (LEO) network was established in 2014 to support business growth at local level. The LEOs operate through the local authorities and provide microenterprises with a range of soft supports and financial assistance. There are 31 LEOs operating in the State â&#x20AC;&#x201C; Dublin City and County have 4 LEOs and Cork City and County have 3 LEOs. The soft supports available to local businesses through the LEOs include start your own business programmes, and training and mentoring. Financial assistance is provided by way of grants for activities such as feasibility studies, business expansion, technical assistance for exporters, and research and development. In 2018 the LEO network approved â&#x201A;Ź18.2 million in grant assistance for 1,259 applicants throughout Ireland. This financial support is provided through Enterprise Ireland. Table 6.3.1 shows that in the Midland and Mid West regions the seven LEOs have provided financial assistance to 1,600 clients and supported 8,556 jobs in the five years from 2014 to 2018:

Table 6.3.1 LEO Clients and Jobs in Midland and Mid West Regions 2018 Clients Jobs Midland 802 4,065 Laois 122 635 Longford 254 1,195 Offaly 201 1,063 Westmeath 225 1,172 Mid West 798 4,491 Clare 239 1,270 Limerick 301 1,926 Tipperary 258 1,295 State 7,164 36,666 Source: LEO Impact Report 2018 An interesting feature of the LEO data is the extent to which the Midlands performs above the State average in the numbers of clients and jobs supported per 1,000 people in the labour force. Using the same above approach as we employed for the Business Demography and Annual Employment Survey data we find that the Midlands has a higher number of LEO clients (5.9) and jobs supported in LEO clients (29.6) per 1,000 people in the labour force than the

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State average (3 and 15.2 respectively). The Mid West with 3.6 clients and 20.1 supported jobs per 1,000 people in the labour force also exceeds the national average but is below the level in the Midlands. This is summarised in Table 6.3.2: Table 6.3.2 LEO Clients and Jobs per 1,000 in Labour Force 2018 Clients

Jobs

Midland

5.9

29.6

Mid West

3.6

20.1

15.2

State

Source: LEO Impact Report 2018 and authors' estimates The higher rate of LEO activity in the Midlands compared with the national average indicates that there is underlying entrepreneurial activity and potential in the region that is not fully reflected in the Business Demography or agency assisted employment data. Part of the remit of the LEOs is to assist client companies to the point where they can be transferred into the Enterprise Ireland portfolio where they can avail of further business assistance, for example to help them to develop export markets. Based on the data from the LEO Impact Report it would appear that there is a pipeline of micro enterprises in the Midlands with the potential to graduate to agency assisted status at some point in the future. The LEOs do not provide a sectoral breakdown for their supported clients but they note that in addition to those receiving financial assistance they provide expert advice and enterprise training to other businesses who create thousands of jobs every year. 6.4

Regional Enterprise Plans

In the 2018/ 2019 the Department of Business, Enterprise and Innovation published a series of nine Regional Enterprise Plans (REPs) which set out a set of selected priority objectives requiring collaborative action at regional level. The REPs are not designed as comprehensive regional economic development plans but they are intended to provide a focus for the work of the enterprise agencies (IDA and Enterprise Ireland), the LEOs and the other State bodies who provide enterprise support across the regions. The approach of the REPs is to provide a “ground-up” initiative to complement national policies and programmes which are more “topdown” in design and content. The REPs are specifically aligned with the national enterprise policy, “Enterprise 2025 Renewed” and complement the “Future Jobs Ireland 2019” initiative. National enterprise policy is based on 5 key policy priorities which are aimed at embedding resilience in Irish companies, enabling them to contribute to a stronger national economic performance over time. The 5 priorities are: • • • •

An increased emphasis on developing our Irish owned enterprises – enhancing productivity and delivering quality jobs – and helping companies to navigate Brexit; Exploiting the potential offered by collaboration and clustering within our distinctive foreign and Irish owned enterprise mix; Placing a spotlight on innovation (including disruptive technologies) and talent development, so that more enterprises are developing new products, services and solutions, and are more competitive internationally; Realising the full potential of our regions – developing places that are attractive for business investment and for people to live and work; and

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•

Raising Ireland’s visibility internationally, protecting Ireland’s reputation, and providing opportunities for our enterprises supported by the Global Footprint 2025 initiative.

(Enterprise 2025 Renewed; emphasis added). The “Future Jobs Ireland 2019” strategy is complementary to national enterprise policy and forms part of a “whole of Government” approach to job creation and labour force participation, talent development, enterprise growth, innovation and competitiveness, and the transition to a low carbon economy. The strategy is based on the recognition that by 2025 Irish workers and enterprises will be working in a changed economy where, as a result of new technology and the challenges of climate change “Certain job roles will disappear or be redefined, and emerging job roles will require new and different skillsets”. Therefore, the strategy states, “It is time to shift our enterprise and jobs focus to ensure quality jobs that will be resilient into the future [and]It is also time to shift the way we work if we are to sustain and increase labour market participation”. Future Jobs Ireland 2019 has 5 pillars in the areas of: • • • • •

Embracing innovation and technological change; Improving SME productivity; Enhancing skills and developing and attracting talent; Increasing participation in the labour force; and Transitioning to a low carbon economy.

(Future Jobs Ireland 2019). As part of the whole of Government the REPs are aligned with the National Skills Strategy 2025 which established a Regional Skills Forum in each of the 9 regions with funding from the Department of Education and Skills. Each Forum is designed to be driven by regional stakeholders, including employers, enterprises and education and training providers and through facilitation and engagement to contribute to better outcomes for learners and support enterprise development. The Fora provide a single contact point in each region to help employers connect with the range of services and supports available across the education and training system and take employers’ needs into account when designing skills training programmes. The REPs are also a key component in the implementation of the Regional Spatial and Economic Strategies (RSESs) at the Regional Assembly level. The RSESs form part of the National Planning Framework and the Project Ireland 2040 National Development Plan. The enterprise policy framework outlined above was developed prior to the outbreak of the Covid-19 pandemic. However, the key pillars on which the framework is structured will remain relevant in the post-pandemic world. It is clear that fostering resilient enterprises capable of adapting to technological change with enhanced skill levels and higher productivity will be central to post-pandemic economic recovery. Equally important will be meeting the ongoing challenges of transitioning to a low carbon economy while labour force participation will be a major focus of policy in the wake of the pandemic after the disruptive change in the labour market in 2020. 6.4.1

The Midland and Mid West Regional Enterprise Plans

The REPs for the Midlands and Mid West were published in 2019. Both plans describe key features of the two regional economies and set out a series of Strategic Objectives and Key Actions for each objective. For example, the Midlands REP describes the region as offering unparalleled national connectivity due to its location in the centre of the country as well as

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access to international airports and ports. The region’s key strengths from an enterprise perspective are summarised as: • • • • •

A strong indigenous non-food manufacturing base; A vibrant food manufacturing base; An emerging internationally traded service sector; A strong base in the Green Economy with the presence of Bord Na Móna, Coillte and ESB; Significant tourism assets which can be developed in a more integrated way in the context of the brand experience “Ireland’s Ancient East” and “Hidden Heartlands”.

The Mid West REP describes its “Vibrant and diverse enterprise base, with recognised strengths in manufacturing, ICT, Aviation, Pharma/MedTech, Tourism and Renewable Energy. In addition, sectors such as Agri-Food and Agri-Tech, Sports Industry and Design offer further potential to develop the sector”. The region’s enterprise base is underpinned by its excellent education infrastructure with third level institutions in the University of Limerick and Limerick Institute of Technology, Skillsnets Training Networks and Education and Training Boards providing extensive further education and training programmes throughout the region. However, the introduction to the Mid West plan notes that “In Ireland 16.2 percent of people live in households with very low work intensity (Eurostat 20171); second only to Serbia (20.1) and significantly higher than the EU average of 9.5 percent. The Eurostat data also points to a strong correlation between low work intensity households and (lower) education attainment” (Mid West REP; italics added). The Mid West REP also states that the region has the highest concentration of unemployment blackspots in the State, most, but all, of which are located in Limerick City while the Midlands REP records 4 unemployment blackspots in the Midland region. The challenges around increasing participation in the labour force are noted in the Mid West REP which draws attention to the newly developed sub-classification of the economically inactive population (retired, student or home duties primarily) categorised as the ‘Potential Additional Labour Force’ (PALF). The National Skills Council estimated that in 2017 this PALF accounted for 8 percent of the economically inactive cohort across the country. The majority of persons classified as being on home duties were female, had higher secondary/ FET or third level qualifications and had previous work experience. The REP states that as the war for talent intensifies “More innovative ways in which to re-engage homemakers and increase female participation rates in the labour market are needed”. Against this background the Midland and Mid West REPs describe their Strategic Objectives for enterprise development which are the centre of their strategies. The Midland REP has 7 Strategic Objectives and the Mid West has 5, and both sets of objectives are summarised in the following table: Table 6.4.1 Regional Enterprise Plans – Strategic Objectives: Midlands

Mid West

1. Enable a digital and innovation economy and make the Mid-West Ireland’s leading smart city-region

Ensure that the Midlands is well positioned to address the challenges posed by the transition to a low carbon economy and renewable energy Leverage opportunities in big data and data analytics from iLOFAR*

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2. Achieve a step-change in progress toward a low carbon economy in the Mid-West

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Position and support the Midlands as 3. Continue to develop workforce skills and an advanced manufacturing centre of talent and enhance the attractiveness of excellence living and working in the Mid-West 4. Enhance the collective offering of the 4. Develop the regionâ&#x20AC;&#x2122;s capacity to deliver Midlands as a place to live, work, and economic growth invest in 5. Strengthen the attractiveness of the 5. Build a coordinated regional messaging Midlands as a destination to visit brand for consistent communication 6. Harness the potential of the food and beverage industry in the Midlands 7. Ensure the availability of skills and talent to realise the regionâ&#x20AC;&#x2122;s economic potential and address upskilling requirements * iLOFAR is the Irish astronomical telescope located at Birr Castle Source: Midlands and Mid West Regional Enterprise Plans Each of the Strategic Objectives is followed by a series of Key Actions with associated delivery timeframes, responsibilities and measurement criteria. The summary above shows that there are shared objectives in both regions, notably the transition to a low carbon economy, the development of workforce talent and skills, and enhancing the regionsâ&#x20AC;&#x2122; attractiveness as a place in which to live, work and invest. In addition, there are shared sectoral goals, particularly in advanced manufacturing and the digital economy/big data/analytics. The Midlands REP identifies specific opportunities to develop its tourism and food and beverage sectors, both of which are well established in the Mid West. This summary of key objectives indicates a good deal of complementarity in the enterprise development agendas of both regions, with scope for enhanced inter-regional collaboration and co-operation across a range of sectoral initiatives. The new TU incorporating AIT and LIT can be an important driver of collaboration between sectors in the Midlands and Mid West, bringing educators, researchers, enterprises and communities together in shared initiatives to deliver more productive and resilient regions. We will explore areas of collaboration and cooperation further in the next part of this section. 6.5

Enterprise and the new Midlands/ Mid West Technological University

The national enterprise policy structure and the Regional Enterprise Plans provide the framework for enterprise engagement in the new AIT-LIT Consortium. As part of this SocioEconomic Assessment the SIDC consultants interviewed academics and professionals working with enterprise in AIT and LIT, along with executives in the economic development agencies and industry partners (to be completed). The interviews covered the extent of current levels of engagement between the two Institutes and the enterprise sector in their regions and nationally, the opportunities for wider and deeper engagement that the new TU will provide, and some of the key barriers that will need to be addressed in order to take advantage of the opportunities for closer TU/enterprise collaboration in the future. It was clear from these interviews that AIT and LIT work closely with enterprises in their regions, and in other regions, and are central to delivering a number of the key actions outlined in the Regional Enterprise Plans. Both Institutes provide programmes and courses whose design, content and teaching are closely aligned with industry needs for skilled workers. Stakeholders described the Institutes as being flexible and agile in their response to meeting the changing needs of industry both in terms of the skills required and the different channels for acquiring those skills. This core function of skills development is complemented by the role

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of the two Institutes in supporting research, development and innovation (RDI) in the enterprise sector with a particular focus on applied research which provides practical solutions and support for industry clients. Their emphasis on applied research enables AIT and LIT as well as the Institutes of Technology in general to differentiate their offer to enterprise from that of the conventional universities, who tend to focus more on basic research. A further important point from the interviews is the extent to which applied research in AIT and LIT is national as well as regional in its scope. Specialising in specific sectors and sub-sectors such as biotechnology, connected media, sustainable energy, materials science (polymer chemistry, for example) and precision engineering enables the two Institutes to work with enterprises and research networks beyond their bases in the Midlands and Mid West. This is important for building expertise and capability in these areas of applied research and strengthening the reputation of AIT and LIT as key providers and partners for enterprise in these sectors. The changing needs of industry in Ireland, both indigenous and FDI, were a recurring theme in all of the interviews. These changes are also reflected in national policy frameworks which seek to align the work of the higher education institutions in supplying education, skills and RDI supports with the needs of the enterprise sector in a rapidly changing and increasingly challenging global environment. The enterprise development agency executives stressed that, driven by the adoption of new technologies and the need for an effective response to climate change, in the coming decade enterprises in Ireland will have to: â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘

Raise the skills level of their workforce as global competition intensifies and new technologies are deployed more widely. This applies both to technical skills and to management and problem solving skills. Increase the volume and quality of their research, development and innovation activities as societies and economies become more complex and interconnected. Respond to the global and national policy challenges of transitioning to a low carbon economy and achieving more inclusive and balanced economic growth.

Both AIT and LIT are recognised as agile and responsive to enterprise needs based on the feedback, we received from their industry partners. These stakeholders highlight the key strengths of the two Institutes as being their ability to produce graduates with practical, usable skills and delivering applied research and development projects and solutions for companies regionally and nationally. AIT and LIT advised us that their industry partners see a key advantage in being able to inform the design and content of courses delivered by the two Institutes, and in the flexible delivery options they provide. They also value the applied research capabilities that the Institutes have developed and their solutions-oriented approach to working with their enterprise partners. These are differentiating factors between the Institutes of Technology and the mainstream universities and are particularly valued by indigenous SMEs. The two Institutes and the Institutes of Technology in general are perceived as having a number of constraints in their work with the enterprise sector and which can be addressed by transitioning to Technological University status. One such constraint is the limited scale and more fragmented nature of RDI activities in the Institutes Technology compared with the universities. This was of concern to the enterprise development agencies who see a growing demand among their client base for RDI support from the higher education sector. The enterprise development agencies were also concerned about the capacity of higher education institutions to respond to rapidly changing skills needs in their client enterprises, not just in technical areas but in management and supervisory roles as well.

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Both AIT and LIT are concerned at the constraints they face in delivering more and better RDI supports for their industry partners. Adequate resourcing of these key activities is always an issue but there are also structural barriers that constrain their expansion. For example, academic staff in the Institutes of Technology spend a greater percentage of their time on teaching duties than their counterparts in the university sector, leaving them with less “bandwidth” for taking part in research projects. Our information is that Institutes of Technology academic staff spend up to 3 times as many hours teaching compared with university staff. This clearly constrains the amount of research that can be carried out by an Institute of Technology compared with a university and will need to be addressed by the new TUs if they are to respond effectively to the rising demand for RDI supports from companies in the portfolios of the enterprise development agencies. The interviews also highlighted another feature of Institute of Technology engagement with enterprise, mentioned by the Technology Gateways in particular, which centres on the higher volume of smaller research projects carried out by the Institutes compared with the university sector. In the case of AIT and LIT this is a positive feature of their regional enterprise support roles as they work with a relatively large number of mostly smaller client companies, providing valuable RDI support that would otherwise be unavailable or unaffordable for those clients. However, this important enterprise support role is limited by resource constraints and also constrains their capacity to work on larger projects for larger clients. The expectation in both AIT and LIT is that Technological University status will remove some of those constraints as research becomes better resourced in the new TU, enabling more engagement with larger and higher value RDI projects. The published data on research and development expenditure by Irish higher education institutions illustrate the concerns expressed in the interviews about the levels of RDI activity in the Institutes of Technology and the scale of the challenge that the new TUs will face to raise them to comparable levels with the universities. At the outset it should be noted that Ireland has a relatively low level of research intensity compared with other EU member states. Eurostat reports that in 2018 Gross Domestic Expenditure on R&D was 1% of GDP, down from 1.22% in 2017, and less than half of the EU-27 average spend of 2.18% of GDP. The national target is for gross spending on R&D of 2% of GDP. The percentage figure is influenced by fluctuations in Ireland’s level of GDP during the past decade which were discussed in Section 4, but even before the onset of the great financial crash and subsequent recession Irish spending on R&D was in the order of 1.2% to 1.3% of GDP compared with an EU-27 average of 1.8% of GDP. The Indecon Assessment of the Economic and Social Impact of Irish Universities estimated that about 50% of R&D expenditure in Ireland in 2017 came from the higher education sector, and that 83% of expenditure in the higher education sector came from the universities. Knowledge Transfer Ireland (KTI) reported that in 2019 Irish universities accounted for 79% of expenditure on basic and applied research in Research Performing Organisations (RPOs) in Ireland. The comparable figure for the Technological Higher Education sector (i.e. the 11 Institutes of Technology and TU Dublin) was 13%. The HEA’s Sectoral and Institutional Profiles for 2016/2017 show that contract research income per academic staff member in the universities was €79,347 compared with €14,341 per academic staff member in the Institutes of Technology. EU contract research income per academic staff member was €12,970 in the universities and €2,777 in the IoTs. Further support for the points made in the interviews can be found in the HEA and KTI data. The HEA reports that in 2016/2017 the number of doctorate students per 10 academic staff in Irish universities was 2.6 while the Institutes of Technology had 0.2 doctorate students per 10 academic staff. Universities accounted for 57% of the number of Collaborative Research Agreements signed with companies in 2019 compared with 36% in the Institutes of Technology. In other measures of knowledge and technology transfer the Institutes of

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Technology were also behind the universities, for example in numbers of Invention Disclosures (18% vs 75%), Patent Applications (5%1 vs 75%), and Licences, Assignments and Options (23% vs 68%). However, the Institutes of Technology accounted for 86% of Innovation Voucher and Consultancy Services Agreements signed in 2019 compared with 14% for universities. This confirms the point made in the interviews about the high volume of contacts between the Institutes of Technology and smaller Irish companies, and the role that the Institutes play in regional enterprise support systems. The Institutes of Technology also accounted for the vast majority of business incubation clients among the RPOs with 79% of all HEI incubator clients compared with 21% for the universities (these incubators provide facilities and support for start-up ventures and are managed by the RPO). The roles were reversed in the number of active spinouts with universities accounting for 82% and the Institutes of Technology for 14% of the national total. (Spinouts are companies who are dependent on IP from an RPO at the time of their formation). These indicators are summarised in Table 6.4.2: Table 6.4.2 Indicators of Research Activity and Enterprise Engagement Indicator

Institutes of Technology*

Universities

Share of: R&D Expenditure 2019 13% Invention Disclosures 2019 18% Patent Applications 2018/ 2019 18%/ 5% Licences, Options and Assignments 2019 23% Innovation Vouchers 2019 83% Consultancy Services Agreements 2019 88% Research Collaboration Agreements 2019 39% Active Spinouts 2019 14% Incubator Centre Clients 2019 79% Contract Research Income 2016/2017: Per Academic Staff Member €14,341 EU Research Income/ Staff Member 2016/ 2017 €2,777 Doctorate Students per 10 Academic Staff 2016/ 2017 0.2 * Technological Higher Education Sector in 2019 Sources: Knowledge Transfer Ireland; HEA. 6.6

79% 75% 76%/75% 68% 17% 12% 61% 82% 21% €79,347 €12,970 2.6

The AIT-LIT Consortium – a Strategic Opportunity

The consensus from the interviews that we conducted for this report is that the new TU represents a strategic opportunity for AIT and LIT to raise the level of their engagement with enterprise and in the process to add a new dimension to the enterprise eco-systems of the Midland and Mid West regions. The enterprise development agencies see an opportunity for the new TU in meeting the demands of the FDI and indigenous industry sectors for niche, specialised skills which companies will need for future competitiveness. As with the two Institutes at present, the new TU can work with companies to design specialised courses and

Was 17% in 2018.

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programmes at every FTQ level and deliver them in flexible ways that meet the needs of learners and their employers. Technological University status will provide a new impetus for AIT-LIT Consortium to scale up towards wider and deeper enterprise engagement, which in turn can differentiate the new TU from the mainstream universities. This is an important consideration for the enterprise development agencies who are seeking to continuously develop the support networks available to FDI and indigenous enterprise clients as they face more intense competition for mobile investment and aim to grow greater numbers of internationally competitive Irish companies. The AIT-LIT Consortium graduate network can be a valuable resource in enabling the new Technological University to engage with enterprise. Graduates from both Institutes who are working in companies across all sectors of the Irish economy and overseas, and those who are running their own enterprises, can be a source of new RDI projects and funding with their knowledge of the expertise and resources of AIT and LIT. The graduate â&#x20AC;&#x153;diasporaâ&#x20AC;? presents a strategic opportunity for the new Technological University to strengthen contacts with its alumni from the two Institutes in order to leverage new projects from a cohort of the workforce who were educated at AIT and LIT and are likely to be well disposed to further engagement. There is also recognition in AIT and LIT that the new AIT-LIT Consortium provides the opportunity to put enterprise engagement at the core of its academic culture, informing programme and course design, teaching and RDI activities. A dedicated Industry Liaison Office, adequately resourced and incorporating a Technology Transfer function, would be a key requirement of the new AIT-LIT Consortium. It would provide a clear statement of intent that the new TU will be focused on responding to the needs of its industry stakeholders and on making the Midlands and Mid West regions more attractive places in which to work and invest. A major challenge for the new TU, as perceived by our interviewees in AIT and LIT, is to raise the level of research activity and intensity beyond current levels in the two Institutes. This means that it must attract more researchers at PhD level from its present level of about 4% of the student cohort to 7%, which would be comparable with mainstream universities. In turn this will require a reorientation of research active academic staff more towards research, and supervision of research students, and less towards teaching duties. This will be a significant management challenge, but one which needs to be met if the new TU is to meet the future education and skills needs of the Midland and Mid West regions. Designated professorial status for qualified AIT and LIT staff was also mentioned as an opportunity to transform RDI activities in both Institutes, making the new TU a more attractive career proposition for research professionals and for students considering a career in research. This could form part of a modified incentive structure for promoting more research activity in the new TU. Collaboration is one the underpinning principles behind the move towards Technological Universities in Ireland. Our interviewees in the research area highlighted the fact that collaboration is essential for successful research projects and that it is well embedded in the ethos of researchers in AIT and LIT. They pointed to examples of collaboration between the two Institutes involving the RUN (Rural Universities Network) project, and the Shannon ABC, COMAND and APT Technology Gateways. In the case of AIT and LIT, collaboration will be facilitated by the complementarity between the two Institutes and the two regions, which do not compete institutionally or regionally but which can benefit from the opportunity to scale up to a higher level which the new TU will create. AIT currently operates from its Athlone campus while catering for the needs of more than 1,000 students availing of part-time flexible programmes through blended learning and attending lectures. In 2020 the first AIT Learning Gate was opened in the e-Working Centre in

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Mullingar to provide students with online blended learning programmes, including lectures and library access, in a professional, supportive environment that enables them to work and study at AIT while living in Mullingar and the surrounding area. The Mullingar Learning Gate was developed in partnership with Westmeath County Council and is the first location in a network of up to 20 Learning Gates throughout the Midlands that AIT plans to develop with regional partners. The Midlands Network of Co-working Facilities (MNCF) has 20 members who operate and manage remote and co-working hubs, incubation centres and enterprise hubs throughout the Midlands and can provide a platform partner for AIT’s “Distributed Reach” flexible and lifelong learning model. The enterprise development agencies identified a number of areas of opportunity for the new TU from their perspective as partners of the new institution. These can be summarised as: • • • • • •

The new TU can develop a “Hub and Spoke” model of distributed campuses, learning gateways, flexible learning delivery and remote working centres that will appeal to regionally based companies and potential FDI clients; Scaling up will enable the new TU to build closer and higher value-added RDI linkages with enterprise agency clients; The new TU can collaborate with enterprises to identify their niche skills requirements and respond appropriately in an enhanced “skills matching” process; There can be a renewed focus on building management and supervisory skills and capabilities in a multidisciplinary and collaborative environment; The new TU can help to re-energise the enterprise start-up agenda in both regions with higher levels of RDI activity and increased numbers of researchers; and The new TU can promote enterprise clustering around specific sectoral opportunities such as the Green Economy, digitisation and biotechnology.

A final point worth noting is that both the enterprise development agency and AIT and LIT interviewees referred frequently to the “German Model” of technical universities and dualtraining as one which the new Midlands/ Mid West TU could aim to emulate. The combination of leading-edge research with unique learning opportunities for students and a spirit of entrepreneurship was mentioned as a worthwhile goal for the new TU and is consistent with the current ethos of AIT and LIT. A focus on providing solutions for the major challenges facing society is also a feature of the German technical university approach and it can be a guiding principle of the new AIT-LIT Consortium. 6.7

Sectoral Opportunities for the new Technological University

In this final part of the section we identify a number of sectoral opportunities that will align the activities of the new AIT-LIT Consortium with the objectives of the enterprise sector in both regions. The strategic opportunity for the new TU, as we have seen, is to intensify its engagement with enterprise through its education programmes and RDI activities. This part of the report sets out some of the sectors on which this enhanced engagement could focus to achieve the most effective outcomes for the new TU and its wider region. We discuss three specific sectoral opportunities in parts 6.7.1 to 6.7.3, namely the Transition to a Low Carbon Economy, Advanced Manufacturing, and the Digital Economy, and move on to horizontal, or cross-cutting, opportunities for the remainder of the discussion. 6.7.1

Transition to a Low Carbon Economy

Both the Midlands and Mid West regions have a strategic interest in the transition to a low carbon economy in Ireland. The Midlands in particular faces challenges as Bord na Móna, which has harvested the region’s peatlands since the 1930s and is a major employer, embarks on its “Brown to Green” strategy to align its future activities with national and EU de-

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carbonisation policies. Bord na Móna employs 2,000 people directly and supports a further 2,000 jobs in the region, giving it a large economic footprint across the Midlands. The company plans to raise up to €1.6 billion in new funding in order to invest in new renewable energy assets, high-value recycling and resource recovery, green energy parks and new green business opportunities in areas such as land-based aquaculture and high-value herb production. The Irish Government is committed to a just transition for workers and communities impacted by the accelerated exit from peat-generated energy in the Midlands. As part of this commitment it has appointed a Just Transition Commissioner and established a Just Transition Fund to support the creation of long-term sustainable employment during the transition. The scale of the challenge facing the Midlands region in Ireland’s transition to a low carbon economy is considerable and will require sustained and focused policy interventions over the coming decade. The Mid West also faces challenges in the drive towards a lower carbon economy given its position as a net contributor to national energy supply primarily through the electricity generation plants at Moneypoint and Ardnacrusha. With the energy production landscape changing, the Mid West, like the Midlands, faces new challenges and opportunities. The region’s geographical location gives it a number of potential advantages for renewable energy generation, especially wind and ocean energy, but the challenge is to convert this potential into economic activity and jobs. There are potential synergies between the Midlands and Mid West regions in the transition to a greener economy, reinforced by their geographic proximity and the creation of the new TU. Both AIT and LIT have been active in preparing for the green transition, leading and supporting research and development projects such as the Empower Eco Sustainability HUB at Lough Boora in Co. Offaly and the National BioEconomy Campus in Lisheen, Co. Tipperary. The two Institutes are also involved in community-based initiatives and projects to promote the green economy in their regions such as the Tipperary Energy Institute. The Technology Gateways in both Institutes have also worked together in R&D projects in the environmental sustainability area, sharing their knowledge and expertise. The new AIT-LIT Consortium can play a key role in the transition to a low carbon economy in Ireland by raising the scale and scope of its teaching programmes and RDI activities. The new TU will have a campus presence in Athlone, Limerick City, Thurles, Clonmel and Ennis, and a learning gate network in Mullingar and other locations in the Midlands giving it wide geographical range across the combined region. It will also have sectoral expertise and knowledge in areas such as biotechnology, precision engineering, connected media, social enterprise and entrepreneurship which can enable the transition to a greener future while managing its more disruptive effects. 6.7.2

Advanced Manufacturing

The Midlands and Mid West REPs identify advanced manufacturing as a priority sector for future development in both regions. Manufacturing is an important source of employment in the Midlands, primarily in Irish-owned companies across sectors such as food, engineering, plastics, cleantech and electronics. The Mid West is also very dependent on manufacturing employment, although the structure of the sector is somewhat different from the Midlands with a higher number of foreign-owned companies. Technologies such as robotics and connected devices are transforming manufacturing processes and posing new threats and opportunities for companies in the sector.

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The importance of the manufacturing sector to the future of both regions is evident from the strategic objective in the Midlands REP of positioning and supporting the region as an advanced manufacturing centre of excellence, while the Mid West REP has a key action of positioning the Mid West as a national centre for advanced manufacturing. Both AIT and LIT have responsibilities in enabling these outcomes to be achieved through their education, research, innovation and enterprise support programmes. The APT Applied Polymer and COMAND Connected Media Technology Gateways in AIT and the CONFIRM smart manufacturing research centre in Limerick City, in which LIT is a partner are cited as enablers of the two regions’ drive to become advanced manufacturing centres of the future. The new AIT-LIT Consortium will be well positioned to drive advanced manufacturing excellence forward in both regions and to achieve greater synergy between projects and initiatives across the sector. There will be opportunities to provide educational courses and programmes in advanced and smart manufacturing across the TU’s teaching platforms as the demand for upskilling and reskilling increases as a result of advances in technology. There will also be opportunities for greater engagement with enterprises in both regions as they adopt more advanced production technologies and processes, highlighting the key imperative for the new TU to increase its RDI intensity. 6.7.3

The Digital Economy

The REPs highlight the growing influence of digital technologies across modern society, enabling productivity and enterprise growth and in some cases completely transforming sectors of the economy. The policy objective is to enable enterprises to deliver on the opportunities presented by increasing digitisation while mitigating against emerging and unforeseen risks. The REPs were written in the pre-pandemic period, but some of the trends identified in the documents, such as the increase in remote working facilitated by digital technologies and infrastructure, have become important elements of the response to Covid19. The Mid West REP was prescient in including a suite of “Digital E-Hubs” as a key action for the region, with the goal being to facilitate the anticipated rise in the number of people working remotely and more flexibly. The Midlands REP highlights the opportunities in big data and data analytics flowing from the presence in Birr, Co. Offaly of iLOFAR, the Irish addition to an international network of state of-the-art telescopes used to observe the universe in unprecedented detail at low radio frequencies. The opportunity is to leverage iLOFAR to establish a STREAM (Science, Technology, Research, Arts and Maths) Creative Suite in Birr that will provide a central location and space, where academics and researchers affiliated with the international LOFAR network can work collaboratively with software developers and data analysts from companies operating in the Midlands Region. The project continues the tradition of astronomical research in Birr Castle which can be traced back to 1845. Both REPs mention the suitability of the Midlands and Mid West regions as locations for data centres, which will be increasingly in demand as the use of digital technologies grows exponentially. The availability of grid infrastructure and large areas of land such as cutaway peatlands in the Midlands are seen as advantages for locating data centres, while the Mid West has a novel proposal for a floating data centre located in Limerick Docks. The new AIT-LIT Consortium will benefit from the evolving digital economy which will increase the demand for new skills across the enterprise sector and society as a whole and provide opportunities for new RDI projects across multiple sectors. It will also provide a platform for flexible learning delivery and the infrastructure for connecting distributed campuses, learning gate and remote working locations. 6.7.4

Developing Workforce Skills and Talent

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The REPs of both regions recognise the importance of maintaining a pipeline of graduate talent from the higher education institutes for future economic development in the Midlands and Mid West. They also emphasise the need for continuous upskilling and re-skilling of the regional workforces, and of developing â&#x20AC;&#x153;skills resilienceâ&#x20AC;? to meet the demands of a changing labour market. The Mid West is identified as having a specific problem with localised unemployment, with 8 of the top 10 unemployment blackspots in Ireland located in the Limerick metropolitan area, and 23 of 79 nationally located in the Mid West region. This presents challenges in fostering greater social inclusion in the Region, as well as complicating the task of increasing the numbers of active participants in the labour market. The Regional Skills Fora are part of the policy response to developing workforce skills and were set up as part of the implementation of the National Skills Strategy 2025. The Fora are driven by stakeholder groups of employers, enterprises and education and training providers in each region. They are designed to provide a single point of contact in each region to help employers connect with the range of services and supports available across the education and training system; provide more robust labour market information and analysis of employer needs to inform programme development; greater collaboration and utilisation of resources across the education and training system; and enhancement of progression routes for learners. The Fora also provide a structure for employers to become more involved in promoting employment roles and opportunities for career progression in their sectors. (Regional Skills Fora Annual Report 2019). The Regional Skills Fora will be important partners of the new AIT-LIT Consortium, providing valuable information on labour market trends and changing skills needs at a regional level. The new TU will be a partner in delivering agreed work plans for the two regions and will provide a vehicle for cross-regional collaboration in meeting the skills needs of enterprises across the Midlands and Mid West. 6.7.5

Tourism and Place-Making

The Midlands REP identifies the tourism sector and strengthening the attractiveness of the Midlands as a destination to visit as an economic development opportunity. The Midlands has a wide range of land and water-based and heritage and archaeological attractions to offer prospective visitors. It is also home to the new Centre Parcs resort in Longford which has the capacity to sustain up to 1,000 jobs in the region. The tourism sector is an area of potential future growth in the Midlands and the REP sets out a series of key actions that will be required to beginning unlocking that potential. The Mid West has a more developed tourism sector with major national attractions such as Bunratty Castle and Folk Park and the Cliffs of Moher located in the region. There is an opportunity in the new TU composite region for the Mid West to transfer some of its tourism expertise and skills to the growing Midlands tourism sector, for example through joint projects facilitated by the new TU. These could be facilitated and led by the Business and Humanities departments with technical support provided by other departments as required. The potential for productive knowledge sharing and transfer between the Midlands and Mid West enabled and facilitated by the new TU is worth further exploration. The food and beverage sector featured as a strategic objective in the Midlands REP with the emphasis on developing diverse high-quality artisan food products across the region. This will complement the tourism development objective and enhance the regionâ&#x20AC;&#x2122;s attractiveness as a visitor destination. The new AIT-LIT Consortium can support this regional objective with its entrepreneurship development programmes, as the majority of the artisan producers will be micro enterprises.

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Finally, in a post-pandemic world there will be new opportunities and challenges for regions and institutions across the country that will require creative solutions. For instance, the higher education sector in Ireland, including the new TU incorporating AIT and LIT, has facilities, equipment and skilled staff well placed to carry out testing for pathogens and other threats to human health at local level. Their expertise in analytical biotechnology, for example, is especially valuable in carrying out these testing procedures. The Covid-19 pandemic has demonstrated the importance of effective testing in controlling the transmission of infections in the community. The higher education sector can provide effective local testing services as part of the national response to managing infectious diseases. The new Midlands/ Mid West TU will be operating in a changed environment from that which prevailed before the pandemic and will need creativity and flexibility to meet the changing demands of its stakeholders. Creativity is a hallmark of the LIT Limerick School of Art and Design which is recognised as one of Europe’s leading fine art, design and creative media schools. The School can be a catalyst for new and innovative approaches to living in the postCovid world, using the Midlands and Mid West regions as testbeds for integrating creativity and enterprise. The School can also enhance the quality of life of people living in both regions by showcasing the work of its students and graduates in different art forms. Both the Midlands and Mid West REPs recognise the importance of enhancing the attractiveness of their regions as places to live, work and invest – the “Place-Making” agenda is closely aligned with regional economic development strategies and complements the focus on building competitiveness and improving productivity. In the combined Midlands/Mid West region the School of Art and Design will provide the new TU with a key creative resource for new business formation in a high-value sector, and for enhancing the quality of life of people living in both regions. 6.8

Conclusions

In this section of the report we reviewed current levels of enterprise activity in the Midland and Mid West regions, examined the priorities for enterprise identified in the Regional Enterprise Plans, and discussed the strategic and sectoral opportunities for the new AIT-LIT Consortium that can align its activities with regional objectives. We found that there is scope in the Midlands and Mid West to bring enterprise activity and employment closer to national norms by growing the sector more intensively in the years ahead. There are also immediate challenges for enterprise and employment in both regions, notably the Just Transition agenda in the Midlands and the persistence of unemployment blackspots in the Mid West. The new AIT-LIT Consortium can play an important role in meeting these and other regional challenges by increasing the intensity of its engagement with the enterprise sector, both in providing relevant education courses and programmes and its research, development and innovation activities. We examined some of the sectors in which the new TU can contribute to building stronger regional enterprises and some of the ways in which make the Midlands and Mid West better places in which to live, work and invest. Raising the level of the new TU’s engagement with enterprise will be challenging and will require sustained focus by the new university and its stakeholders. A framework that could prove helpful in thinking about the challenge is the “Mission-Oriented Approach” developed by the Institute for Innovation and Public Purpose at University College London. The MissionOriented framework was recently deployed by the European Commission to find ways of bringing together smart innovation-led growth, inclusion and sustainability. In the case of the new AIT-LIT Consortium we can use the framework to identify guidelines for achieving closer engagement with enterprise that can make a real impact on the two regions’ economic performance.

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The 5 suggested guidelines are: • • • •

•

Engage the enterprises of the Midlands and Mid West with ambitious statements of intent for the new TU – for example, working towards a low carbon region, prospering in a post-Covid world – that show it can make a difference for their businesses. Set a clear direction for engaging with the enterprise sector with measurable and time-bound targets. Identify ambitious but realistic RDI actions, challenging researchers and innovators to deliver what otherwise would not be attempted if the new TU did not exist. Connect actors in the private, public and third sectors across multiple disciplines and economic sectors by taking a problem-solving approach which promotes new partnerships and co-operative working – for example, the sustainability agenda is not just about renewable energy but extends into transport, strategic design and digital technologies. Facilitate different trajectories to achieving the required outcome based on a bottom-up approach that encourages multiple solutions and is built on many and diverse projects.

The Mission-Oriented framework can help to clarify enterprise engagement priorities and actions for the new TU. It has the advantage of linking the new university with solving realworld problems and engaging with enterprise, entrepreneurs and workers in the Midlands and Mid West in a positive and productive way. 6.9

References for this section

CSO: “Business Demography”, various years. CSO: “Labour Force Survey”, various years. Department of Business, Enterprise and Innovation (2020): “Annual Employment Survey 2019”. Department of Business, Enterprise and Innovation (2018): “Enterprise 2025 Renewed: Building resilience in the face of global challenges”. Department of Business, Enterprise and Innovation (2019): “Regional Enterprise Plan to 2020 – Midlands”. Department of Business, Enterprise and Innovation (2019): “Regional Enterprise Plan to 2020 – Mid West”. Department of Housing, Planning and Local Government (2018): “Ireland 2040: Our Plan”. Department of the Taoiseach/Department of Business, Enterprise and Innovation (2019): “Future Jobs Ireland – Preparing Now for Tomorrow’s Economy”. Eastern and Midland Regional Assembly (2019): “Regional Spatial and Economic Strategy for the Eastern and Midland Region”. Enterprise Ireland (2019): “Local Enterprise Office Impact Report 2018 - Measuring the impact of Local Enterprise Office supports in 2018”. Enterprise Ireland (2019): “Powering the Regions – Enterprise Ireland Regional Plan”.

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Higher Education Authority (2019): “Higher Education System Performance - Institutional and Sectoral Profiles 2016/17”. Indecon International Economic Consultants (2019): “Indecon Independent Assessment of the Economic and Social Impact of Irish Universities”. Indecon/ The Irish Universities Association. Knowledge Transfer Ireland (2020): “Review and Annual Knowledge Transfer Survey 2019”. Mazzucato, M. and Dibb, G. (2020): “Innovation Policy and Industrial Strategy for Post-Covid Economic Recovery”. Institute for Innovation and Public Purpose, University College London. Southern Regional Assembly (2020): “Regional Spatial & Economic Strategy for the Southern Region”.

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Climate Action

Recommendation The AIT-LIT Consortium should set out its own “climate action plan” within the national framework. This would help the new TU focus attention on those specific areas where the TU has special strengths and to help it concentrate on those opportunity areas where its contributions can have the greatest impact.

Ireland’s “Climate Action Plan” (2019) aims to tackle climate breakdown. The accelerating impact of greenhouse gas emissions must be arrested. Ireland has directly experienced the extreme weather events of flooding, drought and lock-down due to extreme snow. Decarbonisation is now a must if the world is to contain the damage and build resilience in the face of such a profound challenge. The Climate Action Plan has set out a detailed roadmap to deliver a cumulative reduction in emissions over 22 sectors: Electricity • Renewable energy • Support for micro-generation • Community participation in renewable generation • Streamline support for new technologies, on- and off-shore Buildings • Stricter requirements for new buildings and substantial refurbishments • Upgrade existing homes to higher energy ratings • Model for aggregation where home retrofits are grouped together • Deliver district heating potential • Attention to energy and carbon rating in property management

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Transport • Accelerate the take up of EV cars • Make growth less transport intensive • Increase the renewable biofuel content of motor fuels • Conversion of public transport fleets to zero carbon alternatives Agriculture • Improvements in farm practice • Expansion of forestry planting and soil management • Value chains and business models for lower carbon intensity farming Enterprise and services • Embed energy efficiency across all enterprises • Clusters for the adoption of new carbon technologies • Employment and enterprise in the new areas being opened up Waste and the circular economy • Reduction strategies for plastics, food waste and resource use • Eliminate non-recyclable plastic • Reduce reliance on landfill Especially relevant is the Government’s programme for Just Transition which focuses on the Midlands Region. The objective of the Just Transition Fund is to fund innovative projects that contribute to the economic, social and environmental sustainability of the Wider Midlands region and which have employment and enterprise potential. There are currently three priorities: • • •

Employment and Enterprise Supports: To support innovation and investment proposals to generate sustainable employment in green enterprise Training Supports: To retrain and reskill workers to assist local communities and businesses in the Wider Midlands to adjust to the low carbon transition Community Transitioning Supports: To support proactive communications with affected communities and other stakeholders in the region, establish best practice sharing networks, and assist in developing local transition plans.

Already, AIT and LIT are engaged in climate action initiatives, and this provides a basis for further work by the new TU. Some current illustrations in research-innovation and teachinglearning are shown below:

Renewable Energy:

• •

Support to Bord na Mona in sustainable renewable energy sources Integration of renewable energy to industry

Microgeneration

•

Buildings and smart energy in the home

Community participation in renewable generation:

•

Mobilising communities, models for community development Finance models for community engagement, such as community-owned wind farms, business models for community engagement Community transition to low carbon technologies

• •

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Buildings:

• • • •

Sustainable retrofits Digital academy for sustainable building Analysis of energy performance of buildings Sustainable management of buildings

Transport:

•

Electric vehicles in apprenticeship education

Improvements in farm practice:

• •

Monitoring climate change in agriculture Energy management in agriculture

Forestry planting and soil management:

• •

Use of peatlands for fresh-water aquaculture Alternatives on re-wetting peatlands

Value chains for farming: Enterprises:

•

Feedstock for new bioplastics

• • •

Ecosystem service management Managing sustainable energy investments Investment in energy efficiency in SMEs, up-skilling of SMEs for energy efficiency Training for clusters of companies for energy efficiency Innovation for enterprise in climate action – support companies through R&D, innovation vouchers, innovation partnerships

• •

Waste and the circular economy

• • •

Plastic re-cycling Green procurement Circular economy in construction

Climate action is embedded in the teaching and learning functions of both institutions. For example, the Faculty of Applied Science, Engineering & Technology in LIT and the Faculties of Engineering & Informatics and Science & Health in AIT have substantial elements of climate action built into their curricula, as have other faculties. Looking to the future TU, there are steps which the new university could take to enhance its inputs to climate action. Every organisation should have its own unique “climate action plan”. In this case the TU could periodically review its actions within each of the sectoral roadmaps and clarify its relative added value and special contribution to the national effort. This would help the TU focus attention on those specific areas where the TU has special strengths and to help it concentrate on the opportunity areas where its contributions can have the greatest impact. The approach is illustrated below.

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Climate Action: a framework for the new TU? Levels of Engagement 0 None

Some

Significant

Substantial Level of Engagement?

Sector Electricity Renewable energy Support for micro-generation Community participation in renewable generation Streamline support for new technologies, on- and off-shore

Buildings Stricter requirements for new buildings and substantial refurbishments Upgrade existing homes to higher energy ratings Model for aggregation where home retrofits are grouped together Deliver district heating potential Attention to energy and carbon rating in property management

0 0

Transport Accelerate the take up of EV cars Make growth less transport intensive Increase the renewable biofuel content of motor fuels Conversion of public transport fleets to zero carbon alternatives

0 0 0

Agriculture Improvements in farm practice Expansion of forestry planting and soil management Value chains and business models for lower carbon intensity farming Enterprise and services Embed energy efficiency across all enterprises Clusters for the adoption of new carbon technologies Employment and enterprise in the new areas being opened up Waste and the circular economy Reduction strategies for plastics, food waste and resource use Eliminate non-recyclable plastic Reduce reliance on landfill

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Urban Development

Recommendation The urban development plans for Limerick and Athlone are important settings for the new TU and the TU must see its mission as embracing those objectives

The contribution of the new TU to Ireland’s urban development policies must play a central role in the new TU future policies. “Ireland 2040 National Planning Framework” sets out the strategic objectives for planning and development over the coming two decades. For urban areas the Framework has ambitious goals: •

The creation of attractive, liveable, well designed, high quality urban places that are home to diverse and integrated communities that enjoy a high quality of life and wellbeing.

•

Develop cities and towns of sufficient scale and quality to compete internationally and to be drivers of national and regional growth, investment and prosperity. Environmental issues are also central.

•

Regenerate and rejuvenate cities, towns and villages of all types and scale as environmental assets that can accommodate changing roles and functions, increased residential population and employment activity and enhanced levels of amenity and design quality in order to sustainably influence and support their surrounding area.

The Framework aims to apply a tailored approach to urban development including a focus on: •

Dublin

•

The four cities of Cork, Limerick, Galway and Waterford

•

Strengthening Ireland’s overall urban structure, particularly in the Northern and Western and Midland Regions, to include the regional centres of Sligo and Letterkenny in the North-West, Athlone in the Midlands and cross-border networks focused on the Letterkenny-Derry North-West Gateway Initiative and Drogheda-Dundalk-Newry on the Dublin-Belfast corridor

Limerick Municipal Area Strategic Plan

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The Southern Regional Spatial and Economic Strategy highlights the importance of the Municipal Area Spatial Plan for the Limerick/Shannon area. Limerick City and Shannon are interdependent and their complementary functions contributing to a combined strength that is a key economic driver for the region and Ireland. Integrated land-use and transport planning will promote strategic new residential areas and provision of the Limerick North Distributor Route. In housing and regeneration, the need is to increase residential density. This includes reductions in vacancies, re-use of existing buildings, in-fill and site-based generation. Employment and enterprise locations include Shannon, National Technology Park, Raheen Business Park and other areas. The aim is also to integrate sustainable economic and social development with protection and enhancement of the natural environment. For social infrastructure, the aim is to ensure that education, health and community facilities are provided. “Limerick 2030 – an Economic and Spatial Plan for Limerick” aims to guide the economic, physical and social renaissance of the city and wider region. There are 3 elements to the Plan. The first is an Economic Strategy which identifies how Limerick needs to be positioned in order to best take advantage of economic opportunities in order to build a stronger local economy through the creation of employment and the attraction of investment. The second element is a Spatial Plan focussed on revitalising and redeveloping Limerick City Centre and the final element is a Marketing Plan which aims to use Limerick’s unique and positive attributes to change perceptions of how Limerick is viewed.

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Athlone – Regional Growth Centre “Project Ireland 2040 – the National Planning Framework” emphasises the role of Athlone. The Framework states that, due to strategic location and scale of population, employment and services, Athlone has an influence that extends to part of all three Regional Assembly areas. Given the importance of regional interdependencies, it will be necessary to prepare a coordinated strategy for Athlone at both regional and town level, to ensure that the town and environs has the capacity to grow sustainably and to secure investment, as the key regional centre in the Midlands. This acknowledgement of Athlone’s importance reflects the role of Athlone as a counterbalancing centre, midway between national centres of Dublin, Limerick and Galway. Athlone thus acts as an alternative and countervailing centre, complementing the attractions of larger cities, and strengthening the centre of Ireland, an area with smaller towns and rural population. This is shown in the map following.

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According to the East Midlands regional strategy, key planning objectives for Athlone are as follows: •

• • •

Promote Athlone as a key location for regional economic development supporting the provision of increased employment through the expansion of the existing enterprise ecosystem in Athlone and smart specialisation, including physical infrastructure and zoned lands in central accessible locations Support the development of a cross sectoral approach to promote Athlone as a key tourism destination in the Midlands, to develop the recreation and amenity potential of waterways including the River Shannon and Lough Ree. Support the regeneration of underused town centre and brownfield/ infill lands along with the delivery of existing zoned and serviced lands to facilitate significant population growth. Support ongoing implementation of flood risk management and flood alleviation measures.

The Core strategy for the “Athlone Development Plan 2014-20” aims to provide for the development of Athlone as a driver of sustainable economic growth, commensurate, whilst balancing the need to safeguard the town’s inherent environmental assets with the creation of appropriate development opportunities. The plan also aims to develop Athlone as a vibrant and dynamic town in which to live, work, do business and visit, offering high quality employment, educational, sporting and tourism facilities, together with sustainable communities. This is illustrated in the map following.

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The urban development plans for Limerick and Athlone are important settings for the new TU and the TU must see its mission as embracing those objectives.

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Rural Economy and Society

Recommendation The Consortium can support rural areas by continuing to deliver its education and training programmes and providing applied RDI supports to enterprises in both regions. The transition to a low carbon economy, building a network of remote and co-working hubs, and developing the tourism and creative potential of rural areas will all require continuous adjustments to, and intensification of, the Consortium’s education and RDI programmes. Social enterprise will be an important vehicle for ensuring that the AIT-LIT Consortium achieves a growing impact in rural areas and on developing the 3 sectors highlighted above. In this section we will examine the rural economic and social context for the AIT-LIT Consortium in the Midlands and Mid West regions. We will review the policy context for rural development internationally and at national level in Ireland before exploring areas of opportunity where the Consortium can make a positive contribution to the economic and social development of rural areas in the two regions. We conclude with the recommendation that engaging more closely with social enterprises in the Midlands and Mid West can enable the AIT-LIT Consortium to become a catalyst for economic and social progress in rural areas in both regions. Before starting our analysis, we should consider what constitutes a “rural” area for policy purposes. There is no accepted definition of a rural area. The OECD uses a population density measure, which has also been adopted by the EU Commission. This methodology shows that 49% of Ireland’s population can be classified as living in rural areas, compared with 32% of the population of the EU. In Ireland the CSO defines rural as areas outside towns of 1,500 inhabitants, which would classify 37% of the State’s population as living in rural areas. In contrast, in 2013 the Commission for the Economic Development of Rural Areas defined rural as all areas outside the administrative boundaries of the five main urban areas, which includes the open countryside as well as the 79 large, medium and small towns identified in the Local Government Act 2001. This definition would classify 66% of the State’s population as living in rural areas. More recently, the Draft National Planning Framework: Ireland 2040 - Our Plan (2018), defined rural as areas outside towns with a population of 10,000 or more, unless they are located within a “metropolitan” catchment area i.e. one of the five main urban areas. This would put 49.8% of the State’s population living in rural areas and would be consistent with the OECD/EU classification (Western Development Commission (2017)). We have seen in Section 3 that the population of the combined Midlands and Mid West regions is predominantly rural, with 60% of people living in areas outside of towns with 2,000 or more inhabitants. The labour forces of both regions reflect this rural dominance with 8% of employment in the Midlands and 7% in the Mid West classified as being in agriculture, compared with the national average of 5%. From a policy perspective the definition of what constitutes a rural area matters because it influences how infrastructure, enterprise supports, and public services are delivered in less populated areas compared with more urban centres. In the first part of this section we will examine the policy context for the economic and social development of rural areas, and how governments approach the challenge of achieving spatial balance in their policy interventions.

9.1

The Policy Context

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Internationally, rural development policy has evolved over the past two decades from a strategy largely based on subsidies for specific sectors of the rural economy, such as primary producers, to a more integrated and inclusive approach that emphasises local resources and local initiatives. The OECD describes this evolution towards a 21st century rural development policy as “Rural Policy 3.0” which was a further refinement of its “New Rural Paradigm” from the 2005/2006 period. The key characteristic of this latest iteration is to focus on rural policy as an investment strategy designed to improve the competitiveness of rural economies rather than as a means of transferring resources to the agriculture sector through price subsidies and income supports. The new rural policy agenda starts from the recognition that not all rural areas are alike and that a “one-size-fits-all” approach, which is characteristic of a price subsidy/income support regime, is no longer an adequate policy response. Instead, the new rural policy starts from the premise that rural areas are diverse and complex socio-economic systems and require multidimensional strategies in order to achieve their potential. The OECD summarises the different dimensions of rural policy as Economic - creating employment opportunities for rural communities; Social – ensuring access to a broad suite of local services; and Environmental – providing an attractive place in which to live and work. The following table was compiled by the OECD to show the evolution of the rural policy paradigm in advanced economies in recent decades: Rural Policy 3.0 – Implementing the New Rural Paradigm Well-being considering multiple dimensions of: (i) the economy, (ii) society, and (iii) the environment Low density economies differentiated by type of rural area

Old Paradigm

New Rural Paradigm (2006)

Objectives

Equalisation

Competitiveness

Policy Focus

Support for a single dominant resource sector

Tools

Subsidies for firms

Support for multiple sectors based on their competitiveness Investments in qualified firms and communities

Key actors and stakeholders

Farm organisations and national governments

All levels of government and all relevant departments plus local stakeholders

Policy approach

Uniformly applied top down policy

Bottom-up policy, local strategies

Integrated rural development approach – spectrum of support to public sector, firms and third sector Involvement of: (i) public sector – multi-level governance, (ii) private sector – for-profit firms and social enterprise, and (iii)third sector – non-governmental organisations and civil society Integrated approach with multiple policy domains

Rural definition

Not urban

Rural as a variety of distinct types of place

Three types of rural: (i) within a functional urban area; (ii) close to a

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functional urban area, and (iii) far from a functional urban area Source: OECD The OECD introduce the concept of “low-density economies” to describe the essential difference between rural areas and urban regions. This concept of the low-density economy also captures the differences between rural and urban regions in terms of their fundamental economic structures and opportunities for economic growth. Lower density of population and economic activity in rural areas marks them as different from their urban counterparts and explains why public policy should follow a different logic in rural areas. It also provides justification for Government support of social enterprise and other aspects of the voluntary sector as a means of enhancing rural communities. In keeping with the recognition that rural areas are diverse and complex socio-economic systems, the OECD describe a typology of rural territories in advanced economies in which they fall into: • • •

Those that are embedded in a metropolitan (i.e. urban) region; Those that are outside of a metropolitan region, but located close to one; and Those that are remote from a metropolitan region.

These categories provide a starting point for developing and implementing appropriate and effective policy interventions in rural areas. These interventions should, according to the OECD, have Innovation and Modernisation as key objectives because: “The future prosperity of rural regions will be driven by enterprise, innovation and new technologies, tailored to specific markets and applied to new and old industries”. (OECD: “Innovation and Modernising the Rural Economy”.) Effective policies should recognise that the need for a “Place-based” approach is greater in rural areas than in urban regions because growth drivers tend to be specific to particular rural areas. Natural geography tends to play a larger role in defining rural areas than it does in cities, for example. Skills are often in short supply compared with urban areas, connectivity can be problematic, SMEs tend to grow at a slower rate, and employment is frequently in lowproductivity manufacturing and services. In “Rural Policy 3.0” rural areas can improve their economic performance more sustainably by mobilising local assets rather than relying on subsidies or other transfers, according to the OECD. This points to the need for rural areas to have a good understanding of their strengths and weaknesses so that they focus on the best prospects for improving their economic performance. Improving the productivity of rural areas by raising workforce skills, strengthening investment in enterprise and fostering entrepreneurship should be a policy priority. This suggests the need for innovation in the governance of rural policy, and in trying to achieve a balance between top-down and bottom-up inputs to policy development. 9.1.1

Rural Development Policy in the EU

The EU’s rural development strategies are described as the “Second Pillar” of the Common Agricultural Policy (CAP). While the CAP is based on market measures, such as price interventions and income supports, rural development policy is designed to strengthen the EU’s agri-food and forestry sectors, and to promote environmental sustainability and the wellbeing of rural areas in general. Rural development policy aims to support rural areas of the

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EU to meet the wide-ranging challenges facing them in terms of economic, social and environmental development. The EU supports rural development with its European Agricultural Fund for Rural Development (EAFRD), the budget for which amounted to €100 billion during the period 2014-2020. In order to access this fund, each member state must prepare its own regional development programmes (RDPs) on a regional or national basis. The RDPs must address at least four of the EU’s six Rural Development Policy Priority Areas which are: 1. 2. 3. 4. 5. 6.

Knowledge Transfer and Innovation; Farm Viability and Competitiveness; Food Chain Organisation and Risk Management; Restoring, Preserving and Enhancing Ecosystems; A Resource-efficient, Climate-resilient economy; and Social Inclusion and Economic Development.

Each Priority Area in turn has specific areas of intervention, known as Focus Areas, against which member states must set specific targets in their RDPs. For example, in the case of the first Priority Area, “Knowledge Transfer and Innovation”, there are three Areas of Focus for member states to consider in their RDPs: • • •

Fostering innovation, cooperation and the development of the knowledge base in rural areas; Strengthening the links between agriculture, food production and forestry, and research and innovation; Fostering lifelong learning and vocational training in the agricultural and forestry sectors.

Themes of SME competitiveness, environmental protection and resource efficiency, climate change adaptation, social inclusion, the low-carbon economy, research and innovation and educational and vocational training permeate the EU’s rural development policy. Rural policy is also supported through the European Network for Rural Development (ENRD), an information and exchange hub for rural development programmes, and by a European partnership for agricultural partnership and sustainability (EIP-Agri) which aims to bridge the gap between those who create new technologies and innovative solutions (i.e. researchers) and those who use them. Finally, the EU requires that at least 5% RDP funding should be allocated to LEADER projects. LEADER is a bottom-up approach to rural development based around Local Action Groups (LAGs) of farmers, rural businesses, local organisations, public authorities and individuals from different sectors who come together prepare local development strategies. While its share of the overall rural development budget is relatively small, LEADER is an important method of promoting rural development across the EU by engaging local communities in the design and delivery of strategies, decision-making and resource allocation for the development of their rural areas. There were some 2,800 Local Action Groups covering 61% of the rural population of the EU at the end of 2018. In Ireland LEADER has been operating since 1991 and there are currently 29 LAGs with contracts to deliver LEADER programmes.

9.1.2

Rural Development Policy in Ireland

The current policy approach to rural development in Ireland can be traced back to the 1999 White Paper on Rural Development which reflected some of the early thinking around the New

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Rural Paradigm. However, the growing urban/rural divide in economic performance which was evident before and after the great financial crash of 2008/2009 and subsequent recession, led to the formation of the Commission for the Economic Development of Rural Areas (CEDRA) in 2012. CEDRA was tasked with preparing a research report and to take on board inputs from public consultation while taking a multi-sectoral approach to the development of rural areas. CEDRA was supported in its work by the Teagasc Rural Economy Development Programme. The CEDRA report was finalised in 2013 and identified a number of strategic initiatives to ensure that rural areas contribute to sustained and sustainable national economic growth and development in the future. The report recognised that many of CEDRA’s aims were contained in the 1999 White Paper on Rural Development but that the lack of delivery of a more integrated approach led to a “less than successful outcome from the 1999 White Paper”. Informed by extensive stakeholder consultations and by wide-ranging research on rural economic development issues by Teagasc (published in a separate document), CEDRA based its report around a “Vision for the Rural Economy” which is that: “Rural Ireland will become a dynamic, adaptable and outward-looking multi-sectoral economy supporting vibrant, resilient and diverse communities experiencing a high quality of life with an energised relationship between rural and urban Ireland which will contribute to its sustainability for the benefit of society as a whole”. To achieve this objective, CEDRA set out 34 recommended actions ranging from a clear statement of rural development policy by Government, to developing new public policy instruments to encourage renewable energy production in rural areas. A key theme of the report is the need for an integrated, co-ordinated approach to rural economic development by Government and its agencies, local communities, the voluntary sector and private enterprise. It was the lack of such a “joined-up” approach to policy implementation that led, in CEDRA’s view, to the sub-optimal outcome of previous initiatives, notably the 1999 White Paper. Taking a similar approach to that recommended by the OECD’s “Rural Policy 3.0”, the CEDRA report focuses on how best to mobilise local communities for rural economic development and how Government can support them by providing targeted financial supports and enabling infrastructure, such as access to skills, high-speed broadband, roads and rural transport services. The report also highlights specific sectoral opportunities for rural areas in: • • • • •

Artisan food and beverages Creative industries Tourism and recreation Marine resources, and Renewable energy.

The CEDRA report was followed in 2016 by the “Charter for Rural Ireland” which was a statement of the Government’s commitment to rural Ireland’s regeneration and to underpin the future sustainable development of Ireland’s rural communities. The Charter was based on the concept of “rural-proofing” Government policies so that consideration would be given to their impact on rural Ireland. The path to achieving this was set out in a Rural Development Policy Framework which provides for mandatory assessments of future Government policies as they impact on rural Ireland and a robust reporting mechanism with provision for amending policies, if necessary. The Charter’s goal was to put in place processes for ensuring that the people who live and work in rural Ireland are heard and considered at all stages of Government policy making and implementation. This process was to start with the consultation process for the National Planning Framework, the Government’s long term, 20-year strategy for the spatial

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development of Ireland. The Charter also sets out guidelines for establishing local development committees (LDCs) to support participation by local communities in rural economic development and for encouraging collaboration by stakeholders to eliminate barriers to rural enterprise development. In 2017 the Government published an “Action Plan for Rural Development – Realising Our Rural Potential” and established the Department of Rural and Community Development. The Department’s mission statement is “To promote rural and community development and to support vibrant, inclusive and sustainable communities throughout Ireland”. The Action Plan for Rural Development, which covers the period 201-2020, focuses on the economic and social development of rural Ireland and the regions, and seeks to “change the narrative” around rural Ireland by emphasising its positive contribution to the economy and to Irish identity. The Action Plan for Rural Development describes itself as “Building on the CEDRA Report and the Charter for Rural Ireland” and as the most comprehensive plan for supporting the economic and social development of rural areas that any Government has produced. In seeking to break the perception that “rural” is synonymous with “decline”, the Action Plan begins by highlighting the importance of rural Ireland to the Irish economy: • • • • •

Almost 70% of the Irish workforce is located outside the Dublin region; Agri-food and tourism employ 363,000 people, or 18% of the workforce; The food sector employs 163,000 people in primary production and food processing; Infrastructure in rural Ireland continues to improve and increased connectivity will create new opportunities for the regions to contribute to a progressive and dynamic Ireland in the 21st century; and This “sense of place” that is typical of rural Ireland is becoming an important factor in attracting foreign direct investment, and individual talent, to Ireland.

Echoing the CEDRA Report, the Action Plan for Rural Development emphasises that the “One size fits all” approach is not appropriate for rural areas which differ in their degree of peripherality, their underlying asset base, and their population and enterprise density. Different areas require different solutions, a theme which is consistent with “Rural Policy 3.0”. However, there are common issues affecting rural areas throughout the country and the Action Plan for Rural Development seeks to provide a cohesive policy structure across a range of development themes to enable rural communities to realise their full potential. Accordingly, the Action Plan identifies 5 thematic Pillars, with accompanying objectives and actions, on which to build this cohesive structure. The 5 Pillars are as follows: 1. Supporting Sustainable Communities. 2. Supporting Enterprise and Employment – including sectoral growth in agri-food, renewable energy, and international financial services, while ensuring that rural communities have the necessary skills for the labour market, and encouraging innovation to utilise rural asserts. 3. Maximising our Rural Tourism and Recreation Potential. 4. Fostering Culture and Creativity in rural communities. 5. Improving Rural Infrastructure and Connectivity. The high level targets for the Action Plan for Rural Development included 135,000 new jobs in rural areas by 2020; initiatives to rejuvenate 600 rural and regional towns; increase the number of visitors to rural Ireland by 12% over the 3 years 2017-2020; assist 4,000 economic development and social inclusion projects; and accelerate preparation for the roll-out of highspeed broadband. The targets were to be achieved by implementing 277 specific actions listed in the Action Plan, each of which was assigned to a specific organisation responsible for its

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implementation. The Action Plan also emphasised the need for a more co-ordinated approach by Government departments and agencies to support sustainable rural development and to maximise the impact of the different actors who contribute to rural well-being. The Action Plan for Rural Development was enabled by 5 main funding streams which provided the financial support to implement the projects and initiatives identified in the Plan. These were: 1. The Rural Regeneration and Development Fund – this is a €1 billion fund for supporting projects in rural Ireland over the period 2019-2027 in the areas of; Infrastructure for Town Centre development; Community and public facilities infrastructure; Improvements to telecommunications connectivity; Support for job creation and entrepreneurship, for example Digital Hubs, Enterprise Hubs, Creative Hubs and Training Facilities; and Enhancements to heritage and other community assets. 2. The CLÁR Fund for Small Scale Rural Projects – this fund is targeted at areas that suffered the greatest levels of population decline; it includes infrastructure and community well-being supports. 3. The Town and Village Renewal Scheme – led by the local authorities, this scheme provides support for the revitalisation of towns and villages, improvements to the living and working environments of local communities, and increasing their potential to support economic activity in the future. 4. The LEADER Programme – as mentioned earlier LEADER is led by 29 Local Action Groups (LAGs) who select and award funding for projects in their own areas. These projects range from rural tourism, enterprise development, broadband, water resources, biodiversity, renewable energy and local services. Total funding was €250 million for the period 2014-2020. 5. The Local Roads Improvement Scheme for financing improvements to private and non-publicly maintained roads. The final progress report for the Action Plan for Rural Development 2017-2020 was published in early 2020, noting that the targets for job creation, town and village renewal projects assisted, and community development projects supported, were met or exceeded. Of the 277 actions contained in the Action Plan, 269 were completed or substantially advanced. One of the delayed actions mentioned in the Final Progress Report – “Develop a new and effective rural proofing model which will ensure that rural development issues are considered in the decision-making processes of all Government Departments, State bodies and agencies” – is to be included in the successor Action Plan from 2020. The consultation process for the new rural development policy 2020-2025 is ongoing at the time of writing.

9.2

Rural Development Priorities in the Midlands and Mid West

The main areas of rural economic opportunity and need in the Midlands and Mid West regions are set out in their respective Regional Enterprise Plans (REPs) and Regional Spatial and Economic Strategies (RSES). They can be summarised as: • •

Transitioning to a Low Carbon Economy; Revitalising Rural Towns and Villages; and

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•

Tourism, Heritage and Place-Making.

These regional priorities provide strategic opportunities for the AIT-LIT Consortium to focus the work of the new Technological University in order to support the development of rural areas in the two regions. We will explore these opportunities further in the next part of the report. 9.2.1

Transition to a Low Carbon Economy

In the discussion of regional enterprise needs and priorities in section 6 of this report we identified the transition to a low carbon economy as a key challenge and opportunity for the Midlands and Mid West regions. This reflects the fact that both regions are net producers of energy, using primarily carbon-based fuels, and are exposed to the changes that a low-carbon economy will create for older technologies. In addition, national policies such as the Climate Action Plan and the newly published Climate Action Bill, set Ireland on a course for achieving carbon neutrality by the middle of this century which will require considerable adjustment for the economy and society in the decades ahead. The Midlands region faces an immediate and specific challenge in the low carbon transition which is of direct concern to rural areas in the region and relevant to the future strategy of the AIT-LIT Consortium. This challenge arises from the wide-ranging effects of the recent decision to terminate the continued use of peat for energy generation in the Midlands on employment, local authority services and the community in the extended region. The ESB and Bord na Móna have been harvesting peat and using it for generating energy in the Midlands for more than 70 years and have been significant employers over several generations. In 2018, Bord na Móna employed 2,000 people in the Midlands, 1,200 of whom were in peat harvesting, and supported a further 2,000 indirect jobs. As a result of legal and planning decisions in 2019, both organisations are ending their peat harvesting and peat energy generation activities in the Midlands in an accelerated timeframe. Prior to the legal and planning rulings of 2019, the phasing out of the use of peat as a fuel was envisaged as taking place over a 15-year period from 2015 to 2030. In 2018 Bord na Móna announced an acceleration of its “Brown to Green” decarbonisation strategy and its intention to “consolidate and simplify” traditional peat harvesting operations, working to a new target date of 2027, which was later revised to 2025. However, the phasing out of peat harvesting now looks set to be compressed into a 12-month period, presenting major challenges for maintaining employment, and reskilling and redeploying workers throughout the region directly and indirectly impacted by the accelerated transition. These jobs extend beyond peat extraction and impact the horticulture, briquette, mushroom, poultry and tillage sectors in the Midlands – mostly in rural areas of the region. In response to the immediate threat to employment and economic activity resulting from the early exit from peat, the Government appointed a Commissioner to help ensure a co-ordinated and effective approach to Just Transition, focusing initially on communities and workers affected by the ending of peat harvesting for power generation in the Midlands region. The terms of reference for the Commissioner included engaging with relevant stakeholders locally, nationally and at EU level, and making recommendations on the essential elements of a Just Transition for the workers and communities most affected. The Commissioner’s Progress Report, published in April 2020, defined Just Transition as: “A vision which sets out a series of economic and social interventions needed to secure and shift economic and social activity in an area dependent on an extractive economy to jobs and activities relating to a regenerative economy. The Just Transition for the Midlands continues to have an important and central relevance to all stakeholders across the counties affected.”

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The Government also established a Just Transition Fund, with an initial allocation of €6 million, to support sustainable projects with employment potential in the areas affected by the exit from peat. The ESB subsequently made a contribution of €5 million to the Fund, bringing the total available for supporting projects to €11 million. A further allocation of €5 million for peatlands restoration was included as part of the Just Transition measures in Budget 2020, and work is ongoing on an energy efficiency scheme for retrofitting the social housing stock of the Midlands and Kildare. The Commissioner has positioned the Just Transition initiative as complementary to existing regional plans and programmes, seeing it as an opportunity to build on the strengths of the Midlands in green enterprises and services as part of a “Whole of Midlands” approach to developing the region. The Progress Report identifies opportunities for employment creation in infrastructural developments, business and innovation hubs, eco innovation, and tourism, greenways and heritage related sectors in the region. After Bord na Móna’s 2018 decision to proceed with an accelerated Brown to Green transition, Offaly County Council established a Transition Team to address the challenges and opportunities that would follow from the move. The Team was subsequently expanded to become a Midlands Transition Team (MTT) with representatives from each local authority in the Midland counties, Roscommon and Kildare, along with other regional stakeholders. The MTT has two main aims: • •

To pursue funding opportunities and actions to mitigate the impact of the Bord na Móna job losses on the individuals concerned, and the impact on the local and regional economy. To position the Region to develop alternative forms of employment, attract investment and maximise existing employment opportunities and resources.

The MTT has sought technical assistance from the EU’s START programme (for regions in transition) in preparing a “Holistic Plan for Just Transition for the Midlands Region”. This is consistent with the Commissioner’s recommendation for building closer and wide-ranging cooperation between State agencies, local authorities and regional stakeholders to achieve common objectives. The Just Transition agenda has become an important component of economic development strategy in the Midlands region, especially in rural areas where the move towards accelerated decarbonisation is having the greatest impact. In terms of the strategic opportunities for the AIT-LIT Consortium in the region the Just Transition initiative needs to be considered along with the REP and RSES. As the communities affected by the exit from peat are predominantly in rural areas, the Just Transition initiative will have its biggest impact on rural economic and social development in the Midlands. A number of projects were identified in the Midlands and Mid West REPs as supporting the objective of transitioning to a low carbon economy. For example, in the Midlands there is a commitment to developing a low-carbon town on a pilot basis to act as a model for other towns in the region in response to the National Mitigation Plan for decarbonisation in Ireland. Portlaoise was identified as the location for the first pilot project in the region with the aim of providing a roadmap for rolling out similar initiatives in other Midland towns. In the Mid West a flagship transition project is the National Bioeconomy Campus at Lisheen in county Tipperary. The Bioeconomy campus is located near Thurles, the site of one of LIT’s two campus locations in Tipperary. The Bioeconomy campus promotes sustainable agri-food production and provides pilot-testing and innovation facilities for bio-based products in the precommercialisation stage of development. It also acts as a hub for entrepreneurs, enterprises

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and academics to collaborate and innovate. LIT and AIT are RPO partners of the Irish Bioeconomy Foundation, who operate the campus, giving the Consortium the opportunity to intensify its engagement with National Bioeconomy campus activities following their transition to a Technological University. In the Midlands a similar project has been proposed in the form of a Bord na Móna cutaway peatland site transformed into a green energy park with other activities such as aquaculture and high-value herb production incorporated into the site. Work is underway on such an initiative with AIT collaborating with Bord na Móna and Enterprise Ireland to develop the Empower Eco Sustainability Hub as a platform for innovative new approaches to freshwater aquaculture, and new medical plants and herbs in a low carbon ecosystem. Rowan and Galanakis (2020) describe this type of wet peatland innovation as “paludiculture” and with its low carbon orientation it provides the opportunity to test smart new solutions for ensuring the sustainability of food production in response to the challenges of pandemics (i.e. Covid-19) and climate change. The transition to a low carbon economy presents an opportunity for the AIT-LIT Consortium to intensify its engagement with initiatives and projects developing solutions to sustainable energy and agri-food production in rural areas of the Midlands and Mid West. These projects rely on applied research, the area of expertise of both Institutions, for successful development and they will require skilled people to turn them into viable businesses. With Bord na Móna looking to invest up to €1.5 billion in decarbonisation projects and the Irish Government committed to carbon neutrality by 2050, the transition to a low carbon economy is a significant strategic opportunity for the AIT-LIT Consortium. Extending the Consortium’s campus network to include a new location in another Midland county at the centre of the accelerated exit from peat is an option for the new Technological University. This could be done in partnership with Bord na Mόna as part of the Just Transition initiative, building on the concept of the eco-sustainability platform and hub which is currently being developed in the region. A new Green Energy Park in the Midlands, with the AIT-LIT Consortium and Bord na Mόna as key partners, has the potential to become a focal point for low carbon innovation, research, entrepreneurship and enterprise creation in a unique peatland environment that is transitioning towards greater sustainability. The Midlands and Mid West have a shared interest in managing their transition to carbon neutrality effectively and in enabling their rural areas to benefit from new approaches to generating energy and producing food sustainably. The Mid West has marine based resources that can complement the peatlands of the Midlands as a source of environmentally sustainable energy and food production. The AIT-LIT Consortium can provide a link between the two regions and a conduit for innovation and new approaches to building a carbon neutral Ireland. Rural areas in both regions will be the main drivers of the move to carbon neutrality with communities from the Atlantic coast to the lakes and peatlands of the Midlands facing challenges and opportunities as Ireland enters a period of transformational change.

9.2.2

Revitalising Towns and Villages

The pattern of economic growth and development in the Midlands and Mid West in recent decades has been unevenly distributed across urban areas, larger towns and rural villages and communities, in common with the rest of the country. Using the OECD typology described earlier rural areas closer to the larger urban centres of Limerick-Shannon and Athlone have benefited from national and regional growth to a greater extent than those areas further away from centres of population and activity. In response to these trends local development strategies have prioritised the revitalisation of towns and villages that have not progressed as

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rapidly as other areas of the Midlands and Mid West. The policy interventions that are proposed for achieving this objective are also consistent with the OECD rural development paradigm, as they emphasise integrated, bottom-up actions to mobilise local assets and resources. An example of this in the Mid West is the plan to pilot test a Town and Village Renewal Project in three rural towns: Ennistymon, county Clare; Tipperary Town and Abbeyfeale in county Limerick. The overall objective is to attract more people to live in these towns, reduce unemployment and improve the physical fabric of their main streets. The pilot project will be led by the three local authorities with the communities in the towns themselves identifying the actions that can help to revitalise the places where they live. The project recognises that there are many factors that influence where people decide to live including the availability of housing, schools, public transport, retail offerings, public realm amenities and social networks. The ultimate goal is to identify the elements that will increase residential occupancy in the pilot towns and develop a blueprint that can be rolled out in other towns and villages throughout the region. A related project in the Mid West is the plan to develop a Regional Smart e-Hub Network to facilitate the growth of remote working in the region. This action was planned before the outbreak of the Covid-19 pandemic when it was already apparent that changes in technology and in the preferences of employees for working outside the conventional office environment were leading to increased demand for more flexible working spaces. The increase in remote working following the outbreak of Covid-19 has reinforced and accelerated this underlying trend and remote working looks set to become a growth area in developed economies in the coming decades. This presents opportunities for rural communities looking to attract jobs and talent in order to stimulate economic activity and revive declining areas. The Mid West Regional Smart e-Hub Network is specifically targeted at rural towns and villages in an effort to revitalise them as places to live and work, and in the process increase the regionâ&#x20AC;&#x2122;s capacity for economic growth and development. In addition to putting new infrastructure in place in the form of broadband connectivity, co-working space and shared office facilities, initiatives such as Smart e-Hubs enable the delivery of e-Learning and e-Health services in rural communities and provide a provide a platform for enterprise development programmes. The Midlands also has ambitions to develop its own network of remote working hubs by establishing co-working/remote working spaces, incubation facilities and enterprise centres in towns and villages across the region. In 2019 the Midlands Network of Co-Working Facilities (MNCF) was formed to bring together a collective offering of 20 co-working spaces across the region. Members of the Network include Remote Working and Co-Working Hubs, Incubator Facilities and Enterprise Centres from across the Midlands, covering an area from Edgeworthstown and Castlepollard to Abbeyleix and Rathdowney. The MNCF collective offering is targeted not only at local enterprises, entrepreneurs and community organisations, but also at companies in the coastal cities who are interested in second sites and flexible/remote working opportunities for employees living in the Midlands. The network can also provide a landing space in the region for potential FDI projects looking to recruit new talent and/or benefit from lower cost working spaces. The growth of remote working during the Covid-19 pandemic was identified in the Just Transition Progress Report as having the potential to create economic opportunities in rural areas of the Midlands impacted by accelerated decarbonisation, reinforcing its importance as a rural regeneration strategy. An example of a co-working hub in the Midlands is the STREAM Creative Suite in Birr, county Offaly which is designed to leverage the presence of the iLOFAR astronomical telescope in

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Birr Castle (referenced earlier in the Enterprise section of this report) to create opportunities for big data and data analytics related enterprise in this part of the Midlands. The STREAM Creative Suite will provide office space, hot-desk stations and IT training facilities, as well as services such as training courses and industry-focused events. It will also accommodate industry-led research projects which will create opportunities for the AIT-LIT Consortium to collaborate with partners in the big data and data analytics sectors. The Enterprise Ireland Regional Plan, “Powering the Regions”, sees the expansion of coworking spaces as a key initiative in its strategy for maximising the future growth of Irish enterprise in the regions. The agency plans to support 600 co-working and incubation spaces in the Midlands and 900 in the Mid West as part of its #Worksmart challenge to support 10,000 spaces across Ireland. The Regional Plan also contains an initiative to support 40 second site locations by Irish companies in the regions. In our interviews with the IDA, we also determined that agency’s support for more co-working and remote working spaces and facilities in the Midlands and Mid West as potential locations for expansions by existing clients and as landing spaces for new FDI clients. A report by the economist Jim Power on stimulating regional economic growth through smart working, commissioned by Vodafone Ireland as part of its Gigabit Hub initiative, examined how “smart working”, from a home or a hub, can help rural communities thrive in a meaningful way and give people a better quality of life. The study shows that “The creation of viable smart working opportunities in a hub, homeworking or a hybrid model in Ireland’s regions could prove transformative for people, businesses and local communities” and that “Smart working and digital hubs can act as a stimulus to addressing the urban and rural socio-economic challenges that exist in Ireland”. Further, a digital hub in every county could create 5,200 jobs in 1,040 new businesses across the country and support an additional 3,640 indirect jobs in local communities. The Covid-19 pandemic has provided a further impetus towards remote working as evidenced by a survey conducted by NUIG’s Whitaker Institute and the Western Development Commission (WDC) during April and May 2020. The survey covered a cross-section of industries and occupations and was national in scope. It found that about 51% of those surveyed had never worked remotely before, but that a significant majority of respondents (83%) would like to continue working remotely in the aftermath of the pandemic. The advantages of remote working were seen as not having a daily commute to and from work, the reduced costs of not commuting, and greater flexibility in managing the working day. About half of those who wished to continue working remotely wanted to do so from home, while the balance would prefer a mix of working at home, in a hub/co-working space and in the office. The growth of remote working and the increased demand for working spaces providing enterprise supports is likely to be accelerated in the post-Covid economy as more people show a preference for flexible working patterns. This is an opportunity for rural regions like the Midlands and Mid West to revitalise towns, villages and local communities that been in longterm economic decline. The opportunity is greater than simply providing remote working infrastructure in the form of co-working spaces and supporting facilities. It also extends to enterprise creation and growth, leveraging the new skills and talent that will be locating to rural areas to create sustainable economic activity and employment opportunities for local communities. The remote working hubs can develop as clusters of market-oriented and social enterprises, education and training providers, and third sector providers of community services. This is consistent with the modern approach to rural development in advanced economies and can provide rural communities with a clear path to a more sustainable future. There are opportunities for the AIT-LIT Consortium in the move towards remote working and co-working in Ireland to partner with the hub operators to provide training and learning support for their clients, remotely and on-site, using the flexible learning approach that is a feature of

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AIT and LIT courses and programmes. Training programmes for remote workers, and for supervisors and managers of remote working facilities, are likely to see increased demand in the coming years. There will also be opportunities, as the STREAM Creative Suite in Birr demonstrates, for the Consortium to work with hub clients and industry partners on research projects linked with local resources and assets, and in the process to support new enterprise and employment growth. Partnering with local remote working and co-working hubs gives the AIT-LIT Consortium a regional reach across rural areas and reinforces the hubs’ status as drivers of economic and social development in their localities. The AIT-LIT Consortium will have a distributed campus and learning gate network in the Midlands and Mid West regions that can become a component of a wider network of e-Hubs and co-working spaces. This will enable the new Technological University to become more embedded in the Midlands and Mid West regions, with a scope extending across multiple rural areas. This will be important for the identity of the new Technological University both as a driver of economic and social development and as a partner and resource for rural communities in the two regions. It will also provide an opportunity for the AIT-LIT Consortium to provide a link between the e-Hub and co-working hub initiatives in both regions, sharing best practice experience and building synergies between diverse stakeholders in the Midlands and Mid West. 9.2.3

Tourism, Heritage and Place-Making

Tourism provides a potentially powerful tool for economic development in rural areas, utilising local physical assets and social, cultural and human resources. These assets and resources are place-specific so that tourism has the capacity to generate economic activity in peripheral rural areas. As the CEDRA report highlighted, most of Ireland’s tourism assets are located in rural areas and are associated with the country’s landscape, history and culture. In principle, therefore, tourism should be a key driver of rural economic development in Ireland. However, in consultations with stakeholders in rural areas the CEDRA researchers heard the view that rural tourism was an untapped resource, with urban areas and established visitor attractions benefiting to a greater extent than rural areas from the success of Irish tourism in international markets in recent years. Fáilte Ireland, the country’s tourism development agency, recognises the importance of tourism for the economies of rural areas, and its strategy for the industry reflects the central role of rural areas in the Irish tourism product offering. The agency’s strategy document, “Tourism Development and Innovation: A Strategy for Investment 2016-2022” articulates Fáilte Ireland’s ambition of “Increasing the economic contribution of tourism across local communities”. One of agency’s strategic objectives is “To facilitate communities to play an enhanced role in developing tourism in their locality, thereby strengthening and enriching local communities”. It is clear that tourism is seen as an important tool for developing rural economies and that, in turn, rural areas are key to Ireland’s tourism product offering. The CEDRA report outlined the essential requirements for increasing the value of tourism in rural areas. These include: • • • •

Developing localised products in a coordinated way; Community networking and capacity building in a bottom-up approach to product development; Services and infrastructure for visitors, including access transport and broadband; Skills and training, especially in marketing skills, and research.

Collaboration is essential for rural areas to be effective in developing their tourism product offerings and in promoting themselves to visitors, as it enables rural communities to overcome

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the disadvantages of scale and peripheral location that can limit their potential for growth. This extends not just to collaboration within rural areas, but also between local areas to create clusters of attractions within a wider destination, and between rural and urban areas, including towns and villages, which are often the main services centres for visitors. Collaboration across sectors in rural areas is also important for building a destination’s identity, for example linking tourism operators with speciality food producers and providers when food is increasingly seen as an essential part of the visitor experience. The tourism sector is identified as a key area of opportunity in the Midlands REP and RSES, and in the Just Transition Progress Report. The region straddles Ireland’s “Ancient East” and “Hidden Heartlands” marketing brands and is well positioned to benefit from the national focus on stimulating the tourism sector in rural areas. With water-based resources such as the Shannon and Barrow rivers, the Royal and Grand Canals, a variety of lakes and reclaimed peatlands, the region can offer unique visitor experiences along waterways and cycle tracks. The region also has heritage assets such as Clonmacnoise which can be combined with visitor activities in local Visitor Experience Development Plans (a Failte Ireland initiative) to increase tourism numbers and spend in rural communities. The Midlands also has a “destination attraction” in the Centre Parcs visitor resort in county Longford, which is a nationally significant tourism FDI project, and the potential to develop other emerging attractions such as the Lough Boora Discovery Park as Eco Tourism destinations. The Mid West has a number of established tourism attractions and destinations such as the Cliffs of Moher, Bunratty Castle and Folk Park and the Rock of Cashel, and the west of the region is part of the successful Wild Atlantic Way marketing brand. However, rural areas in the region have underdeveloped potential as tourism destinations, in common with many areas of the Midlands, and will require local initiatives and external supports to convert their inherent advantages into increased visitor numbers and revenue. The AIT-LIT Consortium can be play an important role in supporting rural communities in the Midlands and Mid West to develop their potential as tourism destinations by utilising their environmental, heritage and cultural assets to generate new sources of revenue. For example, the Consortium can develop the skills base of rural communities to provide local enterprises, entrepreneurs and action groups with the business and technical knowledge to develop, manage and market new tourism products and visitor experiences. Flexible learning delivery options and distributed campuses and learning gates can enable the Consortium to achieve this effectively across the two regions. In addition, the new Technological University can provide RDI support for local tourism initiatives, working with product providers in the two regions to develop new ways of enhancing visitor experiences through the use of digital technologies, for example. Building a closer relationship between the AIT-LIT Consortium and rural communities can also be achieved in the creative sector, which will in turn contribute to place-making in the two regions and to enhancing their attractiveness as places to visit. The Cedra report noted that the creative industries are important to rural communities because they usually are more rooted in the rural areas where they evolve, can attract enterprise and employment opportunities to those areas, and have typically greater longevity than activities in other sectors, partly as a result of their lower cost structures. The broad scope of the creative sector, which encompasses activities from fashion, publishing, crafts, music, film, digital media (gaming, animation) and design, also provides rural communities with a multiplicity of options for developing creative enterprises. As discussed in section 6 of this report, the AIT-LIT Consortium has a significant resource in the Limerick School of Art and Design (LSAD) with its national and international reputation as a fine art, design and creative school. LSAD has two campuses in Limerick and Clonmel and a range of undergraduate and postgraduate courses with flexible learning opportunities. The

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School has also established close links with Troy Studios, Ireland’s largest studio facility, located on a 26-acre site in Limerick City. The film sector was identified in the Mid West REP as a strategic opportunity for the region, specifically by leveraging the success of Troy Studios to create new employment opportunities across the region. The film sector has the potential to benefit peripheral rural areas as locations for features and television productions and the local authorities in the Mid West are supporting a regional film manager to develop and exploit opportunities in the industry. By continuing to work closely with the film industry in the Mid West, the AIT-LIT Consortium can contribute to growing creative enterprises in rural areas, and develop synergies between the Mid West and Midlands in the sector. Rural tourism, culture and heritage, and the creative sector each contribute to making the Midlands and Mid West more attractive places to live, work, invest and visit. They are key elements in local and regional place-making which, as we saw in section 6.7, is important for creating awareness of the advantages of living and working in these areas, such as a good quality of life and connectivity to national and international urban centres. This local and place making can help to offset the tendency in advanced economies towards greater urbanisation and the agglomeration effects that we referred to earlier in this report. The AIT-LIT Consortium can contribute to place-making in the Midlands and Mid West with a renewed focus on building more dynamic and resilient rural areas, working with local communities to develop the potential inherent in the landscape, cultural and heritage resources of both regions. Before concluding this section of the report, we should acknowledge that the Covid-19 pandemic has had a severe impact on the Irish tourism industry. In 2019 Ireland’s tourism industry generated €9 billion for the Irish economy and supported 260,000 jobs. The fall in overseas visitors looks set to reduce tourism’s contribution to 25% of this figure in 2020, reversing a decade of growth which saw trips to Ireland by overseas residents grow by 53% in the decade from 2009 to 2019. One estimate by Ernst and Young suggests that up to 50% of the country’s tourism-related jobs are vulnerable in the post-pandemic downturn or are already lost. Passenger traffic at Ireland’s airports fell by 66% in the first six months of 2020 compared with 2019, according to the CSO. Shannon International Airport is reported as facing a 70% decline in passenger traffic in 2020, and recovery to 2019 traffic levels may take up to 3 years. This is a cause of concern in the Mid West where the Airport is a gateway for international visitors to the region as well as being a key component of the region’s economic infrastructure. In response to the devastating impact of the pandemic on the tourism sector, the Government appointed a Tourism Recovery Taskforce in May 2020 to make recommendations on how best the Irish tourism sector can adapt and recover in the changed tourism environment. The Taskforce published its Tourism Recovery Plan 2020-2023 setting out these recommendations in October 2020, after extensive consultation with stakeholders in the sector. The Tourism Recovery Plan identifies priority aims, key enablers and market opportunities, and outlines the most cost-effective measures to support the sector and deliver the best return on investment. The Taskforce is optimistic that with the right investment and supports, the tourism industry can recover from the effects of the pandemic, improve its competitiveness and sustain employment in local communities where the value and importance of tourism is critical. Central to these supports will be providing opportunities for existing and potential employees and entrepreneurs in the tourism sector to upskill, re-skill and/or re-train as the industry recovers in the coming years. The Tourism Recovery Taskforce recommends a €10 million programme of professional development supports and a new Continuing Professional Development (CPD) pathway for people working in the industry. It also calls for a National Tourism Education Gateway to provide a “one-stop-shop” for employees in the tourism sector, with information on the full range of courses, awards and accreditations from Level 5 to Level 10 in the NFQ. With training and skills development viewed as key to recovery in the tourism

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sector, the AIT-LIT Consortium has the opportunity to play a role in re-building an industry that is critical to the future economic and social development of rural areas in the Midlands and Mid West. 9.3

Conclusions

It is clear from the analysis in this section of the report that the AIT-LIT Consortium has a key role to play in the future development of rural areas in the Midlands and Mid West regions. The Consortium can achieve this following its transition to a Technological University by continuing to deliver its education and training programmes and providing applied RDI supports to enterprises in both regions. The transition to a low carbon economy, building a network of remote and co-working hubs, and developing the tourism and creative potential of rural areas will all require continuous adjustments to, and intensification of, the Consortium’s education and RDI programmes. The AIT-LIT Consortium will require an effective vehicle for supporting the disparate projects and initiatives that are already in place or are planned for the future across the two regions in the three sectors of opportunity. Our proposal is that Social Enterprise can provide the Consortium with the platform from which it can deliver effective support to rural areas as they adjust to the transition to a low carbon economy, respond to the challenges posed by the Covid-19 pandemic and Brexit, and develop their local areas as better places to live, work and invest. It is already the case that social enterprise is embedded in the education programmes and development projects of both Institutes, and is a key element of their engagement with the wider community in the Midlands and Mid West, but there is an opportunity for the new Technological University to deepen and wider this engagement. The CEDRA report highlighted the “Potential of social enterprise to make a valuable contribution to rural economic development in the future and the need to build the capacity of rural communities to avail of opportunities” to develop their areas. CEDRA supported the recommendations of the Forfás report on “Social Enterprise in Ireland: Sectoral Opportunities and Policy Issues” for capacity building initiatives such as increased networking and sharing of best practice, capacity to access funding and other measures to enable social enterprises to become investment ready and financially sustainable. The Forfás report defined social enterprise as: “An enterprise that trades for a social/societal purpose, where at least part of its income is derived from its trading activity, is separate from government, and where the surplus is primarily invested in the social objective”. The National Social Enterprise Policy for Ireland 2019-2022 notes that this definition is evolving nationally and internationally as social enterprises adapt to new social challenges, and as governments and wider society understand more fully the nature of social enterprise and its potential contribution to economic and social development. The EU Commission is also putting the social economy and social innovation at the heart of territorial cohesion and the ongoing search for solutions to social problems. Since 2000 the EU Commission and other EU bodies have adopted or launched more than 200 official documents and initiatives, recognising the important contribution that social enterprise can make to achieving the EU’s principal socio-economic objectives including high quality employment, job creation, social cohesion, social and environmental innovation, promotion of an entrepreneurial culture, and local and regional development. In Ireland there are no comprehensive data on the economic and social impacts of social enterprise, but the National Social Enterprise Policy recognises the important contribution that it makes to achieving Government policy goals in areas such as labour market activation, climate action, social cohesion and rural development. The Assistant Secretary General at the Department of Rural and Community Development noted in 2019 that social enterprise is

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referenced in national policies such as the such as the Action Plan for Rural Development, Future Jobs Ireland, and the Climate Action Plan, and that “As we face new challenges in the years ahead, I believe that social enterprise will be well placed to find solutions to policy issues”. The National Social Enterprise Policy highlights some of the pathways to finding these solutions in its priority policy measures which commit the Government to: • • •

Support social enterprise initiation and start-ups through targeted programmes and initiatives. Explore the scope for further inclusion of social enterprise and social entrepreneurship modules in the education and training system at all levels, and for promoting social enterprise as a viable model for entrepreneurs and social innovators. Work with education and research bodies to further support the development of social enterprise.

The National Social Enterprise Policy also conducted a survey as part of its background research and found a need for specific programmes focused on recruitment, development, and entrepreneurial learning for social enterprise practitioners and stakeholders. This need also emerged from public consultations carried out during the preparation of the Policy. It points to a key role for HEIs in supporting social enterprise and social entrepreneurs, and for the AIT-LIT Consortium in responding to the needs of rural areas in the Midlands and Mid West regions. Dr Deiric O'Broin, Head of Social Enterprise at Dublin City University, sees that “The challenge for a public university is to work with social enterprise organisations to help analyse the economy and [identify] gaps to see how social enterprise leaders can fill these”. The AIT-LIT Consortium will have the opportunity to educate and train a new generation of social entrepreneurs and social enterprise practitioners as the sector expands nationally and regionally in the coming decade. The sector can become more professional and capable of building sustainable businesses through the flexible delivery of education and training programmes that are designed to meet its needs. In addition, there is scope for the HEIs, and the AIT-LIT Consortium, to engage more intensively with social enterprises in RDI projects that develop new business ideas, improve the efficiency of their business processes and put them on a path of financial sustainability. The AIT-LIT Consortium has a strong foundation on which to build wider and deeper engagement with social enterprise in the Midlands and Mid West regions. For example, it is a partner with the Tipperary local authority in the Tipperary Energy Agency, a social enterprise based in the county involved with energy management services, renewable energy generation and support for community energy projects throughout the country. The Agency employs 27 staff and is delivering practical support for national Climate Action Plan objectives in local communities through Ireland. The scope for applying the Tipperary Energy Agency social enterprise model in the transition to a carbon neutral economy, extending regional remote and co-working hubs, and developing new tourism and cultural attractions in rural areas is worth exploring further as the AIT-LIT Consortium engages more deeply with regional issues. The Consortium can support social enterprise development across the combined Midlands and Mid West regions, helping to build a network among economic and community development organisations for sharing knowledge, best practice and demonstration projects, as envisaged in the CEDRA report. The future economic and social well-being of the Midlands and Mid West will be closely related to their capacity to design and implement area-based strategies built on local potential and delivered through partnerships between private, public and voluntary organisations working with individual citizens and local communities.

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We conclude this section of the report with three brief case studies of rural enterprise projects which have supported economic and social development in their local communities. These case studies demonstrate what rural communities can achieve through collaborative action that focuses on developing local assets and resources.

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Case Study 1: Connemara West, Letterfrack, Co. Galway.

Based in Letterfrack, and established in 1971, Connemara West plc is a rural community development organisation that has created and delivered innovative rural development initiatives and models targeting a sustainable economic, social and cultural future for North West Connemara. Since 2010, Connemara West plc has pioneered a unique education-led development model, as part of its overall development strategy for the region which focuses on the independent study abroad sector. The model expands the total number of United States colleges and students using Ireland as a study abroad destination. High impact educational practices are delivered to the visiting college by levering local networks to provide internship, research and service-learning opportunities with a variety of local organisations. Between 2010 and 2017 the number of colleges from the United States visiting Letterfrack through this development model has increased seven-fold. This model allows local rural communities to access United States third level expertise, capabilities and services in their own communities, expertise that can contribute to local development processes and outcomes. Connemara West plc directly employs 29 people on its campus in Letterfrack and including the other organisations, it has helped to create or has invited onto its campus there are over 140 other people employed on the site. The Galway Mayo Institute of Technology (GMIT) National Centre of Excellence in Furniture Design and Technology is located on the Letterfrack campus and GMIT partner with Connemara West in local development projects. Connemara West is currently working on a global learning and digital hub project to accommodate local and international education programmes and serve as a remote working hub. The economic returns to the community from Connemara West’s activities are significant. However, the impact of Connemara West’s activities on local capacity and confidence building to develop evolving strategies for local development has contributed to underpinning the resilience and development of the community. Letterfrack is a remote rural region according to the OECD classification system and is located far from the functional urban area of Galway City. The above summary of the organisation’s work was taken from Ireland 2040: Our Plan – National Planning Framework where it was included as a Case Study and presented as an exemplar of innovation, regional enterprise and community development in a remote rural area. Case Study 2: Dunhill Ecopark, Dunhill, Co. Waterford.

Dunhill Ecopark is located 10 miles south west of Waterford City. It was established as an enterprise park in 2000 as part of the Dunhill Rural Enterprise initiative and today includes a multi-education centre which provides accessible training opportunities for the local community and delivers programmes for the ETBs and Teagasc; enterprise space which is currently home to 32 small businesses employing 70 people; a hot-desk business innovation centre; and 2.5 acres of integrated constructed wetlands which are complex integrated systems for maintaining high water quality in an environmentally sustainable way. Dunhill also partners with rural development initiatives in the neighbouring areas of Fenor, Boatstrand and Annestown in promoting local projects, including the Copper Coast Geopark, a 17 kilometre stretch of coastline which functions as an outdoor geological museum, and is headquartered

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in a restored church. Outside its local area, Dunhill Rural Enterprises partnered with the Carbery Enterprise Group from Skibbereen in county Cork to form the Communities Creating Jobs (CCJ) network of social enterprises. CCJ adopts a shared learning and experience approach to social enterprise and is a learning organisation whose members are willing to share their ideas, solutions, enabling tools, site visits, best practices, funding sources and expertise with each other. Dunhill Rural Enterprises is also represented on the board of the newly formed Social Enterprise Republic of Ireland (SERI) which represents social enterprises throughout the country with a mission to champion the sector and promote Irish social enterprise nationally and internationally. Case Study 3: Ludgate Hub, Skibbereen, Co. Cork.

Ludgate is a digital hub, located in Skibbereen, 51 miles south west of Cork City. It was established in 2016 and provides enterprise space for start-ups, entrepreneurs, established businesses, creatives and artists in the West Cork area. Ludgate was developed as a social enterprise and provides shared workspace for up to 75 people, meeting rooms and other facilities on a full-time or part-time basis. Since its inception the hub has attracted 55 full-time members and has supported the creation of 146 jobs. Ludgate benefits from the high-speed broadband infrastructure, which was installed in Skibbereen by Siro, a joint venture of Vodafone Ireland and the ESB, which aims to provide regional and rural towns throughout Ireland with high-speed – 1 Gigagbit - connectivity. The hub offers established business the opportunity to open a second location or to provide a remote working facility for their employees. Study space is also available for third level students. Ludgate has plans to expand to a second centre in West Cork and establish a Hub Academy to provide other communities with advice and support in setting up their own digital enterprise hubs. As a leader in rural innovation and entrepreneurship, Ludgate’s longer term objective is to become an integral part of a dynamic enterprise and entrepreneurial ecosystem in West Cork, based on a sustainable digital economy model, and facilitating up to 500 direct jobs and 1,000 indirect jobs in the area. 9.4

References for this section

Commission for the Economic Development of Rural Areas (2013): “Energising Ireland’s Rural Economy”; “Research Report”. (The CEDRA report). Department of Business, Jobs and Innovation (2019): “Regional Enterprise Plan to 2020 – Midlands”; “Regional Enterprise Plan to 2020 – Mid West”. (The REPs). Department of the Environment, Community and Local Government (2016): “Charter for Rural Ireland”. Department of Housing, Planning and Local Government (2018): “Ireland 2040: Our Plan – Draft National Planning Framework”.

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Department of Rural and Community Development (2017): “Action Plan for Rural Development: Realising our Rural Potential”. EU Commission (2020): “Protecting the future of rural communities”. Fáilte Ireland (2016): “Tourism Development and Innovation – A Strategy for Investment 20162022”. Forfás (2013): “Social Enterprise in Ireland: Sectoral Opportunities and Policy Issues”. Forfás, Dublin. Heanue, K., O’Neill, M. and O’Toole, J. (2020): “Connemara West 1971-2020: Enabling a resilient community”. Connemara West, Letterfrack, Co. Galway. Just Transition Commissioner (2020): “Just Transition Progress Report”. OECD (2014): “Innovation and Modernising the Rural Economy”. OEECD, Paris. Power, J. (2019): “Stimulating Regional Economic Growth: A Socio-Economic Assessment of Smart Working”. Commissioned by Vodafone Ireland. Rowan, N. J., & Galanakis, C. M. (2020): “Unlocking challenges and opportunities presented by COVID-19 pandemic for cross-cutting disruption in agri-food and green deal innovations: Quo Vadis?” Science of the Total Environment 748 https://doi.org/10.1016/j.scitotenv.2020.141362 Tourism Recovery Taskforce (2020): “Tourism Recovery Plan 2020-2023”. Western Development Commission (2017): “What is Rural?”. Insights Note by Helen McHenry. Western Development Commission and the Whitaker Institute, NUIG (2020): “Remote Working in Ireland During Covid-19 – Initial Findings”.

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10.

TURN Report

Recommendation Following the guidelines of the TURN report, two aspects are highlighted: research development and digital infrastructure. Research development strategy should identify key “regional themes” to which the research should respond, with two examples: collaboration with enterprise to address the differing research needs and possibilities experienced by enterprises. Also, natural environment, including agriculture, restored boglands, forests, vegetation, rivers, lakes, climate, air, ecology, energy, ecosystems is a basis for development. Research strategy should focus on delivering international knowledge to meet regional needs, with emphasis on applied research. Digital infrastructure should be a tool to “reach out” to external stakeholders in the economic and social sectors

The report “Technological Universities: Connectedness and Collaboration through Connectivity” (2019) by the TURN group (Technological Universities Research Network) examines the needs of the future TUs. TURN was established to examine and report on how TUs could most effectively achieve their sectoral and national objectives and the supports that would be required for them to do this. In their report, the TURN group identified three thematic areas as the essential building blocks for successful TUs:

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• •

•

The prioritisation of capital investment in TUs and funding for integrated multi-campus digital infrastructure; Investment in research capacity building in the form of developing researcher human capital, facilitating research activity and opportunities for existing staff and implementing a new researcher career development and employment framework, addressing infrastructural deficits and prioritising research strategies within TUs exploiting fully the mutually supporting roles of teaching and research; The expansion of institutional autonomy and support for reform through the implementation of TU-apposite career structures with the support of the Department of Education and Skills, the reform of the grant allocation model to accommodate TUs, the creation of post-designation TU funding streams and the creation of a borrowing framework for TUs.

Within these three thematic areas, TURN made a series of 11 recommendations. Digital and Capital Infrastructure Investment 1. In order to underpin the cohesion of regionally dispersed multi-campus TUs and facilitate new modes of learning, funding should be made available for integrated digital infrastructure. 2. Prioritisation of capital investment in TUs in the allocation of capital funding resources to the HE sector Research Capacity Building 1. Research capacity should be enhanced through increased funding directed at developing researcher human capital in TU 2. TUs should adopt and implement the researcher career development and employment framework 3. Deficits in educational and research infrastructure in TUs should be addressed in particular for STEM 4. Each TU should prepare and publish its research development strategy Institutional Autonomy and Support For Reform 1. Development of more appropriate career structures to correspond to the distinctiveness of TUs 2. Support from Department of Education and HEA to implement this 3. Dedicated funding stream to support TU development and organisational change management 4. Borrowing framework for TUs 5. Determination of the optimum approach to funding for TU Two recommendations are centrally relevant to the new TU, viewed from the socioeconomic perspective: research development strategy and digital infrastructure. Research Development Capacity The TURN report recommends that each TU should prepare and publish its research development strategy, outlining its prioritised objectives and targets over specified time horizons, with a focus on research developmental and growth areas and highlighting, in

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particular, opportunities for national and international collaboration with industry and other employers, wider society and other HEIs. The need to improve research development capacity is in the context of regional development. Balanced regional development and the further transformation of regional economies, calls for deepening the focus on research to meet economic and societal needs, linking it more closely to innovation and human capital and skills development; and deepening their rootedness in their regions whilst also responding to national policy objectives and building their international profile and linkages. This consideration places the research agenda central to the issue of regional balance. How can research play its fullest role in capturing the potential of the surrounding regions? Regional balance is an equity or parity issue, and this raises the equivalent research challenge of “parity of esteem”. Parity of esteem is a recognised concept in higher education, highlighting that, to play its fullest role, the future TU should enjoy parity of esteem with other universities. This is a central regional issue as the other universities are located in the main cities. So parity of esteem can be viewed as a critical tool by which the future TU can fulfil its promise for regional and national development, as well as participating in international research efforts. Structures of professorial roles as thought leaders, with equivalent career structures, including PhD development routes, should be embedded in the new TU, just like any university, including the award of professorial titles. This should lead to a level playing field where the new TU has parity of esteem with other universities in the cities. The question arises as to how “deepen the rootedness” of research while simultaneously “building their international profile and linkages”. This is a potential challenge to integrate the research development strategy of the new TU both with the regional needs and also the international opportunities. These are complementary objectives and should be mutually supportive. The TU should see its role as connecting the “international” with the “regional.” The TU needs to build up its research strengths at the international level and then use these international resources to support action in the region. The TU would thus add value to the region by introducing international knowledge to regional actors. The TU would be a “bridge” between international knowledge and regional needs. The expertise of the TU would be in both identifying the relevant international knowledge and also pinpointing the regional needs to which this knowledge could be applied. The approach is illustrated following.

International knowledge

Technological University

Regional needs

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One approach to integrating the two dimensions would be for the research development strategy to identify key “regional themes” to which the research should respond with international knowledge. Several themes suggest themselves, such as two examples: •

Collaboration with enterprise: enterprises in the region have differing research needs and possibilities. How can high-level research respond to their potential? The research development strategy could be informed by a “needs assessment” of the research needs of regional industry. The results of the needs assessment would thus feed into the research agenda for the TU. The research development strategy should thus be founded on a realistic view of what the research needs of regional industry are, and how the TU can effectively respond.

•

Natural environment: as a rural region, the Mid West/Midlands is dominated by the natural environment: agriculture, restored boglands, forests, vegetation, rivers, lakes, climate, air, ecology, energy, ecosystems. These are immense issues and deserve to feature in the research development strategy of the new TU. The strategy could do this by systematically relating the research strengths and capabilities of the new institution and identifying how these can be connected with the natural environmental possibilities in the surrounding region. This research agenda can be further connected with the promise of national and international collaboration

A key consideration in the review of regional themes will be to balance the twin issues of “what needs to be done” and “what can be done.” Inevitably, reviews of this nature will generate a “wish list” and identification of actions which could be done in ideal circumstances. However, the list of actions will need to be tempered by funding availability, competing demands and scarce human resources. This refinement of the long wish-list to a coherent short-list of productive measures will require vision and insight.

The type of research knowledge which would be appropriate also needs to be reviewed. The relevance of TU research to the regional environment is emphasised by the Technological Universities Act (2018). The Act states that the TU must have particular regard to the needs of the region, support research that is relevant at regional levels, support enterprise and innovation through the conduct of research, ensure that research undertaken by the TU is relevant to the needs of the regional stakeholders, support creativity between the TU and the community in the region and foster close relationships with organisations in the community. This creates the challenge of the relative roles of basic and applied research in the TU. Basic research aims at expanding knowledge while applied research aims at providing practical solutions to problems. Basic research has in the past attracted greater status and interest in the world academic community. However, the mission of the TU in the 2018 Act is clearly biased towards applied research. The argument would therefore be that applied research should receive at least the same policy focus, incentives and status in the organisation as basic research. This means that the culture, strategy, structures and modus operandi of the new TU should favour applied research. Digital Infrastructure Digital infrastructure was highlighted in the TURN report for several reasons. Digital infrastructure can open up HE to innovative modes and methodologies of learning across the full spectrum of apprenticeship, work-based, multi-campus, online and distance teaching and

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learning. Digital infrastructure can also ensure that the TUs simultaneously prioritise flexible learner-centred teaching and learning approaches, employment and industry relevant programmes and stronger research capacity. Digital infrastructure can deepen the strategic focus of research, linked to innovation, human capital, skills development and the needs of the economy. There are a number of aspects where digital infrastructure could be prioritised by the new TU. The TU will be a distributed campus, with centres in Athlone, Limerick (Moylish, Clare Street, Coonagh) Thurles, Clonmel and Ennis and learning gates in Mullingar and throughout the Midlands. Digital infrastructure will be central to creating a single and unified institution sharing information and knowledge and strengthening contacts among staff and students. Flexible learning is already heavily based on on-line learning and digital programmes are well established. This will accelerate heavily into the future. In the economic sector, the number of industrial enterprises in the combined Midlands/Mid-West comes to 869 supported by EI and IDA. The institutions are already reaching out to these with potential to do more. Digital infrastructure will be a central tool for this. Not only in learning, but digital infrastructure will also play its part in research and innovation. Substantial partnerships with industry through research & development, and through innovation collaboration already exist. Digital infrastructure will enable the new TU to do more in this valuable area. Digital infrastructure will also be a tool to â&#x20AC;&#x153;reach outâ&#x20AC;? to external stakeholders in the social sectors. These stakeholders have confirmed how they value the ongoing engagement with the existing Institutes of Technology and how they wish to see this engagement enhanced and developed in the future TU. This view was strongly expressed by the Education & Training Boards and by the other educational interests. So digital infrastructure should be seen as an instrument of stakeholder engagement with both the Education & Training Boards and the 119 post-primary schools. A digital infrastructure strategy could thus reflect those objectives as illustrated below. Digital infrastructure should thus be a mechanism to implement the stakeholder requirements of the Technological Universities Act (2018). The Act highlights how the TU should collaborate with business, enterprise, the professions, the community and local interests in the region. The TU should also promote the involvement of those stakeholders in the design and delivery of programmes of education and training, support the mobility of staff and students through collaboration with business, enterprise, the professions and related stakeholders in the region and develop strong social and cultural links (and links supporting creativity) between the TU and the community in the region.

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Free Zone and Special Economic Zone development Industrial and Business Park Development Foreign Direct Investment/ Investment Promotion SME Development Regional and Rural Development and Planning

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