5/11/15: Times Higher Education Rankings of Irish Universities: 2016

Times Higher Education rankings of universities are out and the bad news is that Irish universities are doing poorly as a group and more poorly in 2016 rankings than in 2015.

Here is a snapshot of country’s ranked institutions:

And here is the disaster unfolding over time:

So over the last two years of the ‘recovery’: three out of top-ranked 5 Irish universities saw their rankings tank, one saw the ranking static, one saw rankings improve in 2014-2015 table before somewhat deteriorating in 2015-206 table. Three Irish universities are now in the ‘Third Tier’ of global performance, two are in the ‘Second Tier’ and none are in the ‘World Class” group.

Meanwhile, of course, Irish third level education and academic research sustained second largest (in % terms) funding cuts since the start of the Global Financial Crisis amongst all OECD economies.

That is not to say that Irish Universities are doing everything possible to improve their performance. No, sir, we are still stuck in the old mode of past promotions, rewards, hiring and assessment practices. And we are still failing to develop non-tenured faculty and adjunct faculty engagement with rankle activities, including… err… academic research. 

Any surprises, thus? 

4/11/2014: Prosperity Index 2014: Ireland's Reforms Failing to Produce Strong Socio-Economic Results

Today, Prosperity.com (http://www.prosperity.com/#!/) are publishing the 2014 Legatum Prosperity Index which offers cross-countries' comparable data on how economic, social and governance conditions define socio-economic prosperity around the world.

According to the index methodology, "traditionally, a nation’s prosperity has been based solely on macroeconomic indicators such as a country’s income, represented either by GDP or by average income per person (GDP per capita). However, most people would agree that prosperity is more than just the accumulation of material wealth, it is also the joy of everyday life and the prospect of being able to build an even better life in the future. The Prosperity Index is distinctive in that it is the only global measurement of prosperity based on both income and wellbeing."

This post covers my analysis of the Legatum data for Ireland compared to our European peers, covering two peer groups:

• Advanced and highly competitive small open economies within the euro area, including Austria, Belgium, Netherlands, Luxembourg and Slovak Republic (SOE EA) and
• Advanced and highly competitive small open economies outside the euro area, including Switzerland, Denmark, Iceland and Norway (SOE ex-EA).
• Both peer groups are represented by the simple average ranks achieved in 2012-2014 period.

Overall, 2014 Prosperity Index ranks Ireland as 12th most prosperous nation in the world and 8th in the European region (combining 40 countries). This means that Irish rankings remained unchanged on 2013 levels both globally and within Europe. Over 2013-2014, Ireland's rankings deteriorated by 2 place worldwide.

This is an impressive ranking for Ireland placing us 5 ranks ahead of other small open economies in the euro area countries, SOE (EA), but lagging the average ranking of the ex-euro area small open economies (SOE ex-euro) by 7 places. Significantly, while similarly to Ireland's average ranking for SOE (EA) economies has deteriorated over 2012-2014, the average ranking of SOE ex-Euro group has improved. The gap between Ireland's rank in 2014 and the average rank for non-euro area SOE has widened to 7 points compared to 3 points in 2012 and 6 points in 2013.

Very similar dynamics in Ireland's performance are also evident in almost all of the eight sub-categories of the rankings.

While Irish global ranking in the economy sub-category improved from 33rd in 2013 to 29th this year, the latest ranking remains significantly worse than 2012 Index position (25th). For our peers within euro area, average rankings in 2012-2014 were 21st, 28th and 27th, respectively - a slightly better performance than Ireland's. Meanwhile, our peers' average rankings for SOE ex-euro area have consistently improved from 21st in 2012 to 17th in 2013 to 14th in 2014. Despite the officially-registered booming GDP and GNP growth, Ireland still lags behind both the advanced euro area small open economies average and ex-euro area economies average.

The gap between Ireland's rankings (2012-213 at 14th place, 2014 at 16th place worldwide) in Entrepreneurship and Opportunities sub-category and the performance of the ex-euro area SOE group (average rank of 5th in every year between 2012 and 2014) is getting wider. Significantly, after several years of talking up targeted entrepreneurship policies reforms, Ireland is showing deteriorating performance in this sub-index, with our world wide position falling from better than euro area average 14th place in 2013 to 16th (matching the exact average for the SOE euro area economies) in 2014.

Another area targeted by numerous structural policies in recent years is institutional and governance reforms. 2014 Legatum Prosperity Index ranks Ireland 14the in the world in quality of governance - with no change in the rank on 2012 and 2013 levels. Despite much of an effort to clean up and improve Irish institutional systems, our rankings show identical dynamics as that of our euro area peers. Meanwhile, our non-euro area peers' performance has improved from the average 9th rank in 2012 and 2013 to the average 7th rank in 2014. While slightly outperforming the SOE euro area average ranks (16th), Ireland's gap to non-euro area SOEs has widened from 5 places in 2012-2013 to 7 places in 2014.

In terms of core public services, such as health and education, the picture is more mixed. In education sub-category of the 2014 Legatum Prosperity Index, Ireland ranks respectable 8th, which represents an improvement on 2013 and 2012 positions (11th and 14th respectively). Here we outperform our euro are and non-euro area peers, although the gap in favour of Ireland to non-euro area peers group is closing, falling from 5 places in 2013 to 2 places in 2014 rankings. In contrast, in health services, Ireland's performance is rapidly deteriorating in absolute and relative terms. In 2012-2014, our euro area peers average rank stayed stable at 12th. Ditto for our non-euro area peers, whose average rank remains steady at the 9th place worldwide. Ireland's global rankings slipped significantly, from 11th place in 2013 to 15th in 2013 and 17th in 2014. If in 2012 we outperformed our euro area peers' average by 1 place, in 2014 Ireland showed an underperformance relative to this group of 8 ranks.

2014 Legatum Prosperity Index covers three sub-categories of social performance parameters: Personal Freedom, Social Capital, and Safety and Security. In all of these, with exception of Safety and Security sub-category, Ireland's performance has deteriorated over 2012-2014 horizon in absolute terms, and relative to non-euro area small open economies. On a positive side, our performance relative to the euro area peers remains robust.

While Legatum Prosperity Index rankings are not comparable across 2009-2011 and 2012-2014 years, actual index scores offer some indication of our performance in absolute terms in 2014 period compared to 2009-2011. Chart below shows changes in the index and sub-categories in 2014 compared to peak performance in 2009-2011.

All sub-scores that form the overall Prosperity Index are showing poorer performance in 2014 compared to their peak performance in 2009-2011 period. Index scores are reflective of country own performance, as opposed to country ranks which show relative performance compared to other countries covered in the surveys. As the chart above clearly indicates, in all sub-categories of the Legatum Prosperity Index, Ireland performs poorer today than in 2009-2011. Aside from the economic performance deterioration, Ireland's scores suffered significant declines in health, personal freedom, governance and education - all areas targeted by public sector reforms enacted by the current Coalition.

To summarise: while overall rankings for Ireland present a rather positive picture of our socio-economic institutions and environment compared to other euro area small open economies, two major concerns warrant significant attention of our policymakers:

1. Ireland remains relative under performer compared the non-euro area small open economies with our gap to this peer group average ranks and scores widening in 2014 compared to 2013 and 2012.
2. Ireland's reforms are not appearing to yield positive returns compared to 2009-2011 performance across all sub-categories of the index.

Reforms, including structural reforms, enacted from 2012 to-date have broadly failed to significantly alter the our socio-economic competitiveness compared to our core peers.

5/12/2013: Irish Education: In Need of Serious Reforms

This is an unedited version of my column in October-November issue of the Village Magazine.


Over the last two decades, Irish economic growth has been primarily driven by a series of financial and investment bubbles. Each one was fuelled by the ad hoc nature of our policymakers’ responses to shifts in global economic trends and their penchant for fetishizing foreign policies fads.

In the mid-1990s, on foot of the US-led dot.com industry explosion, Ireland became the focal point of the investment bubble that saw the state policies and funds inflating the already out-of-touch valuations of the companies. Promising to plug our economy into the Internet of Things, entities from Baltimore Technologies to MediaLab Europe, and everyone in-between, were hovering public and private funds in a race to leapfrog this sleepy island into the 21st century.

In the 2001, at the onset of dot.com hangover, government investment became the new rage. Social Partners climbed over each other to get funding for awe-inspiring schemes usually described as Global Centres for Excellence. This bubble too was based on fads that came to Ireland from abroad, namely from Brussels. To continue fund our fetishes for spending cash we built bungalows at an ever-increasing pace. From 2001 on, Irish economy became an economy built on breezeblocks.

With the bust and the ensuing Great Recession, one could have hoped for a mature review of the policies past and a shift away from our dreamt up grandiose plans. Yet, to-date, the entire response of the two successive Governments to the bust was to feed our hopium addiction. Budget 2009 announcements made amidst the ongoing implosion of the domestic economy promoted aggressively the concept of the Knowledge Economy as our salvation. Truth be told, the Innovation Island is a Potemkin Village.


To see this, one needs to look no further than at our ability to create the base on which a knowledge-intensive economy is built: the human capital.

In my recent speech at TEDx Dublin, I offered a systemic template for assessing any economy’s human capital potential. That system is called C.A.R.E. as it assesses how well a country can Create, Attract, Retain and Enable its workforce’s technical and social skills, talents, creativity, capacity to innovate, engage in entrepreneurship, willingness and ability to take risks. In the nutshell C.A.R.E. is about systems that should put human beings and their abilities at the centre of our society and economy.

Across the entire spectrum of C.A.R.E. systems, education plays a pivotal role. And it is exactly here that many of our policy gaps become painfully apparent.

Firstly, our education system does not enable seamlessly continuous and high quality life-long cycle of learning and training. Secondly, our education system is incapable of sustaining development of such vital aspects of human capital as creativity, ability to manage risks, and engage in ongoing innovation across various domains of knowledge and skills. Thirdly, our education system is inherently elitist. This prevents it from ever becoming a truly functional creator and enabler of human capital economy. With elitism comes the death of innovation and creativity. Fourthly, our education system is riddled with inefficiencies, protectionism and skewed incentives, which lead to sub-standard educational and research outcomes.


Let’s take some of these claims in detail, omitting many considerations for the lack of space.

Since the Finance Act 2004, Irish governments have been working on expanding indigenous R&D activities. Over the last ten years, billions of euros were poured into the tax credits and investment supports. Billions more went to fund higher education institutions’ efforts to sustain research and innovation.

While some third level institutions – namely the top four or five universities – have produced tangible results in driving research output up, the rest remained far behind. Even tope universities have shown weak performance.

The 2013 Academic Ranking of World Universities (ARWU) lists only three universities for Ireland, with best performer, TCD ranked in 201-300th place in the world. UCD and UCC rank in 301-400th places. On that, Ireland’s presence in top 500 universities as ranked by ARWU runs dry.

QS rankings list eight Irish universities in top 600 in the world, with TCD ranked the highest in 61st place. Second-best, UCD ranks 139th. Only six Irish universities make it into world’s top 300. Back in 2009, we had two universities in top 100, and seven in top 300.

Absurd centralization of education and research policies, coupled with budgetary pressures, centralized and politicized research and teaching funding allocations have accelerate the rate of brain drain from top Irish academic institutions in recent years. This, in part, is the driver for poor ranking performance over the recent years. However, even in 2005-2007, with cash abundant, Irish universities performance was far from stellar.

INSERT TABLE HERE

Meanwhile, across the rest of the higher education sector, both teaching and research remained stuck somewhere in the antediluvian age.

Instead of development of modern, research-capable and skills-based adjunct and clinical faculties, majority of our degrees programmes continue to operate on the basis of full-time faculty teaching out of a textbook and into a pre-set, standardized exam. Furthermore, programmes are often staffed with faculty members who are neither research active, nor have any appreciable experience in applied work relating to their teaching.

While top universities around the world are aggressively moving to new teaching platforms and broadening their programmes by erasing the boundaries between various degrees, in Ireland we still treat a slide projector as a technological enabler. Web-based apps, audio-visual tools, data visualisation and other core tech supports are virtually unheard of in even top-ranked Irish universities.

In many university classrooms, students are more technologically enabled than their lecturers.

Absent deployment of modern strategies and technologies, Ireland embraced the three-year degree system. If anything, lack of proper progression in developing teaching skills and tools should have led to a lengthening of the degree programme to maintain fixed quality of the graduates. Instead we opted to trade down the learning curve in pursuit of higher put-through numbers.

All of this stands contrasted by the fact that in our flagship universities there are some individual teaching and research programmes which operate at a world-class level. Irish academia, it appears, can do excellence, just not across the whole system.


On the research side, things are not stacking up in favour of our education being the enabler of Knowledge Ireland either. New Morning IP, the intellectual capital consultancy firm, publishes regular data on patenting activity by indigenous Irish companies, foreign inventors and Irish academic institutions.

Over the last 12 months, 2,580 patents were filed in Ireland by all types of academic institutions and private sector firms. Irish academic institutions accounted for only 9.1% of these filings. Irish private sector firms are considered to be relative underperformers in terms of R&D output compared to their counterparts across the OECD. Yet, of all patent filings, these firms account for almost four times more patents than all Ireland-based academic institutions taken together.

INSERT CHART

Not surprisingly, the European Patent Office data for 2012 put Ireland in 26th place in terms of total number of patent applications and in per-capita indigenous innovation terms, right between such powerhouses of the ‘knowledge economy’ like New Zealand and Cyprus.

The above data correlates with the poor performance by the country academic institutions in attracting private sector research funding. In August, a study by the Times Higher Education, ranked Ireland at the bottom of global league table in terms of private sector funding per academic researcher. Lower rankings for Ireland can be in part explained by poor innovation uptake by many domestic enterprises. However, these rankings also show that our system of higher education is inefficient in producing market-relevant research. Given the importance of such research to teaching and training future cohorts of human capital-rich workers, this is not a good thing.


Irish system of higher education requires serious and immediate reforms.

At the top, we need more flexible, more responsive public policy formation capable of supporting knowledge-intensive, skills-rich and rapidly evolving education. Fields of research and teaching, such as biotech, stem cells research, content-based ICT, remote medicine, human interface technology, customizable design and development technologies and so on all require a mix of skills we currently struggle to provide. Outside these, the world of business and the overall socio-economic make up is changing rapidly. In previous decades, generic management degrees offered a good starting point for on-the-job-learning. Today we need both specialist knowledge and general human capital as the basis for entering management areas of work. In the past, specialism was the differentiator into growth areas in the economy. Today, encyclopedism and ability to cross boundaries of defined degrees is increasingly a valued skill.

Policy level changes require introducing accountability and direct incentives into education system. Introduction of university-set fees are the starting point for this. Yet, even more institutional autonomy will be required to move to a system of higher education where both success and failure are reflected in actual outcomes. Successful institutions should be incentivised to thrive. Poorly functioning ones should be forced to shut down or be acquired by successful ones. Public funding should follow quality of teaching and research, not political considerations of which constituency is next in line for grants.

We must end political remit over the system of academic research and higher education. The best way to do so is by allowing more competition, imposing tighter quality controls and allowing institutions more freedom to price their offers reflective of both demand for and supply of quality.

3/12/2013: Some top level results from PISA 2012: Part 2

In previous post I covered the PISA results (top-level overview) for Ireland (http://trueeconomics.blogspot.ie/2013/12/3122013-some-top-level-results-from.html). Here's a summary table showing 2012 data and changes on previous survey:

• As you can see, Ireland is ranked in a respectable 20th Mathematics place based on the mean score. 
• We rank 29th in terms of top performers in mathematics and 17th in terms of share of bottom performers in mathematics. This suggests that our system is performing better in raising students from the bottom than promoting students to the top. The first is a good thing, the latter is a bad thing.
• Another bad thing is that we are losing scores, down 0.6 points annually on previous survey.
• Ireland's maths score is statistically indistinguishable from the scores for Viet Nam, Austria, Australia, Slovenia, Denmark, New Zealand, Czech Republic, France, United Kingdom
• And we are statistically above the OECD average along with 22 other countries.

Relationship between annualised change in performance and average PISA 2003 mathematics scores:

• In reading, our mean score of 523 ranks us between 7th and 9th in the world - highly respectable achievement. However, the score is down 0.9 points year on year.
• We are comfortably ahead of OECD average here
• Our score on reading is statistically indistinguishable from Finland, Chinese Taipei, Canada, Poland, Liechtenstein.

Relationship between annualised change in performance and average PISA 2000 reading scores

• In science we have a score of 522 which ranks us 14th to 15th which is good. Even better: the score has increased by 2.2 points year on year.
• We are statistically above the OECD average and our science score is indistinguishable from that of Viet Nam, Poland, Canada, Liechtenstein, Germany, Chinese Taipei, Netherlands, Australia, Macao-China, New Zealand, Switzerland, United Kingdom.

Relationship between annualised change in science performance and average PISA 2006 science scores

3/12/2013: Some top level results from PISA 2012: Irish Education Performance

PISA results are out today. Here's the link: http://www.oecd.org/pisa/keyfindings/pisa-2012-results.htm

And some snapshots of Ireland's performance:

And comparatives to Hong Kong, Korea and Shanghai (just because we think we have the best educated workforce in the world):
Note: Ireland = Blue
Hong Kong:

 Shanghai:

Korea:

And to some European peers:
Finland:

Germany:

Sweden:

And so on. Not take these too seriously as standardised testing is hardly indicative of many important aspects and traits relating to education, but... we are reasonably good in reading skills, mediocre in mathematics and sciences... Improving in sciences, flat in maths, slightly down in reading... oh, and our top students are not really at the races, while our bottom students are. So who do we compete against? The brightest or the lowest performers? Makes you wonder, right?

3/8/2013: Humanities: Don't Just Discount the Vital Set of Skills

Over a month ago, I wrote in the Sunday Times about the topic of balance in education between the humanities and sciences and led this point toward the reforms needed. Last week, Washington Post run a story worth reading on the same subject: http://www.washingtonpost.com/blogs/innovations/wp/2013/07/30/we-need-more-humanities-majors/

My original article and few more links on the topic is here:

http://trueeconomics.blogspot.ie/2013/07/272013-sunday-times-june-30-2013-irish.html

2/7/2013: Sunday Times, June 30, 2013: Irish education system reforms

This is an unedited version of my Sunday Times article from June 30, 2013.

Note: an interesting related article on human capital and values of innovation and creativity linked to education in humanities is here: http://qz.com/98892/the-humanities-are-not-in-crisis-in-fact-theyre-doing-great/ and on the need to link various fields of inquiry in education systems: http://www.farnamstreetblog.com/2013/06/how-great-ideas-emerge/?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+68131+%28Farnam+Street%29


Since times immemorial Irish political and business elites have been fascinated by technocratic ideals. From the 1990s on, the state bodies like Fas and Forfas have pushed forward the worldview in which Ireland required an ever-increasing investment in advanced specialist and technical education and training in ICT, chemical, software, and general engineering.

The ICT manufacturing is now largely the story of the past, as is the dot.com bubble. The pharma story is fizzling out on foot of expiring super-drugs patents, with last week’s patent expiration for Viagra being case in point. Biopharma is too small to replace lost exports revenues and shrinking FDI from pharma.

As the latest quarterly national accounts for Q1 2013 released this week illustrate, traditional specialist areas of exports are no longer sustaining growth in Ireland. Stripping out the contributions by the tax-optimising ICT services multinationals, our economy is in a structural decline. Seasonally-adjusted industry activity is down year on year, and goods exports have fallen 9.2%. Investment is down both year on year and quarter on quarter. All areas of activity that are linked to the real exports production in the country are down. This decline is driven by the fact that we are falling behind the innovation curve in creation of new enterprises, products, services and investment opportunities.

In line with Irish experience, this month Finnish authorities were forced to revise down their own forecasts for 2013-2014 economic growth from an average of 1.0% per annum to 0.4%. The downgrade was linked, in part, to Finland's struggle to maintain competitive edge in traditional manufacturing, which is falling behind on products and services design and innovation, despite, or may be even because Finland concentrated too much of its resources on technical ICT investments and skills.

Still, policies of fetishising technocracy roll on. From science advisory bodies and MNCs HQs, to the IDA and Enterprise Ireland, our decision makers are promoting an economy based on software codes, data analytics and cloud computing. No one seems to think that the resulting education and skills strategies alignment with the technical needs of these sectors can risk being reactive to the immediate global markets demands, instead of moving ahead of the curve.

Recent research and news flow from around the world shows that innovation is becoming more focused on increased customization, design and creativity of products and services. These require the exact opposites of the purely technocratic approach to education and training. This is a bigger and longer trend, and we are nowhere near capturing it in our education and training systems.

Ireland's policy leaders pay vast amounts of lip service to the Silicon Valley - world's largest cluster of technological innovation and investment. The development agencies, like IDA and Enterprise Ireland commonly cite it as an inspirational example in the context of Ireland’s need to promote education in maths, hard sciences and tech. Their logic is that concentrations of locally-based technological skills and research translate into Silicon Valley-styled success. Many in Ireland, contrary to the evidence from the US research, still link academic institutions clustering in the Northern California to the Silicon Valley formation and achievements.

This logic is over-simplifying the reality. Recent studies from Harvard and Duke University show that less than half of all CEOs and chief technology officers working in the Silicon Valley firms hold advanced degrees. Only 37 percent of all degrees held by the Silicon Valley executives are in the areas of engineering or ICT. Only two percent held a degree in mathematics. Vast majority of undergraduate and graduate degrees held by business leaders in the Silicon Valley are in the so-called ‘soft fields’ such as business, finance, and arts and humanities. Put simply, there are more liberal arts graduates steering Silicon Valley companies than physical sciences graduates.

What about the skills demands of the cutting edge innovation firms and start-ups? In 2011 Bill Gates and Steve Jobs publicly clashed in their views on the future needs for skills and education. In his speech to the US National Governors Association, Gates stated that education should focus limited resources on areas and disciplines that are positively correlated with jobs creation. This implies technical ICT skills. Days later, Steve Jobs identified Apple's success with "technology married with liberal arts, married with the humanities".

Jobs was not alone in this recognition. Carol Geary Schneider, president of the American Association of Colleges and Universities says that liberal arts-linked skills and knowledge are critical to the long-term employability of the workforce. Schneider called Gates’ ideas on technically-focused demand-driven education as "much too narrow and unsettlingly dated”. “The question to ask is not: which [degrees] do the best in initial job placement, but rather, which institutions are sending their graduates forth with big picture knowledge, strong intellectual skills and the demonstrated ability to integrate and apply diverse kinds of learning to new settings and challenges,” she said. Per Jobs and Schneider, and many other analysts and business leaders, arts and tech deserve shared credit in driving world's most successful and most important innovative companies since the late 1990s.

The link between humanities, arts, design and value added in business and across economies is now widely regarded as the source for future growth. The global investment community is starting to treat design-focused technologies and innovation as a new Klondike.

This month, the Pictet Report, a quarterly publication aimed at professional and institutional investors produced by one of the largest and oldest private banks in the world, is devoted in its entirety to creativity-driven disruptive innovation. The main focus, of course, is on investment opportunities linked to such innovation.

Last week, Brimingham hosted a major design expo aimed at "showcasing authentic, regionally-based brands and upcoming graduate and entrepreneurial talent". Birmingham-Made-Me Expo is an extension of the UK-wide movement and policy nexus that attempts to re-position design-driven innovation and entrepreneurship at the heart of the future economy. The UK Government is pumping significant resources behind these efforts.

In the mean time, shortages of ICT professionals, while still evident in Ireland, are becoming less acute across the broader world. Reports from India show that the country is producing an oversupply of ICT engineers and technicians, with estimated 50,000 graduates facing a prospect of underemployment in the near future. The problem is acute enough for India's Commerce and Industry Minister, Anand Sharma, to plead with London this week to relax visa caps for Indian ICT workers seeking jobs in the UK.

Even in the fields of big data and cloud computing, technical skills are a dime-a-dozen, as I noted in a recent speech at a cloud computing conference hosted by DCU. What is truly lacking in these areas is the ability to creatively enrich data insights via user-centric visualization of data, and development of applications that drive deeper into customisation of business. Being able to capture, store and process data is a mass-produced commodity. High value-added future opportunities will be found in delivering communicable and actionable insights out of this data that can enable products and services innovation and individualisation.

The world of innovative and high value-added economies is moving in the direction of embracing more broadly-based creativity, intelligent design, consumer-focused disruptive innovation. In this light, Irish education system must be reformed to bring it into the future, not to chase the immediate skills shortages. While we do need to maintain strong efforts in areas of education linked to software programming, design and engineering, as well as maths and sciences, we also need to develop complex aesthetic, social and design-intensive capabilities. And the former is probably less important in the longer run than the latter, especially if we can succeed in aligning ‘softer’ skills with entrepreneurial and business capabilities on the ground.

At the pre-tertiary education level, we need to focus our education on developing basic literacy skills in arts, humanities, as well as in sciences and ICT. Early exposure to web-based applications, even some coding, is a good anchor for such literacy. Alongside, we need to revise our curricula for history, literature and arts. Religious education and mandatory Irish must be absorbed into electives. Time and teaching resources freed from these should be used to give students good anchoring in world history, philosophy, logic, and art.

It is time for investing in specialization-focused schools to reflect not geographic distribution of students, but students’ talents and interests. Specialist curriculum schools focusing, differentially, on arts and humanities, as well as those focusing on sciences and ICT should be prioritized for future development in larger urban areas. Every IT school and University in the country should be required to run significant Young Scholars Academies offering regular engagement opportunities for children with talent and aptitude. These Academies can act as formal facilitators for their entry into higher education.
We also need to remove our reliance on standardized examinations for progression of students through the entire system of education.

Third level education must support the objectives of making our workforce skills and knowledge base broader. We need restore a four-year degree system. Third level degrees curriculum must explicitly require, not just encourage, students’ exposure to studies beyond their immediate major. Students in technical fields must be exposed to basics of humanities and arts. Students in arts and humanities must be literate in ICT and sciences.

Fourth level education too should be used to further enhance the above processes. We need to develop cross-collaborative MSc and PhD degrees and provide for supplementary degree programmes (joint MSc and diploma packages) for students interested in working on the boundaries of diverse disciplines, such as, for example, creative arts and technology, quantitative analytics and marketing, behavioural economics, and product and servcies design. Industry experience and achievement should form the foundation of enlarged and better-structured adjunct faculty. Subject to peer review, industry research should count as an integral part of academic and adjunct faculty evaluations.

In life-long learning, we need flexible programmes allowing for research-focused studies that can stretch over a number of years. Linked directly to work-related projects and topics, these should lead to degrees being awarded in the end, subject, again, to mature students engaging with minimum of a broader curriculum outside their field of competency.

Box-out:

This week, CSO published the latest data on new planning permissions granted in Ireland, covering Q1 2013. The publication was greeted with a chorus of 'good news' reports, as data showed increases in the Number of Dwelling Units approved. Per official statistics, these rose 31% for houses, and 3.9% for apartments. All increases reported reference quarterly rises. There are several problems with the upbeat reports, however. Number of permissions for houses actually fell year-on-year by a significant 9.31% reaching the second lowest level in history of the data series. Number of permissions for apartments also fell, by 18.4% on Q1 2012. More ominously, aggregate activity in the construction sector, as measured by the new permissions granted, shrunk across the board. Total number of planning permissions granted in the state was down 1.35% quarter-on-quarter and down 2.76% year on year, hitting absolute lowest point for any quarter since Q1 1975. Across the board, it is pretty safe to say that the Q1 2013 data does not warrant much enthusiasm, despite the aggressive spin put on it by some media reports.

1/7/2013: Summary of education systems stats for Ireland, 2013

Interesting numbers on education system in Ireland, compared to OECD and EU21: http://ec.europa.eu/ireland/press_office/news_of_the_day/pdf_files/2013/ireland_eag2013-country-note.pdf

Summary tables are very informative.

The full OECD publication is available here: http://www.oecd-ilibrary.org/education/education-at-a-glance_19991487

Here's an interesting chart from the publication (click to enlarge):

Basic point - once we exclude international students, Ireland is basically indistinguishable from the OECD average on terms of tertiary education attainment.

Furthermore, with international students counted in, 1.9% is the Irish graduation rate for Advanced Research Degrees (PhDs) which ranks us 12th in the OECD. Removing international students, the rate is 1.6% or 9th.

Another note: Ireland does not report on the proportion of students who enter the third level education and graduate, so we cannot tell how bad is the propensity of Irish system to graduate students once they are into the system. Ireland also does not report completion rates in third and higher levels of education.

In 2011, Ireland had the fifth highest unemployment rate for those with at least tertiary education completion, the third highest rate for those with Upper secondary or post-secondary non-tertiary education and the sixth highest for those below upper secondary education in the OECD.

Employment rate in Ireland for those with Type A and advanced research programmes tertiary education completion stood at 83%, which ranked as 22nd in the OECD. Put differently, that 'best educated' workforce in Ireland was, apparently, one of the least employed.

A caveat to all reading both documents: there are no corrections in the data for foreign workers employed in the country of residence. Which, of course, means that high salaries in ICT services and International Finance, earned by foreign employees working in Ireland are potentially skewing the data on returns to education

29/7/2012: Irish Competitiveness

Unedited version of my Sunday Times article from July 22.

These days, with nearly 15 percent unemployment, and almost 530,000 currently in receipt of some unemployment supports, the minds of Irish policymakers and analysts are rightly preoccupied with jobs creation. Every euro of new investment is paraded through the media as the evidence of regained confidence in the economy. This week, even the insolvent Irish Government got into the game of ‘creating jobs’ with an ‘investment stimulus’.

Alas, economics of jobs creation is an entirely different discipline from the political PR accompanying it. In the real world, some private and public jobs are created on the basis of sustainable long-term demand for skills. Others are generated on the foot of tax advantages and subsidies, including stimulus. In the short run, the latter types of jobs can still yield a positive boost to economic activity. But in the longer run, they are not sustainable and drain resources that can be better allocated to other areas. The ultimate difference between the two types is found in productivity growth associated, or the competitiveness gain or loss generated in the economy.

The prospects of Irish economic recovery have been rhetorically coupled with the improvements in our cost competitiveness since early 2008. And for a good reason. Rapid deterioration in competitiveness in years before the crisis is what got us into the situation where structural collapse of the economy was inevitable.

During the Celtic Garfield era of 2001-2007, Irish Harmonized Competitiveness Indicators (HCIs) have deteriorated by some 26%. Our productivity growth, stripping out effects of MNCs transfer pricing and tax arbitrage, has been running well below the rate of the advanced economies average. In years of the property bubble, Ireland was the least competitive economy in the entire euro area.

Structurally, our lack of competitiveness was underpinned by the labour costs inflation in relation to producer and consumer prices. Consumer costs-related competitiveness indicator for Ireland deteriorated by 38 percent between the end of 2001 and mid-2008, more than one-and-a-half times the rate of deterioration in producer costs-linked measure. Another, even more pervasive and long-term force at play was creation of hundreds of thousands of jobs in the sectors, like building and construction, domestic retail and finance that lagged in value-added well behind the exporting sectors.

This was not a model of sustainable jobs creation. Instead of incentivising investment in real skills and aptitude to work and entrepreneurship, we taught our younger generation to expect a €40-45,000 starting gig in a ‘professional’ occupation or laying bricks at a construction site. Not surprisingly, uptake of degrees in harder sciences and more mathematically intensive fields of business studies slumped, while degrees in ‘softer’ social and cultural studies were booming. The workforce we were producing had a rapidly expanding mismatch between pay expectations, career prospects, and reality of an internationally competitive economy.

Placated by the opportunity to locate in the corporate tax haven, our MNCs were drumming up the myth of the superior workforce with great skills and education. The Government and its quasi-official mouthpieces of economic analysis in academia, banks, and financial and professional services were only happy to repeat the same line.

The crisis laid bare the truths about our fabled competitiveness outside the corporate tax arbitrage opportunities.

Since then, the focus of the Government labour market reforms, in rhetoric, if not in real terms, has been on regaining cost competitiveness. Sadly, this process so far replicates, rather than corrects the very same errors of judgement we pursued before the crisis erupted.

In terms of headline metrics, things are looking up. Our harmonised competitiveness indicator (HCI) has improved by 5% between January 2009 and April 2012 – the latest data available. However, these gains are accounted for by two drivers. Firstly, jobs destruction in the construction and retail sectors has led to rapid elimination of less productive – from economic value-added point of view – activities. Secondly, domestic business activity collapse added price deflation to the equation, distorting gains from any real productivity improvements. Thus, our HCI deflated by producer prices has fallen 7.7% over the above period of time, while consumer prices-deflated HCI dropped 12.5%.

Thus, much still remains to be done on the competitiveness front, especially since deflationary pressures in the economy are no longer rampant. The momentum of gains in competitiveness experienced in 2008-2010 has slowed dramatically and is likely to continue declining.

On the one hand, jobs destruction has moderated markedly, while across the economy overall earnings are rising. Wages inflation in several sectors where skills shortages are present, such as ICT and internationally traded services, now complements declining competitiveness of individual tax policies.

Year on year, Q1 2012 saw average weekly earnings rising in Ireland by 0.7%. Weekly earnings in the private sector went up 1.5% annually, while there was an increase of 2.0% in the public sector over the year. Between Q1 2008 and Q1 2012, average weekly earnings fell 3.5% in the private sector and rose 0.8% in the public sector.

The skills crunch is evident both via the earnings inflation within the larger size enterprises and by occupational categories. earnings of Managers, professional and associated professionals rose 5.7% y/y in Q1 2012 and are now 1.1% ahead of where they were in Q1 2009. Earnings for clerical, sales and service employees are up 2.4% y/y and down almost 2% on 2009.

The real problem with our labour costs competitiveness is that with rising tax burdens it is becoming increasingly difficult to import skills and our system of training and education simply cannot deliver on the growing demand for specialist knowledge. The former problem has been repeatedly highlighted by the indigenous exporters. The latter has been a major talking point for the larger MNCs. The latest example of this is PayPal, whose global operations vice-president Louise Phelan warned this week that Ireland needs to focus on language skills, especially in German, Dutch and Nordic languages “to protect our status as a European gateway”.

Sadly, the Government is listening to the latter more than to the indigenous entrepreneurs.

Reforming education system is a long-term process and should not be tailored to the current demand for narrow skills. Instead, it should aim to provide broad and diversified education base, including leading (not obscure) modern languages, proper teaching of core subjects, such as history, philosophy, arts and sciences.

Such reforms will not have a direct impact on the likes of PayPal’s ability to hire people with very narrow skill sets. Which means that Ireland will have to systemically reduce the costs of importing human capital.

To derive real competitive advantage anchored in sustainable jobs creation and productivity growth, we need to focus on creating the right mix of tax incentives, educational supports and immigration regulations to lower the cost of employing highly skilled workers and increase returns to individual investments in education and training. Let us then leave the job of selecting which areas of study should be pursued to those who intend to succeed in the market place.

Box-out

The CMA Global Sovereign Credit Risk Report for the second quarter 2012 shows Ireland improving its ranking position from the 7^th highest risk sovereign debt issuer in the world in Q1 2012 to the 8^th – a gain that is, on the surface, should signal that the country Credit Default Spreads (CDS) were improving compared to its peers. While Ireland’s CDS have indeed improved during the quarter falling below 600 basis points (bps) in the last two days of June for the first time since the first week of May, in effect Ireland ended Q2 2012 pretty much where it started it in terms of CDS levels. What really propelled Irish rankings gain was the return of Greece to the CDS markets few weeks after the country ‘selective default’. In fact, Ireland’s rate of improvement (by 1 notch) is identical to that of Cyprus and marks below average performance for the group of the highest risk sovereigns. Perhaps even more revealing is the comparative between Ireland and Iceland. The latter is ranked 20^th in the risk league table, improving in Q2 2012 by two ranks. At the end of June, Icelandic 5 year CDS were trading at 290 bps, with implied cumulative probability of country default over the 5 years horizon of 22.9%. Ireland’s CDS were trading at 554 bps with implied cumulative probability of default of 38.6%.

Economics 29/01/2010: News from the Knowledge Economy Front

Newsflash from Ireland's Knowledge Economy Front - our troops, led by heroic fighter for Knowledge, Batt O' "Modern Science" Keeffe, are now engaged in an orderly strategic retreat into the Darker Ages. Casualties are so far minimal - 228 scientific journals that Batt could not read.

As was reported by me earlier (here), Ireland's knowledge economics have suffered a fresh wound on our Government's hasty retreat from the world of the 21st century research back to the depth of the 19th century paper-based studies. Here's the latest dispatch:

"You will be aware that the current round of IReL funding came to an end in December 2009. The IUA Librarians' Group is engaged in positive discussions with the HEA and others to secure funding for IReL for 2010 onwards but it is likely that this will be at significantly reduced levels. Due to increasing publisher costs and other factors it is necessary for some IReL resources to be cancelled even if IReL funding were to be maintained at pre-2010 levels. Arising from this, and in the first of what will probably be a number of cancellation processes, the resources listed below will shortly become unavailable through IReL. To download the full list of journals and other resources, please click here."

I would encourage you going to the link and checking out the premier academic titles that will no longer be available on-time, on-demand via electronic libraries.

As one senior research academic commented on this: "What sort of insane gibbering passes for our education and research policy?"

As I was informed by the sources close to the DofEducation - as a compensation for unnecessarily complicated scientific titles lost, the Government will supply our Universities with the latest edition of Gaelic translation of the EU Treaties - after all, our Brussels-based Irish language translators are:

• costing us some 5 times the amount it would take to restore our library services back to the 21st century standard, and
• have no readers for their output anywhere on the planet Earth...
  

Economics 24/01/2010: Knowldge Economy and Irish academia

Charles Larkin and Brian Lucey are having a go at the issues clogging up Irish third level policies in Sunday Business Post today.

Here are few takes and my views on them:

“Hardly a week goes by without a government spokesperson discussing an aspect of the "Smart Economy". In the public and perhaps government mind this is equated with technology. We suggest that a truly "Smart Economy" is not based on technology -- the really smart economy is about flexibility, especially mental flexibility. Developing this should be the primary focus of the higher education sector. We suggest that there exist a set of interlinked issues that make the sector as it stands unable to do this.”

Yes – Knowledge Economy is not about quantity of labs / patents / ICT applications etc. It is about our abilities to create new applications and tools, but more importantly – ability to deploy these in profit earning undertakings (I mean, of course, a broader notion of profit that can, should the individual owners of technology and/or skills elect to do so, include pursuit of non-monetary returns).

“Irish higher education suffers from a severe conflict of mission. It is expected to deliver on innovation, education, social enrichment, economic growth, public health, improved lifestyles and put a chicken in every pot. Though research suggests that all of these and more arise from higher education, the effect varies across individuals and disciplines. The context is further complicated by the regional imperative.”

Also spot on – the conflict between objectives of the universities that are political (and this now also includes science policies) and that are academic is best highlighted by the fact that Irish universities are no longer the hot beds of subversive thoughts. Instead, they are staffed and run by bureaucrats with singular mode of thinking – coalescence, assimilation and homogenization of staff to achieve pleasant singularity of view that can then be monetized via Irish and European grants.

Not a single Irish university today would have seen Keynes offering a job to Hayek. Only senior faculty are allowed, and even then – unwillingly – to express dissenting views. Any junior faculty member peeping their head above the grey mass will be thrown out as soon as their contract comes for a renewal. ‘Does not match strategic direction’ on a rejection letter for a job means that the candidate is simply not ‘slottable’ into the Borg collective of some department.

Can anyone expect any sort of creative excellence out of this?

“Academic freedom is perhaps the simplest and yet most profound step. In essence this would involve the granting of "university" (i.e. degree granting) status to all third and fourth level institutions (inclusive of exceptional legal entities, for example the research-orientated facilities, such as the Royal Irish Academy and the Dublin Institute for Advanced Studies). The announcement by Minister O'Keeffe that he is to abolish the NUI is a first, faltering step towards this... Care needs to be taken that we do not replicate the failures of the UK and Australia in similar reforms. Within the IOT sector new programmes go through a very rigorous evaluation. The issue is that existing programmes need root and branch reform to ensure that they are at the same quality and intellectual standard. With freedom comes responsibility, and the most important responsibility will be to offer educational programmes aligned with the fostering of flexible minds.”

I fully agree – which probably means the authors are now at a risk of being branded ‘extreme’ in their views – freedom must be given to universities and all third level institutions, and they must be self-accountable for their actions. If one chooses to pursue EU and Irish academic handouts through so-called ‘collaborative’ piggy-back-riding on other EU researchers grants, so be it. They will sink in the long run, having reduced themselves to the backwater of unoriginality in thinking and output. If other universities chose to take a bolder position and once again become centres for debate, discussion, challenge and search (breaking away from their current tradition of serving as yes-men to the social regime of singular ideological hue) – they will thrive in the long term as their creativity will allow them to command a premium. The same premium the relative start ups of Stanford, UofChicago, University of California campuses, and so on – having arrived to the university game in the US well after the Ivy League institutions – now command over the majority of previously mighty, now completely mediocre Ivy League institutions.

Last night, RTE was showing the documentary about the Bog Bodies discoveries. In the entire lengthy feature, there was not a single point at which the documentary managed to show any disagreements between numerous Irish and international researchers. Instead, it was a saccharine, sonorous and harmonious blandness of: ‘Yes, I agree with my colleague on this point’ and ‘We all agree with our colleagues on all points’. I am certain that there were probably different views discussed by scientists amongst themselves. But the telling feature of the documentary was just how important consensus is to science’s image in the public. And this is frightening. Not a single major breakthrough discovery in science was delivered by consensual group-think of collaborative researchers.

Back to Brian and Charles’ essay:

“Freedom should be extended to faculty wages. At present, within narrow bands, the best are paid the same as the worst, the most active the same as the least. …Evidence from the US indicates that salary freedom can assist in incentivising staff, but this can arise at the cost of over-reliance on casual and adjunct lecturers at the undergraduate level. …we need to ensure that in the newly freed institutions a motto of "every scholar a teacher, every teacher a scholar" is taken just as seriously.”

I am not sure about the ‘over-reliance on casual and adjunct lecturers’. In my view, and a disclosure is due here – I am adjunct myself, adjunct lecturers are usually self-selected individuals with passion for teaching and with different sets of skills from other researchers and academics. If selected on merit, they can add serious diversity of thought and experiences to the universities. They are also key to linking universities to the real world. What is really sad about Irish universities is that casual lecturers are often selected for a single shot teaching, filling in for absent full time faculty. There is neither coherence, nor open-mindedness as to how adjuncts are selected, appointed and contractually hired.

“Freedom must also of course mean freedom to fail. If a university were unable to deliver on the required educational outcomes then it ultimately would be required to fold or to be subsumed by another more successful university and mechanisms need to be put in place to deal with the fall-out if this happens.”

This really needs no qualification. Superb! I lamented on many occasions the lack of consolidation and closure in the process by which universities that thrive can gain market shares.

“We suggested earlier that a truly smart economy involves the production of flexible thinkers. Such an education must be more than purely discipline-focused at the third level. …We can broadly consider three domains of intellectual activity in universities- humanities, letters and the social sciences (arts), life sciences and natural sciences. Mapping degrees to one of these we suggest that a true university education would involve an annual minimum of 15 per cent engagement with each domain.”

Very well put. Again, on many occasions I raised this concern that we are not producing flexible, creative thinkers, but are focused on producing standardized degree-holders. Like a commodity product, these degree holders are then released into the real world where they go on to form a mass of uncreative, unchallenged and unproductive middle managers and functionaries. The future of Ireland Inc rests with people who can deploy creative and innovative thinking in management (not necessarily in the labs alone, but at all stages of production, marketing, delivery, sales etc). This is what I would call a real ‘knowledge-based’ economy. It is good to see that at least two of my colleagues are now publicly in agreement.

“To adequately provide these postgraduate courses all academic staff in the university would be required to be active researchers, which would be achieved by a rolling tenure system. This would involve the granting of tenure for a prospective 5-7 year period, with biannual reviews.”

Spot on!

“Research activity and research quality are only loosely related but quality requires activity as a prerequisite. To ensure quality of teaching we suggest that again there be biannual reviews of teaching based on best modern practice. This would involve some element of student feedback but would also involve reflective portfolios and classroom observation. To oversee this quality issue we suggest a single evaluation unit within the above suggested ministry.”

Sadly, although I agree with the idea of a review, I am not yet ready to place my trust in Ministry bureaucrats to deliver on such an objective. Fas experience shows that our public officials cannot be entrusted to do this job in an impartial, efficient and effective manner. I would rather suggest use of class numbers, relative to faculty averages, as a partial metric for academic wages. Taken, of course, over a period of time and within comparable disciplines. Students tend to vote with their feet.

“A third element relates to funding. …Separating undergraduate from postgraduate education we suggest allows greater clarity to emerge. Persons seeking to take masters or doctoral qualifications in an area do so for one of two reasons -- a desire to seek entry to an area or profession (investment) or from a personal interest (consumption). There is no obvious reason why the government should fund the latter over other consumptions. In any case the operation of the tax/PRSI system should, in most circumstances, offer a return to society partly via the increased taxable earnings that the better qualified persons achieve, thus capturing the public good element of an increase in, for example, dentists, or telecommunication engineers, or doctors of literature.”

I actually disagree. PRSI and income tax place a surplus taxation burden on individual investment. If a person invests their own funds in education, they should be able to deduct the cost of this investment before they pay tax on capital gains. Secondly, if the society at large already benefits from the social good nature of higher education, then a person having invested in it for private benefit must be reimbursed for society benefit accruing not to themselves, but to others. After all, if my money paid for my PhD and I get a return of x% per annum, while the society gets y% per annum and a tax return on my PhD – is this not a case of double taxation?

This means that, while I fully agree that the state should not provide funding – except that based on merit and inability to pay considerations – for post-graduate studies, I disagree that PRSI/income tax should be viewed as fully functional means for capturing individual gains.