Why can't we make anything on our own?

With increased competition from cheap countries Ireland in particular, and the EU in general, has to focus on innovation and developing new technologies and hold the intellectual property (IP) around that technology.
We do not necessarily have to manufacture the goods here but we have to control the manufacture. Nearly every country that has a stable thriving economy has built their wealth on manufacturing or more specifically the engineering and scientific innovation that leads to that manufacturing. This is true of the USA, Japan, Germany, the UK, China, Holland etc.
We are all aware of this and so is our government. There is loads of funding around and there are loads of ideas coming out of third level so why have we failed so completely to build on the knowledge that foreign companies have brought to this island and used the Celtic tiger money to developed anything close to an indigenous technology/ science/ knowledge driven economy?
I know that there is a small engineering base here and I know that we have had some success in the food, software and telecoms industry but for the most part it's been small scale stuff. The one industry that is sustainable in the EU is health care. This is because of the regulated nature of the sector, the fact that most of the purchasing is state funded, the requirement to tie in with doctors and Universities and the size of the local market (the EU is the second biggest consumer of healthcare products after the USA, Germany on it's own is third in the world). Taken on a national scale we have failed utterly to harness this market. The fact that there are a few companies like Trinity Biotech and Creganna Medical Devices doesn't chance this.
So why are we no good at turning innovation into world class companies? Why is it that the few true world beating companies we have grew up in the 70's and 80's?
And most importantly what can we do to change it?

Excellent point, well made.

I think even David McWilliams touched on this recently. As I recall, his angle was that the monied people who, in different times, would open new production plants had been taking the much easier route to further riches by investing in property.
Maybe whilst there is a period of re-adjustment in the property market, manufacturing may become a more attractive prospect. Whether that manufacturing takes place in Ireland is very debatable though. And how much government backing would there be for ventures which wouldn't create much in the way of employment here?
I think Ireland has already pretty much priced itself out of some markets with regard to goods made here. If I was a bright young fella starting out and full of ideas, I'd be looking to place myself with a multi-national & preparing myself for a career which could place me in many different parts of the world as economies change.
I'd be interested to read others' opinions as to how the country as a whole can benefit from the skills we have. Can our innovations be put into practice in other countries & generate wealth that, in turn, generates further innovation? Is there a market for a country that wishes to sell itself as a creator of ideas rather than goods? Are we sure our skills are unique enough to make that a realistic prospect?

I haven't really answered any of Purple's questions, but I do share his concerns.

Three words. Science Foundation Ireland.

Quite simply - it is all about return on capital - private investors have been on a one-way bet on property for over a decade now (Dublin residential up 500% since 1996 - on 90% leverage of capital invested - that is really 5000% yield in ten years - in the face of this maths - no-one invests anymore in private sector manufacturing / technology ventures.

As for the public investment - look at the ruling party in this period - their only contribution is to feed off all this madness and encourage it - bloated inefficient civil service and a bob the builder economy built on huge debt.

Its quite sad really when you look at it all.

room305 said:

Three words. Science Foundation Ireland.

Click to expand...

What about them?
I don't see them setting the world on fire.
Sorry to be cynical but we have to look at the whole thing a lot more creatively if we are really going to have a future. Enterprise Ireland and the Science foundation are all very well meaning but it's all on a small scale with very little risk being absorbed by government and loads of red tape before anything happens. Most of the funding is from the EU so it's very hard to streamline or fast track funding. Anyway, if anything half viable gets commercialised it is bought up and shipped out.
Look at how Japan developed in the 50’s and 60’s and how South Korea developed in the 80’s. They did it with massive government backed loans, in Japans case with many of them just being written off (e.g. Sony). We are constrained from doing this by EU competition legislation but we have to find some way of getting things moving.
The irony is that if Irish company A in Meath wanted to expand they would get bugger all financial support (max 12.5%) but if American multinational B wanted to set up in direct competition beside them the IDA would build them a factory and give them tax breaks for the first god knows how many years. Can someone tell me how that makes sense?

It is frustrating to think that foreign investment seems to be viewed as more valuable than inward investment. I assume this is partially historical and based on the presumption that locals will invest locally so need no additional incentive whereas we are competing for foreign investment with other countries. But can we truly make that assumption any more? We are now investing abroad ourselves in response to similar incentives and market realities, is it now prudent for us to view local investment as being as important to attract as foreign investment?