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As in other sectors of the economy, the future of manufacturing sector depends on the skills and attributes of those engaged in and attracted to the sector. An important factor in Ireland’s success in developing a large high-tech manufacturing sector has been the availability and quality of people with relevant skills. Ireland is the leading EU country in terms of the number of maths, science and technology (MST) graduates (24.2 MST graduates per 1000 population in the 20 to 29 age group compared to an OECD average of 12.3 per cent in 2003) but, as in other western countries, enrolment in these areas at third level is declining in both relative and absolute terms (NCC, 2007b: 40)12_.

In recent years demand for engineers in Ireland has exceeded domestic supply; demand has been met in part through immigration. Ireland’s ability to sustain its success as a location for high-tech industry and to develop R&D and related activities depends on talented people continuing to pursue engineering and scientific careers. There is scope for more effective use of the talents of women to address skill shortages in these fields13_.

Ongoing innovation is essential for success in the light of rapid change in markets and technology. The enhancement of skills at all levels is essential to enable such innovation.

3.4.7 Networks

The Council and the ESG have previously advocated a network approach in the development of enterprise. Networks may refer to groups of firms that co-operate to achieve some objective or may involve other actors such as third level research institutes, financial institutions or development agencies. The term 'business network' describes arrangements where firms collaborate for specific purposes and where the results of the activity will have some identifiable impact on their business. Networks are a possible response to the challenge of increased global competition and can be a way of small firms overcoming some scale disadvantages.

Trust is required if companies are to co-operate substantively in a business network. Research by Jacobson and Mc Grath (2006) on the software manual printing industry in Dublin suggested that the lack of trust and a culture of secrecy prevented what would have been economically beneficial co-operation. To maintain very high quality, companies needed to invest in expensive high-tech machines. The cost of these machines was greater than any individual company could afford. None of the companies considered co-operating to share the ownership and costs of the

12. At honours degree level (level 8 in the education system) the share of acceptances in courses in the technology fields (engineering, computing, science and construction) fell from 31.7 per cent in 2000 to 22.8 per cent in 2006; in absolute terms there was a decline of around 550 acceptances. This decline occurred despite increases in acceptances for construction courses. Acceptances for engineering courses fell by over 28 per cent and for computing by close to 50 per cent between 2000 and 2006 while the absolute number of acceptances on science courses has been fairly stable over this period. There was also a fall in acceptances in technology courses in both absolute and relative terms at certificate and ordinary degree levels (levels 6 and 7) since 2000 with some recovery in 2006. The percentage of acceptances for all courses was affected by the introduction of a nursing degree; the percentages quoted here have been adjusted to take account of this.

13. Women now constitute 60 per cent of new entrants to university but are under-represented in engineering education and related careers. In 2006/2007 less than one quarter (23 per cent) of entrants to full time undergraduate courses in the category of ‘engineering, manufacturing and technology’ were women. There is not the same gender disparity in science education with women representing 47 per cent of undergraduate entrants to science in 2006/2007 and around one half of science graduates in the same year.

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machines. Such co-operation would obviously not have addressed the subsequent collapse in the market for software manual printing but with co-operation ‘it is certain that they (the printing firms) could have done better during the software boom’ (Jacobson and McGrath, 2006: 143).

It should not be inferred from this experience that Irish companies or even Irish printing companies are not capable of co-operation. Jacobson and Mc Grath show that subsequent experience in the Dublin printing industry was different. Of the companies that survived the collapse of the software manual boom, most returned to their traditional market of printing for the public sector. However, these companies were significantly affected by new EU regulations that required that large printing contracts be subject to tendering on an EU basis. The Dublin printing companies lacked the scale of diversity of skills to compete for large contracts in this new environment. To overcome this they formed a joint venture (business network) called the Printing Consortium of Ireland (PCI) that was capable of bidding effectively for large contracts.

The question arises as to what had changed that now enabled co-operation to take place in this industry. According to Jacobson and Mc Grath, it was the experience of executives from four printing companies in serving together on the executive council of the Irish Printing Federation that changed the dynamic and provided the basis for initial trust. This was reinforced by a two year trail period that preceded the formal establishment of PCI.

This experience confirms the importance of trust but also illustrates that the initial absence of trust is not necessarily a fixed factor. Interaction among business people can build trust that can in turn lead to co-operation among businesses.

A report by InterTradeIreland (Hunt et al., 2005) documented for the first time the extent of networks and clusters across the island of Ireland. This report shows that the experience of the Dublin printing companies is not an isolated example. The report found that networks and clusters14 _{were more widespread than previously} thought with 110 networks and clusters of different kinds identified on the island. Almost 10,000 firms were involved in a network or cluster; this includes training networks promoted by Skillnets. Over two thirds of these were in the category of business networks, i.e., firms that collaborate for specific purposes where the results of the activity will have some identifiable and measureable impact on their business.

Following on from the ESG report, Enterprise Ireland established a pilot programme to support business networks. To date a small number of networks have been supported through this programme.

There is considerable potential for the network approach to play a more significant role in enterprise development policy. The results of the pilot network programme should be evaluated and consideration given to more widespread support for networks in enterprise policy.

14. This study defined clusters as geographically concentrated groups of interconnected companies, educational institutions, local authorities, local development agencies that arise out of linkages or externalities across sectors. This should be distinguished from full clusters in the sense used by Porter of a group of industries that benefit domestically from all of the elements of the Porter diamond being in place (factor conditions, demand conditions, related and supported industries and firm structure, strategy and rivalry).