From Department of Public Expenditure, NDP Delivery and Reform
By: Minister for Public Expenditure, NDP Delivery and Reform; Paschal Donohoe
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FUTURE OF IRELAND: HOW OUR UNIVERSITIES CAN CONTRIBUTE TO NATIONAL DEVELOPMENT
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Hello, I am delighted to join you all here today and I’d like to thank Jim Miley and the team at the IUA for the invitation. It’s wonderful to see such a crowd on a Thursday afternoon.
And of course, it’s always wonderful to be back here in Trinity, where I passed a number of great years studying for my undergraduate degree. I’d like to acknowledge Trinity Provost, Professor Linda Doyle, as well as Professor Kirsten Mey from the University of Limerick – I look forward to hearing from both of them a little later.
I know first-hand the value of education - both in how learning can transform our personal outlook on the world and how it can transform our country.
The development of human capital and knowledge is at the heart of our response to the key challenges we face, including economic transformation fuelled by technological change, the transition to a low-carbon society and greater international competition for investment. The higher education and research sector is an essential driver of the development of our society, our economy, our culture and national identity and our place in the world.
The performance and resilience of the sectors in recent years, and in particular during the COVID-19 pandemic, is testament to the hard work and dedication of our universities and their staff.
Let me start by providing an overview of the current performance of our economy.
Despite the difficulties following our emergence from COVID-19 and the continuing impact of the war in Ukraine, our economy is performing well.
The domestic economy has proved to be strong, with Modified Domestic Demand (MDD) growth of 8.2 per cent recorded in 2022. Expectations are that this growth will slow this year, remaining subdued over the coming months, however will return to positive territory later in the year.
Our labour market has also remained remarkably resilient. A record 2.6 million people were in employment in the fourth quarter of 2022, with an unemployment rate of 4.3 per cent recorded in February.
Inflation in Ireland stood at 8 per cent in February: this marks a decline of around 1.5 percentage points from the peak of 9.5 per cent reached last summer.
Nevertheless, risks to the economy remain. These will continue to be monitored closely by my department and the Department of Finance.
I believe the further and higher education sector plays a key role in how we, as a nation and as an economy, respond to these risks and to our national development.
I would like to focus on three areas in talking to you today. They are:
Our labour market is currently undergoing a great deal of change having faced significant disruption in recent years. COVID-19 and the public health restrictions, resulted in huge changes in the labour market, with unemployment rates increasing from 4.8% to 20.4% in the space of a year. At the same time, ongoing pre-COVID issues such as Brexit, as well as new challenges from the war in Ukraine, have created uncertainty for the economy and labour market.
It is critical that we are planning for the workforce of the future. There are fundamental changes happening in our economy with the acceleration of both automation and digitisation as well as the existential and urgent need to address climate change.
Each of these has the potential to transform the world of work and we must ensure we are well positioned for these changes.
It is vitally important that the Irish population has the necessary skills to meet the needs of a changing world, to engage fully in society and to thrive in a global economy. Our competitiveness is hugely driven by our social and human capital – investment in skills and education at all levels is critical.
The Expert Group on Future Skills Needs’ has reported that one in three jobs in Ireland are at high risk of being affected by the adoption of digital technologies. Many low skilled jobs, as well as those in administration and customer service, are at the highest risk of digital displacement.
While these changes will render certain skills and professions obsolete, they also create huge opportunities as new jobs and professions are created. The tertiary education system in Ireland needs to be responsive and flexible in adapting to these changes, to ensure that learners have the necessary skills to succeed and that people are not left behind.
In this regard, Ireland has performed admirably with one of the most highly educated populations within the EU for people less than thirty years of age. But we must continue to build on that work and the universities will be at the centre of our continued investment in skills development.
These changes to our economy have further highlighted the importance of innovation in safeguarding our economic success and ensuring that we are in the best position possible to exploit opportunities.
Our further and higher education and research systems represent a critical national asset which can be an engine for economic growth and support the future success of our citizens. The government has recently set out a strategy for Ireland to become a leading knowledge economy, with recognition internationally in the areas of higher education, research, and innovation.
Investment in research will be a critical driver of innovation providing the foundation for Ireland’s future economic growth and societal wellbeing; research that is grounded in a framework of collaboration between educational institutions and enterprise.
That is why the government published Impact 2030 to set out our strategic vision for both research and development. Impact 2030 is about promoting and supporting excellence in research and innovation and ensuring that we are effective in how we resource the sector through the National Development Plan. It is about maximising the contribution of the sector to our economic, social, cultural and environmental development and sustainability and strengthening those vital relationships between the research and innovation system and enterprise.
Furthermore, the strategy highlights the importance of growing Ireland’s international offering and reputation in the field of excellent research and innovation and the importance of advancing equality, diversity and inclusion in research and innovation.
The importance of these sectors to our economy and society is also reflected in both the number of related commitments contained in the Programme for Government, as well as in the establishment of a dedicated department for the Further Education and Training, Higher Education and Research and Innovation sectors. The establishment of the Department of Further, Higher Education, Research, Innovation and Science represents an ambitious programme of reform in the tertiary sector.
With the establishment of the Department of Further and Higher Education, Research, Innovation and Science, also known as DFHERIS, two key competitive research funders – the soon to be merged Science Foundation Ireland and the Irish Research Council – now come under single departmental responsibility.
Higher education institutions form the vast majority of Ireland’s public research system. With responsibility for competitive research funding now co-located in DFHERIS, this provides a unique opportunity to maximise the impact of research and innovation that is happening every day in our universities, including on this very campus, on our economy, society and environment.
However, the best strategy will fail, if we don’t provide the resources to deliver on it.
Further reflecting the government’s commitment to supporting research and innovation, as well as the educational aspirations of the Irish population, the government has allocated over €4 billion to support the higher and further education, research and innovation sectors this year. This builds on the investment in Budget 2021 and 2022.
We have also invested heavily in our capital infrastructure under the National Development Plan. The plan will see total public investment of €165 billion over the period 2021-2030. In overall terms, over €12 billion will be available this year for vital infrastructure investment or 4.5% of national income, well above the EU average. The capital allocation for DFHERIS will increase from €500 million in 2021 to €652 million in 2025. This is in addition to capital funding under the Shared Island Fund, as well as the Grand Challenges Research Programme, under the National Recovery & Resilience Plan.
This year, DFHERIS will receive an allocation of €595 million in capital funding. This allocation will support research and innovation priorities, as well as infrastructure investment to expand student places in line with demographics and future skills needs, expanding and modernising apprenticeship provision, progressing the digital agenda and support progress towards energy efficiency and decarbonisation targets. It will further support capacity expansion under the Higher Education Strategic Infrastructure Fund (HESIF) and the Public Private Partnership Programme, as well as new higher education projects under the Technological Sector Strategic Projects Fund.
In concluding, I want to thank the Irish University Association for your advocacy and support of Ireland’s public universities. The IUA plays a valuable role in progressing access, teaching, learning, and engagement across the sector.
Creating a sustainable future for our people that embraces digitalisation and addresses the challenges of climate change is key. Education is at the centre of how we build this future, how we discover new ideas, support bigger and better thinking, and have the determination and resilience to manage the risks we will face and seize the opportunities presented.
Ireland’s further and higher education and research system is a strategic national asset that supports a knowledge-based, innovative, creative society and economy across all regions and for all citizens.
I am confident that our continued commitment to the sector will safeguard our future economic prosperity, and in turn our societal well-being.
Thank you.