Mr. Neil McDonnell:

ISME is grateful for the opportunity to make a submission to the joint committee on the future of STEM in Irish education. Ireland is now nominally one of the wealthiest countries in the world, which is a position we have not reached by accident. The quality of our education system has played a significant role in achieving it. While the OECD's economic survey for 2020 noted high performance levels of Irish school leavers relative to the OECD average, it also noted that this attainment level declines among older age cohorts. It noted that "measured literacy skills of Irish adults remained close to the OECD average, and numeracy and problem-solving skills were significantly lower for all age cohorts". Similarly, the OECD's economic survey for 2022 identifies deficiencies in enterprise resource planning and customer relationship management, CRM. It also notes difficulties in filling job vacancies in life sciences, information technology, construction, health and financial activities. We believe at least some of these are a result of deficiencies in STEM education.

The Central Statistics Office, CSO, notes a large divergence in labour productivity between foreign direct investment, FDI, and domestic firms, with a gross value added, GVA, per hour worked of €50.70 in the domestic economy, versus €95.80 in the total economy and €484.80 in the foreign sector. While we acknowledge there are significant statistical and reporting issues around this divergence, the nature of the high value-added services provided by much of our FDI sector must be recognised. We should aspire to encouraging more of our domestic firms to scale this productivity ladder and STEM will be key in achieving this.

Indigenous enterprise will not close the productivity gap with foreign firms without better STEM performance, especially among the management cohort. While there is a regular focus on employee skills, ISME has identified significant skills shortfalls among SME owners and managers as being material in explaining at least part of the productivity gap. For this reason, we continue to recommend the adoption of the blue cert as a basic qualification for all small business owners and managers.

The OECD's economy survey for 2022 identifies the need for greater training in digitisation, especially among lower-income groups, and more focused education in green and digital skills in our higher education system. The green and digital transition targets will not be met without improved STEM performance among Irish adults entering the workforce.

While Ireland's performance at secondary and tertiary levels is good by international comparison, this comes at the expense of a significant degree of overeducation relative to job requirements. This is estimated by the Economic and Social Research Institute, ESRI, and the Institute of Labor Economics as being at 30% in Ireland.

On its own that would not be problematic, but we see our academic education system outperforming while vocational and lifelong learning underperform. This should be at the forefront of the advancement of STEM in the Irish education system in future. I am happy to take any questions the committee has.