Deirdre Clune (Cork South Central, Fine Gael)

We, on this side of the House, have been accused, as have economists and media commentators, of being prophets of doom. One of the major prophets of doom was the Minister for Finance, Deputy Brian Lenihan, as seen recently on national television talking about the construction industry coming to a shuddering halt and his misfortune in being appointed Minister for Finance at this time. That certainly sent forth a negative message and indicated the Minister's own lack of confidence in his abilities, in not being happy to be in that position. I hope to see some leadership from Government and positive measures to indicate it knows how we are going to get through the economic crisis. The announcement made yesterday comprised a few issues cobbled together that really had little meaning, and did not instil confidence as regards the Government steering us out of this downturn in the economy.

I would not give it any credit for foregoing the ministerial rises, since that was well flagged. Perhaps it had not been intended to announce it yesterday, but no doubt it was to be a bargaining chip in the social partnership talks. It was not a surprise, in any event, and the Government has missed the boat as regards gaining any credibility in that regard. It should have shown leadership and done this a long time ago.

On today's debate, I wish to highlight some points in an ESRI report that appeared in the last couple of weeks which did not get much media attention. It was a special report the ESRI produced on Ireland's innovation performance from 1991 to 2005. I am sorry the Minister of State with responsibility for innovation has left the House. Innovation activity, the report stated, is particularly vulnerable to economic conditions, especially to economic downturn. This was evidenced in the downturn in the hi-tech sector between 2002-03, when there was a sharp fall in the level of innovation. If we have been over-dependent on the housing and construction sector, the way forward is through innovation and the knowledge economy, encouraging people to turn their knowledge into creative and economic activity. We must continue to support innovation and ensure Government policies are working. One of the report's conclusions is that policy is not transferring into significant innovation increases among companies. If we are to develop a knowledge economy, create innovation and encourage creativity, we need to ensure we have policies that work so we can encourage universities and other third level institutions to enter into collaborative arrangements with business. There are many issues in the whole area of innovation and policies that need to be implemented to support research and development in creating innovative processes and products. It is the key to the future of the economy and it is very important the policies are in place to ensure it happens.

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