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Will Irish eyes be smiling?

Today, we welcome our Celtic cousins from Ireland to what promises to be a fantastic rugby match and an occasion for all of us to savour, whatever the result.

Like long-lost cousins, the tens of thousands of fans coming over to Cardiff will be given a welcome they will never forget.

Old acquaintances will be renewed and new friendships made as our teams battle it out for the Triple Crown and the Six Nations Championship, although it is likely that the Irish economy will not be the most popular topic of conversation over a pint or two of Guinness this weekend.

Despite the success of the previous 15 years when Ireland surpassed the economic growth rates of the rest of Europe and attracted the presence of a range of global giants such as Microsoft, Google and Intel, the recent recession has hit the Emerald Isle hardest of all during the past six months.

On St Patrick’s Day, the Irish Finance Minister warned that the effects of a domestic housing crisis feeding into the banking system had resulted in a situation where “Ireland is facing a very difficult recession, somewhat worse than the rest of the world”.

Indeed, he predicted that the Irish economy could contract by up to 6.5% in 2009 and that unemployment would rise to 12%. In addition, tax revenues are down 28% on what they were two years ago and government spending is likely to be 49% of gross national product as compared to 55% in the mid-1980s when Ireland was one of the poorest nations in Europe.

The question, of course, is how the Irish get themselves out of this hole.

According to the government think-tank, the National Economic and Social Council (NESC), they can take comfort from the fact that other small countries, such as Sweden, Denmark, Finland and the Netherlands, have suffered similar problems in the past but went on to recover quickly, thanks mainly to a commitment to innovation, radical reform of the public sector and social solidarity.

As every Welsh rugby fan knows, the battling spirit of the Irish, especially when they seem down and out, is what gives them unexpected victories and it is something the Welsh team must look out for on the pitch today.

Given this, it should be no surprise that the Irish Government, rather than waiting for the recession to take its course, has come out fighting with an ambitious plan to transform innovation within their nation and put them into a position for sustained growth when the recovery starts.

For example, in an announcement last week, the Irish Government announced that it would establish an Innovation Taskforce which will examine options to increase levels of innovation and the rates of commercialisation of research and development in Ireland, accelerating the growth and scale-up of indigenous enterprise and attracting new knowledge-intensive direct investment.

It will also provide 350 million euro to create a new Innovation Academy to help develop the new type of business-ready and innovative graduate to ensure Ireland remains an attractive destination for multinational investment and, more importantly, to turn academic ideas into new businesses.

It is estimated that this new project could create 40,000 highly paid jobs within the economy.

It is an audacious move and, critically for the Irish economy, sends a signal to the international business community that Ireland is open for business and that it aims to develop a strong culture of innovation and build on the entrepreneurial skills of its biggest assets, its highly educated workforce.

As the global recovery starts next year, having such an infrastructure in place could mean that large multinational companies will again look to Ireland as their base for Europe, especially in key areas such as life sciences and ICT.

Like all Welshmen, I am hoping that the Irish will be valiantly defeated in today’s attempt to take the championship away from our rugby team.

However, in the wider playing fields of the world economy, I am sure many of you will join me in wishing the Irish every success with their bold gamble to rejuvenate the Celtic Tiger into an entrepreneurial and innovative nation.

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