45126-Invest. Qual-No111

Investment in Quality1.4.1 An Interpretation of Ireland’s EconomyIn its reports since the mid-1980s, the Council has formulated itsadvice to government on the basis of a number of empiricalobservations and analytical principles. These included:● The importance of competitiveness in a small open economy;● The limited role of demand management in sustainingemployment and output in Ireland;● The role of European integration in facilitating the developmentof a small peripheral region;● The importance of specialisation in high-value, high-growth,sectors in maximising the gains from trade and integration;● That technological development can make it possible for certaincountries or regions to rapidly improve their position in theinternational economic system;● The validity of European regional policy and the importance ofusing Structural Funds to reduce the disadvantages ofperipherality;● Most of the policies that affect national prosperity are supplyside.These must produce flexibility. Successful supply-sidepolicies, directed towards innovation and competitiveness,depend on a high level of social cohesion and co-operation;● The validity of development policy in building first the capacityand then the capability of the export sector;● The damaging long-run effect of emigration and the importanceof increasing population and employment in Ireland;● The inter-dependence between the traded and non-tradedsectors, and the importance of an efficient non-traded sector;● The interdependence between the economic and the politicaland the need for a consistent set of macroeconomic, distributionaland structural policies based on a shared understanding;and● The importance of regional networking in strengtheningcompetitive advantage.44