Productivity growth has been trending down for some time, although the recent surge in knowledge-based capital by multinational enterprises will lift productivity. The diffusion of innovation to smaller, national firms is limited by weak linkages with multinationals. Public support to business R&D should be rebalanced towards direct support.

  • Enhance R&D spending and innovation. Rebalance innovation support towards direct grants. Introduce a Research Technology Organisation focussed on SME needs.
  • Strengthen competition in non-manufacturing sectors. Decrease vertical integration in electricity.
  • Reduce fees and waiting times for licences and permits required to start and operate business. Replace planning fees with recurrent property taxation.
  • Expand the remit of the National Competitiveness Council into a productivity-focussed body. 

Productivity - Ireland

Source: OECD June 2016 Economic Outlook database; OECD, Income Distribution and Poverty database; and OECD Secretariat calculations from EU-SILC – preliminary results.


Key publications

NCC Study on Productivity (2012)

NCC Ireland’s Competitiveness Challenge (2015)

DJEI Enterprise 2025 (2015)

OECD Economic Survey: Ireland (2015)


Institutions icon Productivity - enhancing institutions

The National Competitiveness Council (NCC)

The council was established by Government in 1997. It is an independent, non-statutory body, which monitors national competitiveness and reports to the Taoiseach (Prime Minister) and the Government, through the Minister for Jobs, Enterprise and Innovation on key competitiveness issues facing the Irish economy and offers recommendations on policy actions required to enhance Ireland’s competitive position. Generally, definitions of competitiveness are either focused on (short term) costs (i.e. market share, macro imbalances etc.), or on (medium-to-long term) productivity performance. The competitiveness framework currently applied by the NCC represents a pragmatic approach that balances both definitions of competitiveness.



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