THE LESSON from severe global recessions of the past is that, as well as weathering the economic storm, countries need to restructure their economies to target the next wave of growth, Taoiseach Brian Cowen claimed yesterday.

Speaking at an event in Leixlip to mark the 20th anniversary of chipmaker Intel in Ireland, Mr Cowen said the Government was one of the first to devise a blueprint for repositioning the economy via its smart economy framework, announced last December.

Mr Cowen said that central to this repositioning plan was an attempt to transform the State into an "innovation island which would be an attractive home for foreign-owned companies and an environment in which indigenous firms could thrive".

He added that "Ireland has had a proud tradition of cultural innovation" for centuries.

"We have long been known for our literature, our theatre, our art. But now we are also known for our innovation in science, technology and business," he said. "We must harness the best asset Ireland has to offer: the talent and ingenuity of our people . . . We must think smarter, work smarter and be smarter, expanding productive capacity, raising knowledge intensity and improving energy efficiency."

During his speech, in which he announced that incoming European commissioner Maire Geoghegan-Quinn had been given the research and innovation portfolio, Mr Cowen said that in the 20 years Intel had been in Ireland it had become part of the fabric of Leixlip through its support of local social and environmental initiatives.

The Taoiseach also praised Intel and its general manager in Ireland, Jim O'Hara, for their role in supporting the Lisbon Treaty in the recent referendum.

The total amount of foreign direct investment in Ireland last year fell to just under [euro]121 billion from [euro]138 billion a year earlier, according to new figures from the Central Statistics Office (CSO).

The CSO attributed the decline to a sharp rise in the amount of loans from foreign-owned subsidiaries to their parent companies overseas.

During 2008, the amount of Irish direct investment in other countries increased from just under [euro]102 billion to [euro]123.3 billion with almost a quarter of that investment going to European firms.

The services sector accounted for 85 per cent of the direct investment stock overseas last year, while it accounted for just over 60 per cent of the direct investment stock in Ireland.

Originally published by CHARLIE TAYLOR.

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