We can’t afford to chicken out when quality is at stake
When the first Japanese cars arrived in Britain, the motoring journalists were invited to go down to Southampton docks and pick a car to test at random.
It caused a sensation. British test cars were given a full going-over in the factory before meeting a journalist. Otherwise the door might fall off.
In due course, the Japanese destroyed the UK and US car industries.
The Japanese were obliged to make cars in those countries instead, and chose to do so in the north-east of the former and the south of the latter, which the locals said could not be done.
The point is not about cars, but about management. It was innovative management, even before robots, which made Japanese cars of better quality. It was innovation which allowed continental European manufacturers to respond more effectively to the Japanese threat.
Even before Toyota’s spectacular difficulties, quality difference was no longer a key selling point between Japanese and European models. It may be a close contest as to which takes the lead in electric or other differently fuelled vehicles. Twenty years ago, it would have been no contest.
The effort to stay in the lead has to be unrelenting.
It is not clear that this is well understood in the Republic of Ireland, even as the development of local business moves centre stage in the wake of the credit crash. Who would relate it, for example, to the finding that almost all Irish chickens are contaminated with some kind of bug?
Let me say at once, that properly cooked chicken is perfectly safe. And it seems to be a pretty widespread bug. On average, three-quarters of all EU chickens carry it. The point is that an industry which is significantly worse than the EU average has a problem, and it is not just a marketing problem.
This matters as the search intensifies for a new model of economic development which is less reliant on the innovative skills of foreign companies. One has even seen a return of the old mantra that Ireland should concentrate on its indigenous strengths such as foodstuffs and, um, foodstuffs.
It would certainly help if the foodstuffs industry could improve its management and methods so that its products were consistently superior to the EU average, as well as carrying more value. But only to a certain point.
A sophisticated food industry might export €10bn a year, instead of the current €6bn. At 7% of national income, that leaves the bulk of new native competitive products to come from elsewhere.
The Irish government probably feels that its recent document on the knowledge economy innovation did not get the attention it deserved, and one sympathises to some extent. Politically, the Government cannot offer much — if anything — by way of good news in the short term. It has to point to ways to make things better in the end.
A lot of thought has gone into it but people focus on the short term in a crisis like this. Fine Gael might be entitled to feel even more aggrieved, since its idea of a mighty state holding company investing in hot technologies would create immediate jobs. Yet it has had limited traction, too.
That is probably because few believe in it, and they have good reason to be sceptical. Present levels of Irish management expertise make it unlikely that such an ambitious programme could succeed. There are Irish companies which are globally competitive. Only a handful are large companies and turning even a few of the rest into large companies without losing them to foreign takeovers is a key challenge.
The Irish government and the EU Commission both agree that research and development spending should be 3% of GDP. Yet R&D money has to be invested in an existing process of improvement.
The government repeats that its own investment programme can contribute to this. That has been known for decades, but little use has ever been made of it. Even the document may not be ambitious enough.
Like the Industrial Development Agency strategy, there is a new attempt to mix foreign and local, with collaboration and convergence instead of the traditional, not really successful, idea of supplying the multinationals' needs. The talk is of entrepreneurship and risk-taking, and of making bankruptcy less onerous and shameful.
All of which is correct, but we have not really been short of risk-takers, or even of entrepreneurs. What we have been short of is people who can do things better than the competition. Perhaps the poultry producers might like to show us the way?