The Principles of the ‘New Competition’: An Empirical Assessment of Ireland's Position

Abstract

An assessment is provided of the extent to which industrial development policy and manufacturing firms in Ireland have embraced the four principles of the ‘New Competition’ outlined by Professor Michael Best. Comparisons with Germany arc made throughout the paper. A functional analysis of industrial development spending in Northern Ireland and the Republic of Ireland suggests that less than a tenth of all expenditure is targeted at improving sectoral competitiveness. Less than 2% is aimed directly at developing collaboration and cooperation between firms, The remainder is counterstrategic, grant aiding the development of individual firms. Although plants in Ireland are found to have more extensive network linkages than those in Germany, these were predominantly between companies which were part of the same group rather than collaborative relationships between independent plants. The limited information available suggests that the production operations of manufacturing plants in Ireland are less flexible than those of German plants. In terms of product development, plants in Ireland had more multifunctional involvement and less functional demarcation than plants in Germany. Plants in Ireland also had similar product-quality aspirations to their German counterparts. Political and operational difficulties are likely to arise in the adoption of a more strategic industrial policy. Firms in Ireland may also be constrained by available human and financial resources in their attempts to embrace the principles of the New Competition.