We must go back to basics -- O'Driscoll
The leading Irish businessman who called for a five-year pay freeze has warned that, to create employment, Ireland needs to make things again and get back to basics.
The chief executive of Glen Dimplex Group, Sean O'Driscoll, said we need to create real wealth by making something out of raw materials rather then manipulating money.
What was needed was to create an indigenous export-driven manufacturing sector, executing economic strategies that we have not been successful at in the past.
"This process will not lead to instant success but will be a long-term one, towards rebalancing our economy and making it more sustainable," he said.
Mr O'Driscoll, who called for a five-year wage freeze and more pay cuts for Ireland to regain its competitiveness, said bluntly: "We pay ourselves too much.
"Initially the national wage agreements were necessary but the last two were far too excessive. Ireland was giving pay rises of five per cent per annum and other countries were increasing pay by 2.5 per cent. As a result, Ireland's competitiveness was compromised. A five-year pay freeze will replenish the country and allow us to regain our competitiveness."
He said that during the Celtic Tiger economy we stopped making things.
"We had an economy that was not only unbalanced but unsustainable. We stopped making things."
He added: "Our children wanted to be lawyers and accountants -- they wanted to get rich in a year -- rather than be an engineer; yet in China, 30 per cent of its students are studying engineering."
Mr O'Driscoll told the Lemass International Forum in Dublin that 15 per cent of our GDP was generated by the construction industry, double the sustainable OECD average, while we had no indigenous manufacturing export sector, except for food.
"With the exception of hi-tech and pharmaceuticals, manufacturing has been greatly undervalued in Ireland for far too long -- we are not interested in factory jobs, our focus is on the Smart Economy.
"Our attitude has been, we have the knowledge and the know-how, let someone else do the physical work. Regrettably we all cannot work in the imaginary Smart Economy," he said.
"Do we really want an economy that is based on a relatively low number of highly paid jobs, with mass unemployment for the remainder of our people -- because that is the end game of a strategy that does not value the traditional manufacturing sector."
In Ireland we had neglected our manufacturing base and destroyed many sections of it, as a result of national wage agreements, he added.
However, Siptu general president Jack O'Connor dismissed Mr O'Driscoll's call for a five-year pay freeze while Ibec, the main employer group, backed his call for a long pay pause.
Mr O'Connor insisted a pay freeze would not sort out the country's economic woes, but he would not be drawn on whether he would seek wage rises if the social partners returned to talks. He indicated that unions may be open to negotiations on a new national agreement.
Mr O'Connor said a new national agreement was the only way forward but it was "too premature" to talk about pay rises. Public servants have already signed up to the Croke Park deal, which means a wage freeze until 2014.