How will we know if we are making prgress towards building a Smart Economy

Everyone seems to be in agreement that we need to transition towards a Smart Economy in Ireland. Although there is some vagueness about what is meant by a Smart Economy , there does seem to be a consensus that when we achieve a Smart Economy we will observe the following facts:

1. Our economy will be vibrant (i.e. strong GDP growth and low unemployment).
   
2. Most of our workforce will be working in Jobs which require high skills and involve a high level of innovation.
3. Business leaders in other parts of the world will look to Ireland for new ideas and innovation.

Once we have these success factors agreed, the government should try to measure the impact of every initiative/investment taken to see if it helps us make progress towards achieving them.

The trouble with these success factors is that it difficult enough to measure the overall achievement and virtually impossible to judge the impact of any individual initiative. However, we should not allow the difficulty of accurate measurement to be used as an excuse to abandon all metrics.

What I would propose is that every investment proposal (e.g. to fund a new research group) should include a section where the proposers of the investment would include:

1. Their estimate for the economic impact of making this investment. I know this will be open to some interpretation, but perhaps the forthcoming economic forum in Farmleigh will give us ideas of a standardised way to do this estimation.
2. Some concrete metrics (e.g. Patents filed, scientific papers published, newly established companies etc.) that will give us an early indication that the hoped for economic impact is being eachieved.

It would be in the best interested of the people proposing a new investment to put in a realistic estimate for the economic impact achievable. If they underestimate the impact their proposal will not be likely to get funding, but if they overestimate the impact they risk making it very likely that their project will be cut off after the first review because they won't be able to meet the unrealistc targets they set for themselves.

The other advantage of this approach is that it emphasises the fact that the metrics are not an goal in themselves, but merely an indirect way of estimating whether or not the economic goals are being achieved. If you pick a single metric (e.g. number of patents filed) you will get people focussing on quantity over quality - this is one of the reasons why IBM felt the need to lanuch the Patent Value Initative.

Note: Is shoudl disclose that I work for IBM. While I am proud of the fact that my employer is the organisation has field the biggest number of patents per year for the last number of years, I must admit that I can't say I am proud of the quality and validity of all of the patents filed.