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JAMES FLANIGAN

Ireland Offers a Lesson in Value of an Education

November 11, 1986|JAMES FLANIGAN

If you subscribe to Money or Vogue, Playboy or Glamour or scores of other magazines, you may have noticed that changes of address and subscription inquiries are sent to a post office box in Boulder, Colo. That's the headquarters of NeoData Services, a subsidiary of Dun & Bradstreet that handles subscription inquiries for magazines at 50 cents per subscriber name per year.

But your letters don't stop at Boulder. Rather they are bundled up, put on a United Airlines flight to New York and then transferred to Irish International Airlines and flown to Limerick in Ireland. There, a staff of 500 Irish young people enter the address changes and subscriber queries into minicomputers, make the corrections and write the replies, and ship the whole lot electronically back to NeoData in Boulder. The workday ends in Ireland while it is only mid-morning in Boulder, seven hours' time difference away.

Welcome to the assembly line of the information age. That computerized clerks in Ireland are responding to your magazine inquiries is a demonstration of the new world of international trade in services. And the fact that the work is more mentally demanding than the old manufacturing assembly lines demonstrates more than ever that if a society is to prepare its young people for the jobs of tomorrow, it must push them at least through high school.

Attracting Investment

Ireland's advantages in simple data processing are the English language and a good level of secondary education for all its people. But beyond that, the tiny country has compiled a sophisticated record of attracting investment and employment by supporting education and technical training. It could stand as an object lesson for the American communities from Rust Belt to Oil Patch now seeking to diversify their economies.

The role of education is paid a lot of lip service in such economic development efforts. But paying taxes to improve the schools is often something else again. Mark White, the governor of Texas who raised taxes partly to pay for improved education, was defeated in last Tuesday's election. The attitude seems to be that since education is such a long-term solution to economic ills, improving it can always wait till next year.

Poorer places have no such leeway. Little Ireland--3.6 million people, 50% of them under 25 and 17% of the work force unemployed--has to use its wits to create jobs for the 20,000 youngsters coming into the labor force annually. Yet it is not so poor that it can compete with Taiwan or Korea for manufacturing assembly jobs. Its people make incomes closer to $8,000 a year than $2,000.

Growth in Services

What do you do if you're Ireland? You think the situation through as Jerry Kelly did. Kelly is senior vice president-international services for the Industrial Development Authority (IDA), which is charged with attracting foreign investment to Ireland.

"International trade in services is growing 16% a year, while overall world trade is growing only 4%," said Kelly in his small office in Dublin. "So the direction we had to go in was pretty clear. But what tradable services does an economy like ours have? We cannot build an international trade in hairdressing or dry cleaning. So we started looking, in the 1970s, at electronics and data processing and software development."

But first they had to change Irish higher education. Ireland's traditional universities, although superb in Latin and Greek, didn't prepare its people for the technological world. So several technical colleges, called National Institutes of Higher Education, were created to teach a curriculum more in tune with modern industry. The success of the NIHEs, in turn, has spurred the traditional universities to pay more attention to technology.

The educational effort has paid off in more than magazine data-entry jobs, which pay less than $10,000 a year. Ireland, which over the years has attracted electronics and computer manufacturing investment from more than 300 companies, is now developing computer software for dozens of international companies, including IBM. And the ambition of Padraic White, the IDA's managing director, is for Ireland to handle computer chores--to "serve as the back office," as he puts it--for the insurance industry on the U.S. East Coast. His office hopes to announce a software development tie-up with a Hartford, Conn., insurance giant before the end of this year.

The economics are both simple and profound. In New England, skilled software developers command salaries of $50,000 a year, when you can get them in a labor-short market. In Ireland, they make about $25,000 a year, and they are available because Ireland is a country that has always had more people than jobs. But they are skilled because it is also a country that invested in education as a way to create employment for its people.

The lessons for U.S. communities trying to diversify their economies seem obvious. If unprepossessing Ireland, with all its problems, can carve a presence in international services, then surely U.S. regions can. And, second, maybe the payoff from an investment in education isn't so long term after all.

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