When the Irish Tiger stopped roaring...

Useful lessons might learned from here the West Midlands in its dealings with plant closures like MG Rover, Peugeot and van maker LDV. As with Dell, task forces were set up to respond to the closures.

Recent reports have highlighted the fact that Ireland's competitiveness has been eroded of late. Dell, for example, is moving its labour intensive assembly operations to Poland, where wages are much lower. This move was no great surprise; the firm had been reviewing its global operations for months, aiming to cut costs by $5bn a year by 2011.

The warning signals went back as far as 2006 and should have been picked up by development agencies. That time could have been used to prepare the wider economy for a Dell downsizing. It doesn't seem that this was done.

Several waves of redundancies at Dell will ultimately see some 2,000 jobs cut out of Dell's 3,000 employees. As with other manufacturing plant closures, there will be knock on effects, with as many as 2,600 jobs lost in the wider Irish economy, including at suppliers such as Flextronics and RR Donnelly. The latter is entirely dependent on Dell and is making 477 workers redundant.

A key problem here is that suppliers such as these had not diversified beyond Dell, so were especially vulnerable to a cut-back.

Things were rather different in the MG Rover case in the West Midlands. Well before the firm shut down, the Regional Development Agency - Advantage West Midlands - was working with suppliers to help them diversify away from MG Rover and into other industries.

This advanced action over five years helped save as many as 12,000 jobs in the local supply chain. Local suppliers found new markets in the auto industry but also other sectors like medical instruments.

There will be other cases like Dell in the future which Irish agencies will need to anticipate and plan for. The failure to act in advance to diversify the regional economy away from over-reliance on a few large, foreign firms like Dell was a key policy 'error', despite the warning signals.

In the UK, the MG Rover case suggests the need for some sort of 'permanent capacity' to deal with restructuring - with local, regional and national agencies using a mix of policies.

It is hoped that workers laid off at Dell will set up in business, as happened after a previous wave of job losses in the IT sector, especially at Digital in Galway. But hoping is not enough. This time round the economic environment is much tougher. Finding any jobs, or successfully setting up in business, will be much harder.

The other key difference is that over a third of Digital workers laid off had a Third Level qualification (equal to degree/diploma level in the UK), whereas with Dell the figure is much lower. Here the European funds will be useful if used intelligently and if there is the capacity to deliver re-training to a higher level.

In the MG Rover case, policy intervention was again critical. By 3 years after the closure, some 60% of ex-workers had engaged in some form of re-training or education. Two thirds took up the offer of free training places offered by local agencies and many others underwent training by their new employers.

The types of assistance and support that people found most helpful were free travel to a training course or job interview; a free place on a training course; being sent on a training course by a new employer; and help with setting up a business.

In other words, agencies need to make sure that employees have the necessary skills to cope as industries change, with access to high quality, flexible education and training programmes, backed up with support for mobility programmes. There are such interventions taking place in the wake of Dell, and these need to be extended.

Indeed Dell is hardly alone, with a wave of redundancies being announced in recent months by foreign affiliates, including those at Amann, Georgia-Pacific, Tecnotree, Teva, Element Six and many more.

As the Irish economy has contracted, it seems that low skilled workers have been the worst affected by the downturn. Their jobs - particularly in construction and low skilled manufacturing - are unlikely to return as the economy recovers.

Education and re-training thus have key roles to play, so that when the economy does improve such people are positioned to come back into sectors where the new jobs will be.

Longer-term, Ireland cannot compete on low-end manufacturing. Yet as we have found, shifting into higher-value added services requires putting in place local policies to help workers and firms move into growth areas.

The MG Rover and West Midlands case suggests that is not easy but requires carefully tailored policies which fit local needs, with a long term plan for how to help the economy restructure.

That was a very different economic climate, of course. In 2005 the UK economy was growing. Nevertheless, lessons from the MG Rover Task Force offer some interesting insights in preparing for, and dealing with redundancies and plant closures.

That success is seen in the fact that three years after the closure some 90% of ex- MG Rover workers who lost their jobs had found new employment.

Lessons can be learned from this by those charged with dealing with Irish layoffs and closures, now that the Tiger has stopped roaring. The same could also be said for regions in Belgium, Germany and possibly Austria, with the Magna takeover of Opel and the prospect of job cuts and plant closures.

Professor David Bailey works at Coventry University Business School and Dr. Helena Lenihan is a Senior Lecturer in Economics at the Kemmy Business School at the University of Limerick, Ireland.