Irish employees "largely wasted" their income during the economic boom, according to a new report from Davy Stockbrokers.
The study says one of the great misconceptions about Ireland is that it is a wealthy country.
Davy's report states that while Ireland climbed the income per captia table year-after-year from 1994 onwards, it never became wealthy because much of the money earnt between the years 2000 and 2008 was "largely wasted".
The study notes that at the end of 2009 Ireland was still ranked eighth in the euro area in terms of wealth but adds that "years of high income must be invested wisely for a country to become wealthy."
The report notes that estimates of the nation's capital stock such as hospitals, telecommunications, schools and transport infrastructure show that Ireland lags behind other small euro zone countries such as Finland or Belgium.
Davy says that the country's infrastructure should be far better than it is today.
It adds that while capital stock soared by 157 per cent in real terms during the boom years but housing accounted for almost two-thirds of increase.
In the eight years to 2008, the net capital stock of the State more than doubled from €222 billion to €477 billion but most of that went into housing, which Davy calls 'an unproductive asset."
Private sector productive capital stock, which excludes housing, public sector and semi-states sectors, rose by only 26 per cent in the eight years covered by the report with under-investment in the communications network and software a particular concern.
According to Davy, the upgrading of road infrastructure was the greatest triumph during the years 2000 to 2008, boosting productivity in the economy.
Nonetheless, while highly critical, the report notes that Ireland still has the second-highest number of graduates in its 25-34 age cohort in the European Union and says the quality of employees has not been diluted.
Davy warns though that Ireland must continue to make investment in education a salient priority.
