Business R&D spend to drive knowledge economy

9 Aug 2004

By 2010 Ireland will be at the forefront of research and development (R&D) and the use of new technology for economic and social progress if an action plan presented to the Government by an Inter Departmental Steering Group is acted upon. However, to do so will mean a two-thirds increase in R&D spend, primarily from the business community.

“Ireland by 2010 will be internationally renowned for the excellence of its research and will be at the forefront in generating and using new knowledge for economic and social progress, within an innovation driven culture,” the report said.

The report was presented to the Inter Departmental Committee on Science, Technology and Innovation by a high ranking steering group chaired by Ned Costello, assistant secretary general in the Science, Technology and Intellectual Property Division of the Department of Enterprise, Trade and Employment.

The steering group was established by Tánaiste Mary Harney in response to the target agreed by heads of state at Barcelona in 2002 to increase expenditure on R&D in the EU from 1.9pc of GDP to 3pc in 2010, with two-thirds of the increase to come from the business sector.

Ireland’s current overall investment in R&D is currently below the EU average at just 1.4pc of GDP.

A two-third increase by business in R&D would see an increase from €917m in 2001 (0.9pc of GDP) to €2.5bn or 1.7pc of GDP.

This would mean doubling the number of indigenous companies with minimum scale R&D activity (€100,000) from 525 companies in 2001 to 1,050 in 2010.

Companies performing significant R&D (in excess of €2m) should increase from 26 companies currently to 100 by 2010.

In terms of foreign companies performing significant R&D, these should increase from 47 in 2001 to 150 in 2010.

R&D performance in the Irish higher education and public sectors should increase from €422m in 2001 to €1.1bn in 2010.

To reach these significant milestones, a strong culture supportive of risk-taking, invention and entrepreneurship should be encouraged to develop alongside crucial factors such as more seed capital for early stage ventures, a less bureaucratic approach to R&D and encourage companies to support budgets for R&D in their business.

By John Kennedy