Comment: Driving forward R&D

25 Aug 2004

By 2010 Ireland could be at the forefront of research and development (R&D) and the use of new technology for economic and social progress – that’s if an action plan presented to the Government by an interdepartmental steering group is acted upon. To make this lofty goal happen, the steering group says the country will need to witness 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 screamed confidently.

The report was presented to the Interdepartmental 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 TD 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.

While topping Europe in terms of R&D may be a desirable goal similar to the country’s leadership in software production, the reality is that Ireland is woefully behind most European countries in terms of R&D.

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 (€100K) 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.

The recommendations of the interdepartmental steering group echoed a similar sentiment communicated during an interview I had recently with Dr Alastair Glass, the director of the information and communications technology (ICT) division at ICT Ireland.

Dr Glass argued if Ireland is to take its place in the front rank of global R&D centres it should set a target of having industrial R&D account for 2pc of GNP while Government-funded R&D should account for 1pc of GNP.

Dr Glass was speaking in the aftermath of the recent historic €69m investment by Lucent Technologies’ subsidiary Bell Labs — one of the world’s most eminent industrial R&D players.

Glass said that the current government investment target of €646m in establishing a strong scientific research community up to 2006 by Science Foundation Ireland (SFI) should help the country reach the 1pc goal for government-funded R&D.

Glass argued that securing Bell Labs will act as a catalyst for growing an industrial R&D base in Ireland and will set the template for future industrial R&D projects, which will involve close collaboration between academic institutions and manufacturing companies.

“From SFI’s standpoint, generating an industrial R&D community is very important as it will mean we will achieve value from the initial investments we are making. Of all the R&D labs in the world, Bell Labs is top of the list and in terms of getting recognition for Ireland in the R&D world, it is the equivalent of securing Intel in the nineties. We believe that it will act as an impetus to encourage other companies with manufacturing in Ireland to leverage their investment by looking to establish R&D operations in Ireland.”

While much has been made of moving Ireland up the value chain and away from traditional manufacturing, Glass argues that manufacturing is still vital to the country. “It is crucial that Ireland retains manufacturing. The era of manufacturing has not passed. Certainly other industries are coming along, but a foothold in this area is vital.

“For example, Ireland was an early player in the software industry but now the lower end of that industry is going to locations such as India. But that doesn’t exactly mean the end of software development and manufacturing in Ireland, it just means we have to move to the higher end of the scale,” he said.

Glass also believes that the arrival of Bell Labs in Ireland will have serious implications for Ireland’s community of scientists and engineers. “It will help with the supply of talented professionals. Scientists always wonder where the best scientists are. Investments such as that of Bell always attract the interest of other scientists. This was the case of Germany in the thirties and the US in the fifties and sixties.”

But Glass is anxious that Ireland keeps the momentum in carving out a new industrial and scientific research centre of world renown. “The best impact that we can achieve is to realise a target for industrial R&D to be worth 2pc of GNP and for government-funded R&D to be 1pc of GNP.

“While the Government can only do so much, it is vital that industrial R&D accounts for the majority of research activities. This is particularly the case in the US where industry works very closely with academia. It is vital that we strive to do the same in Ireland,” Glass concluded.

By John Kennedy