Comment: Laying the foundations on Ireland’s R&D future

31 Aug 2005

This summer must surely go on record as one of the busiest ever in the telecoms sector. The moves made by Chorus parent UGC to buy NTL Ireland in May were followed by the frenzy surrounding the sale of Meteor to Eircom, sparking the return of the incumbent to the mobile market. Since then, the long-awaited arrival of new mobile operator 3 to the Irish market has added some spice to the news pages.

However, more astute observers would have recognised the laying of another more subtle pattern connected with Ireland’s industrial future over the traditionally lazy days of summer. This was the weaving of an intricate pattern of supports, investments and attitudes essential to ensuring Ireland can muscle its way to the top of the international league tables of research and development (R&D).

More than a month ago, Forfás said Ireland would have to pursue its status in the knowledge economy with vigour. Chief executive Martin Cronin warned: “In the future, Ireland will increasingly have to compete on the basis of its ability to manage the development, efficient production and sale of high-value products and services tailored to meet global market demand.

“Firms with an eye on long-term growth in international markets will ensure they have clear plans to introduce higher-value products and services, improve operating efficiency and build and leverage international sales and marketing capability,” he said.

The good news, Cronin revealed, is that gross expenditure on R&D across the Irish economy is estimated to have risen to €1.7bn in 2004, up 10.3pc on 2003. Business expenditure on R&D rose by 19.5pc between 2001 and 2003, outpacing the 15pc increase in the previous two-year period. R&D in the higher education sector increased by 35pc to €322m from €238m in 2000. State expenditure on science and technology increased to €2bn in 2004 from €1.8bn in 2003, a rise of 9.6pc. Government budget outlays on R&D rose to €591m in 2004, up 23pc on the previous year.

Cronin said a key focus of the development agencies would be policies to maximise knowledge transfer between university research programmes and enterprise,
particularly SMEs, ensuring national investment in R&D translates into new product, process and service opportunities.

Within three weeks of the Forfás figures, IDA Ireland and Minister for Enterprise, Trade and Employment Micheál Martin TD announced a €53.25m investment by five blue-chip companies in R&D, traversing the world’s of IT, pharmaceuticals and financial services. These included: Xilinx locating a facility that normally would have been based in Silicon Valley in Dublin due to the strong performance of its Irish operations; Bristol-Meyers Squibb entering a collaborative research programme with Dublin City University and NUI Galway; Pfizer investing €20m to establish a high-containment facility in Cork; Citigroup investing €10m at its International Financial Services Centre operation in Dublin to establish an R&D centre; and Genzyme corporation investing €6.1m in a process R&D centre in Waterford.

Highly skilled and educated people, many at postgraduate and doctoral level, are required for such operations and these five companies are confident of finding them here. “The Ireland of the future will be one where education, skills and research are the defining advantages in an increasingly competitive world,” Minister Martin said at the time.

In recent weeks computer giant Dell, which already employs in excess of 4,000 people in Ireland, said it has chosen Ireland as a site for a new communications and network product development centre, employing 28 people with the scope to grow this to 50 people within four years.

This was followed within days by news that Dublin-based campus technology firm ChangingWorlds is to create at least 10 new highly skilled positions at a new R&D lab at the NovaUCD technology transfer centre.

R&D efforts by companies North and South working together on a joint research product are to be offered up to €200k each through an innovative cross border R&D scheme by InterTradeIreland. Under a pilot initiative, known as Innova, the fund will support industrial research for blue-skies opportunities and pre-competitive development activities for near-to-market opportunities.

Maximum grant aid rates, which comply with EU R&D guidelines, will vary between 40pc and 50pc of eligible expenditure depending on the size of the company, its location and the type of research being undertaken.

This has not been a quiet summer by any means and to accuse industry or government to be sitting on their hands would be wrong. However, as we enter the autumn and winter months, work still needs to be done in encouraging broader uptake of R&D by indigenous companies and central to this would be a more accessible form of allowing firms to avail of R&D tax credits.

A big thumbs up to R&D. Pictured at Government Buildings were (from left) Paul McCambridge, corporate vice-president and managing director of Xilinx Ireland; Seán Dorgan, CEO of IDA Ireland; Aidan Brady, country corporate officer of Citigroup; Minister for Enterprise, Trade and Employment Micheál Martin TD; Dr Paul Duffy, site leader Pfizer Ringaskiddy; Professor Terry Smith, NUI Galway/Bristol-Myers Squibb collaboration; and Dominic Carolan, general manager of Genzyme

By John Kennedy