Five-fold increase in Government’s spend on R&D

9 Nov 2004

Ireland is now achieving a five-fold increase in investment in technology, innovation and scientific research over previous years, Micheál Martin TD, Minister for Enterprise, Trade and Employment, told a major gathering of business, academic and scientific leaders in Dublin today. Martin said that some €2.5bn will be spent in the years between 2000 and 2006, compared with €0.5m between 1994 and 1999.

Martin said: “The ability to create and exploit knowledge is now an integral feature of every successful advanced economy. Ireland has recently placed research and development (R&D) at the heart of its economic development strategy.

“In the current National Development Plan, we are achieving a five-fold increase in investment in technology, innovation and scientific research. Spending of €2.5bn is planned for the period 2000 to 2006, compared with €0.5bn over the period 1994 to 1999. This commitment is aimed at building the skills needed for a modern knowledge-based economy and strengthening Ireland’s research base.”

Also present at today’s IBEC and American Chamber of Commerce conference was the head of corporate banking at AIB, Jerry McCrohan, who said: “There is no reason why Ireland could not in the future become the European hub for collaboration and research.” To make this happen, he warned, there is continued need for governmental, private sector and academic co-operation around R&D and product innovation.

“In Ireland we have unrivalled brand names in the world of academia that are renowned and recognised across the globe. We have a stable of multinational names that is the envy of our European neighbours. We also have a Government that is clearly committed to keeping R&D as a key strategic priority as evidenced by the innovative tax breaks introduced this year. Continued government support is undoubtedly going to be a key deciding factor around Ireland becoming a hub for collaboration and knowledge sharing,” said McCrohan.

“We have in Ireland a good history of collaboration and innovation. Who would have ever thought that the International Financial Services Centre could become a reality in Ireland or that Ireland would be the world’s largest exporter of software, or that we have for all intents and purposes reached full employment,” he added.

McCrohan also spoke of the need for industry to become more involved in the Irish education system, thereby encouraging innovation and entrepreneurship at a young age. “Industry in partnership with the Department of Education must bring itself into every Irish classroom in a planned and sustained way. This is the only way to create future intellectual capital and plant the seeds of innovation in the minds of our future workforce.

“To become a European hub for collaboration the Government does however need to ensure that matters relating to research and development and innovation be of top priority. The funding of R&D and a focus on science and engineering education is imperative to this success and the long-term development of the Irish economy,” he said.

“Whilst the establishment of Science Foundation Ireland has without doubt transformed the research culture and capability of Irish universities more can still be done. As a society we need to be vigilant that critical funds ear marked by government for this type of activity are not diluted or squeezed by budget deficit or any shortfall considerations that may arise,” he added.

McCrohan also spoke about the banking sector and how innovation and collaboration have traditionally been overshadowed within the sector by organisational functions such as human resources and finance. “As a sector we must resist the temptation to allow funding originally earmarked for innovation and R&D deferred, cancelled or altered as a consequence of other ‘short term’ business priorities that can prevail internally. It’s crucial the banking sector continues to innovate and invest in R&D both for the good of the organisation and our customers.”

Also speaking at the conference was Ciaran Ennis, president of the American Chamber of Commerce, who said: “The will exists to achieve the challenging target of increased R&D spend from 1.4pc to 2.75pc of GNP by 2010 but we risk failing in our ambition if we do not develop the blueprint which will allow the commercialisation of the burgeoning research and development infrastructure which has been created in recent years.

“We must develop this new model of collaboration – one which will see the third-level institutions and industry work hand in glove on the research, development and commercialisation process, if we are to maintain our current strong base of US and other overseas owned companies in Ireland, attract new investment and continue the development of a strong base of Irish high tech companies. Success in this will be fundamental to our next phase of growth.”

Brendan Butler, director of enterprise at IBEC, said: “At 0.88pc of GDP, Ireland’s business expenditure on R&D is only 73pc of the EU average and 57pc of the OECD average. As an industry, we must also take ‘ownership’ and look at how we can increase our investment in R&D, working with other companies as well as with our research institutions. The pursuit of knowledge is worthy in itself, but it does not ultimately pay the bills or develop a competitive advantage if it is not properly harnessed.”

By John Kennedy