Irish companies spent €240m on R&D this year


21 Dec 2004

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Irish firms are targeting new export sales of €1bn in 2005, Enterprise Ireland (EI) revealed in its end-of-year statement. The state agency revealed that some €240m was spent by Irish firms on research and development (R&D) during 2004, of which €80m was given in support by EI.

During 2004, EI-supported companies created 11,898 new jobs and reported a 60pc reduction in net job losses to 1,317. The state agency reported that Irish companies delivered a solid performance in 2004, building on the growth revival experienced in the latter part of 2003 and preliminary indications are that new export sales will grow by €1bn.

Indigenous companies are reporting a steady increase in the volume of new business orders and a greater demand for sophisticated new products and services is being evidenced by company R&D expenditure of €240m, of which €80m was supplied by EI, up from the €65m supplied in 2003. Overall, EI-supported companies employ 148,000 people amounting to a payroll of €4.7bn and a resultant economic expenditure of €16.6bn.

EI chief executive Frank Ryan commented: “This is a very encouraging trend. R&D and the commercial output of applied research are absolutes in the relentless drive by Irish companies to continue to compete for and win international sales. Creativity, agility and flexibility in responding to customer requirements are deeply embedded in the most successful of Irish companies. These traits are increasingly valued by customers worldwide and are, therefore, critical to Irish companies as they continue to win new business.

“More of our new start-up companies with high export growth potential are emerging from the creation of new ideas, new technologies and new content driven by market demand. This year 65 such companies were established with our support in areas as diverse as biotechnology, photonics, medical devices, functional foods, ICT and entertainment.”

A recent review of EI start-ups, completed this year, recorded that 76pc of the 470 companies started since the early Nineties are actively trading today. “They are achieving sales of almost €1bn and employ 7500 people. The pipeline for start-up exporting companies for next year is very strong,” he said.

Ryan welcomed the restoration of the Business Expansion Scheme and the Seed Capital Scheme and cited them as vital to the development and growth of young companies. “Growth strategies by Irish companies have shifted significantly from a proposition that marketing overseas will win sales to one where true internationalisation, embedding and partnering in the marketplace is the future.

“More of our companies are establishing a market presence to better meet their customer needs. This gives them direct and immediate access to customer intelligence — a major competitive advantage. This year EI assisted 140 companies to establish a market presence in major export markets worldwide,” Ryan said.

Looking forward to 2005, Ryan said that there are still challenges facing Irish companies, despite claims of a Tiger II economy. “Most economic commentators are predicting moderate worldwide growth in 2005 against a background of a strengthening euro against the dollar and energy costs. Notwithstanding these challenges client company performance this year is to be commended.

“Confidence remains high and the substantial increase in R&D expenditure provides a solid foundation on which to build over the next 12 months,” Ryan said.

By John Kennedy