Investment structure for industry ’10 years behind’


7 Jun 2007

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A US expert on industry and innovation has slated Ireland’s investment structure for indigenous Irish companies as being 10 years behind the times.

“It’s more fitting to what Ireland was eight or 10 years ago and how the world looked then,” said Professor Danny Breznitz of Georgia Institute of Technology. “The financial system should be rethought, maybe even restructured, significantly, from the grants the government gives up to the regulations and laws about how you construct those companies.”

Breznitz told siliconrepubic.com that while development in the Irish technology industry was impressive in the past, it has now lead to complacency on our part.

He said: “The attitude is: ‘We have won, we have done it, we don’t need to change anything,’ but I think there is now the realisation that is not true. I’d like to see more strategic rethinking.”

Breznitz will be meeting with Enterprise Ireland, Science Foundation Ireland, the Industrial Development Authority and science advisor to the government Professor Patrick Cunningham this week to discuss IT economic policies.

Breznitz said he felt Ireland’s greatest weakness is innovation. Although he rates the work done by organisations such as Science Foundation Ireland, to the extent of saying that our research and development (R&D) model should be imitated by other countries, he said that creating a world-class R&D infrastructure is not enough.

“In order for that to be successful, there is a need to make sure it stays and grows.”

He said his visit to Ireland is his way of paying back to the country the support he received while researching his book Innovation and the State, in which the Irish R&D model played a large role.

His priority now is to address “what was, what is and what should be”, he told siliconrepublic.com.

He said it was easy to start with biotechnology and ICT but that this approach was “a bit like catching the train after it left”. He said it is important to create capabilities for both the industry and economy to move as technologies have changed, and for Ireland to be among the first movers.

Crucial to this will be the need for more collaboration between universities and industry to monetise new technologies. “Ideas should come straight from scientists because they know better than the government what these hot new areas are.”

Looking at the financial incentive system between research and industry, he said that it was built in an historical process. “It’s more fitting to what Ireland was eight or 10 years ago and how the world looked then.

“The financial system should be rethought, maybe even restructured, significantly, from the grants the government gives up to the regulations and laws about how you construct those companies.”

He said the State needs to change the way it looks at native entrepreneurs and business people and have more confidence in them.

“For historical reasons there was a very different reception given to Irish entrepreneurs and businesspeople than to how multinationals are being treated.

“The State has no confidence that native entrepreneurs are not going to steal tax payers’ money.”

Local entrepreneurs, he said, are seen as successful only if they mage to sell their business for a million or half a million to a multinational, at which point we wait with bated breath for the multinational to start R&D in Ireland.

“You roll out the red carpet to multinationals,” he commented ruefully.

By Marie Boran

Pictured – Professor Danny Breznitz of Georgia Institute of Technology

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