Ireland rates average as innovation nation: survey

16 Jan 2006

Ireland’s performance as an innovative nation is “average”, with levels of business research and development (R&D) falling, a new report has claimed.

In the fifth edition of the European Innovation Scoreboard (EIS) Ireland ranked 11th overall out of 25 EU member states, grouped in with France, Luxembourg, the UK, Netherlands, Belgium, Austria, Norway, Italy and Iceland as being an average performer. Northern European countries fared best, with Sweden, Finland Switzerland, Germany and Denmark rated as the European innovation leaders.

Ireland mixes above average and below average performance in many of the indicator groups, the report found. On the credit side, its good performance is due to high-tech export shares that are 68pc above the EU average. Ireland also scored well on the supply of new science and engineering graduates and above average results for third-level education.

Where Ireland fell down was in business R&D, which showed an absolute and relative decline over time, falling from 0.90pc of gross domestic product (GDP) in 1998 to 0.77pc in 2004. Public R&D has not increased at a level to offset this, having grown only modestly from 0.35pc to 0.40pc of GDP over the same period.

“Ireland must make the transition from an economy where foreign investment played a large role, particularly in the ICT sector in order to serve the EU market, to an economy based on innovation,” the report urged.

The document has highlighted several indicators to suggest that this transition may be fraught with difficulties. The share of exports from high technology products fell by 25pc between 2001 and 2003. In addition, the consistent slowing in business R&D is seen as a major challenge, coupled to the decline of the share of university R&D funded by the business sector.

Other factors cited in the report include a drop-off in venture capital supply, from 136pc of the EU average in 2000 to 92pc of the average in 2003. “These developments suggest that Ireland could be entering a difficult transition phase towards developing domestic R&D and innovation capabilities,” the report editors said.

In a wider context, the report found that if trends for all 25 EU member states continue, the innovation gap between Europe and the US will not close. The EU invests about a third less in research than the US while emerging countries such as China and India are becoming world-class centres of research and innovation.

By Gordon Smith