Research and development (R&D) expenditure in the Irish economy increased to €1.7bn during 2004, up 10pc on the previous year. State agency Forfas estimates that the amount spent on R&D in the economy in 2005 is set to reach €1.9bn in 2005.
In a report entitled Gross Expenditure on R&D (GERD), total R&D spending in Ireland increased from 1.35pc of gross national product (GNP) in 2001 to 1.43pc of GNP in 2004. This compares with a European average of 1.85pc and the OECD average of 2.24pc.
Despite having one of the strongest growth rates in business R&D performance, business expenditure on R&D as a percentage of economic activity has remained static as the strong R&D gains only matched the strong economic growth posted in the period. Business-sector R&D recorded a 16.3pc increase, totalling €1.1bn in 2004, up from €988m in 2002.
The higher education sector significantly increased its R&D spending from €322m in 2002 to €492m in 2004, a 53pc increase. This increase outpaced economic growth, pushing up relative intensity and driving much of the increase in GERD. Increasing Higher Education Research and Development (HERD) has been driven by direct government funding through Science Foundation Ireland (SFI) and the Programmes for Research in Third-Level Institutions (PRTLI).
The Government Budget Allocation to R&D (GBAORD) increased from €430m in 2002 to €625m in 2004, a 45pc increase.
Strong increases in personnel employed in research activities were recorded from 2002 to 2004. The main increase was within the higher education sector with an increase in researchers from 2,695 full-time in 2002 to 4,152 in 2004. Researchers in Ireland now account for 5.7 per 1,000 in employment. This compares with the EU figure of 5.8 and the OECD figure of 6.6 per 1,000 in employment.
A new indicator is the percentage of women engaged in R&D activities. Currently 33pc of total research personnel are women (head-count basis). However, only 22.5pc in the business sector are women. While 44pc of total research personnel in the higher education sector are women, most of these (78pc) are support staff.
Commenting on the new research, the chief executive of Forfas Martin Cronin commented: “The continuous improvement in R&D performance will assist Ireland in boosting the competitive position of our goods and services in the international marketplace in the years ahead.
“R&D performance will be advanced further in the coming years by new R&D investments supported by SFI, IDA Ireland, Enterprise Ireland, the Higher Education Authority and the Research Councils and this will foster innovation and lead to productivity gains.
“While these increases provide us with a stronger base on which to build, it is vital for long-term national economic success that we promote further investment in R&D to meet the targets in the National R&D Action Plan.
“The key challenge will be to accelerate the positive trend in business R&D performance, backed by continued increases in publicly funded R&D. Enterprises must understand and exploit the potential of R&D for their development and continue to invest for the future. Firms with an eye on long-term growth in international markets need to ensure that they have clear plans to introduce higher value products and services and to improve operating efficiencies,” Cronin warned.
By John Kennedy