Research fund freeze will harm foreign investment

9 Oct 2003

The Government’s decision to suspend the Programme for Research in Third Level Institutions (PRTLI) could have serious implications in terms of Ireland’s ability to attract overseas scientists and researchers, a leading academic has warned. The move also sends out the wrong signals to multinationals at a time when the country needs to boost its R&D profile and attract future foreign direct investment (FDI), he added.

According to Dr Pat Frain, director of the pioneering NovaUCD R&D centre at University College Dublin, foreign investors and overseas scientists attracted to Ireland need to see consistency in the Government’s commitment to making the country a hub for leading research as well as a clear intention to boost R&D amongst indigenous companies from the present 1.4pc to the 3pc of GDP as planned for the rest of Europe under the EU-sponsored European Research Area (ERA) scheme.

Dr Frain warned: “We need to do more R&D in Ireland and for third-level institutions, the PRTLI was key to enabling better technology transfer of research from colleges and universities into cutting-edge entrepreneurial enterprises. But that has been put on hold by the Government.”

The government established the PRTLI in 1998 in order to develop research infrastructure, which is seen as a central component of the National Development Plan. Some €284.6m in PRTLI funds were allocated during cycle one and two of funding, covering capital and programmatic costs. Some 13 research centres around the country were built during 2001 and 2002. However, the capital element of cycle three funding — €178m out of a total of €320.4m — has been ‘paused’ since the budgetary announcements of the fourth quarter of 2002. It is understood that a proposal for a borrowing arrangement to cover the capital requirements of the PRTLI for the next two years is with the Department of Education and Science and the Department of Finance. But neither department can provide a date for a resumption of funding.

Dr Frain said: “This sends out the wrong signals to the world. It means that research facilities are not being built and for foreign researchers that have come to Ireland, it may mean that some will return to their home countries. If this continues for too much longer it will impact R&D facilities in all of the country’s third level institutions and put many of them four to five years in the red.

“The other major issue is the impact the postponement of PRTLI will have on foreign investment. The high-quality companies that will come to Ireland to do research will read into the decision to postpone PRTLI as a lack of commitment on the Government’s part and this could be a serious problem down the road.

“The scheme when it first came on board resulted in a significant improvement in infrastructure, but it will cause considerable bottlenecks if it is delayed any longer,” Dr Frain warned.

The €10m NovaUCD Innovation and Technology Transfer Centre on UCD’s campus will be officially opened next Monday by the Tánaiste and Minister for Enterprise and Employment, Mary Harney TD. It will have 40 incubation units and provide innovators and entrepreneurs with the necessary support and knowledge to take their ideas from proof of concept to commercial success. The centre is managed by the University Industry Programme, which has established an excellent track record in spinning-off campus companies. These include Changing Worlds, Massana, NTera and WBT Systems. Spin-offs from UCD have collectively raised US$90m in funding to date.

Up to 75pc of the €10m funding for the first two phases of the NovaUCD Centre came from private-sector companies, including Goodbody Stockbrokers, AIB Bank, Arthur Cox Solicitors, Deloitte, Ericsson and Xilinx. A further €1.6m was donated by Enterprise Ireland and the remainder was supplied by the Board of UCD. NovaUCD will work with the founding sponsors and other organisations such as patent and trademark attorneys F.R. Kelly & Co, to ensure the successful development of the NovaUCD support programme.

Among the facilities available at the 2,850 sq. m. purpose-built centre are 42 incubation units of varying sizes, desk space, meeting and seminar areas, advanced telecommunication and Internet access and reception and secretarial services. The opening of NovaUCD increases ten-fold the incubation space available to campus companies in UCD.

Companies currently participating in the NovaUCD programme include: Neosera Systems, developing specialised processors to accelerate simulation tools used by the microelectronics design market; Locumotion, a medical service company, and GoldStack, a software development company that develops specialised information systems and information management tools.

By John Kennedy