SMEs vital to Irish economic future

12 Jul 2005

Trade and Commerce Minister Michael Ahern TD again outlined the importance of SMEs engaging in research and development to secure Ireland’s economic future, especially given the increasingly global economy that Ireland operates in. He warned of a trend of industry moving away from European Community research programmes because of inadequate funding for SMEs.

Inadequate funding and excessive red tape were forcing industry, and specifically SMEs, to move away from EU grants and focusing instead on private sector funding. With the Seventh Framework Programme (FP7) soon to be rolled out – with some €5bn of funding available – Ahern said it was imperative that the programme is finely tuned with the needs of SMEs.

Ahern was speaking at a ministerial EU Informal Competitiveness Council meeting in Cardiff.

The Sixth Framework Programme (FP6), which covers the four-year period 2002-2006, had a target of awarding 15pc of project funding to SMEs and has so far achieved 13pc across the programme. The Commission has however left targets out of its Seventh Framework Programme (FP7).

One of the key speakers to address the ministerial meeting in the context of SME participation in EU funding was Dr David Corr, co-founder and chief technology officer of Irish nanotechnology company NTera. As an Irish company that has successfully accessed European funding, Dr Corr spoke of its critical importance in developing and growing his company’s business. He said: “You cannot create new products without creating new knowledge. This is what all new innovative SMEs strive to achieve.”

Minister Ahern pointed to the contribution SMEs such as NTera are making in pushing the research frontiers and reaping the benefits of cutting-edge research. “More companies need to take advantage of the opportunities provided by funding of this type and we must ensure that we take all necessary steps to assist greater access by small businesses.”

Ireland has put forward a number of suggestions for ways in which community research programmes could be structured to address the needs of SMEs and the use of simpler instruments. The retention of a target for SME participation in these programmes is also a high priority for Ireland.

Minister Ahern argued that specific targets for SMEs would send an important message about the future direction of the Framework Programme. However, he accepted that a target may need to be more nuanced in FP7 given the more complex nature of the overall programme.

A decision on the overall structure and content of FP7 is not expected until mid 2006 and will be subject to the outcome of the negotiations on the EU budget.

By John Kennedy