Innovation Nation – Digital 21

24 Sep 2009

Building an island of ideas.

If Ireland holds its nerve on its science, technology and innovation (STI) investments, the country could be well on its way to becoming a world leader in the creation and management of intellectual property, generating thousands of well-paid jobs for decades to come.

In less than a decade we have progressed from a situation where ‘technology transfer’ was a term unheard of on Irish university campuses and the country had few PhD researchers. Today, Ireland has more than 2,500 PhD graduates and a growing number of eminent global scientists locating here. More than 40pc of all foreign direct investments secured by IDA Ireland are research and development (R&D) based. But more work needs to be done if we are to generate our own Google or Nokia. Last year Ireland’s overall investment in R&D was 1.6pc of GDP, disappointingly low when compared to countries such as Japan (5.1pc). The recent ‘An Bord Snip Nua’ report headed by economist Colm McCarthy has called for a 15pc cut in STI spending – some €100m. Experts warn that this cut could produce a ‘ripple effect’ and permanently derail the development of Ireland as an innovation nation.

Why Ireland needs innovation

The ambition to make Ireland one of the leading digital nations in the world marches in step with the ambition to make the country a leading home of scientific innovation. You can’t have one without the other.

The remarkable progress in building a science infrastructure via Science Foundation Ireland   from virtually nothing a decade ago needs to be stepped up – not undermined – to ensure that Irish small to medium-sized enterprises (SMEs) as well as multinationals innovate to create new products and, fundamentally, new well-paying jobs.

Last year Ireland’s overall investment in R&D was 1.6pc of GDP, disappointingly low compared to countries such as Japan, where it’s over 5.1pc.

But the country is making headway – business R&D investment in Ireland grew from US$1.5bn in 2007 to US$1.6bn in 2008. Two thirds of investment in R&D comes from business, with the remaining one-third coming from the State.

This progress is now at risk because of the current perilous state of the economy and the public purse in particular.

In July, the Department of Finance published a report by the specialist team headed by UCD economist Colm McCarthy – infamously known as ‘An Bord Snip Nua’ – which recommended €5.3bn in public expenditure savings, and cast its eye on Ireland’s science, technology and innovation (STI) investments.

The group proposed an initial reduction of just over €100m in STI, or 15pc of the 2009 allocation.

In relation to STI, An Bord Snip Nua noted that between 2000 and 2007 there was a three-fold increase in Government outlays for R&D and outlined a number of concerns.

“The evidence adduced to date for the impact of state STI investment on actual economic activity has not been very compelling,” the report read.

An Bord Snip Nua said there was an absence of a clear business need to double PhD numbers, and it said it was concerned that the graduates will be under-employed or forced to emigrate.

“Indeed, some empirical evidence suggests that 20pc of new doctorate holders find employment overseas and of those who remain, most find employment in the public rather than the private sector.”

It said that funding of STI is dispersed through a large proliferation of supports, with many targeting the same or similar activities, and it argued for rationalisation of supports and reduction of large administrative overheads.

Streamlining the policy framework will improve co-ordination and maximise the potential for commercialisation of research, the report said.

An Bord Snip Nua noted that exchequer funding of R&D has grown compared with other sources, which suggests “some displacement of private funding by public funding”, a trend it said should be halted.

However, leading figures who have led Ireland’s STI strategy in recent years have warned that any pause in funding will cause a ripple effect that could undermine the pioneering work of recent years.

Worse, it could mean that Ireland’s intake of PhD researchers will stop dead by next year, causing irreparable damage to our perception overseas.

Freedom to innovate

Dr Danny O’Hare, former chair of both the Information Society Commission and the Task Force on Physical Sciences and current chair of the Exploration Station, a world-class €30m science facility earmarked to be built near Heuston Station in Dublin, agrees that short-term conservative decisions could have long-term implications.

“One of the great drivers for our economic success has been the strength of our education system. There is no getting away from the fact that the country is faced with a shortage of money so we will need to be smarter in how we use these resources, but we need to avoid universities being pushed into a bureaucratic situation.

“We’ve got to give individuals within our universities the freedom to be innovative, using whatever resources they are given by the taxpayer to do the best job they can,” he says.

“By all means let’s get the economy back to great physical shape – but by way of prudent management and by institutions and individuals being allowed and encouraged to innovate.

“In the Seventies people in Ireland regretted not having coalmines and steel, arguing that if we had those raw materials we would be in a stronger economic position,” O’Hare explains.

“But in the 21st century the world is moving in the direction of a knowledge economy where brainpower is the raw material. Well, you know what? Ireland has no shortage of brainpower. Whatever we do we must give people the freedom to innovate.”

Keeping the faith

Science Foundation Ireland (SFI) has played an integral role since 2002 in building up Ireland’s science clusters – in universities especially – attracting world-leading scientists to locate here as well as creating eight CSETs (Centres for Science, Engineering and Technology) that will be integral to attracting multinational business as well as supporting (SMEs).

Last week it emerged that the Irish Government is to invest €14.8m over the next five years in a new CSET, the Systems Biology Ireland Research Centre led by UCD, that will make Ireland a leader in the consolidation of computing, maths and biology and could prove vital to attracting foreign direct investment in the years ahead.

The new computing centre could also make Ireland a vital contributor in the fight against cancer and the race to find a cure for the deadly disease.

The director general of SFI, Frank Gannon, points out that the agency accounts for 20pc of Ireland’s overall spend on STI. He warns that any pause in the STI journey Ireland has embarked upon will be noted internationally. “STI investments don’t give a return on investment in the short term. It’s a long-term strategic investment.

“In relation to PhDs moving overseas when they graduate, that’s a sign of normality. Our analysis shows that 30pc of PhDs move from country to country when they graduate but they eventually return to Ireland. A further 30pc of SFI-backed PhD researchers go directly into industry. But all PhD researchers interact with industry,” Gannon says, pointing out that 40pc of all IDA investment companies from Wyeth and Pfizer to Bristol Myers Squib are conducting R&D in Ireland.

“In the economy of today there will be two types of nation that are in the race to be leaders in science. Those who continue to invest in their science base and will be in a strong position when growth returns, and those who cut investment and who will inevitably slip back. We need to avoid taking a drastic step backward,” Gannon warns.

“In 2003 we funded our first PhDs, by 2005 we had our first PhD graduates. By 2008 40pc of all IDA-backed investments were R&D based. The average man on the street may not understand the link between academic researchers and industry but there’s an indelible link between research and their jobs. They understand when companies decide to locate in Ireland or pull out.

“If Ireland breaks its faith with its science commitment the reputational damage to our smart economy will be enormous. Ireland has moved from 34th place in the world in 2002 to 17th place today in terms of the quality of our research. We can’t stop now. We need to continue what we started.

“Every industry in the world is basing its survival on innovation. We are a country where only 1pc of our GDP goes into R&D. You’re not going to save an economy by cutting back on that, but you will certainly ruin it,” he concludes.

The importance of PhDs

Martin Hynes is chief executive of the Irish Council for Science, Engineering and Technology  (IRCSET), the national body that operates

the multimillion euro research funding initiatives which support talented researchers in their early stage career formation. Hynes believes that a 15pc reduction in funding of PhD researchers would stop progress dead in the water.

“Like a tanker at sea, you cannot change direction suddenly. In the case of science investment you need to plan your trajectories years in advance. In 2002, research predicted that Ireland would need only 150 PhD students by 2008. That was ludicrous. Today we have 1,250 PhD students currently fully employed. You can never have the right number of PhD students, you can only have a surplus in order to attract industrial investment.”

Hynes warns that Ireland is also far behind the European norm in terms of the number of PhD researchers per thousand of population. “If we were to roll back investment, one year without an intake of PhD researchers would be disastrous.

“We have gone from no PhD researchers to an average output of 250 per annum and we have built extremely good relationships with some of Ireland’s leading investors – Intel, IBM and Pfizer, for example. I cast my mind back to Rex Shaw of Wyeth. When Wyeth was setting up in Ireland, his biggest concern was not water or electricity but the availability of skilled graduates.

“Only when they had that reassurance did they decide to come. We are hoping and others are hoping that our PhD pipeline will lead to further inward investment. We need to keep the pipeline flowing,” Hynes warns.

“It would send out a bad signal on behalf of Ireland Inc and its status as an Innovation Nation if we’re not going to stay in the race for talent.”

By John Kennedy


John Kennedy is a journalist who served as editor of Silicon Republic for 17 years