Speech by Mr. Tom Kitt, T.D., Minister for Labour, Tradeand Consumer Affairs on the Occasion of the UCDChemical Engineering Department’s Open Day and Awards Dinner on 3rd November, 2000 at O’Reilly Hall, UCD

I am delighted to have been invited here today to attend the UCD Chemical Engineering Department Open Day and Awards Dinner.

Last Wednesday, the annual Irish North-South Innovation lecture was held not a million miles from here in the Berkeley Court Hotel. The speaker this year was Nick Scheele, who, as Chairman of Ford Europe and Chair of the UK Manufacturing 2020 Foresight Panel, was able give a unique perspective on the current state of industry and the challenges facing it in the short and medium term. Among the many insightful comments he made about the impact of increased consumer demands and increased competition on manufacturing industry in the near future, one in particular stood out. "The next twenty years would involve a high degree of uncertainty for all manufacturing industry, but any firm which could build up a lifetime relationship with its customers was guaranteed to thrive."

I think that something similar could be said for Universities. Any University that establishes and maintains strong lifetime links with its graduates is embarking on a process which brings rewards for everyone concerned. It rewards graduates, who can use the opportunity to revitalise old friendships, renew links with the academic research community and forge new business contacts. It rewards Universities, who can take advantage of their graduates’ successes in business to develop linkages to national and international industries. It rewards industry by giving it immediate access to the birthplace of new technologies. And of course any subsequent strengthening of industry/university relationships will not only bring benefits to the partners concerned but will ultimately strengthen the Irish economy.

Some might say: after a decade of exceptional economic performance at every level do we really need to further strengthen the Irish economy? The answer is an emphatic yes. At this stage in our development we can’t afford to be complacent. Firms in the modern high-tech sectors of business in Ireland, including IT, chemicals and pharmaceuticals are currently more production-oriented than R&D oriented and therefore more vulnerable to global market changes. As the global economy becomes more "knowledge-based" i.e. driven by research and technology, the key to Ireland's continued success is to re-position Irish industry higher up the economic value chain.

Engineering intensive industries, including pharmaceuticals, software and electronic hardware are leading the way in achieving this objective. The Pharmaceutical and chemical industry is also pursuing these goals, by undertaking collaborative research projects with Irish Universities and establishing process development centres on site. In order to sustain and focus this development the Government has included a number of measures to enhance the national Research, Technological Development and Innovation system in the National Development Plan covering the period 2000-2006.

Taken as a whole, the National Development Plan emphasises the importance of infrastructural spending to Ireland’s balanced economic development - be that spending on roads, housing or public transport. Yet in tandem with investment in bricks and mortar there is an equally pressing economic case for investment in RTDI infrastructure. There is a real need to increase Ireland’s attractiveness as a location to carry out research and development - and we plan to address this need by creating a critical mass of world-class research excellence in niche areas of particular importance to Ireland’s long-term future. The Technology Foresight Fund, totalling £560m over 7 years, represents a substantial investment in world-class research infrastructure in the key strategic technologies which will underpin our future competitiveness. Initially it will fund activity in Information and Communication Technologies (ICT) and Biotechnology.

The Fund, which will be managed by a new dedicated research foundation - Science Foundation Ireland (SFI) - under the aegis of Forfás, is intended to facilitate the creation of a critical mass of world-class research excellence in such niche areas. This will underpin the enterprise environment in Ireland particularly for industries such as Biopharmaceuticals, Healthcare, Agri-Food, Information and Communications.

While the Technology Foresight Fund and Science Foundation Ireland may be getting most of the headlines these are not, of course, the only initiatives being taken to develop the national RTDI system.

The new operational programme for the Productive Sector contains a suite of measures aimed at developing the national RTDI system in three key areas:

1. RTDI for Industry 2. RTDI Collaboration 3. RTDI Infrastructure

Irish industry has made significant investments in RTDI in the 1990s, but there remains a need for vast improvement. While the number of companies carrying out some form of research is steadily increasing, only a very small proportion of these can be classed as RTDI performers - firms which spend over £100,000 a year on RTDI. Of the Irish investment in industrial research, too much is directed towards relatively straightforward product development and too little goes towards higher value research. Schemes directed towards industry have been established to encourage more Irish firms to carry out R&D and to encourage those firms already involved in R&D to invest more substantial resources in this area. In addition, an innovation management capability scheme has been introduced to allow SME’s in particular to achieve greater returns on their RTDI investment by providing training and consultancy in R&D management.

The new operational Programme also contains measures to promote greater collaboration between third level institutions, and between these institutions and Industry. Successful co-operation and networking with third level institutions helps increase the competitiveness of industries. This is especially the case in so-called science-based industries but is increasingly true for all Irish industry. As Mr Scheele said at the Innovation Lecture last Wednesday, there are no longer such things as low-tech industries, just low-tech companies.

The Irish pharmachem industry continues to be one of the success stories of our economy. The substantial investment and growth of the sector has been facilitated by the provision of a favourable business environment to develop and expand including a low corporate tax rate, the availability of highly qualified personnel and the ability to meet the required levels of quality on a consistent basis.

Many of the world’s leading companies have established manufacturing operations here and have made Ireland a significant force in the European pharmachem industry. The industry in Ireland continues to develop and prosper. A particular feature in recent times has been the number and scale of plant expansions. This demonstrates a strong vote of confidence by these companies in Ireland as a location in which to do business. The industry has achieved a critical mass and Ireland is now ‘on the map’ in the eyes of the pharmaceutical industry world-wide.

The pharmachem sector is making a major contribution to the Irish economy – with exports of over IR£16 billion and employment of 17,500 people. Its high graduate content, well-paid secure employment and considerable indirect employment, including linkages with Irish suppliers, underline further the importance of the sector in our economic development.

Against the background, I am delighted to be here tonight as we honour the founder professor of the Department of Chemical Engineering at UCD, John O’Donnell. Clearly, Prof. O’Donnell’s work in the Department has in no small way assisted us in underpinning the success of the pharmachem sector in Ireland. Co-operation between this University and Industry - fostered by Prof. O’Donnell - has served us extremely well and I join with all here tonight in saluting the great work of John O’Donnell and his Department of Chemical Engineering at UCD.Thank you.