Address by Mr. Noel Treacy, T.D., Minister for Science, Technology & Commerce. at the Gala Dinner of the International Society of Pharmaceutical Engineering [ISPE] Maryborough House Hotel, Cork - 13th April, 2000 at 8.00 pm.

I am delighted to be here this evening to address the International Society of Pharmaceutical Engineering (ISPE).

I see an event such as this as much more than just another social get-together. It is an opportunity for your Organisation both to take stock of developments in your industry, and also to celebrate its success. I believe that your industry has good reason to celebrate and, for my part, I am delighted to avail of this opportunity to acknowledge the part which you and your companies have played in Ireland's current economic well-being.

One of the more remarkable facts about the recent success which the Irish economy has enjoyed is the extent to which this success has been accompanied by a radical transformation of Ireland's industrial base. In a relatively short space of time, we have moved from being a producer of primarily agricultural commodities to one of the most vibrant export-led economies in the entire world, with a portfolio of products from very diverse sectors, many of which did not even exist in this country a decade or more ago.

The two sectors which are represented by your Organisation - the pharmaceutical and the medical devices industries - illustrate this transformation very well. These industries were almost non-existent here in the Ireland of thirty years ago. Today, they are among our great success stories, and we can proudly boast that we have located here many of the world leaders in the sectors.

This Government recognises the economic importance of these sectors -

• they provide substantial levels of well-paid employment, with a high graduate and skills content,
• they contribute handsomely to our positive balance of trade figures,
• in terms of taxation, they make a substantial contribution to the Exchequer,
• there is a considerable linkage with the service industry here, for example, in engineering design, construction, engineering maintenance, environmental monitoring services, and so on, giving rise to several thousand additional jobs.

And your companies are especially welcome for the advanced level of technological capability which you bring to Ireland's industrial base. Some of the technologies involved would, until very recently, have existed only in the world of science-fiction, and their presence here places Ireland at the forefront of these industries.

The signs are that these sectors are set for continuing growth here. This growth is truly remarkable when set against the background of international trends in the industry where a competitive business environment is leading to reduced employment as a result of widescale rationalisation through mergers and acquisitions and cost reduction programmes. I am confident that the present growth patterns here will continue into the years ahead.

This does not mean, of course, that we are content to rest on our laurels. We must continue to ensure, and the Government is committed to ensuring, that the conditions which Ireland has to offer will continue to attract the high level investment in the sectors which we have attracted in the past.

We cannot but be aware of the increasingly stiff competition which Ireland faces, particularly from locations in the Far East, in attracting pharmaceutical foreign direct investment. You will be aware of a number of companies with significant investment and employment in Ireland which in recent times have decided to establish facilities in Singapore. While, clearly, the attractions of Singapore were sufficient for those companies to decide to locate there, I am satisfied that such decisions were made mainly for strategic geographic and market presence reasons.

A key strategy for IDA Ireland is to work with existing multinational subsidiaries in Ireland to embed their activities here and, over time, to move their level of operations higher up the value chain. This is part of a focused approach designed to identify projects with high value content which are more sustainable into the future.

One of the key location attractions which Ireland has presented in the past is the ready availability of an educated work-force. Some clouds have been gathering on this particular horizon recently. Against the background of our unprecedented economic growth in the 1990s, there has been an increase of 450,000 in the number of people now in employment. This, of course, has an impact on the availability of the manpower needed for future economic growth.

This issue has recently been addressed by the Expert Group on Future Skills Needs . In a comprehensive report published about two weeks ago, the Group set out the skills needs of industry over the next five years. In relation to the Chemical and Biological Sciences sectors, the Group forecast that employment in the sectors will grow by over 30% by 2005, and identified a number of issues which need to be addressed, including-

• the fall-off in the take-up of science subjects in the Leaving Certificate,
• at third-level, the Group estimates that there will be an annual additional requirement of 410 chemical and biological graduates and technicians in these sectors by 2005 - this does not take into account the impact of the Technology Foresight Programme,
• the mix of graduates available is not expected to match that likely to be required, and
• science graduates are being attracted to the IT industry.

The group made a number of recommendations designed to meet the future skills needs in these areas, including the provision on a phased basis over 4 to 5 years of an additional 1,150 places at third level, the extension of the accelerated technician programme, an examination by the third level colleges of the promotion and positioning of their science courses to increase their attractiveness to potential students, and the setting up of an Interactive Science Centre to encourage a greater interest in science among primary and secondary school children.

This Report is being examined at Government level and we will be tackling the many issues raised to ensure that our future economic progress is not undermined by shortages of the kind identified.

As well as the measures needed to deal with our skills needs in the more immediate five-year time frame, we are conscious of the need to provide for the skills needs in the science areas in the longer term. Clearly, a key question to be tackled here is the fall in the numbers taking science subjects at second level.

The issues surrounding the decline are complex and require a range of responses. We have, in the Department of Education and Science, put in place a £15 million plan designed to develop the teaching of physics and chemistry at second-level. And I am aware of a number of other initiatives such as that by the Irish Pharmaceutical and Chemical Manufacturers Association in conjunction with FÁS, and the setting up by the Royal Irish Academy of a special working group to tackle this problem.

But, I believe that the decisions being made by second level students on this issue also have much to do with perceptions - their perceptions not only of the type of employment which these areas have to offer, but also of what it takes, academically, to get into these areas.

The Science, Technology and Innovation (STI) Awareness Programme, which is managed by Forfás on behalf of our Office of Science and Technology, is designed to highlight the increasingly important role which science, technology and innovation play in modern life, and in so doing, to alert young people to the many exciting and rewarding career opportunities currently available in the technology industries here in Ireland.

I am also concerned that many young people believe courses which would prepare them for these jobs are somehow inaccessible to them. A survey carried out last year showed that many misunderstood the points needed to obtain entry to science at third level. The evidence is that the majority of people hold the view that they must achieve a high number of points at Leaving Certificate level to study subjects such as computer studies. In fact, the entry points for many of these courses are lower than those for Arts in nearly all of the major third level institutions.

Of course many companies in high-tech areas will employ young people with Leaving Certificate qualification (including mathematics) and will then offer excellent further education and training opportunities to their employees.

Intervention in a meaningful way to arrest the trends in take-up of the physical sciences represents a major challenge, not only to Government, but also to the industrial sector and perhaps your Association might consider whether it has a role to play here.

I mentioned earlier the futuristic nature of the technologies which your sectors bring to our industrial base. A good example is the recently-announced American Home Product plan to set up a state-of-the-art biotechnology campus in Clondalkin, where 1,300 new jobs will be created. Such projects, together with the Government's Foresight Technology Fund, will help to ensure that Ireland remains one of the most attractive locations for knowledge-based and innovative high-tech investments.

I want to turn briefly to the Technology Foresight Fund. This arose out of an initiative which I took in 1998 when I asked the Irish Council for Science, Technology and Innovation to undertake a Technology Foresight Study. What I wanted to achieve in this exercise was to identify the technologies that would be key to our future economic and social development, and to suggest what actions we needed to take to foster our capabilities in these areas.

This was a major undertaking and required an enormous effort by those involved, but I believe that it was well worthwhile. The Reports produced have been an enormous help to all concerned in attempting to see the future, and in planning for it.

Arising from this exercise, this Government approved the setting up of a £560 million

Technology Foresight Fund which will be used to establish Ireland as a location for world class excellence in niche areas within Information and Communication Technologies and Biotechnology. A dedicated Foundation, operating under the aegis of Forfás, is being set up to administer the new Fund. It is envisaged that the new Foundation will have a two pronged approach to funding. Firstly, researchers in Third Level Colleges and Research Institutions will be offered the opportunity to compete for funds through the international peer review process. Secondly the Foundation will have the option to establish its own laboratories if necessary to secure world class performance. We are confident that the new Fund will establish Ireland as a location where world class research in ICT and Biotechnology will be carried out.

I wish to thank you for the opportunity to address you all here this evening. It is clear from the programme of events which you have scheduled for the year that your Organisation performs a very useful function, not only for its members but for the sectors in which it operates.