Address by Mr. Noel Treacy T.D., the Minister for Science, Technology & Commerce at the Graduation of the M.SC. (Technology Management) Class at UCD, Carysfort, Blackrock, Dublin on Wednesday 19th April 2000 at 7.30 p.m.

I am delighted to be here this evening at the graduation of the first M.Sc. class in Technology Management. It is particularly gratifying for me to see the coming to fruition of this flagship course of the National Institute of Technology Management which I officially launched in October, of 1997.

It is a fundamental tenet of Government policy that the application of technology and the exploitation of scientific research is a key driver of growth and competitiveness. The role of government is to support the provision of a scientific infrastructure which will allow firms to move up the R&D staircase thus helping them to maintain competitiveness on both the domestic and international markets.

There was a time not so many years ago when Ireland looked on as more advanced countries drove their economies forward by capitalising on their technological prowess. In particular we saw the US, Japan and Scandinavian countries leading the field and reaping the rewards of continued investment in R&D in both the public and private sectors. These countries still lead the field in Business Expenditure in R&D, with expenditure in Finland standing at 3.3% of GDP. Ireland’s performance over the period 1991-1997 saw BERD rising from 0.63% of GDP to 1.1% of GDP, so that it now equals the European average. This is in turn reflected in the performance of Irish industry whose average investment in innovation related activities is 3.3% of sales. The share of sales from new products is 32%, which is also at the European average. The success of the RTI scheme which is administered by Enterprise Ireland in funding R&D activity in over 400 companies (many of them first time performers) shows the value of continued State investment in this area.

So it would seem like that we are well on the way to proper exploitation of technology. But there is a problem. R&D is concentrated in a relatively small number of companies - 1250 in 1997 and twice as many foreign owned companies spent over £100,000 per year on R&D compared to Irish owned companies. This concentration of spend in the foreign owned sector reflects the maturity and size of the R&D activity in a relatively small number of companies. The challenge for the indigenous sector is to develop their capability and resources to the extent that they can perform R&D to a world class level. We have the numbers - two thirds of the R&D performers being Irish owned, we now need the scale. And scale in the R&D field requires investment - in staff, facilities, equipment and systems. There is also a challenge of embedding still further the operations of multi-national companies in the Irish economy.

It is precisely for these reasons that the National Institute of Technology Management (NITM) was established in 1997. We knew that just as in any other business function there was a structured way to R&D - a best practice way – and a system for managing technology for competitive advantage. The Scandinavians had cracked it, as had the US and increasingly the Far East, and the source of much of their expertise was the Sloan School of Management at Massachusetts Institute of Technology in the person of Professor Tom Allen and his colleagues.

Our good fortune has been that we have been able to go to this same source for the structure and course content used at NITM. Professor Allen has essentially taken his material, tried and tested over the years at MIT, and applied it in an Irish context. We now have a world class resource in technology management, which this year has begun its third Masters programme. The President, Dr. Art Cosgrave and his staff at UCD must be congratulated for their efforts in bringing the Institute to successful fruition. Credit in particular should go the Faculty of Commerce and the Faculty of Engineering and Architecture, which have so effectively achieved the collaboration needed to support this multidisciplinary programme.

If you take a look at the profile of participants on the Masters programmes you see features which might surprise you:

• An average age of 32 years old;
• Over 80% from industry;
• Substantial industrial experience;
• A predominance of participants in management functions.

Here we have a powerful college/industry initiative, which is targeting exactly to the right group of people, those who are steering the technological direction of their companies. This is a demanding course for experienced R&D professionals. Demanding enough indeed to pose real challenges for lecturers as much as participants. Adding value to the R&D knowledge of these people is both challenging and rewarding.

The State with ESF help has invested heavily in NITM because we see it as an essential resource in building R&D capability. A resource, which provides structure and form for the increasing level of R&D activity in Ireland. This is therefore a national resource, and as such it needs to spread good Technology Management practice throughout the regions. I am happy to see that this has begun with an NCEA Diploma at the Institute of Technology in Tallaght. Through the Institute of Technology route, NITM will ensure that the MIT source material is made accessible to firms countrywide.

Notwithstanding the progress which has been made this Government is very much aware of the necessity to continue to invest wisely and adequately in research and technological development, in the changing economic environment which faces us, as such wise investment is the cornerstone on which future innovation and competitiveness will be built.

To this end, we have provided nearly £2 billion for investment in Research, Technology and Innovation over the next seven years. Included in this is £560 million, earmarked for the Technology Foresight Fund which the Tánaiste and I officially launched last month.

As is the case with any substantial investment of this nature, there are many opinions and views on the types of implementation mechanisms that are required. The Tánaiste and I along with officials in our Department of Enterprise, Trade and Employment and Forfás have also consulted widely and extensively in arriving at the positive conclusion to set up a dedicated Research Foundation under this new Fund. We have listened very carefully and attentively to the wider Research and Business community and are satisfied that this proposal reflects a balance between the demands of both the education and industrial sectors. The mechanism proposed will be of the utmost benefit to both.

The Foundation, which will operate under the aegis of Forfás, will in pursuit of its objectives: - consult widely with national and international experts in selecting the niche areas. - fund world class Research in the selected niches on the basis of a competitive international peer review process. - ensure that the continuation of support for any project funded by the new Foundation will be dependent on a continuing Research output at a world class level.

It is envisaged that the new Foundation will have a two pronged approach to funding. Firstly, researchers in Third Level Colleges and research institutes 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.

This Government does not underestimate the challenge facing the new Foundation to develop significant clusters of world class teams which can make a major impact as judged by their international peers. Ireland has faced such challenges in the past when we first began to attract high technology investment. I am confident that we have the creativity now to develop a research environment which will compete with the best in the world in strategic niche areas.

We are employing a High Level Implementation group in order to assist with the setting up of this ambitious project. This Group will advise the Government on the arrangements and the decisions required in order to allow our Department of Enterprise, Trade and Employment and Forfás ensure a smooth launch for the new Foundation. This special group will present the results of its deliberations to Government by the end of June next.

It is vitally important that the S&T community, continues to work together to ensure that Ireland reaps the long term innovative benefits of this investment. It is only the first but nevertheless essential step on a long ambitious road ahead.

I am very confident however that with continuing consultation, astute management, world-class people and the support of the entire research community we can, both in partnership and co-operation with all concerned, deliver the economic objectives for this country and society as a whole, in the exciting Millennium ahead.

I would like to pay tribute to all of the graduates who are being conferred here tonight. You are the vanguard who have been prepared to undertake this onerous course of study in Technology Management. Your companies, through their foresight, have recognised the potential of this programme to develop the needed scale and depth in the R&D and technology functions. I would like to wish you the very best in the years ahead as you continue to pioneer the management of technological innovation in your companies and thereby assist in a major way the continuing economic growth in all regions of our Country.