Tánaiste Welcomes Ireland's Action Plan To Promote Investment In R&D To 2010

Background

Investment in research and development is at the heart of the European Lisbon agenda to improve economic growth and competitiveness. Following a decade of relatively stagnant growth and lagging competitiveness, the EU Heads of State at Lisbon in 2000 agreed a strategy to reinvigorate growth in the EU. At Barcelona in 2002 Heads of State agreed to a target for Europe for gross expenditure on R&D to reach 3% of GDP by 2010, from 1.9% currently. They also agreed that two-thirds of the increase in R&D should come from the enterprise sector.

In April 2003 the European Commission published its Communication on actions required in Europe to achieve the 3% target by 2010, `Investing in Research: An Action Plan for Europe'. This European Action Plan sets out initiatives to give Europe a stronger research base and to make it more attractive to private investment in research. This Communication also provides a basis for the development of national action plans by the Member States.

In response to the Communication from the Commission, the Tánaiste and Minister for Enterprise, Trade and Employment established a High Level Steering Group in 2003, under the auspices of the Inter Departmental Committee on Science, Technology and Innovation, to determine the implications of the policy initiatives at European level and to develop an agreed Irish Action Plan. Mr Ned Costello, Assistant Secretary General in the Science, Technology and Intellectual Property Division of the Department of Enterprise, Trade and Employment, chaired the Steering Group, which included members from all Government Departments. Additional external members to represent enterprise and academic research sectors were also invited to join the Steering Group (see Appendix 1), and these external members chaired the Sub-Groups.

The Steering Group established three subgroups to examine the issues involved in the areas of

• Business Expenditure on R&D, Chaired by Dr Leonora Bishop, a member of the Irish Council for Science, Technology and Innovation;
• Public Expenditure on R&D, chaired by Dr Conor O'Carroll, Head of Research, Conference of Heads of Irish Universities;
• Framework Conditions/Business Environment for Research, Chaired by Mr Dan Maher, member of ICT Ireland in IBEC and ACT Venture Capital.

The sub groups undertook wide ranging consultation with all the stakeholders in the national innovation system, completed an in-depth review of current public and private investment in R&D and assessed the competitiveness of the business environment for R&D in Ireland. The final report was agreed by the Steering Group on 24 June 2004.

Ireland's Current R&D Performance

The report of the Steering Group notes that a key challenge for Ireland is increasing research and development performance in the enterprise sector. R&D in the business, higher education and public research institutions increased three-fold during the 1990s. Business expenditure on R&D reached €917 million in 2001:

• One-third of foreign affiliates in Ireland (300 enterprises) are active in R&D. These firms account for two-thirds of all business R&D. Of these, 50% spend less than €500,000 annually. Nineteen foreign affiliates spend more than €5 million annually and account for two-thirds of all R&D performed by foreign affiliates in Ireland;
• One-third of indigenous enterprises (1,000 enterprises) have some expenditure on R&D, with 85% spending less than €500,000 per annum. Only twenty six of the 1,000 indigenous enterprises have expenditure of more than €2 million annually.
• R&D performance in the higher education and public research sector reached €422 million in 2002. Of Government funding for R&D, 56% is allocated to third level, 32% to public research organisations and 12% to support R&D in firms. Government support to business accounts for 4.5% of total business R&D, which is below the EU average of 8%. There is a strong focus on research in biotechnology and information and communications technologies, supporting researchers in Ireland and attracting researchers from abroad.

The Vision and Recommendations

The vision set out for R&D in Ireland is:

"Ireland by 2010 will be internationally renowned for the excellence of its research and be at the forefront in generating and using new knowledge for economic and social progress, within an innovation driven culture."

The Action Plan sets out the following targets for Ireland to 2010:

• business investment in R&D should increase from €917 million in 2001 (0.9% GNP) to €2.5 billion in 2010 or 1.7% GNP;
• the number of indigenous companies with minimum scale R&D activity (in excess of €100,000) should double, from 525 in 2001 to 1,050 in 2010;
• the number of indigenous enterprises performing significant R&D (in excess of €2 million) should increase from 26, currently, to 100 by 2010;
• the number of foreign affiliates companies with minimum scale R&D activity (in excess of €100,000) should double, from 239 in 2001 to at least 520 in 2010;
• the number of foreign affiliates performing significant levels of R&D (in excess of €2 million) should increase from 47 in 2001 to 150 by 2010;
• R&D performance in the higher education and public sectors should increase from €422 million in 2001 (0.4% GNP) to €1.1 billion in 2010 or 0.8% GNP;
• The combined increases in performance in business, higher education and public sector R&D should result in gross expenditure on R&D increasing to 2.5% of GNP by 2010;
• and consequently, the number of researchers should reach 9.3 per 1,000 of total employment by 2010, from approximately 5.1 per 1,000 in 2001.

To achieve the targets set out above for building Ireland's research and development base, the following actions are recommended:

Next Steps

This report is a report to the Inter Departmental Committee on Science, Technology and Innovation. The report will be brought to the new Cabinet Committee on STI, for its consideration, following its establishment in the autumn.