Dáil Éireann - Statements on the Economy Address by Minister Devins

Check Against Delivery

As a country, we all acknowledge that we are coming through a tough period as the impacts of the international recession begin to manifest themselves as daily occurrences. As we face the biggest economic challenge we have faced in some time, it is no consolation to know that we are not alone and that we share these difficult times with most developed western economies; if anything this compounds our problems.

However, we must weather the storm of negative international economic factors. We must do so by facing our problems realistically, by keeping cool heads and adopting prudent responses, and by re-building well-grounded hope and confidence in Irish people and in the Irish economy.

Guiding our thinking and actions, will be the belief that we will come through this period of upheaval. We should not lose sight of the fact that we have confronted challenging economic circumstances before this, and we won through. There are factors that we can and must influence and control, and we must lose no time in getting to grips with this task.

How to achieve a transformation of the Irish economy in the present difficult circumstances? We will play to our strengths. We must have the right people, in the right place, doing the right jobs. As an open economy, Ireland must establish a positive enterprise environment, one which promotes the development of indigenous companies as well as being attractive for Foreign Direct Investment.

Ireland must be an entrepreneurial economy with real competitive advantages; an economy which focuses on utilisation of the knowledge, skills and creativity of its people, and their ability in translating ideas into useful processes, products and services. In achieving this vision, innovation will be the watchword.

In the course of this debate, my colleagues in Government have identified that the key elements of recovery will be secured by addressing the current economic challenges by stabilising the public finances, by improving competitiveness, by supporting Irish business and multinational companies and by supporting those who have become unemployed.

In delivering this we must keep faith with our investment in Irish enterprise and continue to support high-value innovation of products and services that will create thriving Irish companies and support significant numbers of dependable jobs, in particular by building on Ireland’s stock of highly-skilled workers.

We must build for the future by continuing our strategy of supporting research and development, by incentivising multinational companies to locate high value activity such as research and development capacity in Ireland, and by ensuring the commercialisation and retention of ideas that flow from that investment.

Over the past two years, the Government has been implementing a Strategy for Science Technology and Innovation, the key objective of which is to ensure that Ireland is to forefront in generating and using new knowledge for economic and social progress, within an innovation driven culture. We must hold fast to our plan in the conviction that we are on the right strategic path by investing in world-class research of the highest quality in strategic areas allied to the needs of our enterprise base. We must maintain this investment, even in these economically difficult times. We can see that countries that have taken this road have achieved sustainable competitiveness.

Investment in science, technology and innovation is not a luxury; it is an essential part of building our international competitiveness and our future. It is not an easy road. It is built on turning the hard slog of our brightest minds into knowledge, ideas and technologies that we can bring to the world marketplace.

As a country we have trebled Research and Development expenditure over 10 years from a very low base. We have reached an intensity ratio of 1.56% of GNP. In terms of such investment, we are nowhere near top countries like Sweden, Finland, Japan, Korea whose intensity ratio is more than double ours. Over the last 10 years, China has more than doubled its intensity from a very low base and now spends more on R&D as a percentage of GDP than Ireland – this is surely an indication of the competition we are facing and the urgency with which we must act.

As Minister for Science, Technology and Innovation, I am responsible for the development, promotion and co-ordination of Ireland’s Science, Technology and Innovation policy. Fundamentally, this Strategy is seeking to create for Ireland a competitive edge on the global market by building a new competitive advantage based on an increased capacity to generate, protect and use new knowledge, by developing mechanisms to translate knowledge into jobs, exports and growth; underpinning this we must achieve a level of excellence in research previously lacking and we must advance science and technology engagement, nationally.

The enterprises that will survive and grow are those that deliver innovation, quality and value whether in goods or services. The necessary improvements required in efficiency, quality and productivity can be driven through investment in research, development and innovation facilitated by key human capital.

To this end, the Government Strategy for Science Technology and Innovation provides a co-ordinated suite of inter-related programmes and my Department funds investments through the enterprise agencies Science Foundation Ireland, Enterprise Ireland and the IDA to tackle this challenge.

Ireland is investing smartly. Key enterprise state agencies, IDA Ireland, Enterprise Ireland and Science Foundation have been working towards the achievement of the ambitious mandate set by the Strategy.

IDA and Enterprise Ireland are promoting the use of Research in enterprises and they leverage this strong research base to commercialise the outputs of research through intellectual property licences and start –up companies as well as to attract high quality Foreign Direct Investment into Ireland.

These two agencies are working closely with companies to strengthen the research and technological base of the enterprise sector in order to drive productivity, competitiveness exports and jobs.

Enterprise Ireland has developed a range of schemes to ensure we have the capacity to capture and transform the ideas and advances coming from higher education research into commercial reality. Backed by this support companies are opening up new markets with innovative products and services.

In order to tap into the capacity and talent available in our Third Level Educational Institutions, Enterprise Ireland has funded strong Technology Transfer to ensure the commercial outputs of publicly funded research is realized and to help industry collaborates with the Third Level sector to find solutions to the research problems they face.

We are growing our Higher Education research base through Science Foundation Ireland investments, linked to industry needs and to the activity of the IDA and Enterprise Ireland. Taking advantage of the physical infrastructure provided by the HEA on third level campuses, Science Foundation Ireland is providing world-class researchers working in strategic areas allied to the needs of industry.

SFI is also building large-scale research centres, known as Centres for Science Engineering and Technology, and Strategic Research Clusters with industry partners. Thus we are building a strong research base which is directly aligned to industry needs but, while maintaining a strong connection with higher education to producing top quality graduates and PhDs armed with the skills the economy requires

We can see the success of our connected approach.

In 2008, 56 IDA research, development and innovation investments, valued at €420m, were won and almost one third of these investments involved collaboration with Irish third level institutions and research institutes, many of which have been supported by Science Foundation Ireland and the Higher Education Authority.

Enterprise Ireland client companies are opening up new markets with innovative products and services - directly linked to advancements in innovation, research and productivity and payback will come in helping Enterprise Ireland companies meet a target of securing €4 billion new exports over 3 years. Delivering on its mandate to transform Research and Development activity in Irish enterprise, during 2008 Enterprise Ireland has assisted 757 companies to undertake R&D investment include top companies such as the Kerry Group, Iona Technologies, Trinity Biotech, Glanbia, Kingspan, Greencore and Datalex.

New High Potential Start-up Companies, yielded sales of €638m, exports of €344m and generated employment of 5,500 over a six-year period. The Campus Incubation Programme which funds centres for the incubation of emerging business ideas and enterprises, now has put in place business incubation centers on every Institute of Technology campus in addition to six business incubation facilities in the Universities and six more specialist bio-incubation facilities, also in Universities. At the end of 2008, there were 240 companies located in such centers, employing over 1,000 people.

During the past eight years Science Foundation Ireland has focused on building a high quality research environment in Ireland in an effort to establish Ireland as an international location renowned for the excellence of its scientific research. The Agency has been very successful in this ambitious objective. The number of research teams working in strategic areas grown to 336 at the end of 2008.

SFI-funded projects involve interactions with over 300 companies both indigenous and multinationals and in addition 103 distinct companies are involved in 131 formal, cost-sharing collaborations. There is a high degree of overlap between IDA R&D clients attracted to Ireland and SFI investment such as IBM, Boston Scientific, Beckman Coulter, to name but a few. SFI projects have facilitated substantial growth in the number of companies formally working with academic researchers on SFI projects through its Centres for Science and Engineering and the Strategic Research Cluster programmes.

The Government’s investments in Research and Development through the IDA, Enterprise Ireland, and Science Foundation Ireland are central to the Science Strategy. In any period of change, for those that are alert and visionary there are opportunities. It will challenge us to innovate, change, to reinvent what we do and how we do it.

We will hold fast to our aim to be among the leading locations for business innovation, to be a country where there will be a critical mass of companies creating the products and services of tomorrow, a country that provides the best environment for the commercialisation of innovative, leading-edge products and services. Despite the present circumstances, we will grapple with the challenge of funding the necessary increased investment in this area over the difficult years ahead in order to ensure that we will have a secure future.

ENDS/IP82