asked the Minister for Industry and Commerce if, in view of the urgency of upgrading the technology capacity of Irish industry, he will state (a) the number of technology transfer agreements completed in 1985 with foreign companies; (b) of these, the number which were joint ventures; and (c) the number of applications to date for the new technology acquisition grants under the Industrial Development Act.
Ceisteanna—Questions Oral Answers. - Irish Industry: Technology Capacity.
28.
I am informed that the industrial development agencies under the aegis of my Department arranged for the conclusion with overseas companies of 52 technology transfer agreements in 1985, of which 28 were joint ventures. The Industrial Development Act, 1986, enacted on 7 May contains provision for a new technology acquisition grants scheme to assist companies to develop their technological capability. As the proposed scheme represents a change to our regime of State aids, the approval of the Commission of the European Communities will be required prior to its implementation. The relevant notification has been sent to the Commission. In the meantime a number of companies have expressed interest in availing of the new technology acquisition grants and they are in discussion with the industrial development agencies on this subject.
It is quite clear that high industrial output and new sources of employment depend on the electronics sector. The Irish productivity centre noted in May that software will grow by 20 per cent a year over the coming decade. They said Ireland is quite weak in this sector. Can the Minister state whether any special effort is being made to remedy our weaknesses in the software area by buying in expertise through specific joint ventures with established overseas companies?
First of all, I do not think it is correct to say that our total industrial base will be dependent on high technology. That is not the way to approach it. It is only part of the policy, and certainly an important part. The IDA encouraged over the last number of years the development of software by bright young Irish graduates working in companies here or coming from the universities. They also succeeded in encouraging major electronics companies to locate research and development divisions of their operations, including software, in Ireland. I agree with the Deputy that software is an area of great potential. The agencies are very aware of that and are actively promoting the development of software both indigenously and by the enticement of foreign companies into Ireland.
I did not indicate, as the Minister said, that the software electronics sector is the only expanding element of industry. Can the Minister comment on a recent report by the sectoral development committee on the electronics industry which pointed out that large numbers of skilled personnel, especially in the software area, are leaving the country because of heavy taxation on their pay?
(Limerick East): There are areas at the front edge of industrial development especially in research and development. Part of this is in the development of software and coarseware, where there is a very small number of experts worldwide who operate in a world market. They can be attracted out of the country and into the east coast of the United States, or into California, by offering levels of salary which would be impossible to match here. A number of sections in the recent Finance Bill will help in a major way because stock options can be provided by companies to recompense targeted workers they regard as having very high levels of skills, who are in the world market and who can move quite easily.
The report by the development committee said that quite a number of people are leaving the country because of taxation. The Minister says they are going because they are getting high salaries. Does he not accept that the reason they are leaving is taxation on pay? Does the Minister not consider that it is unsatisfactory that the national micro-electronics research centre which was intended as a focus for joint research and development between the universities and industry depends to such an extent on the EC for its research work? In 1985, 54 per cent of its research work came from the EC. What steps does the Minister envisage to increase participation by native industry in research and development?
A small number of very qualified graduates in electronics and in pharmaceuticals leave Ireland and others come in. The movement is caused by a variety of factors. Many people like to travel when they are young. Others go for experience. Others are attracted out by lifestyle and others are attracted out by money. Taxation in individual countries is included as part of that package but it is impossible to put a figure value on it. It is something that always has to be taken into account. In the absence of radically reducing taxation, the best option is to allow companies to target key personnel in the manner in which they can now target them as a result of the stock option provisions in the recent Finance Bill.
The second question raises a very interesting matter about the level of research and development and other areas such as management and marketing in indigenous companies. As the Deputy is aware, there is now a conscious policy of developing key indigenous firms. It is a company development scheme which, among other things, would be interested in developing research and development in indigenous industry. As the Deputy rightly points out, proper research and development are the key to expansion in the future.