Vol. 592 No. 3
75 Mr. Broughan asked the Minister for Enterprise, Trade and Employment if his attention has been drawn to the finding of the report on the Lisbon Agenda, drawn up for the EU summit in Brussels, which shows that spending on research and development here is well below the EU norm; the steps he intends to take to promote greater expenditure on research and development; and if he will make a statement on the matter. [28327/04]
133 Mr. J. O’Keeffe asked the Minister for Enterprise, Trade and Employment the remedial action he will take to tackle Ireland’s substandard performance in areas like public investment in research and development as identified in the National Competitive Council’s competitive challenge report of October 2004; and if he will make a statement on the matter. [28352/04]
I propose to take Questions Nos. 75 and 133 together.
The research agenda is one of the most important elements in the Department's drive——
Is the Minister of State not taking all the related questions together?
I am taking these two together, but separately from Questions Nos. 76 and 96.
The research agenda is one of the most important elements in the Department's drive to grow competitiveness and quality employment. As the Deputy has identified, several recent reports, including those of the National Competitiveness Council, the enterprise strategy review group and the national research and development action plan have pointed to our strong economic and commercial need continually to develop our research and development potential.
At the European Council in Barcelona in 2002, the Heads of State agreed that overall spending on research and development in the Union should be increased from the current EU average of 1.9%, with the aim of Europe approaching 3% of GDP by 2010, and with two thirds of that new investment coming from the private sector. In consequence, each member state was asked to set a target for its research and development spending to 2010 and to draw up an action plan for its achievement.
Ireland's action plan has been developed under the aegis of the Department by a group involving representatives from industry, venture capitalists, universities and institutes of technology, Departments and agencies. The plan was published in August 2004. It sets a target of spending on research and development of 2.5% of GNP by 2010 and makes a range of high level recommendations in pursuit of that aim.
I very much support the action plan targets and recommendations. They are ambitious but represent the kinds of actions that Ireland must undertake to continue to be competitive in a fast-changing, globalised economy. While public expenditure must increase to meet the 2.5% target, it is important to recall that in line with the overall Lisbon and Barcelona strategy, the critical change must occur in industrial involvement in research and development. In that regard, achievement of the target requires that industry research and development spending increase from €917 million in 2001 to €2.5 billion in 2010. While industry must drive the process, we are fully conscious of the vital supportive role that the Government must play in developing the environment for research and development.
In that regard, the National Development Plan 2000-2006 aims for a significant increase in support for research and development, with total spending of €2.48 billion planned for the period. In this Department, expenditure on research and development rose from 8.9% of gross public expenditure in 1999 to over 21% in 2003. In particular, Science Foundation Ireland's investments have made a significant impact in marking Ireland out as an attractive location for excellent researchers from around the world. Similarly, in education, the programme for research in third level institutions has impacted strongly on bringing the research infrastructure in our universities up to the standard expected for carrying out world-class research and development. Under the NDP it is intended that funding for SFI will continue to increase in coming years.
As regards fiscal measures, the Finance Act 2004 for the first time provides for the introduction of a research and development tax credit. The 20% credit provides an effective incentive to industry to increase research and development and help enhance our competitiveness as a location for new internationally mobile research-related investment. In addition, Enterprise Ireland and IDA Ireland provide direct supports to firms to increase their research and development capability and in promoting collaborative research involving companies and the third level institutions. The Department is working with Forfás, SFI and the enterprise agencies, reviewing existing schemes and incentives to ensure that they are optimally tuned to the goal of significantly growing enterprise investment in research and development.
Becoming a truly knowledge-driven and innovation-driven society requires a whole-Government approach. That is why we are putting in place new structures and mechanisms to bring all key research funders and policymakers together. Those include a dedicated Cabinet sub-committee on science, technology and innovation, supported by an interdepartmental committee, and the appointment of Ireland's first chief science adviser. I am asking the interdepartmental committee to ensure that the principal funding agencies be brought together to achieve genuine inter-agency co-operation and a consensus response to the action plan targets.
We must move rapidly from analysis to enhanced action based on the significant achievements of recent years. It is intended that the approach just outlined to the House should result in firm recommendations on the shape and scope of our science and technology programme initiatives and the level of investment required being made available to the Cabinet by the interdepartmental committee by mid-2005.
I thank the Minister of State for his comprehensive reply. While a great deal of work has clearly gone into expanding the role of research and development in Ireland, perhaps I might ask a few specific questions. Notwithstanding all we have done in terms of Science Foundation Ireland and the chief science adviser to the Government, when will Ireland meet the action plan target to spend 2.5% of GDP on research and development? When will we achieve the Lisbon Agenda target of 3%? Is it a cause of concern that while Ireland is performing well on many fronts, only 1.2% of gross domestic product is spent on research and development? Since the Minister of State has identified industrial spend as a difficulty, how does he propose to ensure research and development becomes a critical component of industrial development? What has been the uptake of the tax credit for research and development?
I do not have up-to-date information because figures are not available regarding the uptake of the tax credit.
Has it been good, bad or indifferent?
The indications from industry are extremely positive in that it has been a significant incentive to industry. However, the tax credit is relatively new. I will forward figures to the Deputy if they become available.
I refer to the GDP target and the current position on expenditure. The Deputy is correct that a significant gap must be bridged. The Minister has asked the interdepartmental committee to set intermediate targets and to report on an ongoing basis because the target has been set for 2010, which is a considerable time away. He is most anxious that intermediate targets should be set and met and, if they are not, new actions to meet the targets should be devised. The 2.5% target referred to by the Deputy is ambitious while the 3% target is extremely ambitious. However, by monitoring expenditure on an ongoing basis, it will be possible to ascertain what progress is being made, what actions are effective and what new and alternative actions may need to be taken.
We all acknowledge that, on the basis of his previous job, the Minister is extremely good at commissioning reports, but we would like to see results.
There is nothing other than the 2010 target date to achieve the level of research and development that those who are charged with formulating the new strategy for Europe regard as critical now. Does the Minister of State regard this deficiency as posing the greatest threat to the continuation in the State of competitiveness and the new era of job growth based on new technologies such as biotechnology and nanotechnology?
Given that Ireland is so far behind now and that all the strategies implemented by the Government parties over the past seven years have resulted in a less than impressive research budget in comparison with our European colleagues, how can we be confident the 2010 target will be achieved?
I refer to the number of research and development personnel. It is projected that to meet the target, Ireland will need to have 8,000 research and development personnel in place by 2010. The report on future skills estimated that, within current constraints across a range of fronts, the shortfall would be between 3,500 and 3,600. A number of initiatives have been taken, not least by Science Foundation Ireland, to ensure the quality of personnel required to advance Ireland's position in research and development are attracted to the State.
I launched a programme on behalf of the heads of universities last week to facilitate personnel who take up these positions. Progress has been made, for example, in identifying the difficulties they face. The programme being implemented by the heads of universities will facilitate the transfer of qualified personnel to the State and will address many issues that have caused difficulty in attracting such people.
The Deputy is correct that Ireland was a late starter in this area. Prior to 1998, no Government spending was directed at science and technology or research and development in the context of the Barcelona and Lisbon targets. That has been addressed quickly. The Minister is correct to ensure intermediate targets are set and met and, if they are not, action should be taken to meet them. No external reports are required in this regard.
During the debate on the Industrial Development (Science Foundation Ireland) Act 2003, much consideration was given to broadening the areas of investment for research beyond the current two, information technology and biopharmacy, to a third category, sustainable technologies. Given the dramatic increase in the price of oil since and the resultant cost to the State, is the Minister of State happy with the level of research and development in the area of renewable technologies? The only investment of which I am aware is a €7 million budget available from the Department of Communications, Marine and Natural Resources for renewable energy projects. Given the massive financial implications of dwindling oil production for the State, should it increase investment in research and development in industries such as tidal power and wind power where Ireland has a competitive advantage? Will the Minister of State commit to carrying out a review of the broadening remit of Science Foundation Ireland, as agreed in amendments to the Bill establishing it, and include sustainable technologies as suitable for investment?
Renewable energy is a matter for the Minister responsible. However, a number of programmes have been introduced in this area. The interdepartmental committee and the Cabinet sub-committee are addressing a much wider range of research and development and science and technology proposals than the narrow ones regarded as the core business of Science Foundation Ireland. I attended the launch of the SFI report on 1 September in Dublin Castle and was overwhelmed by the magnitude of the task, but I was also impressed by the manner in which SFI is taking on the challenge, especially given the quality of the people who have been attracted to Ireland and the commitment of third level institutions to this area. I will pass on the Deputy's concerns on renewable energy to the Minister but I assure him that the personnel involved in this area are committed to delivering the target.
76 Mr. Broughan asked the Minister for Enterprise, Trade and Employment the progress made with regard to the implementation of those areas of the Lisbon Agenda for which he has responsibility; and if he will make a statement on the matter. [28326/04]
96 Mr. Naughten asked the Minister for Enterprise, Trade and Employment the progress to date on the Lisbon Agenda; and if he will make a statement on the matter. [28353/04]
I propose to take Questions Nos. 76 and 96 together.
In so far as my Department's area of responsibility is concerned, key issues covered by the Lisbon Agenda relate to establishing a European area for research and innovation, creating a friendly environment for starting up and developing innovative businesses, especially small and medium enterprises, developing an active EU employment policy, developing the information society, measures for completing a fully operational internal market and certain company law and corporate governance measures. While the Lisbon Agenda is supported by a series of sectoral targets and structural indicators against which EU performance is measured by reference to the average performance of member states, it is not based on country specific targets. It is a matter for each member state to take appropriate action and develop its own mix of policies with a view to contributing to the EU-wide goal of the Lisbon Agenda.
Implementation of the agenda is an incremental process across a wide range of diverse policy areas. However, my Department has been and will continue to be proactively engaged in pursuing policies in the areas under the agenda for which it is responsible that are designed to contribute to the achievement of the overall Lisbon goal. The key actions include completing the Internal Market. Ireland's commitment to the Internal Market is clear from the significant progress with regard to the implementation of internal market measures in recent years, moving from a ranking of 13th in the league table of member states in the European Commission's Internal Market scoreboard in mid-2003 to a position of joint third in the latest scoreboard published by the Commission in July. Ireland's transposition deficit of 1.2% is ahead of the target of 1.5% set by the European Council in the context of implementation of the Lisbon Agenda.
A key component of the agenda is the creation of the European research area and the European Council has set a target of average overall spending on research and development of 3% of GDP by 2010, and with two thirds of this new investment coming from the private sector. Ireland's investment in research and development is approximately 1.4% of gross national product, which is below the EU average. However, the recently published Irish Action Plan for Promoting Investment in R&D, dated August 2004, responds to the earlier recommendations of the Commission in this area. It sets a challenging but achievable target of 2.5% of GNP spend on research and development by 2010 and proposes a range of actions to achieve this.
With regard to employment, the targets set at Lisbon for 2010 are an overall employment rate of 70%, a female employment rate of 60% and an employment of older workers of 50%. The European employment strategy is the tool used for the implementation of the employment objectives of the Lisbon Agenda. The National Employment Action Plan 2003-2005, prepared by my Department, is Ireland's response to the European employment strategy. Ireland had achieved an overall employment rate of 65.4% at the end of 2003. The employment rate for women stood at 55.8% while that of older workers stood at 49%. By contrast, the average employment rates for the 25 EU member states for the corresponding period are an overall employment rate of 62.9% and 55% and 40.2% for female and older workers respectively.
Measures in a range of other areas such as enterprise and SME policy to improve the administration of business start-ups, implementation of the charter for small enterprises, e-business, development of a national e-business strategy, regulatory reform and company law are also relevant.
We have listened to the laudable list of objectives set out in the Lisbon Agenda. Does the Minister of State accept that the outgoing European Commission President, Mr. Romano Prodi, has labelled the process a big failure? Does he also accept that the expert group, chaired by the former Dutch Prime Minister, Mr. Wim Kok, published its report in the past few days indicating there is a lack of commitment and political will towards the process? It warns that the process could become a synonym for missed objectives and failed promises. In that context, is the process still on track?
What does the Minister of State propose to do to deal with Mr. Wim Kok's recommendation that member states prepare national programmes to commit themselves to delivery on the process and to engage citizens and stakeholders in it? Does he agree with the recommendation that far more emphasis must be placed on involving European social partners and engaging European citizens with the case for change?
The Minister of State has listed all the positive achievements for Ireland. However, does he have anything to say with regard to the objective of social cohesion, in particular, the finding in the analysis that Ireland has 21% of its population at risk of poverty, in comparison to the European Union's average of 15%? Despite our growth, success and employment rates, 6% more of the Irish population is at risk of poverty than the populations of any of our European member state countries.
I am aware of the findings of Wim Kok's report. The Deputy will not be surprised to hear that the issue frequently features at European Council meetings. The European partners have directed much attention to trying to achieve the Lisbon targets and those of the Barcelona agreement in that regard.
The partnership process here is considerably more well developed than at European level, but I take the Deputy's point that there is a strong case for better involvement of the social partners at European level. We try to encourage them to use our experience to advantage at that level. With regard to the targets, Ireland has, undoubtedly, set about addressing them as discussed in the previous question. On the question of social cohesion, nobody can argue otherwise than that the social partners have a direct and strong involvement in ensuring we meet the targets in that regard.
Written answers follow Adjournment Debate.
