I welcome the Minister of State, Deputy Seán Sherlock, and his officials. Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
I ask the Minister of State to begin his briefing on his proposals to support enterprise and promote business innovation.
I thank the committee for the invitation to appear before it today. I am very pleased to be here to discuss my role as Minister of State with responsibility for research and innovation. I am accompanied by Mr. Michael Davitt, assistant principal officer, Mr. Martin Shanagher, assistant secretary, Ms Anne Forde, principal officer, and Ms Helen Nugent, Ms Gráinne O'Carroll, Ms Patricia Timmins and Ms Anne O'Mahony.
Members of this committee will be aware that the Government has set job creation and retention as one of its key priorities in the programme for Government. In this context, the concept of supporting enterprise and promoting business innovation goes to the heart of what we are doing as a Government. We will seek, and we will succeed, in our efforts to provide a better future for our young people, for our society and for Irish business by creating a climate in which entrepreneurs can do business, business can flourish and trade can grow. Our objective in Government is clear. We are encouraging the renewal of a sustainable economy by putting in place supportive enterprise policies and investments aligned to deliver a return of sustainable jobs. A key element of these policies is the research and innovation initiative. It is a central priority at the core of my Department's efforts and that of the enterprise State agencies under the auspices of my Department.
Our exports are performing well and leading recovery. In June 2011, exports were up 5.6% to €8.343 billion on June 2010. The €4 billion trade surplus in June was the highest ever. This feeds through to the domestic economy as exporting companies grow and increase their trade with suppliers. Investment in science, technology and innovation is directly linked to growth in sales and exports. From 2000 to 2009, exports from El and IDA firms that were research and development performers grew from €44 billion to €87 billion while exports from non-performers fell from €48 billion to €39 billion. Research and development and innovation has evolved to become a key driver of business success.
I would like to outline the areas of focus within my brief as Minister of State with responsibility for research and innovation. They are supporting the agenda for research, development and innovation and ensuring it is a strong driver of growth; prioritising public investment in research, development and innovation so we obtain the greatest possible return on our investment in terms of jobs, new intellectual property and technologies; winning more FDI investment and getting enhanced technologies and ideas rapidly from research to companies that will commercialise them; and ensuring that our education system is lining up the skills and expertise needed for the future. Our emerging workforce will need skills in science, technology, engineering and maths and these skills must be fostered from the early days of school life.
I strongly welcome the fact that our cost base is improving to enhance our competitiveness but cost reduction is only part of the answer. If we are to compete and be successful in the challenging and competitive trade environment in which we operate, Ireland must become both a high productivity and high innovation economy. We must have top-class research and innovation and embed it in our enterprise because this is a sure-fire way for Irish companies to acquire a competitive advantage in national and international trade.
As a country, we have trebled the level of investment in research and development. We strongly support enterprises to do more research and development. We have invested in human capital, in top quality researchers and third and fourth level education. We have now got excellent physical research infrastructure in place and the structures to commercialise research. This public investment has accelerated the creation and application of new knowledge and technologies, has contributed significantly to the competitiveness of indigenous enterprise and has played a large part in attracting increases in foreign direct investment.
The three enterprise agencies, Enterprise Ireland, IDA Ireland and Science Foundation Ireland, are working together in a coherent and complementary way under the direction of my Department to support the development of an innovative and vibrant enterprise sector. I will briefly touch on the role being played by a number of agencies in implementing and underpinning Government policies in this area.
Through Enterprise Ireland we are working to enhance the capacity of indigenous enterprise to develop new products and services, we are building research development and innovation capacity within companies to create competitive advantage, we are providing support to commercialise research ideas and we are developing and fostering links with the third-level research base.
Enterprise Ireland's goal is to grow the capacity of Irish companies so that both domestic activity and exports can expand, create wealth and increase jobs. Enterprise Ireland client companies exported €14 billion in 2010, which was a 10% increase on 2009. New export sales totalled a record €1,945 million, with growth in all major sectors. During 2010, El approved funding to 1,070 companies, supported 80 new innovative start-up enterprises, and financial support was approved for significant research and development projects, that is a grant in excess of €100,000, for 860 client companies. In 2010, 8,193 new jobs were created in El supported companies, bringing the total number employed in these companies to 137,000.
With the goal of getting existing companies involved in research and innovation and of developing new innovative companies, a number of strategic programmes are offered by Enterprise Ireland. The high potential start-up scheme provides supports and funds for start-up companies and entrepreneurs through investment in equity. The target is to increase the number of new companies created to 100 per annum by 2013. The initiative to transform research and development activity in enterprise fosters and supports the growth of research and development capabilities needed by an enterprise to grow, develop and trade. Through industry collaboration programmes, companies are linked with third level researchers and get them working together for the benefit of industry. The commercialisation of a research programme provides funds to bring an already developed research idea to a point where it can be transferred to the market place.
Through the IDA we are continuing to attract high quality foreign direct investment projects to Ireland and embed existing FDI companies in the Irish economy. Half the FDI wins are now research and innovation projects; in 2010 there were 37 investments, worth around €500 million. The IDA is focused on winning new investments, in particular in sectors such as life sciences, including pharma, biopharma and medical devices, ICT and financial services.
Foreign direct investment has been hugely important for the Irish economy and job creation over the last 30 years. The IDA supported FDI sector alone accounts for around 240,000 jobs in the economy or 13% of the labour force. Research, development and innovation plays its strategic role as part of Ireland's FDI landscape embedding existing employment and setting the groundwork for increased future employment. In overall terms, IDA and Enterprise Ireland client companies directly accounted for the employment of approximately 300,000 people in the Irish economy. These companies also supported an estimated additional 300,000 indirect jobs.
Through Science Foundation Ireland we are continuing to foster top-class research and develop and make Ireland into an attractive option for researchers and firms seeking to conduct world-class scientific research. In ten years, Ireland has moved from Third World status into the world's top 20 countries based on quality of research output. Science Foundation Ireland activities are undertaken because the long-term competitiveness of enterprise can only be successfully built upon a base of top-class national research.
Much of the focus of SFI is directed to strengthen connections between researchers and industry. This is achieved through the centres for science, engineering and technology - CSETs - and strategic research clusters - SRCs. SFI currently supports nine CSETs and 19 SRCs and currently supports over 2,500 research positions directly. CSETs and SRCs help link scientists and engineers in partnerships across academia and industry to address crucial research questions, foster the development of new and existing Irish-based technology companies, and grow partnerships with industry that will make an important contribution to Ireland and its economy.
A substantial impact of the SFI investment is in attracting new foreign direct investment, previously beyond Ireland's reach. Importantly, this also underpins existing jobs. SFI researchers now interact with 534 companies, the majority of whom are IDA and Enterprise Ireland clients based in Ireland.
Although not within my brief as Minister of State with responsibility for research and innovation, I want to speak briefly about the role of county and city enterprise boards in supporting small enterprises. A network of 35 local offices are the primary initial contact point for business start-ups in Ireland. The micro-enterprise support programme assists business start-ups at local level. Exchequer funding of €27 million was provided for the CEB network at the start of 2011 and an extra €3.1 million was recently provided to fund further job creation projects, a necessary investment in the current economic situation. A number of other areas of activity such as the programme for research in third level institutions and the work to enhance maths and science literacy have an important bearing on the future for the enterprise sector, for which I have responsibility.
PRTLI is an enabling investment, putting in place the bedrock of national research capacity in the higher education sector. This includes top-class research infrastructure, namely, buildings, laboratories and cutting edge equipment, including national shared facilities and structured PhD programmes. It is about providing appropriate top-class facilities for Ireland's research community while also providing training and education opportunities for our next generation of scientists. It will significantly contribute to the Government's goal of developing the capacity and capability of the higher education institutions to carry out high quality research across various fields of strategic national importance. The €359 million investment under PRTLI will stimulate our economy and is an investment in the future.
On science, technology, engineering and mathematics, STEM, I am working in a cross-departmental role with the Departments of Education and Skills and Jobs, Enterprise and Innovation to enhance science and maths literacy and to up-skill our emerging workforce for the skills needs of the future. We must ensure that graduates in science, technology, engineering and maths have the relevant skills that are applicable in the current employment market. While the latest OECD data shows that, on average, the number of science graduates in Ireland is higher than other countries, there is need for continued focus. A targeted approach is being taken to bridge the short-term skills gap in ICT graduates identified by the expert group on future skills needs. We will also address the longer-term pipeline issues. The emerging action plan on ICT will be complemented by initiatives to improve the mathematical proficiency of new entrants to higher education, as well as by measures to ensure that the higher education sector responds to the changing skills needs of industry. The promotion of science awareness and careers in science is particularly important if there is to be a steady pipeline of young people equipped to sustain a true knowledge economy.
The Discover Science and Engineering, DSE, programme, an initiative of my Department and Forfás, has undertaken two key initiatives as part of the ongoing campaign to encourage young people to develop an interest in maths and in careers where a high level of competence in maths is required. A major reform in the teaching of maths at primary and post-primary school, Project Maths, is also under way, involving a major curriculum revision, a different approach in the examinations papers and a nationwide programme of education for existing mathematics teachers. From summer 2012, bonus points will be awarded to students who achieve a grade D3 or above in leaving certificate maths in respect of entry to higher education institutes. In addition, the programme for Government contains commitments to reform maths and science teaching at second level, to make science a compulsory junior certificate subject by 2014 and to prioritise professional development for maths and science teachers.
The Government is committed to ensuring that we get the maximum return on public investment in science, technology and innovation. My Department, together with Forfás, is leading a research prioritisationinitiative to identify areas of opportunity with the greatest potential to deliver economic return, with a view to the Government prioritising the public investment in science, technology and innovation to support the real opportunities there. This is chaired by Dr. Jim O'Hara, formerly of Intel. Another planned change is the extension of the remit of Science Foundation Ireland, SFI, to enable it to bring the research it funds closer to market. Work is also well under way on the development of an intellectual property protocol, the objective of which is to establish clear, straightforward ground rules around ownership of and access to all State supported IP, with a view to supporting commercial exploitation of the results of publicly funded research. Clarity and certainty with regard to IP can be another plus in choosing Ireland as a place to do business.
I thank the committee for the opportunity to make this presentation this morning. I assure the committee that the Government is taking a strategic approach to the science, technology and innovation field. I welcome all opportunities to engage with this committee or individuals of it on any aspect of this field. I would argue that it is largely an apolitical space and, as such, the views of all Senators and Deputies will be vital. The more we engage with committees and individual Members, the more proficient we will be in terms of the roll-out of policies in this area. The Government is open to engage with Members on identified needs in this regard. I thank the committee for its time.
I thank the Minister of State for his presentation.
I, too, thank the Minister of State for his presentation. I apologise for having to leave early but I must be in the House at 10.30 a.m.
The Minister of State said that Enterprise Ireland had approved funding to 1,070 companies and supported 80 new innovative start-up enterprises in 2010. What are the figures for this year? Are we moving forwards or backwards in that regard? The Minister of State also said that 8,193 new jobs were created in EI supported companies in 2010. How many jobs were lost in EI supported companies in 2010?
On the high potential start-up scheme, the Minister of State said that the target is to increase the number of new companies to 100 per annum by 2013. Where are we in that regard? How many such companies are we currently supporting and how has this improved in recent years? The Minister of State said that IDA Ireland made 37 investments worth €500 million - a substantial amount of money - in 2010 and that the Government is focused on winning new investments. Can the Minister of State give us the figures for this year?
On Science Foundation Ireland, the Minister of State kindly acknowledged the work done in this area during the past ten years and in terms of research and development, where the country has moved during that period. Is there any extra investment in this area for 2011? As I understand it, the investment announced was already allocated to Science Foundation Ireland in the 2010 budget. Also, how many patents have been developed as a result of Ireland's fairly substantial investment in science and technology?
The Minister of State said that another planned change is the extension of the remit of SFI to enable it to bring the research it funds closer to market, which is crucial. Perhaps the Minister of State will indicate where we stand in that regard. I am tempted to ask a question about the county enterprise boards but will not because they are not part of his brief.
Science Foundation Ireland funds basic research. We need to move it into a more applied space. The key aim is to increase market outputs. The research prioritisation exercise is focused on ensuring that research can move into a commercialisation space and, therefore, create necessary spin-outs and embed further the collaboration between industry and academia. In extending the remit of SFI into a more applied space we can facilitate that process. That is key. The legislation in that regard is currently being drawn up. It is vital that we acknowledge the collaboration between SFI and industry. Approximately 3,000 researchers are funded and there are 530 plus collaborations with industry or individual companies. We are talking about supporting 90,000 plus jobs in this field.
We need to ensure Science Foundation Ireland, SFI, is in a space in which it is closer to industry but maintaining its core principle of having the best researchers in the field. That is where the funding of basic research comes into play.
The rate of job losses is being stemmed. While no spin can be put on the fact that in 2009 there were 18,000 net jobs lost compared to only 5,300 net new jobs, the rate of losses is being stemmed now, which is vital in Enterprise Ireland's view. In 2010, there were 80 new HPSU, high potential start-up, companies. The HPSUs have funded about €18.7 million in equity grants and €21 million in follow-up investment. In the first six months of 2011, some 41 HPSU companies were supported which will provide more than 750 jobs in the next three years.
Patent applications in 2005 came to 83 while in 2010 they came to 101. In 2008 and 2009 they came to 2002 and 144 respectively. Licensing arrangements between 2005 and 2010 went from 12 to 93. More licensing of innovations is good for industry and academia. I accept the peak in 2008 has reduced but it has gone up on average since 2005.
SFI capital grants increased from €150 million in 2010 to €160.8 million in 2011.
I worked in the enterprise area for seven years and it reminded me of the man asking how does one get to somewhere, only to be told not to start here. The area is fragmented with many agencies involved such as Enterprise Ireland, InterTradeIreland, the IDA, county enterprise boards and SFI. The person who wants to start up a business will do the rounds of these agencies, and is often sent from one to the other. Sometimes, a business may fall between the stools with no agency dealing with it, a frustrating experience.
Ideally, each city or provincial town should have a business incubation campus with an individual to represent these agencies, dealing with prospective businesses and plugging them into the appropriate agency. Third level institutions could have an outreach office in these campuses too. Hot desks could also be established to allow a business bring potential customers to a clean business environment until it established its own offices. Such an approach would be more efficient, rational and cost less. Such a sharing approach could also lead to efficiencies in Enterprise Ireland and IDA Ireland offices abroad.
During the summer, some country enterprise boards had already run out of funding. Has the investment made by the Government ameliorated this problem? While we commend Enterprise Ireland on its good work, it can only be properly assessed when benchmarked against international best practice. How does it stack up against similar international organisations? I feel it is not aggressive enough. County Kildare, for example, has 12 times more Enterprise Ireland provided jobs than, say, County Meath. When asked about this, the agency will often claim not enough businesses are coming out of Meath. It should be more aggressive in campaigning in such areas to instil, develop and encourage the enterprise culture. Eighty to 100 HPSUs a year is nowhere near enough, given 500,000 people are unemployed and 50,000 emigrating. It should be 800.
SOLAS amalgamating many of the further education programmes could deliver further programmes for Enterprise Ireland and county enterprise boards. Six years ago, there was co-operation with businesses in the North on international trade visits with State agencies here. I have not seen much progress in this area. Sharing business trips abroad would lead to better efficiencies and savings while delivering for the whole island of Ireland in the same way Tourism Ireland does in tourism marketing and administration.
The changes that will take place in the county enterprise board structure will bring them more in line with the one-stop shop model. This will also address some of the concerns regarding enterprise support at local level. We all agree there needs to be a more streamlined approach. I absolutely agree with the point made on fragmentation.
With regard to job creation in science, technology and innovation I would argue there is highly evolved interaction between academia and industry. The number of collaborations is very high. It is highly evolved in the sense that Enterprise Ireland is very close to the ground and very knowledgeable on what companies' needs are with regard to science, technology and innovation because they interface with them on a daily basis. I think I can stand over this because I have responsibility for science, technology and innovation.
Extending the remit of SFI to allow it into the applied space would leverage more in terms of economic outputs. However, a challenge still exists. We could do more work with the technology transfer offices in each institution to try to leverage more. The research prioritisation exercise will create thematic approaches on where research funding will go, so EI, SFI and the IDA will be locked into a space with the Government to allow as much as possible to be extracted. It would allow the potential to be exploited commercially to create more jobs in the field.
It is not a case of resting on our laurels. Successive Governments have realised the potential of science, technology and innovation and more and more related foreign direct investment jobs are embedded in Ireland by virtue of the research and development component. We cannot overlook this either.
I take the point made by Deputy Tóibín on streamlining. He asked for figures on the budget allocation for county enterprise boards, CEBs. Exchequer funding for the CEB network at the beginning of 2011 was €27.2 million of which €15 million was made available for capital expenditure. In the past two weeks, the Minister of State, Deputy Perry, announced funding of €3.1 million for the CEBs for further job creation projects in the remaining months of 2011. I have not seen the metrics on how this has been spent so far or what is the return on the investment in terms of job creation. It has yet to be assessed as far as I am aware.
One must be careful with regard to high potential start-ups. I imagine the Deputy has a figure in mind, and he mentioned 100 in Dublin alone. If one seeks to achieve this, one cannot be afraid of failure. By this I mean in the US, which has a highly-evolved venture capital structure, there are fewer hang-ups about failure. However, if the State will fund an exponentially larger number of high potential start-ups using taxpayers' money then the State cannot be afraid of these companies failing. There is a good chance a certain proportion of high potential start-ups will fail.
The balance we have struck is correct. I will hear the Deputy's views on it and I have an open mind. If we try to hit these targets we will be doing fairly well. We must be mindful that we are funding companies in the sector using taxpayers' money and we must be careful about how we expend these resources. There must be checks and balances to ensure the risk is mitigated.
Much work is being done with regard to InterTradeIreland and the North-South link. The trading and investing in a smart economy strategy was launched in September and it uses all of our diplomatic resources to maximise support for Irish businesses in key markets. The focus is on promoting team Ireland. The Deputy is aware of the good work done by the Government throughout the island with regard to InterTradeIreland. I do not have statistics with me on this work but I can come back to the Deputy with the information.
I appreciate this, but the issue is the existence of a ceiling on how far InterTradeIreland can grow. It cannot have more than 40 members of staff. In this climate, it does not make sense to put a ceiling on organisations which work extremely efficiently and beneficially throughout the island of Ireland.
I take the point. Another point to make on funding in the science, technology and innovation framework is that there is much collaboration on the framework 7 funding model between North and South. Enterprise Ireland's innovation vouchers also work on a North-South basis. I am happy to speak to the Deputy on the point he has made.
How does Enterprise Ireland compare and contrast with international competitors? Does the Minister of State agree that rather than being a demand-led organisation from which people demand services it should campaign, for example, in areas such as Meath?
I am not entirely sure I accept Enterprise Ireland is demand-led. Perhaps more could be done with regard to SMEs but the level of engagement between Enterprise Ireland and the multinational sector which supports more than 100,000 jobs is a highly-evolved model and constantly pushes out. If members have not already done so I encourage them to visit any of the Enterprise Ireland partially-funded centres throughout the State which are involved in frontier research with industry. They are supported by the State agencies in a very highly-evolved model. It puts us in the top 20 in some of the metrics in specific areas of research.
There is no doubt that in certain areas of the State, Enterprise Ireland is not aggressively pursuing the development of business and when it is asked-----
Enterprise Ireland will come before the committee and we can discuss the matter with its representatives-----
-----why businesses are lower in a particular area-----
-----and then follow up with the Minister. I do not want to spend the entire meeting speaking about this point. The Minister of State understands the point being made by the Deputy.
The point can be fleshed out when Enterprise Ireland comes before the committee. My experience as a Minister of State with regard to working with Enterprise Ireland on science, technology and innovation is that there is no complacency. It constantly listens to industry on its needs. If one visits institutes such as the Tyndall Institute in Cork; the Centre for Research on Adaptive Nanostructures and Nanodevices, CRANN; Athlone Institute of Technology; or Institute of Technology, Sligo one will see a highly-evolved model of engagement on the needs of industry by the State agencies. We should not underestimate this. Perhaps an opportunity will be provided to flesh it out in greater detail.
A question was asked on international comparisons.
I am not aware of international comparators in this area. The measurement is the number of jobs supported and the top tens and top 20s we hit in specific fields of research. Eight of the top ten pharmaceutical companies are based in Ireland.
This is with regard to Enterprise Ireland and Irish SMEs.
The answer is probably that no research compares them internationally.
I do not have an answer but I will come back to the Deputy.
Perhaps Enterprise Ireland will have the information when it comes before the committee. We can follow up at that meeting.
I welcome the delegation and I commend the Minister of State on the energy and commitment he brings to the very important position he holds. I refer to his broad objective of stimulating research as a means of broadening and sharpening the base of the economy. How does he regard the Dublin City of Science 2012 programme, given that he has made a number of pronouncements on it? With regard to his call for proposals and responses, what contribution does he envisage from schools and communities to his broad objective of using research, technology and innovation as a means of keeping the economy moving forward?
I was impressed by what the Minister of State had to say about many areas. He referred to creating a climate in which entrepreneurs could do business. When I visited Panama a few years ago, people there said their objective was to make the country the most attractive place in which to open a new business. They decided to reduce the time and paperwork involved in opening a new company. They targeted countries such as Singapore and Hong Kong and reduced the time involved to seven hours. In other words, if one wanted to open a new company, one could do it in seven hours. I acknowledge that the danger in doing this is that some of the controls and restrictions we have in place would have to be removed, but it is a reminder of what can be done.
The Minister of State referred to a fear of failure. A few years ago I was on an aeroplane with an Irishman who was on the board of an American company. Somebody had suggested the company should become involved in a new venture that would have employed 37 people. The board members agreed to go ahead, but he asked what would happen if they failed. They said, "If it does not succeed, it does not succeed." I do not know whether it did, but this is an example of a fear of failure. We have to be careful that we encourage entrepreneurship but in a way that indicates that people might fail.
RTE is a good example of a semi-State body which has stated it would like to play its part in encouraging the development of the economy. A programme entitled, "Local Heroes - A Town Fights Back", will be broadcast shortly. Drogheda was the town selected and it was fascinating to see what had been done. For instance, a man by the name of Gerry Kennelly in County Kerry has set up an entrepreneurial workshop for young people which is aimed at transition year students. I visited him three weeks ago. At a meeting he had 600 students from County Kerry and we brought down 60 from Drogheda who were being encouraged to be entrepreneurs at the age of 15 and 16 years. I would like the Minister of State to intertwine in his work the belief one does not have to wait until one is older to set up a business. I asked a young woman at the meeting what she was doing. Her name was Tara Haughton and she was from County Kildare. She had come up with an Internet business and employed one person - her father. She is only in fifth year, but she has customers in 22 countries. She is one of many young people who are being encouraged to be entrepreneurs. I could outline what she has done, but the Minister of State will have to read up on it, if he has not already heard about it.
I acknowledge this issue does not come within the remit of the Minister of State, but the Department of Education and Skills is involved. If young people can identify a solution to a problem, they should be encouraged not to be shy about bringing it forward. They do not need significant sums of money. While the banks have come in for considerable criticism, students are able to secure the small amounts of money needed to develop their ideas. They should not have to wait until they are older to engage in entrepreneurship.
Semi-State bodies such as RTE must state they would like to help in this regard. RTE is also adopting a mentoring system on this new programme. I recently visited four large employers in Drogheda and they have agreed to take the promoters of a number of start-up companies by the hand and give them advice on how to proceed. That is what can happen, particularly given that the promotion of science and innovation are also part of the Minister of State's brief.
To reply to Deputy Conaghan's question, the city of science programme will be a vital showcase for Ireland. It will happen in July 2012 and we are expecting between 5,000 and 7,000 delegates. The Government will provide €2.9 million towards the cost of the programme which will cost approximately €6 million. They key focus will be on showcasing Ireland's talents in this field to boost our standing internationally. The multiplier effect of up to 7,000 delegates returning to their respective countries will be great. Our key goal is to promote the country in this global setting. The programme will have the knock-on effect of promoting careers in science and greater engagement by students and parents because of the publicity that will be generated. We are, therefore, taking the event seriously. In the recent past people have made a joke about Ireland trying to restore its international reputation, but the Government takes this agenda seriously, of which this programme is part. If we take the opportunity to showcase the best and the brightest, we will get a return on our investment in terms of reputational enhancement. That is one part of the process.
With regard to schools, Project Maths is a vital component at second level. The ship has sailed and the programme will be rolled out in every school. We believe strongly that because of how it is taught, it will have a positive effect downstream on examination results. The provision of bonus points next year should result in a marked change in the results obtained. The aim is to ensure students think more laterally about the everyday use of maths. We want to deconstruct a language where parents say they were never any good at maths and this is reinforced in their children. If we can do this, there will be a positive effect downstream, but we have to be mindful of the need to ensure that while education is a priority, there is a balance between this and the graduates we produce. The intention should not only be to churn out engineers in order that they can interface with companies but also to get students to think laterally in solving problems, which is the key component.
Within the innovation and maths space we have young social innovators. I attended an event in my home town of Mallow which was attended by more than 2,000 parents and primary schoolchildren who interacted with providers in the science and maths space. A great deal of work is being done by the national centre of excellence in the University of Limerick, Calmast and the Blackrock Castle Observatory in Cork. The aim of these initiatives is to make STEM subjects more attractive to students at a younger age. We are having success in this regard, but the challenge will be to roll out these projects in primary schools.
The fundamental question is whether it is possible to teach entrepreneurship. Is it something that is innate or can it be learned? That is a matter on which I would defer to Senator Quinn. There are now more flexible models in schools, particularly in transition year. The YSI model is very good and we have seen a major proliferation of companies being set up at schools level. It seems to be more embedded, but if we need to do more I would like to hear the Senator's views on that. Where do we go and are we on the right track? I believe we are with Project Maths. We need to do more in the junior cycle, but the Department is doing considerable work in that and the primary sector is the key. We will have continuing professional development of teachers, especially for teachers who are out of field. I may have used the term unqualified teachers before - I openly admit that was the wrong choice of phrasing. We need to look at out-of-field teachers who are teaching maths and invest money - which will happen - in upskilling those teachers and providing CPD. It all depends on the engagement of the teachers and schools, and I hope they will engage.
This does not require State involvement. The blue sky day in Kerry, a marvellous venture, happened because individuals wished to get involved in the community. That community spirit which is so successful in Kerry can be translated into each of the other 31 counties in Ireland. It has worked so well over its four years. It reminds young people not to be shy about thinking to become an entrepreneur. This young woman at 15 years of age has set up a business dealing with 22 countries, which is just one example.
We also have the excellent discover science and engineering programme run by Forfás, which does much outreach with individual schools. Peter Brabazon there does great work in interacting with schools.
I have only just begun to engage with the issue of fear of failure. It is worn like a badge of honour by Americans engaging with VCs. It is almost as if one must fail in order to ultimately succeed. We should inculcate that culture that one is allowed to fail once and the State agencies will support such a person who wants to come back into the system again.
I thank the Minister of State for attending. In his opening statement he said he had responsibility to ensure that our education system was lining up the skills and expertise needed for our future workforce, particularly in the STEM subjects. Given that the junior certificate curriculum is scheduled for revision, a window of opportunity has opened to do something in the ICT sector. Representatives of the Irish Internet Association and the gaming sector recently appeared before the committee, and it was a real eye opener. They said that there are 2,500 unfilled jobs in their sector, in which Ireland has great potential to be a hub. However, we have a deficit in software development and engineering, particularly with people transferring from secondary school to third level owing to a lack of formalised teaching of the subject. I do not want to use the term ICT, because that leads people to think of what ICT is at the moment in schools - students learning about Excel and Word. I am talking about the use of and teaching of the language of ICT, such as introducing students to Java and Ruby. As one of the speakers said on the day, would people prefer to learn how to play a game or how to make a game? The jobs and money lie in learning how to make the game rather than playing the game. Unfortunately that deficit exists at the moment.
I tabled a parliamentary question to the Minister for Education and Skills asking about his plans for this subject and the answer I received was not very satisfactory. Given that the Minister of State has a particular responsibility that might come into the question, does he feel he could have an input into a proper overhaul and revision of what ICT means in the junior certificate cycle as the window of opportunity is open and something could be done?
My question is related to the education sector. I am delighted the Minister for Education and Skills has given the Minister of State, Deputy Sherlock, direct responsibility for this area. The Irish Internet Association and all the league tables indicate we have fallen behind. Much is being done on it and the discover science and engineering programme is doing very valuable work. Project Maths will certainly encourage students to think laterally and not just learn by rote. In his presentation the Minister of State mentioned the short-term need and there is a glaring gap in the short term. The work with Project Maths and the discover science and engineering programme will yield long-term benefits.
The quality of our teachers is critical. Other countries that have done well in this area have focused on their teachers to ensure they had high quality maths, science, engineering and technology teachers. If we continue with the same type of teacher training we will get the same results. I know CPD is there and the Minister of State is trying to work with what we have. If we are serious about the technology, science and innovation area we need to concentrate on a cohort of teachers and get them fully connected with the ambitions the Government has for developing the area and ensuring we are a nation that is good at technology, science and engineering, and that can compete internationally. As many countries are competing in that space, it is very important we get ourselves up there. While the Minister of State has mentioned it in response to previous questions, where are we with teacher training and are they buying into it? From what I hear it is not as good as we would like it to be.
On technology transfer, Science Foundation Ireland is getting more into the applied research space. When Jim O'Hara's group reports, it will probably focus us more on that area. Is the change that is coming with Science Foundation Ireland complementary to technology transfer? Will technology transfer offices be a permanent fixture? They play a very important role in bringing business and industry into connection with the third level institutes.
The Department set up an ICT steering group in 2010. That was a stakeholder forum to address the issues Deputy Lyons and Senator Clune raised. We need to start with the dotcom bubble that burst, which led to a decrease in the points requirements for science and ICT-related courses. As demand for those courses has now increased, some of that demand will be fulfilled, albeit within the next three to four years. The question is what we should do in the intervening period to fill the 2,500 vacancies Deputy Lyons mentioned. The Department will shortly roll out a facility to facilitate bridging of the skills gap for industry. That will facilitate engineers or others who want to upskill and transfer into the industry.
These issues are being tackled, but the fundamental issue is one of getting kids to engage in programming languages. They know how to play games and are early adopters of technology. I have witnessed this with children as young as two years of age. How do we get them into a space in which they begin to engage in creating games and the knowledge base to see what occurs behind the screen? This is where we want to go. Work is being done in this regard, but industry, including Internet service providers, has a greater role to play. A further engagement with the Irish Internet Association may be the way to go.
An ICT action plan is in place. Its purpose is to engage with the questions being posed by Deputy Lyons and Senator Clune.
Will the Minister of State supply the information on the action plan after the meeting?
We can make it available. DSE and others are trying to engage kids in these platforms, but the work is disparate. We have heard from individuals working with VECs on rolling out specific programmes in, for example, east County Galway, where someone visited schools to teach languages. How can this be rolled out across the State, given the fact that not every kid will be able to engage?
The key point is we are grappling with the issue. One must strike a balance between the core educational subjects and other subjects. I do not want to say "market-focused", but if we want to create the best graduates in the world, that is the space we must enter. It must start when kids are young. The action plan's bridging courses will tackle personnel shortages in those sectors in the short term.
I have just been informed by my officials. They are excellent and we sometimes underestimate them. By all accounts, the shortage within the ICT sector is a global phenomenon. We are conscious of this fact and are trying to bridge the gap.
We need to maintain the engagement with technology transfer offices, TTOs. The structure that is in place is vital. Their current round of funding is up for renewal and a conversation is under way within the Department as to how the funding process will evolve. I have met TTOs from individual institutions and one cannot but be impressed by their work. We need to discuss with them the question of extracting more, but their work is inherently good and they have a strong link with industry.
Discussions are under way on how to extract further IPs and obtain further licensing arrangements, whether we need to be more pragmatic in our approach and whether a conversation on getting more of a return on this publicly funded research is necessary. The TTOs have a forward-looking viewpoint and I will meet them shortly.
Is the funding up for review?
Yes. One must be conscious of the need for TTOs. If this component is axed, there will be a major gap.
There is no conversation under way.
It is under review.
What about teacher training?
Pre-service training will be extended. There will be a two-year higher diploma and a B.Ed of four years. This is one way of tackling the issue. I had a good meeting with the Association of Secondary Teachers Ireland, ASTI, last week. There seems to be a strong willingness to engage on each of the platforms in question.
According to the National Centre for Excellence in Mathematics and Science Teaching and Learning, NCE-MTSL, which rolls out many continuous professional development, CPD, programmes, there is a strong demand among teachers for CPD in out-of-field subjects. This is encouraging. My sense of the situation is that the teaching community wants to upskill and train.
I thank the Minister of State for his presentation. I am encouraged by how well our exports are doing. Much of our discussion has been on young people, but a large cohort of people aged over 50 years have lost their jobs. They have a massive wealth of experience and wisdom. How are they being upskilled and retrained? They are the ones who give young people a good example. I agree with Deputy Tóibín's suggestion of incubation units. What is the Minister of State's opinion on this matter?
I thank the Minister of State for attending. There is a shortfall in ICT skills. Businesses trying to employ people with these skills from abroad are experiencing issues getting permits. It is a long and tedious process. Can we do anything to accelerate it? When one job is created, it usually creates five more.
Deputy Tóibín referred to the foreign offices of Enterprise Ireland and the IDA. Perhaps more strategic alliances could be developed so that they might work together as a unit to sell Ireland.
Deputy McFadden touched on the question of supporting older people who have lost their jobs. Could they be used to mentor younger people in developing science? This could be done under the remit of Science Foundation Ireland, SFI, which was not mentioned in the presentation.
Senator Quinn referred to Blue Sky Day in County Kerry. I was a mentor on the programme last year. I cannot tell the committee how fantastic it is. It is run through the Institute of Technology Tralee and was devised by Mr. Jerry Kennelly a few years ago. Mr. Denis O'Brien sponsors it. The programme covers every school in County Kerry and parts of north County Cork, including Millstreet and Kanturk in my constituency. Transition year students come up with ideas and develop and present plans. The competition is well run. It would be worthwhile were the Minister of State to consider developing the programme nationally.
Deputy McFadden referred to incubator units. Last Friday, I visited Athlone Institute of Technology, a shining light regionally in how these units should be run. The Midlands Innovation and Research Centre, MIRC, in the institute is doing fabulous work.
I do not know the statistics on age, but the number of mature students in higher level institutions is increasing year on year. This is one way of tackling the skills shortage and providing opportunities for people within the age bracket in question. Through the VEC structures, colleges of further education are doing a great deal of work. Their age coterie is higher than average. This is one platform. The labour market activation programmes deal specifically with people aged over 50 years. JobBridge provides opportunities for people to obtain skills relevant to sectors other than those in which they worked heretofore. In fairness to the Department of Social Protection, there is a great deal being done to ensure we get people within that age bracket back into the workforce.
Deputy McFadden is correct that there are people with huge life and work experience who do not necessarily have a qualification. The Government is actively trying to bring that breadth of experience back into structure.
It is important their upskilling leads to a job.
I take on board the Deputy's point. Springboard is a targeted programme. On mentoring, I have spoken at length on this issue with Deputy Collins and have taken on board her point about soft skills. People will say that it is not always money they are looking for when interacting with the State agencies. Very often, what they need is mentoring. Enterprise Ireland operates a mentoring programme. If members have views on that programme-----
What is at issue is that not enough people are eligible for it.
Also, it is agency dependent.
It is often perceived that those who provide mentoring are ex-consultants or ex-bank managers. That is not a criticism of bank managers. However, we may perhaps need a wider array of advisers in terms of mentoring.
I am happy to take part in deeper engagement with the committee in respect of issues which individual members believe the Government needs to do more.
We intend to do that.
We will also work to that end. On work permits, I have been told turnaround through the IDA is usually 15-days for people with key skills. I understand that the Minister for Justice and Equality is also working on ensuring a quick turnaround in respect of visa applications.
That is only for visa applications.
If there are specific examples, I would like to hear them.
To get a permit one must advertise on FÁS for 12 weeks. One also has to advertise in one's local paper. Before doing any of that, one must have already found the person abroad. Perhaps this process can be fast-tracked and I do not know about it. While IDA clients may have that option, I have not heard of it in respect of Irish clients.
It is not only a permit problem, getting a visa can take a lot longer.
Perhaps we should take a closer look at that issue.
Yes.
I would appreciate that.
I thank the Minister of State and his officials for attending.
I compliment the Minister of State, Deputy Sherlock, on his presentation today. He brings a great deal of freshness to his Department in his role and capacity as Minister of State. As he stated at the outset, this is an apolitical issue. The Minister of State has been encouraging Members of the Oireachtas to speak to him about it at any time, which is to be welcomed.
I believe there should be closer liaison between all the agencies in this area. Are efforts being made in that regard, in particular with the third level institutions and businesses? We need to ensure co-ordination of services in this area. While the report we received today is comprehensive one sector not mentioned is the local development organisations who are performing outstanding work at regional and county level. Is there in place a mechanism whereby the progress they are making can be monitored?
I welcome the Minister of State's comments in regard to the new approach to mathematics and the deficiencies in this regard in terms of teaching. Pupils believe maths to be a boring and cold subject. We need to engage with them at second level, from first to fifth year in respect of mathematics and applied mathematics. This will ensure they are more confident facing into whatever career path they choose. I welcome the Minister of State's comments in this regard today. While this issue has been highlighted at national level for the past number of years, the Minister of State is the first to tackle this deficiency within the system.
Some of Deputy Fleming's questions have already been answered. I invite the Minister of State to respond briefly if he wishes as we have other presentations to hear.
I thank Deputy Fleming for his comments and questions. I agree with him in respect of the priorities he has outlined. I hope I have addressed those in the course of the debate. Strategic alliances between the State agencies is highly evolved in the field for which I am responsible. There is an intimate knowledge between the State agencies and industry, including the personalities involved in individual companies. The relationships there are close. This issue is highly embedded therein.
I responded earlier to questions on education.
Yes.
I am grateful for the opportunity to be here. I am happy to interact with any cross-party sub-committee on the science, technology and innovation issue, even on an informal basis.
We appreciate that.
I thank the Minister of State for the information he has given us. We spent much of our time today speaking about job creation. While we are meeting, potentially, 950 jobs are to be lost at Avia. Would it be possible for the Minister's officials to engage with the unions or business in regard to its business plan and strategy costs in an effort to see if any of those jobs can be saved?
The Minister of State can give a brief response to that question now or can communicate on it with the joint committee.
I see no problem with that proposal. I will take the Deputy's views directly to the Minister, Deputy Bruton.
I thank the Minister of State and his officials for attending today's meeting. They have been very informative. We will take up the Minister of State on the possibility of looking more closely at certain issues.
I remind Members that the joint committee will hear two presentations now from Enterprise Ireland and Science Foundation Ireland.
I welcome the delegates from Enterprise Ireland. They are as follows: Mr. Feargal Ó Móráin, executive director, innovation, commercialisation and investment; Dr. Martin Lyes, division manager, research and innovation; and Mr. Jim Cuddy, manager of finance and enterprise software. I also welcome the delegates from Science Foundation Ireland. They are: Dr. Graham Love, director general; Dr. Ruth Freeman, director of enterprise and international affairs; and Mr. Donal Keane, chief operations officer.
Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House, or any official by name or in such a way as to make him or her identifiable. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence in regard to a particular matter and they continue to do so, they are entitled thereafter only to qualified privilege in respect of that evidence. They are directed that only evidence connected with the subject matter of these proceedings should be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
I know the delegates have had to wait all morning but it was not possible to bring everybody into the room together. We want to keep to the same topic for discussion. A few more members will attend and people will be in and out of the room because the meeting clashes with some Dáil work. The committee will also discuss the issue in private and go through all the recommendations that may be made. I ask Mr. Ó Móráin to commence his presentation, and he will be followed by Dr. Love. They will deal with the roles of Enterprise Ireland and Science Foundation Ireland, respectively, in helping to support indigenous enterprise start-ups and promote business innovation.
I thank the Chairman and members for the opportunity to attend this morning and contribute to the joint committee's work. We sat in on the earlier session and believed it to be very good. I will introduce my colleagues from Enterprise Ireland, Dr. Martin Lyes, division manager of the research and innovation business unit; and Mr. Jim Cuddy, manager of finance and enterprise software sectors. I also convey the apologies of Mr. Frank Ryan, our chief executive, who is unable to be here because he is on a trade mission in the Middle East with the Minister of State with responsibility for trade and development, Deputy Jan O'Sullivan.
With the Chairman's permission, I will not read the full written submission as I am conscious of the time. I will read some extracts. Above all else, Enterprise Ireland's objective is to grow jobs in Irish companies, which is critical for sustaining the economy. Our job is to help companies create jobs. For companies to grow their employment, they need to grow their sales. Export growth provides a sustainable route for companies to grow in a small economy and if they win sales overseas, they will drive the growth of jobs here in Ireland.
Enterprise Ireland client companies employ more than 137,000 people in the economy, supporting direct and indirect employment estimated to total more than 300,000 jobs. I draw the committee's attention to the fact that Enterprise Ireland client companies have a similar economic impact in the country to foreign-owned companies here, in terms of the number of people directly employed and in the estimated annual expenditure in the economy, which in our case is €19 billion. This is a relatively similar amount to IDA clients.
Innovation is and will be central to our success, whether through our enterprises adopting new business models, developing people and leadership skills, focusing on capabilities in research and science or linking companies with institutions and each other to deliver innovative products, services, processes and designs that have value for their customers.To promote business innovation with the ultimate aim of creating jobs, Enterprise Ireland works with two distinct groups. The first contains Enterprise Ireland clients, the approximately 3,500 Irish companies that export or have the potential to do so. The second group contains the broad enterprise base in Ireland, including foreign-owned multinational companies and the research community, where we work in close collaboration with IDA Irelandin its efforts to attract foreign direct investment and link those companies with research and development performing companies and institutions here in Ireland, andScience Foundation Ireland in its objective of building and strengthening scientific and engineering research and its infrastructure relevant to business in Ireland.
There are a number of major ways in which Enterprise Ireland seeks to stimulate business innovation among established companies in Ireland. We provide research, development and technological innovation support relevant at all stages of company development, enabling companies to progress from undertaking an initial research project to higher level innovation and research and development activities. For example, innovation vouchers help to build links between Ireland's public knowledge providers and small businesses, and they are helping to create a cultural shift in the small business community's approach to innovation. I will not go through the examples in the written submission but the committee can consider them, with Shasta Limited being one.
Enterprise Ireland funds the undertaking of research and development to support significant in-company projects which have the potential to do new things. In this regard we find it important that companies undertake projects leading to improved design, better processes and new products and services, all of which are equally important aspects in a company gaining advantage over their competitors. For example, we also support the development of company capability in a number of ways. We have assisted chief executive officers and managers in a wide range of sectors, from construction to software and food to engineering, to build up their capability and ambition to implement innovative strategies through programmes such as Leadership 4 Growth, which we run in conjunction with Stanford University, International Selling and Lean, which is a programme focused on ensuring companies are using their resources in the best possible way.
With regard to promoting business innovation through commercialisation, in addition to in-company support a major aspect of El's work is to extract maximum value from Ireland's research system. Our objective is to secure a commercial purpose, leading to jobs and sales, for technologies and ideas developed in Irish research institutions. These can be used by large multinational companies, MNCs, such as Intel or Microsoft, established Irish companies of all sizes, or they can form the basis for a spin-out company which can offer something novel and exciting in a particular sector. El operates a range of supports to help companies engage with third level researchers to undertake collaborative research for the benefit of the company.
The technology centre initiatives are a major element in ensuring that the research community adapts its work more closely to the needs of industry in Ireland. The model provides a forum for interaction between industry and the research infrastructure in Ireland, gives access to specialist equipment and research and is a top-quality environment for training people in postgraduate skills with direct relevance to industry, which will be eager to employ them. I can offer one example, from many, which illustrates the connection between an SFI-funded centre, the CRANN centre, and EI activity, in this case an overseas company, Merck Millipore. It is an initiative which was announced by the Minister recently.
Enterprise Ireland has taken the lead in driving commercial return from research by building the technology transfer infrastructure within the universities, which was discussed earlier, establishing commercially relevant research centres in institutes of technology and putting in place campus incubation facilities to support new technology companies in their formative years. As well as the funding which has been invested in these efforts, the very considerable efforts of Enterprise Ireland staff in driving changes in culture and ensuring collaboration happens, have been essential in getting these initiatives to where they are now. Since the inception of Enterprise Ireland's specific supports for technology transfer there has been a threefold increase in the number of spin-outs generated when compared with the average of approximately ten per year before we changed the system. In 2009 there were 35 and last year there were 31. We have seen a major shift in the number of spin-outs. Similarly, there has been a huge increase in the number of licences from third level institutions, universities and institutes of technology to industry, from 28 in 2005 to 93 in 2010. I have given the committee some examples in the submission.
The committee also asked us to discuss the role of EI in supporting indigenous enterprise start-ups. This is a major part of our work each year and is something which is closely linked to the process of building innovative capability in our economy. Since the early 1990s, thousands of jobs have been created by El-supported start-up companies. More than 10,500 jobs exist today in start-up companies supported since 1990, while, in addition, at least 4,000 jobs were created in start-up companies that have since been acquired by multinationals. In many cases those multinationals went on to multiply those numbers. Our drive to identify and support high potential start-ups, HPSUs, continues. In the first six months of 2011, El supported 41 start-up projects with an estimated jobs potential over the next three years of in excess of 750.
Our efforts over the course of this year are likely to see us support the greatest number of high potential start-up companies in any year since our establishment. We are on track for 12 of these companies to come directly from State-funded research in 2011, which is one of the outputs of the commercialisation work I mentioned earlier. This is an important and growing contribution to the stock of start-up companies and represents a threefold increase in the number of high potential spin-outs from the university sector over recent years.
Underlying this end-product of supported start-up companies is a broad system of Enterprise Ireland actions which support entrepreneurs in their efforts to set up internationally focused, innovative companies with significant job creation potential. These include seed and venture capital, enterprise centres, incubation space, workshops, seminars, mentoring and the work of our high potential start-up division.
In conclusion, EI operates a wide range of supports to promote innovation across our client base, promote collaboration between industry and the third level sector and drive the commercialisation of third level research. Our goal in those efforts is to ensure that Ireland is well positioned to sustainably grow exports and employment in our economy. It is important to emphasise that all three bodies with responsibilities in this area - Enterprise Ireland, IDA Ireland and Science Foundation Ireland - work very closely together, within the context of the objectives set for the agencies by the Department of Jobs, Enterprise and Innovation. The reality is that it takes each body, with specific but mutually beneficial objectives, working closely together to ensure that a good support system is in place to benefit the economy. The emphasis is very much on maximising the employment contribution to Ireland from research and innovation both in the third level sector and in industry.
On behalf of myself and my colleagues, I again thank the committee for inviting us today. We will be happy to respond to members' questions at the appropriate time.
Thank you. I invite Dr. Graham Love to make his presentation.
I thank the committee for the invitation to appear here today. I am accompanied by Dr. Ruth Freeman, director of enterprise and international affairs, and Mr. Donal Keane, our chief operations officer.
Science Foundation Ireland, SFI, is a relatively new organisation so members of the committee might know a little less about it. I will take this from first principles and I hope that over the next five minutes members will understand why SFI was established, what it was tasked to do and whether it is delivering. Those are my objectives in outlining a summary of the executive summary which has been given to members of the committee.
In the late 1990s Ireland was performing well economically but it was clearly identified at that time, in view of the trends with wages and so forth, that in order to maintain the living standards we had achieved at OECD levels it was necessary to move to what was described as the knowledge economy. It was a policy recognition, in effect. However, a gap was identified in Ireland's capacity to transition to this knowledge economy - the lack of a world class scientific and engineering research capability in the country to develop and train people and produce the ideas and technology that could transfer into companies to make them more innovative and thus competitive and charge higher prices for products and services on world markets. SFI was established in 2000 to fill that gap.
Decades of under-investment in scientific and engineering research in Ireland meant we were way behind world averages. Rather than try to do it in all areas, the areas of biotechnology and ICT were, wisely, identified at the time as the two areas to concentrate our efforts on to achieve world class excellence, with the time horizon of 2015. That is a very important message; this is a medium to long-term play.
Over the past decade we have built a community of approximately 3,000 researchers, scientists and engineers, primarily throughout our universities and institutes of technology. From the internationally accepted benchmarks that placed us below countries such as Bangladesh and the Philippines in terms of our scientific research capacity as recently as the late 1980s, by 2003 we had risen to an international ranking of 36th. In 2008, we broke into the top 20 in terms of the benchmark for scientific research capability. It is a significant achievement in that space of time. In certain niche fields such as materials science, which is very relevant to the semi-conductor industry and to companies such as Intel, we have achieved notable rankings such as eighth, and in the area of immunology we have achieved a ranking of third, which is very important to the pharmaceutical and health care companies based in this country.
Having built a solid research base over the past decade, we have now constructed 28 centres and clusters. I heard the Minister refer earlier to the CSETS, which are sizeable centres that we fund. These 28 centres connect to 500 companies. The goal of this is to connect with those companies in training people in the labs and producing certain technologies and ideas that can transfer out of those labs and into those companies allowing them to be more innovative and productive, have higher prices and go up the value chain. I know they are cliches but that is effectively what we are trying to do.
I will give two or three specific examples or case studies which give this reality. Most members will be aware that approximately one year ago, Intel announced a major €500 million investment in its Leixlip facility. Basically, the plant upgraded that critical facility for the next wave of investment from Intel corporate headquarters in the United States. Intel needs to hire some very high end people into that facility to make that work. I think it is aiming to hire between 100 and 200 people. Just in the past few months, Intel has hired 17 PhD graduates from the SFI funded CRANN centre in Trinity College. That is a nanotechnology centre which we fund and which Mr. Ó Móráin mentioned earlier. That is the human capital moving from the labs at high end into that facility to enable it to keep the value and the innovation going. That is an important example of what is perhaps one of the most important things SFI is doing, that is, training people, high end human capital, and enabling companies to be more innovative and competitive.
Another interesting story is that back in 2005, we funded Dr. Emmeline Hill who was working on what some people would have referred to as an obscure area of horse physiology or genetics. It popped out at the other end some years later as a genetic test that can identify in thoroughbred race horses whether they will be sprinters or long distance runners. This is extremely important in the multi-billion euro horseracing and horse breeding industry in which Ireland is a leading player. Mr. Jim Bolger, who is well recognised in that industry, has invested in that. That is a great example of how basic science progresses up the food chain. Indeed, it is supported now by Enterprise Ireland as a high potential start-up and it has clients on four continents.
A final example is that one of our centres located in Cork is helping the HSE in Waterford Regional Hospital cut its waiting queues for radiological services and other diagnostic services. These people are experts at timetabling and scheduling the fasting requirements, the equipment and the various complexities in a facility like that. They have helped Waterford Regional Hospital to get its waiting times down to the clinical best practice - critical, within 24 hours, urgent, within 24 to 48 hours, and routine to acceptable within four to six weeks. It is a good success story.
Beyond those anecdotes and at a more general level, is it working? I will provide a little bit more evidence. We have seen the IDA profile. Five years ago, less than 10% of IDA investments with clients coming into the country was in the area of research, development and innovation. Five to six years later, this is at 50%, with the annual investment worth €500 million. There is a very significant shift towards the research and development among the IDA clients.
We heard Enterprise Ireland earlier refer to the significant upgrading of production of intellectual property in the universities and institutes of technology through these technology transfer offices with significant numbers of licensed patents and spin-outs being generated and a very significant percentage - over 82% - of that product developed over the 2007 to 2010 period transferred into companies based in Ireland. Forfás has actually shown, with very revealing data, that over the past decade firms in Ireland which perform research and development are far more resilient in terms of export sales and value added than firms which do not. There is detail on that in the submission.
To summarise, the system is working very well. I remind the committee that 2015 was set as a timeline for delivery of this agenda, so we are two thirds of the way. I think the indicators and metrics are showing that we are succeeding. I hope that has made it clear why SFI was set up, what we were tasked to do and that we are delivering that space.
If I can be a little brave in terms of advocating what we would like to see happen - now that I have been speaking for a few minutes, I am feeling a bit more courageous - I will digress a little from the formality of the presentation in front of us. As a child, my mother taught me to cook and bake. She was in a wheelchair, so she encouraged me from a very young age. One of the things I used to do every year was make the Christmas cake. It took a couple of hours to prepare but critically it took four hours in the oven and one did not open the oven door. One could look in and see it rise. The message I want to give is not to take the cake out two hours early because one is hungry and then wonder why it does not taste right. We must stay the course on this. This is about holding the nerve. It is delivering.
Gabhaim míle buíochas leis ár gcuairteoirí as an t-eolas iontach a thug siad dúinn sa chur i láthair sin.
By all accounts, it seems as if there is a lot of good work happening in both organisations. As elected representatives, one of our jobs is to hold organisations to account and analyse how they are achieving their goals. How do both organisations compare and contrast with international competitor organisations, if there are equivalent organisations? What key performance indicators do they use in regard to investment in research and innovation? I know most enterprise organisations state that they create X number of jobs for X euro invested. It is probably a little more complex when it comes to research and innovation because there is more of a long-term element to it but I imagine there are still key performance indicators by which they work.
Many of the witnesses were here for the last meeting with the Minister. One of the points I put to him and which I will put to the witnesses, in particular those from Enterprise Ireland, is that my view is - it may be right or wrong - Enterprise Ireland may not be aggressive enough in some regions in the State in that the impression I get is that it is a demand-pull organisation. In other words, if there is a critical mass of individuals who want Enterprise Ireland's help and go to it, they will get it and will be supported but in other areas, there maybe a desert in regard to the level of work EI does. What I mean by that is that if one looks at Meath and Kildare, which have roughly the same population, geographics, etc, Kildare has 12 times more EI work and investment than Meath. I am not bringing that up because I am a Deputy from Meath but it is important that regional discrepancies like that are addressed. Is it a strategic decision by EI or, higher up, by the Government or the Department or is it for other infrastructural reasons that might exist in those places?
In regard to high potential start-ups, HPSUs, is it the witnesses' and the Minister of State's view that this could be further increased? There is a lot of talk about cross-Border co-operation, etc. It is important that we start to monetise cross-Border co-operation. What work has been done with Invest NI? Is it seen as a competitor or is there co-operation in that regard?
In regard to the universities across the island, I believe they have an association with each other. Is that being leveraged to develop business on the island?
Gabhaim buíochas leis an Teachta agus freagróidh mé na ceisteanna a bhaineann le SFI.
In regard to international comparisons, we seek to benchmark ourselves against other similar organisations. EI is a unique organisation because arising from Government policy decisions in the 1990s, all the elements were brought together. I know there was talk earlier about co-ordination at local level but if one thinks of it in terms of bringing the marketing organisation, the science and technology organisation, the investing organisation and some element of industrial training together, that is us. It was all brought together. One does not really find that in most other parts of Europe where one finds different organisations.
If one looks at a country with which we have close links, namely, Finland, there is Tekes, which is a technology agency, and Finpro, which does overseas marketing. We have the advantage in a small country of being together. The idea behind that is to provide a service so that people exporting do not have to go from one organisation to another. As an agency, we aspire to being the best in the class. It is hard to ask us; others will have to judge if we are right. Our ambition is to be the best in class. As such, we keep a close eye on what other agencies are doing globally.
Ours is a development agency, although we work in the technology transfer space. Our interest, therefore, is in the hard metric of jobs. In the overall metric for Enterprise Ireland, job creation and exports, we count the number of spin-outs, licences to industry and collaborative projects. In the longer term we keep an eye on their economic impact. Our interest is economic in that we are at that end of the spectrum. SFI has a similar interest, but it is further back. However, the metrics overlap.
There is no policy at our level or anywhere else not to be aggressive. Our ambition is to seek out people who want to start a business wherever they are. We run seminars and events and have an elaborate website. We are available, although the committee is giving differing feedback. We will listen to it, but it is not our policy not to be aggressive.
Our ambition is to increase the high potential start-up numbers as much as possible. There is, however, a financial constraint. Apart from this, we are talking about the top end of the pyramid. The definition of a high potential company is one which can reach sales of €1 million within a couple of years and which can export and become a significant company over time. Not all of them do, but that is the starting point. There is a limit to the number of such companies any economy can produce. Finland has engaged in a similar exercise and produced 60 to 70 such companies per year using the same definition. Our ambition is to increase the figure here. As the Minister said, we will reach the highest number ever this year and expect to get to 100 next year. To do this we are looking at all possible sources. We are trying to maximise the number coming out of the universities, in which respect there has been a threefold increase, and we expect to have 12 high potential companies stemming from the universities this year. However, there are many more spin-outs than this.
We are starting to focus aggressively on the overseas market. There will be some announcements about this by the Minister in the coming period. If we can attract people in, they will become another source. When we look at the breakdown, they come from different sources. There are those who are leaving multinational companies, those who have sold companies and who are serial entrepreneurs who want to start again. We want to tap into all of these resources. I do not know how far we can get, but we are not constrained financially. We are dealing with as many as we can find and trying to increase the number. The first challenge is to get to 100, after that it will be a matter for the Minister and the board to decide how far beyond that figure we can go.
We do not see Invest Northern Ireland as a competitor. We have close relations with it and meet our colleagues from there a couple of times a year. We work closely with them and collaborate in some areas. I mentioned the technology centres. There are Northern Ireland companies such as Bombardier involved in these centre; therefore, where it is possible to work together, we do so. We accommodate Northern Ireland companies on trade missions and are happy to do so. We have looked at areas in which it is possible to collaborate and we do as much as we can. There might be scope for greater co-operation, but we do maximise collaboration.
There was a reference to the Irish University Association. There is also an all-island association with which we collaborate to an extent, although most of our work is done with individual universities, not the collective, with which SFI might have more contact.
Mr. Ó Móráin mentioned Tekes in Finland. We are a member of a European network of innovation agencies which includes agencies in Sweden, Finland, Austria, the Netherlands and Britain, among others, including Enterprise Estonia, the only other organisation close to Enterprise Ireland, although it is much smaller. That network is used to exchange information on best practice in new programmes and approaches. In the last year we have been involved in a programme that looks at organisational efficiency. That part of our business is open to international best practice.
Ireland invests about 1.8% of GDP in research and development, or 2.1% of GNP. The countries with which we compete invest at least twice as much. That puts the matter in context. We are, however, doing well for the amount we are investing and can continue on that path.
It might sound academic, but one of the specific key performance indicators for the science system is the number of citations of publications produced by our people. The number of scientific papers cited in the international community is a reflection of how it is regarded in terms of quality. The 80:20 business rule applies; venture capital and foreign direct investment will chase the good stuff. Therefore, we need to produce high quality end product. Quality, not quantity, is what matters. That is why it is important we take account of the international benchmark - Thomson Reuters does this for Ireland. Ireland has ascended the ladder very quickly in the last decade, going from 36th to 19th in the space of six years, which was impressive. Not many countries would have done this in the last couple of decades. It is not the whole job, but it is a critical stage-appropriate metric to achieve en route to meeting our objective.
We leverage a lot of international funding. For an investment of €160 million by SFI in its researchers each year, the same amount is raised by the researchers from non-SFI sources, many of them international, particularly the EU framework programme.
SFI's business and administration cost to the scientific community runs at 5%, a very lean figure. The EU average is around 6.5% to 7% under the framework programme. Therefore, ours is quite tight and we are proud of this.
University rankings are important and it has been a hot topic in the last week. We have seen our universities slip down some of the important rankings. Relative to the position ten years ago, however, we are still high. We have come a long way, with UCD and Trinity College breaking into the top 50 and top 100 two years ago for the first time for Irish universities. Last week's slip happened because the staff to student ratio had slipped. This is a major factor in the Times Higher Education Supplement calculation mechanism. The other components, particularly those involving research, have only moved one way, significantly up. This is vital because international financing and foreign direct investment firms often look at this in assessing the quality of the people and products coming out of laboratories.
In response to Deputy Tóibín who raised the issue of cross-Border co-operation, we are engaged in a programme with the Department for Employment and Learning in the North and one of our sister agencies in the US, the National Science Foundation. We run a tripartite funding programme where we fund people based in laboratories in the Republic and in the North and they partner up with big institutes in the States. We would like to do more of that but we are partially constrained by Science Foundation Ireland's governing legislation. The Industrial Development (Science Foundation Ireland) Act 2003 does not permit us to put funding into universities and institutes in the North, but that is being addressed by the revised legislation to which the Minister of State, Deputy Sherlock referred. That should enable us to run all island competitions in a more holistic manner. That addresses the points raised by Deputy Tóibín
I am very satisfied with all the answers. I do not want to put too much work on Science Foundation Ireland, but would it be possible for the committee to get an e-mail on the metrics used, the actual results on them for the past few years, so that we can compare and contrast them?
Of course.
I thank the delegates for their informative presentation. I know that both agencies are quite constrained by the framework in which they operate. Is there anything that politicians in Government can do to help the agencies create more jobs?
Agencies are but bodies that run and implement programmes. In the case of Enterprise Ireland we seek to have an impact on the development of indigenous industry in collaboration with third level institutions. We work within a context of the broad economic environment, the regulatory, fiscal, the cost competitiveness of the economy. If I may go back a few years, during the height of the Celtic tiger, everybody forgot about the cost of doing business in Ireland. There is no point in the State funding an agency like us to promote enterprise if at the same time the overall environment is going in the other direction, for example, if the cost of wages, local authority charges and other charges and the general efficiency of business in Ireland is going the other way. My response to Deputies and the Government is that we must be concerned about the fundamental issue, the general economic environment in which we operate. These issues are being addressed. In terms of the development of small business, the supply of capital is fundamental. The Government is rightly concerned about the lending by banks, and how that can be addressed. We can do a certain amount but we cannot substitute for the more fundamental processes in the economy.
We in Enterprise Ireland do not seek any new powers. We will make the best use of the resources allocated. Like other agencies, we have been decreasing our numbers rapidly and our costs. Whatever the future brings, our job is to make best use of the resources allocated to us and work within the policies laid down by the Minister and Ministers of State at the Department of Jobs, Enterprise and Innovation.
We work at the fundamental end of the spectrum, providing the funding for the research to produce the people and ideas that move up the food chain and are used by Enterprise Ireland and the IDA to protect existing jobs and add jobs. We could do with help in several areas. The governing legislation for SFI should be extended from basic research to allow us fund and do applied research in order to hand a better product to Enterprise Ireland and other agencies. We seek the support of the Houses to help get that legislation through as it will maximise our effectiveness. That is one concrete example where Deputies could help us. We fund a great deal of life science research. One of the areas where we would like to see improvement as we think it would help make more use of everything we have invested to date, relates to a greater engagement by the Health Service Executive in using some of the product of our research and transferring that into the health service. We would like to see that agenda being seized and used. I gave the example where a relatively small investment can make transformative change in waiting lists in one of the hospitals, but that needs to be driven by the HSE as well and not just us knocking on the doors. We could do with help in that area. To use my cake baking analogy, the main thing is to help the system hold its nerve with this investment. This is a wise policy and a very sage move for ten years and we need to stay the course.
An area mentioned earlier, but I did not refer to it, is the availability of skills. We are now in the unfortunate position of having an extremely high rate of unemployment while at the same time having a significant deficit of people in the broad ICT space. The Minister mentioned short-term measures which are being taken. We need to take a longer-term view to see if the entire structure of training people in that space is fitted to meeting the needs of a very flexible exporting economy. My colleague, Mr. Jim Cuddy may wish to comment on the skills issue.
I look after companies in the indigenous software sector, comprising of approximately 600 Irish owned companies. Some 70% of these companies are in Dublin, followed by Cork and Galway but there is a reasonable sprinkle of that 30% around the rest of the country. The demand for these companies is in Dublin. It is a sector that has enjoyed rapid growth since the mid 1990s. If one looks back to 25 years ago, when there was no indigenous software industry, a few companies were sprinkled here and there. This is a recent, fast growing industry. There is a strong cohort of companies in the sectors. We are trying to go from high potential start-up, companies to an established company area and then up to a scaling area, where the established companies are moving into a fast growth area. To do that we must raise the ambition and skills level of the CEOs of those companies. A programme was set up about five years ago, called the leadership for growth programme, which was mentioned by my colleague which connects these companies into an executive training programme in Stanford University in California. On the software side, about 120 or so CEOs have been through that programme, with dramatic results. Nearly all the CEOs of the software companies in our scaling unit have been through this leadership for growth programme, which is designed to raise their ambition level and to help them to cope with the growth, having expanded the company in a structured way. There is a second programme called leadership for CFOs, leadership for chief financial officers, which is the counterpart to the CEO leadership course. One must grow the leadership skills of the chief financial officers and that programme has started fairly recently.
The issue for companies is where they find the personnel with skills. There is a serious skills shortage in the sector. There is a short-term and long-term issue. At present there are approximately 2,000 vacancies in Irish owned software companies and probably twice that in the multinationals, about 5,000 to 6,000 vacancies in IT. What the Irish companies need in particular is experience, which it is difficult to get among people just out of college, who need to get out and get experience in the first place. The long-term issue is being addressed by Forfás, to which the Minister referred. Engineers Ireland plays a role in stimulating teachers and career guidance professionals at second level and having inputs into third level courses. There is an opportunity for industry to play a greater role at third level, perhaps by working with students and running schemes to bring them into companies in the summer. A company in County Mayo, CBE Software, does this extremely well and employs students from the local campus of the Galway Mayo Institute of Technology for the summer.
In addition to the long-term issue, we have the short-term of issue of finding experienced staff immediately. Will they come from the dole queues? While some of them may come through conversion courses, we believe most of them will not come from the dole queues. I hope some will come from Science Foundation Ireland, while others will come from overseas. We must examine closely the speed at which these individuals can be processed, which is an issue to which the Chairman referred.
Is anything being done to attract people with the required skills from abroad?
We launched a brand during the summer known as "IT's Happening Here". Some members may have seen a video about it on the Enterprise Ireland website. The brand promotes Irish owned software companies and highlights vacancies in them. We are promoting it through our overseas offices and it is aimed at sources of talent in the countries in question. It is an evolving programme to get the message out that excellent jobs are available in the Irish software industry and provide information on how to contact the companies concerned.
Do we need people with experience or can we also recruit individuals straight from overseas colleges?
It depends on how good they are. We are happy enough to take people, provided they have the required skills, although ideally they will also have experience. We will see what comes through.
We participate in events such as the Massachusetts Institute of Technology careers fair to try to attract excellent graduates from that institute to come to Ireland. We also participate in the Naturejobs Careers Fair and other trade events with Enterprise Ireland and IDA Ireland to try to recruit people.
To return to the Deputy's previous question on what assistance the Oireachtas could provide, the science, research and development and high-tech industry story is a good news story at a time when the country does not have many good news stories to tell. We need to talk about this more. The City of Science 2012 designation for Dublin is a great and timely boost to promote the message that Ireland is performing well in this area. High level academic researchers have left the system recently, while others have decided not to come here. This is a source of concern for us as we want to ensure we can keep some of the best and brightest here and continue to attract others from abroad. We need to talk about this as much as we can.
I welcome both delegations. The information and data they impart are invaluable, particularly if one does not come from a business background, in informing the political process and assisting the decision making in which we are meant to be engaged. The first paragraph in the document circulated by Science Foundation Ireland is rather oddly written. It states that during the late 1990s the economy had reached a certain standard and to maintain living standards, it was recognised that the economy would have to "shift further" to one "generating products and services". This is an odd statement. The crux of the matter was that the economy was structurally unbalanced and in a highly precarious position. I accept, however, that it is easy to make this argument in retrospect. Were Science Foundation Ireland and Enterprise Ireland asked by the political class to give their perspectives on the economy? Did they offer a view on what we now recognise was a fundamental structural imbalance in the economy? Was their advice sought by the Government? To state the economy simply needed to "shift further" is an odd way, in hindsight, to highlight the critical and precarious state the economy was in, as is clear to everyone from our current standpoint.
I take full responsibility for those words as I wrote them. I had better, therefore, explain myself. What I meant to articulate was simply that Ireland had started along the correct competitive road, as we understood it, and was performing well in the late 1990s in the competitive sectors of the economy. Gross national income per capita had reached OECD levels. It was not a comment referring to structural alterations to the economy, relations with property or anything like this. We had competitive enterprises operating effectively at that stage. To put the matter simply, many companies were running production assembly lines and employing workers on that basis. As wages increased, we knew we would have to shift up the value chain. That is what I hoped to articulate in the statement cited by the Deputy and I apologise if it has caused confusion.
As to whether Science Foundation Ireland was approached at the time, it only came into existence in 2000 on foot of officials in the Department of Enterprise, Trade and Employment, as it was known at the time, and others coming to the conclusion that if we were to continue, for instance, to run assembly lines for computer parts, we would not maintain the progress we had been making throughout the late 1990s. I hope I have addressed the Deputy's query.
Did the chairman of Enterprise Ireland offer advice or perspectives to the Government on the inherent strength and health of the economy - or otherwise - in the latter part of the previous decade? Is that part of Enterprise Ireland's job?
No, it is not part of our job in a formal sense. Enterprise Ireland is an agency of the Department of Jobs, Enterprise and Innovation the job of which is to implement Government policy. In that context, dialogue is constantly taking place between the agency and the Department. During the period in question we were doing two things. The biggest interest we had was in continually reminding people that the development of industry remained important because there was a strong tendency during the boom to forget that we needed a vibrant indigenous industry sector as well as a vibrant foreign investment sector. We continually sold that message to the Government. We also fed back to the Government the views of our clients on various areas, particularly costs. The cost of doing business became an increasing problem as the period continued. Again, there was a tendency both at local and national level to assume the income from one sector, construction, would sustain everything else when this clearly was not the case. We were not formally asked for our views and we did not give them in a formal sense, as that was not our job. Other organisations such as Forfás and the ESRI are policy advisory bodies, whereas our job fundamentally is to be accountable to the Department and the Oireachtas in implementing Government policy.
Enterprise Ireland is involved in the current review of the various schemes we have discussed.
Yes, we are feeding into the review. As I indicated, ours is an agency of government which implements policies. Policy creation, if one likes, is the responsibility of our colleagues in the Department of Jobs, Enterprise and Innovation and, ultimately, the relevant Ministers. Clearly, we feed into this process and can, in particular, reflect the views of our client companies. However, we are implementers rather than makers of policy.
I compliment Enterprise Ireland and Science Foundation Ireland on the comprehensive report they have provided and their success in assisting indigenous and international companies to maintain competitiveness in the world market. We should focus on the short to medium-term objective. I would like to hear the views of the delegations given that we are in a crisis situation and need to ramp it up. In regard to announcements of grant aid for the setting up of new enterprises two or three years ago, for which the then Department of Enterprise, Trade and Employment and Enterprise Ireland rolled out the programme, what progress has been made in respect of job creation? Various indigenous firms throughout the country were involved, including in the south west in County Kerry. I am aware that one particular initiative has not yet got off the ground but an application is being made for planning permission. Is that grant aid still available? The sums available at the time ranged up to €500,000. Is there constant monitoring of firms in terms of what is being achieved and are progress reports available on all of these indigenous firms?
The overriding priority for us is to stimulate our existing client base and new start-ups to increase their business because our concern is to do what we can to impact on employment in Ireland. For companies to employ more people, they need to sell more. Much of what I described earlier is about that issue, namely, supporting companies to be innovative, to create new products and processes and to sell more so that ultimately they employ more people. Our overriding concern during the past couple of years, has been to support and sustain companies through the very serious crisis they faced and as they have become more stable in recent times to support them to export, which is the only route available to most companies. Given that we have a flat domestic economy it is through exporting they will grow and expand. All our effort, as an agency, has been devoted to that area. That is the contribution we can make and we have redoubled our efforts to try to ensure we are getting to all our clients.
In regard to projects which have been approved, we might make an investment in the company or provide grant assistance. It may take that company some time to get established as there can be delays in the planning area. I do not know the particular case to which the Deputy referred but there can be planning delays and it may take some time to raise more venture capital or whatever. There can be a delay between the time of approval of funding and the start up or the time the company expands but, typically, funding remains available to that company and does not disappear. However, if it was over a very long period it might disappear. What happens is that we keep in close touch with the company and provide what support we can. That is linked to Deputy Fleming's final question about monitoring firms.
We monitor all our investments very closely. We have a huge range of internal metrics measuring many day-to-day activities in which we engage. We keep a close eye on our companies. All our clients are surveyed formally twice a year with two different surveys but we all keep in day-to-day contact with them. As I said earlier, our concern is to translate the actions we take ultimately into economic activity for jobs.
By definition ours is slightly more in the medium to long-term timeframe. Notwithstanding that we are ten to 11 years into that 15-year programme mentioned earlier, we are seeing the delivery beginning to happen. Several metrics are mentioned in the report, not least giving the foundation to Enterprise Ireland and the IDA to be able to support and protect jobs. My colleague, Dr. Ruth Freeman, director of enterprise and international affairs, goes out on a daily basis to meet companies and, effectively, acts as a matchmaker, linking those companies, identifying their needs and putting them in contact with research groups in Ireland who have the people and the technologies that can help those companies be more competitive.
If I can use one specific example that is probably familiar to all members of the committee, Mark Little, formerly of RTÉ, runs a curated news service called Storyful. There is much technology sitting behind that initiative to help Mark's start-up be competitive. He is now linking into an SFI-funded centre, Clique, to help him on the technology side of his business and be competitive. It is a good example. We expect we will accelerate rapidly over the next four to five years in terms of those types of stories as that timeframe matures towards 2015. We are seeing plenty of evidence of it now but we expect to be able to tell many more of those stories by 2015.
Does Dr. Freeman wish to add to that?
There are about 500 different companies already involved in collaborations. It is interesting to note that when Science Foundation Ireland started, those collaborations were more heavily weighted towards international companies whereas last year, for the first time, when we surveyed our clients, which we do every year, we found that the number of indigenous companies interacting had exceeded the number of international companies. We see that as positive. It is a balanced portfolio but certainly we work every day with Enterprise Ireland and IDA to help companies find the right capability and the right partnership to make them more competitive. That is happening today. That is what those collaborations mean - they are numbers on paper but all of them have a project behind them.
On the science side, Deputy Ruairí Quinn is Minister for Education and Skills, formerly the Department of Education and Science. I was a member of the last Seanad and a member of the committee. The amount of time we spent dealing with science issues was quite small compared with the emphasis on education. Previous Ministers for education and science were referred to as Ministers for education - the science part tended to get lost. I say this as one who comes from a scientific background. Do the delegates consider there is sufficient emphasis at departmental level in terms of the development of science? My question is probably more for Science Foundation Ireland than Enterprise Ireland.
Is that in the Department of Education and Skills or generally in the Department?
Wherever it is or ought to be.
In the context of SFI our job is to develop the fourth level research capability for enterprise and our funding is channelled down specifically through the Department of Jobs, Enterprise and Innovation. A major portion of the State's annual spend of approximately €700 million, some of which goes on publicly-funded research and development, comes from that Department. Therefore, we get full support from the Government.
What is important in the context of the Department of Education and Skills is that it refers to the HEA, an agency of the Department, in encouraging the university system and the institutes of technology to reform and move on in the delivery of this agenda. We have seen a major structural shift in the past ten years. I refer to Deputy Tóibín's earlier comment about the level of collaboration that exists among the universities and IOTs. We have transformed them in terms of how they work together to deliver a particular research agenda for competitiveness. It is not me working in my silo here in my area of chemistry, the chemical industry. We have structured our competitive funding in such a way that they are more likely to win if they pick the best bits from Cork, Galway, UCD or wherever, and come together to put forward a compelling package. That has been heavily supported by the HEA and the Department of Education and Skills. I think the two are reasonably well aligned with the bulk of our funding coming through the Department of Jobs, Enterprise and Innovation.
I thank the delegates and acknowledge the preparation that has gone into preparing for this meeting. How is contact initiated with SFI and clients and what level of co-operation exists between Enterprise Ireland, SFI, the IDA and other State agencies?
In their work to date, have Enterprise Ireland and Science Foundation Ireland seen any evidence of reputational damage to Ireland among potential foreign investors due to our recent economic history? Is that a factor that will affect future employment or investment?
One of my roles within SFI is to be a point of contact for Enterprise Ireland and the IDA. Therefore, Mr. Ó Móráin and Mr. Lyes and I and their equivalents in the IDA interact on an almost daily basis. We certainly interact very closely. We already work with Enterprise Ireland specifically and run two jointly-branded programmes aimed at the third level sector. We run a commercialisation development manager programme, which is fully funded by Enterprise Ireland, but in the review of which we are involved. We also run a technology and innovation development award, which we fully fund, but in which Enterprise Ireland participates, monitors and reviews. One could say that in the grey area, or in the overlap between our remits, we have come together and run joint programmes. This is a practical example of how we work together.
With regard to the IDA, I interact with the various divisions in the IDA on a daily basis. I have gone out to the overseas office with the IDA and have met potential Indian, Japanese and Chinese companies it is trying to attract into Ireland. The IDA does not have big teams overseas and it tends not to have people who can cover all of the technical areas where we would provide funding. I go out and support that agenda and help the IDA talk through some of the more technical aspects of the research and development we fund. We also tend to do trade fairs overseas and the like under the Innovation Ireland banner, where the three agencies work together. That works very well in the research and development area in particular.
The question was asked as to how companies might come to us and ask to be linked to the research community. Sometimes this just happens through word of mouth and contacts, or it may be through the agencies themselves. For example, the IDA might ask me to meet a client coming through on an itinerary or we might arrange for clients to meet the appropriate research groups.
We have seen some reputational damage. We ran programmes to try to attract high level academics, but in recent years some people who had accepted positions decided not to come because they were concerned about the continuity of the funding and support that might be available for them here. We are working hard to try to redress that and are telling the story. We take opportunities at international events to point out that we are doing well at this. The support is there from Government, it has continued through the hard times and the message is that it will stay that way. There has been some damage, but we are working to try to fix it.
I will ask my colleague, Mr. Martin Lyes, to comment on the area of collaboration.
To follow on Dr. Freeman's comments, over the past four or five years there has been strong recognition that the organisations must work together. We are all being paid out of the public purse and are all trying to achieve the same thing, so it would be unforgivable not to work together. We have seen the development of mechanisms, such as joint running of programmes, which have started to make the interaction tangible. We have been running a programme on technology centres with the IDA for some time, because it makes no sense to run a programme which is trying to involve industry if we do it separately. Programmes where we work together are becoming more common. The exchange of information is also very important. One of the big trade shows or conferences held in the United States is sponsored by Bayer and the three agencies go there jointly branded, under the Innovation Ireland brand. This is an important step forward.
The Minister of State mentioned the research prioritisation exercise earlier, which was chaired by Mr. Jim O'Hara. We went through the process of developing a response or input to that jointly with the IDA. Interestingly, we found that the areas of technology that were emerging or were likely to emerge in the next five or six years were common to both agencies. As a country we need to work together towards those international areas. Science Foundation Ireland also has a strong role to play in underpinning these new research areas so that we can work together.
I have no particular comment to make on reputational damage, but perhaps Mr. Ó Móráin may want to comment.
It was not helpful to clients trying to sell overseas for the Financial Times to print articles every day saying the country was about to go bankrupt. We are getting better press overseas nowadays and over time the damage will be repaired. The bad press did a great deal of damage. My colleague, Mr. Jim Cuddy, would have seen with some of his clients that they found it much more difficult to sell due to the adverse publicity.
It certainly did not help on the software, but we have moved beyond that now and software had a particularly good year in 2010. The year 2009 was a difficult year, but things have improved in 2010 and this year. As the country has put the correction process in place, the perception of Ireland has improved.
Do members have any more questions? With regard to the direction we are going, there is a plan in place for up to 2015. Is there a plan in place for 2015 to 2025 or is that a work in progress? Do Enterprise Ireland and Science Foundation Ireland have a role to play in schools or in the development of the curriculum in the science area? I am aware the organisations are specifically set up to provide for enterprise and back-up, but this all starts early on. I presume Enterprise Ireland and SFI have a role, but if not they should have.
Enterprise Ireland and Science Foundation Ireland have managed to get our colleges to work together on funding for research. Is that an issue in general? Are there colleges that do not specialise in any area whose applications for funding are spread out too thinly? Could that affect our position in terms of the world rankings of colleges? I get the impression that our universities or colleges do not specialise because they are trying to get money from any or all categories. Is that a problem?
My last question is for Mr. Cuddy. With regard to the vacancies in the IT area, would those companies be willing to employ people with less experience if the positions were subsidised, because if people do not have experience, the company cannot get the full benefit? Perhaps the issue would be resolved if the companies did not have to pay full wages. Is that the issue or is it necessary that people have experience? Would companies be willing to take on people without experience if the State helped out?
With regard to colleges working with industry, EMC is a very good example of this in Cork. It has worked with the Cork Institute of Technology and UCC on developing a cloud technology programme, which is now a four-year programme. I am sure there are many more examples, but this is a particularly good one.
We seem to be way behind on the development of science parks, or "smart parks" as some people call them, compared to Scotland or other places. Have the delegates any comment to make on that?
We have no role in defining curricula for the schools.
Is that something we need to consider?
We are happy with our remit at the moment because we need to keep our nerve and deliver on this agenda. We must make sure we deliver it. Therefore, I would not advocate an extension at the moment. With regard to the plan for 2015 onwards, we are currently working on our own five-year plan. However, a couple of major initiatives will converge by the end of this year that will, effectively, set the template for the research agenda for the next ten years. We have heard about Jim O'Hara's research prioritisation exercise, which will define the areas on which we should concentrate funding to get bang for our buck from an enterprise point of view until 2020. That will define itself.
In respect of the question of encouraging collaboration or competition between the colleges, there are real clusters of expertise developing, not necessarily aligned to a college in a particular area, but the centres that grow within them. An example would be medical devices in Galway. They are building that industry in Galway because there is a concentration of medical device companies in the western region, and they are building much expertise in that area through ourselves and Enterprise Ireland. There is a great deal of nanotechnology building up in Cork and in the CRANN centre in Trinity College, and they work together. I am glad the EMC example was given. It is a perfect example of how to invest in research. A big company comes on board which sees the advantage and taps CIT and UCC for the expertise to help it be competitive in Ireland and protect its jobs.
As there was an initial Government decision to invest in research in the higher education sector, as opposed to setting up stand alone research institutes, that is currently what we fund. We were asked about strategy. For example, we can see that Galway has adapted to service that medical device community, while EMC is a good example in Cork but many pharmaceutical manufacturers are there as well, so the schools of pharmacy and chemistry in UCC are involved with Pfizer. Limerick is also strong on crystallisation technologies for the pharmaceutical industry, so we see some adaptation to what is going on around the colleges.
One could argue that this could be more focused, but our programme certainly tries to pull together the best of all the institutions to service a particular sector. For example, we fund this crystallisation cluster and it brings together expertise from Cork, Limerick, and from UCD and the RCSI in Dublin. Ireland is not too big and this can be an advantage.
On the issue of collaboration between the universities, I would like to back up everything said by the Science Foundation Ireland delegates. We are far too small a country and our budget relative to the larger countries is tiny. The entire Irish spend on research and development is less than that of the Medical Research Council in the UK. Since we are small, we have to specialise. The funding agencies have a major role in that. Neither SFI, HRB nor ourselves are interested in spreading the money around any more. While the researchers might be interested, they will not get the money. We are interested in building clusters and from an Enterprise Ireland point of view, we are interested in latching on to those clusters and making use of them, especially through the technology programme.
A question was asked about subsidising labour, which Mr. Cuddy-----
Is the cost of employment an issue, if the person has not got the skills?
I am not sure if it is ever a good idea to get into subsidising things, because ultimately industry has to stand on its own two feet, but I will let Mr. Cuddy answer that.
We have an issue here where the person might have the qualification but not the experience, whereas the company wants someone with experience. How do we close the gap? If we bring in everybody, there might not be a job in the future for those who have one but not the other.
I will comment on this. It is not really an issue of subsidy, but an issue of supply. When the graduates come out of college, the first companies they work for are the likes of Microsoft, IBM, Google or Facebook, which have a big brand and apparently offer a very attractive package. The Irish companies are fishing in the same market and they do not have that level of brand awareness in the colleges. The other thing Irish companies find is that when they take on people and train them up for a few years, they often jump ship to the larger companies. They cannot be stopped from doing that, but it certainly creates a problem.
There has been some debate in recent years about science parks, partly stimulated by the availability of property. There are some initiatives proposed in Cork and elsewhere. The thinking behind science parks is that somehow we can create an ecosystem within which more will happen than if companies were not located in a science park. There has to be some truth in that. On the other hand, bricks and mortar do not create businesses. The fundamental requirements are the people, their skills, their initiative, their access to markets and so on. I would be cautious of giving the development of bricks and mortar too high a priority relative to other priorities.
Science parks are a bit old fashioned at international level. Places like Sophia Antipolis are still going and still successful, but that is based in the south of France, and there is something about the sunshine as well as the availability of scientists.
We are now seeing the beginnings of the wave of collaboration, merger and aggregation. That is coming out of the Hunt report and similar initiatives. We routinely look for collaboration in activities with which we are involved. The Minister mentioned that the technology transfer offices programme is coming up for review. We put money into that for several years. We have very good professional technology transfer units in the universities. The debate is about how we capitalise on that. One way of doing that is getting them to work closer together so they think of themselves as a network. If someone in NUIG is really good on medical devices - IP and medical devices is a tortured area - then that should really be available wherever it is required. For every programme we are dealing with, that person will talk more and more about collaboration, networking, and trying to get a better use of the resources.
The people in Cork are disappointed with Mr. Lyes's comment on science parks.
There is a lot of sun in Cork.
There is, but a science park only recently opened in Cork.
SFI runs a series of Oireachtas breakfasts in Buswells Hotel. Tomorrow morning at 8.30 a.m., we will bring in one of our scientists, Ms Linda Doyle, who is in the telecoms software space which is doing really well from a research and jobs point of view. We speak plainly at these meetings, jargon is banned, and we provide breakfast. We encourage Members to join us and learn about the process. That is a shameless plug, but I could not resist it.
That is allowed. There is no commercial benefit. We will send around an e-mail to that effect.
On behalf of the committee, I thank you very much. It was a long morning, but it was very worthwhile. We look forward to working more with you on these issues.
