Seanad Éireann debate -
Thursday, 17 Dec 1987

Vol. 118 No. 2

Science and Technology Bill, 1987: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of Industry and Commerce (Dr. McCarthy)

The purpose of this Bill is to combine, in one body, the functions which have up to now been carried out by two organisations, the National Board for Science and Technology and the Institute for Industrial Research and Standards. It is intended that the new body will be called "Eolas — the Irish Science and Technology Agency" and that it will come into being on 1 January 1988.

The Government consider that this Bill is of major importance. It reflects not only the Government's determination to make the best use of scarce resources and to deploy public funds more effectively but also, and most important, the Government view that a strong and well-developed scientific and technical base, integrated with industry, is essential, if Ireland is to prosper in today's keenly competitive high-technology world. The bringing together of the IIRS and the NBST is an essential step towards providing that base. It will result in a unified support mechanism for science and technology development in industry and services and in the higher education sector.

The close relationship between science and technology, and between the two elements together and economic and social development is an accepted fact. The countries which are most advanced in science and technology are the countries which are the wealthiest and have the highest living standards. It is only logical, therefore, to aspire to take a leading place in this high technology world. To do so, we must have proper national policies and we must have the most effective mechanisms in place for carrying through these policies. We are now well placed to do so.

Government policy for science and technology can now be described as having the following broad objectives: co-ordinated management of programmes and planning; raising the overall level and quality of science and technology; intensifying the application of modern technologies in indigenous industry; and increasing industrial innovation.

The Bill now before the House aims at creating the proper and most effective framework in which these elements can be pursued and worthwhile results can be achieved. The two organisations being combined are the major State support services under the aegis of the Department of Industry and Commerce for scientific and technological development.

The role and the functions up to now assigned to the IIRS can be summarised as follows: supporting industry through process improvements, testing, analysis and the dissemination of technical information; specifying standards and marks for commodities and processes, and encouraging and monitoring standards; promotion and utilisation of national resources through research and development and assisting the development and exploitation of inventions which are in the public interest.

By contrast, the NBST have been concerned with technology development policies, strategies and assessments at a national level. In particular, they have been involved in developing and co-ordinating national programmes for science and technology and in fostering the emergence of a science and technology infrastructure attuned to industrial and economic needs.

The new agency, Eolas, will combine both these sets of functions and will have as its prime objective the development and expansion of industry in particular, and of economic and social development in general through science and technology. It will set out to achieve this by undertaking the following precise actions: promoting national investment in science and technology; providing and administering grants for science and technology projects; optimising EC funding for science and technology; co-ordinating science and technology funding between development agencies, third-level institutions and industry; providing a national technical information service; providing technical, consulting and testing services; monitoring industrial R & D projects; and operating the national quality and standards programme. It will undertake these actions under the general direction of the Office of Science and Technology.

Eolas will be a vital element of our growing technological infrastructure and will exercise a much-needed directional and co-ordinating role for State-support services in this area. A co-ordinated science and technology input is crucial for a successful industrial development policy and should be closely integrated into that policy. The direct input, by entrepreneurs through in-house research and development, and the indirect input, through the State science and technology infrastructure, are major elements of industrial strategy. They are just as important as management competence and financial resources. This fact will be reflected in this Government's approach to industrial development and industrial planning. This approach is being facilitated by bringing together, under one roof, responsibility for advising the Government on science and technology policy together with responsibility for providing support services for the technical development of Irish manufacturing.

I would like to refer briefly to the new science and technology development programme which was established by the Government in 1987. This programme followed the Government's commitment in their policy document on science and technology. An allocation of £3.1 million was made in the Department of Industry and Commerce Vote in 1987 to initiate immediate and indeed long overdue action in a number of key areas including: biotechnology; advanced manufacturing technology; microelectronics; a re-equipment programme for the IIRS; a technology innovation programme; and a teaching companies programme.

The common theme running through all the actions funded in this programme is the transfer of new scientific and technical knowledge to Irish industry to enable it to compete and develop new jobs. These programmes, which will be continued and extended in 1988, are now up and running. Many of them are under the management of the National Board for Science and Technology or are being carried out with the full co-operation of both the Institute for Industrial Research and Standards and the National Board for Science and Technology. The new agency, Eolas will be responsible for the management and execution of these programmes.

In legislative terms, the Bill is relatively simple. The mechanism being proposed to effect the merger is as follows. Section 3 of the Bill provides that the name of the Institute for Industrial Research and Standards will be changed to Eolas — the Irish Science and Technology Agency. Section 6 provides for the repeal of the National Board for Science and Technology Act, 1977, and for the repeal of certain redundant provisions of the Industrial Research and Standards Act of 1961.

Section 8 of the Bill provides for the dissolution of the National Board for Science and Technology and assigns the functions of that board to the new agency, in addition to the functions assigned to it by the IRS Act of 1961. The functions are listed in sections 8, 9 and 10. They are the same as the functions which were specified in sections 4, 5 and 6 of the NBST Act of 1977. The Government consider that the resultant functions which will now be assigned to the new agency are suitably worded to enable the Agency to fulfil the role expected of it.

I recognise that it could be argued that there are certain similarities between the functions listed in the 1977 Act and those in the 1961 Act. This was unavoidable since the stimulation, co-ordination, funding and advisory functions of the NBST were exercisable in respect of areas and activities of national interest where, necessarily, an operational body like IIRS would have operational programmes. But any such similarities in the combined functions will not result in any practical difficulties, given that one agency will be responsible.

Section 8 (b) provides that the Minister may by order assign additional functions to the agency. This power is considered necessary in the event that it may be decided in the future that some further functions might appropriately be performed by the agency.

Section 14 of the Bill provides for the amendment of section 43 (5) of the IRS Act which deals with expenditure by the agency on the development and exploitation of inventions. The limitation on expenditure, £5,000, is considered no longer appropriate, given the passage of time, and the amendment will give the Minister the power, by order, to set a more suitable limitation.

I do not propose at this stage to go into the detail of the other provisions of the Bill which could, I think, be regarded as relatively standard provisions. I would, perhaps, draw attention to section 27 which provides for the transfer of the staff of the National Board for Science and Technology to the new agency on terms and conditions no less favourable than those they currently enjoy. It would, I think, be appropriate, at this point, to express the Government's appreciation of the work carried out over the years by both the Institute for Industrial Research and Standards and the National Board for Science and Technology. Both organisations — their respective staffs and board members — have served this country well. They have performed valuable work right across the scientific spectrum and have laid the basis for the tasks which now, I hope, will be successfully undertaken by the new agency.

The creation of Eolas — the amalgamation of the IIRS and the NBST — and the close co-ordination of its activities with those of the other developmental agencies and the third level institutions will result in a real synergy. The ambition must be to utilise the application of science and technology to create worthwhile new opportunities for industrial activity and long-lasting employment. I stress that the academic world has a vitally important and practical role to play in realising this ambition. I am confident that the new agency will provide the proper framework for successful implementation of Government policy on science and technology.

I commend this Bill for the approval of the House.

Mr. G. Reynolds

I welcome this Bill. The amalgamation of the Institute for Industrial Research and Standards and the National Board for Science and Technology has many positive aspects. The Minister and the Government have stated that by the amalgamation of the IIRS and the NBST they want to establish a strong and vibrant science and technological base in the country. That is a very commendable idea but what I find very ideological about the Government policy is that they have decided to cut the grant aid for the combined agencies by a total of £1.49 million for 1988 alone. That is a farcical step in the sense that you want to have a strong and vibrant science and technological base and, at the same time, you are willing to cut the amount of money available by such a huge sum. Surely, if the Government believe in their fine words and aspirations about science and technology there was a case for utilising the savings and putting the money into many of the hard pressed areas in this service?

This is an area with enormous potential and of vital importance for the future wellbeing of the country in the creation of industrial wealth and jobs. It is very difficult to argue for a new departure when the first thing the Government decide to do is to cut the existing budget and none of the savings are being put directly back into that area. There has been a serious run-down in the provision of resources especially with regard to scientific equipment for the IIRS. We must keep our facilities and our equipment up to date in a fast changing area. We now find that the combined agencies have considerably less money than they had last year despite a low inflation rate and other factors. I believe that the lack of funding could have a detrimental effect on the new agency.

I welcome the general structure of the Bill but if we do not have a strong science and technological base the arguments we are now presenting here will relate more readily to other countries with such a base. The new agency will have a major role to play. The new board and chief executive will be very important in portraying Ireland's image abroad as a serious, developed economy and nation. It has real potential for providing a planning and co-ordinated focus for science and technology in Ireland. It is important also that we must be able to transfer the research work of the universities and institutions to industry.

It is very important that these things should happen. We must accept we cannot compete with huge economies as regards the kind of investment we put into science and technology. I know we cannot compete with the large countries of the world. We have given a lot of money over the years and we have been very productive in that area and I think it is a backward step to have such a lack of funding for the new agency.

The initial success or otherwise of this whole operation will depend on getting the right person for the job of chief executive of the new agency, whether coming from within the existing operation or being recruited from outside. The chief executive will need to be a person who can command the confidence and respect of all branches of science and technology. Bringing together the IIRS and the NBST, the various universities and institutions and the various downstream activities will be a major task. This will be a key factor in the initial period. I would like some clarification as to the role and power of the Minister for Finance in this appointment. The Minister of State has said that section 50 provides for the appointment of a chief executive of the board with the consent of the Minister and the Minister for Finance.

My reading of the section is that the board of the agency shall appoint a person to be the chief executive of the agency under contract of service on such terms and conditions as may be agreed by the board with the approval of the Minister and Minister for Finance. That would indicate that what has to be approved by the Minister and the Minister for Finance is not the appointment but the terms of contract agreed by the board. I would like clarification on this because if the appointment is not under a term of contract I cannot see any role for the Minister for Finance.

I would also like to hear the Minister on a matter which I think is very important in the science and technology industry, the keeping of our good and bright graduates at home. I know the Minister and the Department are very well aware of the fact that many of the very bright graduates in this area are being snapped up by companies in Britain, Europe and America and are being lured out of the country before they have done their final examinations. That is a very sad situation but it is something that has to be looked at. A plan is necessary to encourage our good graduates to stay at home. It is a very essential element in being productive in this area.

There is only one other point I would like to make and perhaps it shows my ignorance of our native language. The new word for the agency is Eolas and the Irish Science and Technology Agency is the English term. I am not sure what the word "eolas" means but I believe there could be confusion as it would not be associated basically with science and technology.

Mr. Mulroy

As the explanatory memorandum states, the purpose of the Bill is to combine the functions of the Institute for Industrial Research and Standards and the National Board for Science and Technology, to dissolve the National Board for Science and Technology and to change the name of the institute to Eolas, the Irish Science and Technology Agency. The Government recognise the competitiveness of Irish firms in both the industrial and services sectors and their capacity for growth will be largely determined by their ability to keep abreast of technological change and to apply it effectively. Failure to understand this fact and to respond positively will result in a further widening between standards of living here and in other EC countries. We recognise that the implications for our economy arising from new technology are such that it should have a central part in all economic policy formulation.

By bringing this Bill before the House the Government recognise the need to concentrate our resources on those areas which have the greatest potential for industrial job creation. The objective as set out in the Programme for National Recovery is the creation of approximately 20,000 gross extra jobs on average each year over the next ten years. The Government also have plans for a radical reorganisation and simplification of the industrial promotion agencies to provide a combined approach to the growth of the indigenous manufacturing sector. The initial measures to be taken as set out in this Bill are the amalgamation of the IIRS and the NBST for the promotion and integrated development of all industry. The roles of these agencies complement each other in so far as the statutory responsibility for advising the Government through the ministry of Industry and Commerce on policy for technology on science rests with the National Board for Science and Technology. The NBST have defined their overriding objective as developing a cost effective national effort in science and technology, emphasising their application to industrial and economic development.

The NBST at present operate a number of their own programmes in this regard. They also provide technical representation to the European Community, the Space Agency and the OECD. The principal functions of the IIRS are to assist on the use of science and technology in industry. Their main task was defined in 1984 as the seeking out of companies and sectors where product and process improvements will lead to significant growth in output and better product quality. Their main activities are industrial research, provision of consultancy services, technical information and advice to industry. I believe that the combined efforts of this new agency will better assist in the development of the technical capabilities of indigenous manufacturing companies, an area which badly needs support particularly in the field of new technology and development.

There are various reports which have been commissioned in recent years which include the Telesis report, the NESC report and the White Paper on Industrial Policy. These reports clearly indicate that Irish industry comprises of two distinct sectors. On the one hand, we have a modern, foreign-owned sector providing approximately 80,000 jobs which are heavily involved in chemicals, electronics, pharmaceuticals. The USA are by far the largest single source of investment in this area. On the other hand, we have an indigenous sector which is heavily involved in traditional product areas and which has essentially failed to lift its horizons beyond a small home market. Profitability is low and sufficient funds for reinvestment are not being generated. All available material on the technological capabilities of indigenous manufacturing firms points towards deficiencies on a scale barely compatible with a developed economy.

In 1985 the Sectoral Development Committee published a report entitled "The Technological Capacity of Indigenous Irish Industry" and this, I am sorry to say, paints a pessimistic scenario. The report concludes that:

(1) Even in growth areas such as electronics, plastics, chemicals and pharmaceuticals, and mechanical and electrical engineering, the indigenous component mainly comprises small firms producing low value added products with a medium to low technological capacity. Growth is confined to companies of overseas origin and there is no sign of improvement in favour of the indigenous firms.

(2) Traditional sectors such as clothing, textiles, printing and packaging are dominated by indigenous manufacturers and these sectors are in decline. The technological capacities of these firms are low to medium and the indications are that their decline will continue.

(3) The innovative capacity of indigenous firms is low with a consequential negative outlook for future expansion.

(4) There are major technological gaps particularly in those technologies with the greatest rate of change such as engineering technologies resulting from electronic developments, e.g. the computer-aided design and manufacture.

(5) There are major skill deficiencies in our indigenous firms particularly with regard to the newer technologies but also in design, quality assurance and knowledge of materials and

(6) the lack of skills in the technological and technical areas is mirrored by similar deficiencies in market intelligence and information system, poor marketing performance, lack of equity capital and lack of strategic planning. The principal aspects of the new approach to science and technology are encouraging. They include: — a new national programme in Biotechnology — a new national programme in advanced manufacturing technology — a new trading companies programme — a new pilot programme in the south-east region on the application of science and technology to regional development. The National Board for Science and Technology is making major contributions to the Biotechnology programme which is giving a new dimension in the developing area of higher education/industry co-operation.

I believe that the amalgamation of these two prestigious agencies working in harmony will greatly enhance the environment for industrial exploitation of biotechnology in Ireland. These operations involving biotechnology will be supported by the centres of excellence, through the involvement with the centres of Irish subsidiaries of major pharmaceutical companies which will lead to greater research and development by such companies, through the creation of an even more favourable climate for attracting new overseas development and through the stimulation of Irish enterprises.

Biotechnology is an important new area of high technology. It may be defined as the application of biology to industry. As biotechnology is such a wide field covering, as it does, all the life sciences there is considerable room for development and growth. In the past ten years Ireland's research programme in a variety of biotech sciences has developed and has commercially exploitable units in many areas. A number of companies have been established in recent years which include Bicon, Nortech, Flemming and other companies. It is interesting to note that Nortech was established following extensive research carried out in UCG. In the food industry companies involved in biotechnology development include Cadbury, Kerry Co-Op and Guinness's. These companies clearly demonstrate the commercial viability and financial potential in this area.

However, the overall picture with regard to biotechnology in Irish industry is less reassuring. In 1984 a survey carried out by the National Board of Science and Technology which investigated 160 companies in the food and drinks industry reported that: the level of expertise in the Irish food industry is low and needs urgent attention; the food industry will have to consider the employment of biotechnology-related graduates; the commitment of some companies to invest in biotechnology is strong if a suitable niche can be identified; the number of companies that see biotechnology is the main factor in expansion and increasing profitability is sizeable; unlike countries such as the UK there has been little entrepreneurial activity to date in biotechnology. However, some initiative has been taken in so far as the Institute for Industrial Research and Standards already has a biotechnology unit at University College, Galway. This unit currently provides a very valuable service to small industry in this area.

In 1984 the Industrial Development Authority and the National Board for Science and Technology submitted a joint plan to the Government for an Irish biotechnology initiative. I am pleased to see that the national biotechnology programme was established in June of this year. The programme has a number of objectives: (1) to encourage the research activities in Ireland by home based and overseas companies in order to develop the biotechnology industry in this country; (2) to establish a significant reputation for Irish biotechnology research and thus help attract overseas companies to locate in Ireland. These objectives will be achieved by establishing, equipping and staffing centres of biotechnology research expertise in the universities which is a step in the right direction. We have got probably the best educated youth in Europe and I believe we should be making better use of this great natural resource as an aid to industry.

These centres are being developed around research topics in which there is existing Irish expertise and which are relevant to Irish industry. I hope to see the programme expanded and developed in the coming years.

There has been a more recent development in the field of plant biotechnology which is presently receiving particular attention due to its connotations as a food provider for the developing world. It is reasonable to assume that this developing field could create a substantial number of jobs within the next decade provided the institutional and infrastructural facilities are made available. I believe the amalgamation of these two agencies is a step in that direction.

Traditionally constraints of food production derive from traditional methods of cultivation and production. Biotechnology is pushing back the horizons of plant production and facilitating the rapid multiplication and hence the production of a wide variety of disease-free food plants. These plants are particularly suitable for growth in countries with scarce natural resources such as Ethiopia, Sudan and other sub-Saharan countries.

It is my earnest wish that this new board of science and technology will act swiftly in association with the EC, the United Nations, the World Bank and other world agencies to develop this new science of biotechnology, particularly in the propagation of food plants and to apply it in Third World countries to ensure that the Ethiopian disaster will never be repeated.

There is an Irish company operating in Saudi Arabia which a few years ago grew no plants apart from the few traditional things like date palms. This company has revolutionised the dairy industry in Saudi Arabia. It is interesting to note that Saudi Arabia now has a surplus of wheat. There is no reason why this expertise could not be extended to the African countries. This exercise has proved that all that is needed is the know-how, the technical expertise which is there and has been established and proved and the necessary finance. Once again I appeal to the Government to take the initiative in this area and to pursue actively agricultural development in these African countries.

We recognise we must develop technological expertise if we are to progress. There is substantial EC support available. The EC has three funds from which considerable support could be expected for the national developments which it is proposed to undertake. There is the Regional Fund which can provide considerable assistance for infrastructural measures on the capital side which includes buildings and equipment where they are required. The Government are actively pursuing the application of this fund to desirable capital developments in the field of science and technology. There is the Social Fund which provides considerable assistance towards training costs and work experience for young graduates and technicians.

I am sorry to say that Ireland's take up of the Social Fund in the science and technology sector is minimal at present which is partly because we have taken so few initiatives in this respect. I am sure the Government will now make a determined effort to ensure that such initiatives are taken with the aim of channelling the funds towards re-equipment and additional staffing of the scientific laboratories, particularly in our third level colleges. Thirdly, there is EC funding in the research budget of the Community in which Ireland has already established a good record due to the excellent work of the NBST staff. They are concerned with promoting the take up of these funds in industry and the higher education sector.

However, the research budget only funds operational activities and does not contribute to the establishment of the cost of equipment and facilities. Because of the scarcity of investment in this area our take-up from this budget is currently less than it should be. I hope that the situation will be corrected by an increased national commitment on the capital side towards a national, scientific and technological infrastructure and through a better co-ordinated take-up from the Regional Fund.

I welcome this amalgamation of the two agencies but I would like reassurance from the Minister that the valuable services provided by the IIRS at present will not be diminished. This service is particularly valuable to small manufacturing firms; it includes technological acquisition, product development, application development, materials selection and sourcing and manufacturing design. The IIRS also run a very valuable information desk service and they have a considerable data bank of which small and indeed large companies avail themselves. I hope there will not be a diminution of this service to industry.

There was something else the IIRS mooted some time ago. It is important and it is in regard to the dumping of products from developing countries, products that carry no quality or standard marks. The IIRS in the past favoured the idea that there should be product testing at point of import to ensure that products meet with Irish and EC standards. At Christmas time particularly we see the import and the sale of dangerous toys for young children. I would like the new agency to look into that area because the market has been flooded with inferior products from countries outside the EC.

Finally I would say there is a need to get new technology into our indigenous industrial sector. We can get this by technology transfer from companies in America, Japan and other more developed countries. I would like this agency to pursue that area.

Ireland has a leading part to play in the emerging world of high technology. We are ideally placed to play our part and to become a high income country with high productivity but to achieve this ambition we must do more to help the people who are actively working in the area of technological research and development. The policy measures outlined in the Bill will give real support and leadership to the makers and doers of our scientific and technological community. I believe the amalgamation of the IIRS and the NBST will go a long way in giving these people the means to generate growth and progress for the future development of our country.

Mr. McGowan

I join with other speakers in expressing a warm welcome for this Bill and compliment the Minister on the initiative he has taken. Coming from a rural area where we stand to gain so much from the new technological development, I think it is exciting news. The provisions of the Bill create a lot of interest and excitement in rural Ireland and especially in a remote county like Donegal. The new emphasis on technical development is necessary and is very welcome. This country largely missed the industrial revolution that took place after the war. European countries went ahead and are competing fiercely with each other in engineering business. The production of cars and other engineering goods has now reached a very high stage of development in all European countries and in the UK. We were largely left out of that revolution. We were dependent to a great extent on agriculture. This was fine in the past but we have now reached a stage at which the new technology is being used in agriculture and if we were not involved we would be left completely out. We recognise that we have been light years behind in technological development. In fact we are so far behind that one of the biggest problems will be to encourage our young people to get involved. Many people of my age may be afraid of new technology and may need a lot of encouragement to use it. That is one of the difficulties we will face in this country. I believe that while we have a big number of young people here at second and third level who will benefit tremendously from the new technology we will need a major effort to involve all of our young people and everybody else.

I stand up to support this Bill mainly because I was very fortunate. I was one of a number of people up in Donegal who had the pleasure of welcoming the Minister to our county to introduce the first star programme where the new technology made it possible for people in Donegal to communicate live and visually with Dublin, Brussels and Copenhagen on a live link. I am pleased to say that that is a permanent link assisted by the Minister. We in Donegal recognise the foresight and the assistance he gave us in bringing us out of the dark ages because in fact it is not too long since we had to use the turn handle telephone up there. The modern technology brings us out of the peripheral area into the technological world in which we have not so far participated.

This Bill is of particular interest to us in rural Ireland. We recognise the effort and the work the Minister has put into this and we support him totally. We would encourage him and we recognise the value of what he is doing for rural Ireland. Much more value and much more interest will accrue in rural Ireland than in the city. In our third level institution, our regional technical college in Letterkenny, the Minister will agree that we have shown foresight and have been abreast of new developments. We are participating in the new star programme which is being provided for under the new measures.

This is a welcome development. We would have some reservations. When the new technology is introduced on a wide basis the only bodies that could handle it in rural areas would probably be regional colleges. We see that if you absorb senior people in regional colleges in modern technology you might create a problem. At present in our regional college we have a community development programme, we have the information technology programme and we have incubator units. We hope that the provisions now being introduced in this Bill will make it possible to co-ordinate business innovation centres in rural Ireland and that that will remove the remoteness whereby business innovation centres can participate on a European basis and that small industries will find it possible to communicate and to co-ordinate with major centres in Europe and the whole of the technology area will be available on a co-ordinated basis.

I believe it is necessary to have a lot of training at the introduction of the new technology. Introducing the Bill and providing the funds will not go far enough. A lot of training and guidance on how to use and to take full advantage of all the new technology that is available will have to be given. I trust that the Minister will set up within his own Department people who are prepared and have the time to give guidance and assistance to rural areas that want to participate and want to be involved. This is one opportunity that cannot be left to the city dwellers and those who are located in the capital. This is a new measure of technology and it must not only benefit the big centres of population. Great care should be taken by the Government to make sure that those who want to participate and those who should participate in the rural areas will have an equal opportunity.

I am pleased that my county was one of the first to be involved in the new technology that has been made possible with the new initiative taken by the Department. I support the Bill and welcome it. The people of Donegal are excited and very interested in supporting the Bill, too, and look forward to participating in the many new technological developments that will now be possible as a result of this Bill. Rural Ireland will be brought into focus and for the first time will be allowed to participate on an equal footing with the bigger centres of population. The Bill is very welcome and there is a great interest in it in the country. I just hope that great care will be taken and great guidance will be given on how best to approach the involvement of our young people in this new technological age.

Mr. B. Ryan

There is no doubt that there is an overwhelming argument in favour of the decision the Government have taken in principle to amalgamate the National Board for Science and Technology and the Institute for Industrial Research and Standards. That being said, it is regrettable that either in reality or in perception this is a cost cutting exercise. I could not find any reference in the Minister's script to redundancies but I recollect that at the time when this decision was taken there was a suggestion of redundancies resulting from this, voluntary redundancies albeit but nevertheless redundancies. Far from redundancies in this area this country needs an extensive and increasing investment in technological research and the related areas referred to in the Minister's script which are the objectives we all share. Looking at the objectives the Minister described or attributed to Government policy for science and technology, one of them is of considerable importance and that is intensifying the application of modern technologies in indigenous industry. I remember reading a recent publication of the Department of Finance on the prospects for the economy. They produce a graphical comparison between the performance of what were called high tech industries and the remaining industries. The performance of the high tech industries was one of rapid and considerable growth. Notwithstanding even the general recessionary conditions within this country high technological industry was expanding and expanding rapidly, the remainder was not. The tragedy is, of course, that the vast majority of high tech industry is not indigenous and the vast majority of indigenous industry is not high tech. There are startling and impressive exceptions but by and large that is the case. It is becoming clear to me at least, though the Doheny Nesbitt school of economics would not subscribe to the view, that the view this country has failed economically because of taxation policies or other policies is to say the least imprecise and in fact is probably totally wrong. The failure has been a failure of indigenous industry to respond to new conditions. It has been a failure of indigenous industry to understand the world it was moving into, to respond to free trade, the insistence of indigenous industry on seeing free trade as a threat and not as a possible opportunity and a general collapse in that area which could not be compensated for even by the spectacular performance of high tech industries. It is a fact that we should address that for instance the enormous growth in exporting industries which represent half of our GNP still fails to produce more than about a one to one and a half per cent growth overall in our gross national product which suggests that that part of our gross national product which is attributable to non-exportable production of goods and services is actually contracting at an alarming rate at the order of 4 or 5 per cent per annum.

You cannot talk about two sectors of our economy, one which is the high technological area which seems to survive in spite of the admittedly high levels of personal taxation, in spite of the high levels of interest rates in this country and a number of other things and still manages to boom and at the same time look at the failure of indigenous industries based on the home market to expand and blame it all on something that applies to them all like taxation or interest rates. There is obviously a more fundamental flaw and that, in my view, is related to the third objective which the Government have set themselves, that is, the failure to apply modern techniques in indigenous industries and increase industrial innovation. There was an OECD report on innovation in Irish industry. Notwithstanding the attempts of certain interest groups in the industrial area to suggest that all the OECD said was that we should reduce capital gains tax, the OECD did a very detailed study of the lack of an innovation culture in this country and identified a number of things, among them research, a lack of an innovation culture in our education system and suggested that, if we were going to create an innovation culture in our industrial and manufacturing sector, we needed an innovation culture to run through our education system from the very beginning.

The first prerequisite for innovation is creativity and imagination. To have creativity and imagination fostered in our young people requires a form of educational provision which is different from what we currently provide. It requires small classes with a capacity for teachers to supervise children in an imaginative way. I think I am receiving what I would describe as a non-verbal warning from the Cathaoirleach.

An Cathaoirleach

We are on the Science and Technology Bill.

Mr. B. Ryan

I was attempting to identify the connection between science and technology and education. The Minister's speech makes considerable reference to the academic area. I do not think you can create an innovation culture simply by pouring money into third level education, notwithstanding my own interest in that area. An innovation culture is based on the capacity of citizens to do a number of things. The first is to think creatively. The second is to have the skills at their disposal to translate that sort of creative thinking into modern saleable products; and the third is to have the resources to follow through those ideas from conception to production. All of those things are inter-related and, simply providing money to more and more university academics to do more and more research will not necessarily create an innovation culture. It is a necessary but not a sufficient condition for an innovation culture.

We also need a much different approach to what science and technology are about in terms of second level education and we need the beginnings of an innovation culture in terms of encouraging imagination amongst school children. They all relate to each other. The only reference I was going to make to primary education was to point out that the more an education system becomes simply a process of handing out information to be regurgitated by students at whatever level it is done, the less it will be a system which encourages innovation. What we need most fundamentally in this country is a capacity to think originally and to think creatively in the areas where manufacturing industry is most likely to grow.

I welcome what is being done by this Government. My only argument with the Government is not about the policy objectives they set themselves, on the future they identify for this country, but the fundamental contradiction between the policy objectives they have set and some of the policy decisions they have taken. I agree fully and support the policy objectives they have set themselves. I do not believe it is possible to reconcile the view of a high-tech country with a high level of technological and scientific sophistication with the closure of An Foras Forbartha. There is a fundamental contradiction between the two policy decisions. One is a playing down of the role of scientific research, of the assembly of information, of the protection of the environment and things like that which are an inherent part of developing a real high-tech environment.

The idea that there is a trade off between high technology industry, whether it be in the biotechnology, chemicals or electronics area and the price that must be paid by our environment is pure and utter nonsense. Any suggestion that we have to sacrifice those things that are most precious to ourselves in the environment in order to create industrial employment is rubbish. It is simply a story that is foisted upon us by people in manufacturing industry who are either unwilling or unable to operate efficiently. Industrial efficiency is the most important single objective that we need to develop, not just relatively efficient manufacturing industry but the most effective and efficient manufacturing industry in Europe and the most effective and efficient indigenous manufacturing industry in Europe. That is why we have to look at ourselves. I do not dispute the value of attracting in international multinationals companies in the areas where they have been involved, but we should stop believing that they are the only ones who can provide the industrial development. It is important that we get beyond seeing science and technology as a service to attract in multinational investment. Investment in science and technology ought to be as much a concerted attempt to encourage the development of large indigenous high technology industries as it is an attempt to attract in existing industries from outside. What we need are high technology industries which are rooted firmly in this country's natural resources and its location relative to important markets.

One thing that is still lacking in the area of science and technology policy is the question of who will take the risk for all the well educated young people who are coming out of universities, national institutes, regional technical colleges, many of them with ideas but without capital. One of the weakest points in our strategy is that we are prepared to invest huge sums of money in capital, in labour, training and educational schemes but not much in ideas. We do not have a particularly high proportion of our natural product devoted to research and development. It is extremely low. A policy decision has to be made here over a number of years to push up the proportion of our gross national product that is being devoted to research and development. The small countries of Europe that have been successful in competing in the international environment, and have been successful in developing themselves into high tech, high wage economies, have all programmes of research and development that are light years ahead of ours. This is not a criticism of the present Government but it is a criticism of all Governments we have had. There is no point in making a token gesture towards research and development. Research and development of their nature are both expensive and risky. The figure I give my students is that if one in 100 ideas comes to production you ought to be reasonably happy. Therefore if we are to encourage on a large scale people to start up indigenous high technological industries we will have to accept the possibility of failure on a large scale. There is no way of picking winners at that level.

I believe in the industrial development policy in general whereby the State can pick winners. I do not believe you can pick winners at the level of fundamental research or at the level of applied research. You have to accept that many ideas may never come to fruition or, if they come to fruition, it may be in 30 or 40 years time. It is interesting that the person who in the thirties or forties — I cannot remember the decade — did an enormous amount of study on silicon concluded that silicon was probably never going to have any commercial use. The truth is that silicon later on became the fundamental building block of the whole micro-chip semi-conductor industry which is the bedrock of modern information technology. The man who did that research concluded it was an interesting subject but it was not going to be of great commercial benefit. We are going to have to accept that. The media attitude that sees every industry that closes down as a slap in the face for the IDA and a failure is wrong as far as that goes. It cannot be allowed equally to conclude that because we spend huge sums of money on research and not much comes out of it in a one, two or five year time scale that our research programmes are failing. That sort of attitude is the direct antithesis of what we require in this country if we are going to move from what we are, a semi-Third World country into a real European country like all the other small nations of Europe, producing high quality products from high technological industries with a workforce that is highly paid. That is the objective we all have.

It is important to point out that this is not in any way a romantic idealistic vision. The truth is that it is a small nation in Europe outside the EC which has the most modern industrial base in the world. It is a country which has the highest number of robots per thousand workers in the world and that is Sweden. It has a vastly more automated manufacturing base than either Japan or the United States. It has succeeded in doing that not because it sat back and waited for multinationals to invest but because it succeeded in developing many of the world's best known high technology firms in a whole range of areas.

It is important that we should not believe we have to go with a supplicant begging bowl, that we are of an inferior mentality, looking for other people to show us how. Anything that somebody else can show us how to do has already been done. What we need to do in this country is to develop new ideas, to develop products that have never been sold before, to develop technologies that have never been used before and they should be based, not necessarily exclusively, but largely on our indigenous resources.

I take issue with the Government on the general thrust of economic policy on this point. What is needed is the leap from a dependent economy to an independent economy based on our own ideas. It will not be cheap and cannot be done on the cheap, and, therefore, involves large scale investment. It involves large scale investment at all levels of education. It is wrong to assume that it can be done simply by investing in third level education. I do not want to stray too far but the sort of qualities of imagination, curiosity and innovation that we need so much will be developed in primary schools as much as in third level institutions. If we do want to do that, then we cannot do it on the cheap.

A commitment should be given to a gradual phased increase in the proportion of gross national product invested in research and development. There is no point in simply saying that it will be done by creating incentives for manufacturing industry. One of our difficulties is that most of our manufacturing industries pay either no or very low levels of corporation profits tax and, therefore, tax breaks on research and development are not particularly attractive, particularly to multinationals. We have to do it ourselves.

A recent edition of The Economist states that most research and development in any country is funded by the State; it is a question of whether it is funded directly or indirectly. Therefore, if we are going to increase the proportion of our gross national product which is being spent on research, the State is the only source those funds can come from. They can only come from the State through taxation and, therefore, we cannot pretend we can simultaneously cut back on public expenditure, particularly in this area, and at the same time create a climate of innovation in the areas of science and technology.

Having said that, I welcome the Bill, with one exception, I do not believe this is the time for reducing the numbers employed in any area of science and technology. We are hopelessly under-resourced in this area in terms of people and the resources available to them to develop new ideas. I do not believe we can succeed in the objectives the Government have quite rightly set it if, at the same time, a climate of continuous and increasingly severe cutbacks dominates this area of activity.

Professor Eogan

I welcome this Bill with considerable enthusiasm. I was very pleased to have heard the Minister say earlier that we certainly need a strong and well-developed scientific and technological base in this country. Therefore, the development of science and technology and the maintenance of standards are essential so as to allow wider developments to take place and to bring about improvements in industry and in other fields from which we shall all benefit.

Unlike some other countries I am afraid our investment in scientific research is rather low. Firms, industrial firms and other firms, also place a low value on research. Of course, this inhibits development. A scientific and technological base is essential not only to enable us to cope with major shifts in attitudes but, more importantly, to lead the way forward and bring about innovation. We need a major change in opinions and attitudes and I hope that the establishment of Eolas will help us to bring this about.

As I understand it, the new board will by and large be an adviser to the Government but will also administer some of the Government's policies in relation to science and technology. It will also have other functions one of which will involve the authorisation of standards which, of course, is a very importrant aspect of the work of the board.

I have been particularly interested in this wide range of additional functions of the agency. I would generally agree with all of these and indeed I am particularly interested to see that one of these additional functions is to prepare a national programme for science and technology. It is also very important that the new agency should engage in international activities in science and technology and become involved in conferences and in various other external research programmes.

It is hardly necessary to say, therefore, how essential it is that the State opens up scientific development. To do this, a sound infrastructure is essential. We must attempt to identify strategic research areas and these must not be solely short term projects perceived by current industrial needs. A correct balance must be achieved and maintained between long and short term projects. The aim then should be an open policy in which research proposals can be considered on their intrinsic merit and not just confined to deals in which one might anticipate quick results.

One certainly gets the impression that from the point of view of industry there is an attitude in some quarters that long term research can be detrimental to short term achievements because of the fact that scientific personnel might be tied up and, therefore, the companies would not have the results within a short space of time. In considering this new agency and considering the new board, we must take into account — and I hope the board will also do this — that such attitudes might be shortsighted because basic research, in other words, discovery, is very fundamental to allow us to develop along the lines which this new agency is being set up to do. We should not allow our emphasis to shift too much towards one side or another. Indeed, there is often a tendency to allow the emphasis to shift just that much towards the applied sciences and to neglect the basic or fundamental research. Furtherore, it is of course essential to build up a body of experts and it is vital that we have people who are involved in investigation at the most up-to-date and advanced level. We must, therefore, develop a broad background as well as a specific one. We need people who are engaged in solving problems, be they in industry or otherwise, as one can never tell what is going to be important. It would be rather shortsighted to assume that we knew it all at the moment and that all we have to do is apply our knowledge.

In this connection, the thrust of some of the activities in the past of the National Board for Science and Technology has been to focus to some extent on the interaction between universities and industry. Indeed, one gets the impression that if we shake a magic wand and extend the university activity into industrial research, industry will flourish. This can be too idealistic. It need not be an instant formula for success in an Irish context. It may work in some places abroad but what happens, say, in the University of California need not be relevant to Ireland. America and other countries are in a different industrial environment and their structures need not transfer particularly well.

I hope that the new agency will be given as much responsibility as possible to look after its own affairs. It should have as much autonomy as is feasible. Certainly if the hands of the board are unnecessarily tied this could seriously inhibit its functioning as a vigorous and lively body, a body that should become the leader in attitudes and be at the forefront of new thinking. This agency must be concerned not only with scientific facts but with the development of all other scientific aids at the highest intellectual level. Therefore, I find section 12 slightly out of place. It refers to the fact that the agency, with the approval of the Minister, can institute and conduct research into and studies on such problems relating to science and technology as it considers appropriate and may publish or disseminate the results of any such investigation as it considers appropriate. I would be concerned that there might be an inhibiting factor here or that an inhibiting factor could creep in. All research involves a certain amount of risk and a certain amount of travelling new ground and I would hope that this in no way would be restricted.

I welcome the Bill and I hope that a great deal will flow from the establishment of this new agency. I trust also that the establishment of the new agency will help to increase the profile of science and technology within the thinking of the Government and, indeed, of the people in general. This is essential for all of us because we can all benefit from it. Countries that have developed a high level of scientific and technological infrastructure have achieved a great deal materially and, of course, Finland is a case in point.

I hope, therefore that we are embarking on a new and fruitful era for scientific attainment in Ireland and in doing this I wish the Minister well in his work in this field. I also trust that the new board will go about its work with commitment and that that will also apply to the staff which, of course, have certainly shown dedication in the past in the various bodies with which they were associated.

I hope that my final remark is not out of place but I do not think that we should consider that scientific and technological development started today or yesterday in response to what, perhaps, some other people have been doing, notably the Japanese. We have a very old and respectable tradition of technological development. I know what happened in ancient times may not in any way be relevant to today but it is a fact that, for instance, during the Bronze Age Ireland was one of the four major industrial producing centres at that time and I would hope that with the passing of this new Act we will be moving again towards much greater industrial and scientific development and that this in turn, is something which will aid and benefit all of us.

Miss Wallace

I join with other speakers in welcoming the Science and Technology Bill, 1987. It is indeed good to see these two agencies, the Institute for Industrial Research and Standards and the National Board for Science and Technology being brought together formally. The functions of the new body are well defined in section 8 of the Bill which is by far the longest section. I would be concerned though that no reference is made to fee earnings by the new body, whether it should earn fees or must earn fees or how much it should earn. Section 8 (1) (b) states: "to advise the Government or the Minister on the Agency's initiative..." This in effect allows the agency to contribute and to assist the Government without having to be asked. Section 8 (1) (c) to 8 (1) (i) elaborate on the way in which the single body of professional people are to advise, provide and co-ordinate the advancement of science and technology for the good of the State both economically and socially.

Section 8 (3) (b) is most important, that is to prepare and review periodically a national programme for science and technology. It is essential that this periodic up-date takes place. Section 8 (3) (c) to 8 (3) (h) detail the particular functions of the new institution, only some of which have an income directly associated with them but, indeed, all of which will cost money. I would like to see emphasis being placed on income from these functions such as in the existing policy of the IIRS of pushing towards higher income targets each year.

I would like to compliment, as indeed the Minister did in his opening remarks, the very good work carried out by the board and the staff of both the IIRS and the NBST. The excellent work carried out by these two bodies should now be more dynamic in Eolas.

Section 9 of the Bill clearly establishes an annual science budget and this is to be welcomed as is the review in section 10 of the programmes provided for in that science budget. This is essential and should ensure that action rather than lip service is paid to science and technology.

Section 25 of the Bill covers the confidentiality of information obtained. This is very important. It is good to see that it is stressed again in the new legislation. I suggest, however, that at a future date the fee of £500 on summary conviction should be looked at. It seems very low particularly because of the specialised nature of this work. Indeed, it could be considered profitable to breach confidentiality at times. Perhaps at a future date a larger figure could be included to represent a greater deterrent.

Overall, I welcome the Bill which demonstrates the continued work of this Government to utilise the State finances in an effective, economic way and, most important, particularly in the areas of a science budget, reviews of the effectiveness of the budget and a national programme for science and technology. The legislation shows an important commitment to science and technology. I welcome the Bill.

Minister of State at the Department of Industry and Commerce (Dr. McCarthy)

I sincerely thank Senators for their valuable contributions to the debate on this important legislation. I hope I will be able to cover satisfactorily most of the points raised. Senator Reynolds was concerned about the name of the new agency, Eolas, or the Irish Science and Technology Agency. Eolas, we decided would be appropriate. Since we still have a great arid dear love for our language, Eolas representing the Irish for "knowledge" is appropriate. That name was chosen after a lot of consideration had been given to it.

Senator Reynolds was also concerned, as was Senator Brendan Ryan, about the fact that there is a drop back in the amount of grant-aid. The 1988 Estimates provide for grant-aid of £9.777 million to the agency. This compares with a grant-aid in 1987 of £7.927 million to the IIRS and a grant-aid of £3.349 million to the National Board for Science and Technology, a combined total of £11.276 million. The saving involved, therefore, is £1.499 million. This saving will be achieved through a reduction in staff numbers, a reduction in overhead and administration costs, and an increase in own resources generated by the new organisation. The Government have also provided for funds for the continuation of the science and technology development programme in 1988 at least at the same level as in 1987 which was £3.1 million.

It is proper to refer at this stage to what we actually have succeeded in doing since 10 March with the £3.1 million which was allocated to us in the Vote for the Department of Industry and Commerce. We established a biotechnology programme in June. The programme has as its objectives to encourage research activity in Ireland by both home based and overseas companies in order to develop the biotechnology industry in Ireland and to establish a significant reputation for Irish buyer technology research and thus help attract overseas companies to locate in Ireland.

These objectives will be achieved by establishing, equipping and staffing centres of biotechnology research expertise in the universities. These centres are being developed around research topics in which there is existing Irish expertise and which are of relevance to Irish industry. Three such centres were nominated by me in 1987 in University College, Galway, University College, Cork, and NIHE in Dublin. I propose to expand that programme in 1988 to encompass other university activities.

An advanced manufacturing technology programme has also been established under the fund to help industry to cope with the rapid advances in manufacturing technology. Four advanced manufacturing technology applied research units have been established in colleges of higher education since the Government took office. These were in Trinity College Dublin, University College Dublin, NIHE Limerick and University College, Galway. The programme aims to direct the high calibre engineering skills in these centres towards meeting the needs of industry.

Specifically the research units will provide research and development support to industry involved in both the use and provision of advanced manufacturing technology. Each of the four units is involved in complementary aspects of advanced manufacturing technology. Other programmes which are being developed — which have either commenced or are being developed at the moment — include the teaching companies programme to which I will refer later. That subsidises the placement of highly qualified graduates in science and engineering fields in Irish industries. The south eastern region pilot programme in technology development seeks to co-ordinate the representatives of all the State technology and development agencies and higher education research institutes in the south east region with a view to developing an integrated technology based plan for the development of the region.

As I am sure Senator Reynolds now appreciates, in the process of the amalgamation of the two agencies, the IIRS and the NBST, it is natural that there would be a reduction in costs because we no longer have to rent accommodation premises. There will, obviously, be a reduction in staff by way of voluntary redundancies because we cannot have duplication. It is not a cost cutting exercise. It is a streamlining exercise whereby we will have one single agency doing in a singular fashion, under the direction of my Department and the Government, what was done by the two agencies heretofore.

Senator Reynolds was also concerned about how the chief executive and the agency might be appointed. He referred to section 15 of the Bill. The appointment of the chief executive will be a matter for the board of the agency. Section 15 of the Bill provides for the appointment of the chief executive by the board under a contract of service on terms and conditions agreed by the Minister and the Minister for Finance. The appointment will be made by the board, not by the Minister. I can assure the Senator if he has any worries or fears, that that is the way it will be.

Senator Mulroy raised a number of questions. He was concerned that the services of the IIRS should not be diminished particularly for the smaller firms. I can assure Senator Mulroy that there is no intention to reduce the services which are provided by the IIRS to Irish industry. I consider this to be one of the most important activities in which the new agency will be involved. The need for indigenous industry to upgrade its technological capacity is a need of which I am very aware. The new agency has a vital role to play in bringing about the necessary upgrading.

Senator Mulroy also made the point that there are two distinct sectors in Irish industry, the modern foreign owned sector and the indigenous sector with low profitability. He also gave some examples of high tech emerging companies.

One of the main functions of my office will be to upgrade the scientific and technological capacity of indigenous Irish industry. As I said earlier, the programmes on biotechnology, manufacturing technology and microelectronics are all aimed at including the technological capacity of Irish firms. The teaching companies programme which I referred to earlier is specifically designed to place the most highly skilled graduates in small but promising Irish industries. Senator Mulroy also referred to the IIRS biotechnology unit in Galway which he believes provides good service to Irish industry and he also referred to plant biotechnology. For the information of the Senator, the IIRS unit in Galway is being integrated into the national biotechnology programme and in relation to plant biotechnology this is now being examined as an area of real potential for the future. Ulcombe Company in Roscommon is working in this field and hope to supply Third World countries.

Senator Mulroy was also concerned about EC funds. He referred to our opportunities under the European Social Fund and the Regional Fund and suggested that our take-up under the European Social Fund has been minimal. I am aware of all the opportunities available under the various EC funding schemes. To the best of my knowledge the take-up by Ireland of the Social Fund is widely used in the training of young people in the regional technical colleges, for example. As regards the Regional Fund, I intend to avail of Regional Fund moneys for science and technology related regional development which includes infrastructural developments.

Senator McGowan made a point in his speech that this country largely missed out in the earlier industrial revolution. We must ensure that this will not happen on this occasion. I would agree with the Senator — even though it is probably not advisable to say so — that it was a good thing to have missed out. If you look at it this way, having missed out to some extent in earlier industrial development, we do not have at this stage the same restructuring problems or the mothballing of the ageing industrial giants which are problems some other countries have. I agree with Senator McGowan that we must not miss out in this technological era, this new era of change. If we do I believe we will become a Third World country from the economic viewpoint.

We must select and identify appropriate areas for development and develop spin-off industries to maximise the opportunities, building on our inherent strengths and resources. That is an objective which we intend to pursue through the agency on one hand and through my office on the other hand to ensure that we will be able to identify our areas of strength and to introduce new technologies and new programmes of research and development.

Senator McGowan also mentioned the importance of the involvement of rural areas in science and technology programmes. Without wishing to suggest that he was involving himself in a classical rural-Dublin divide, may I say, as far as I am concerned, we are committed to ensuring that science and technology and research and development are introduced right throughout this country from the cities to the most isolated rural areas. One of the examples he gave was when I was in Letterkenny two weeks ago where we had a live video conference taking in Letterkenny, Dublin, Brussels and Copenhagen. That clearly exemplified the fact that we can now make the world so much smaller by the use of new technologies and that is what we intend to do. I believe that if we commit ourselves to it, all parts of Ireland including the most isolated parts as well as the cities can and must benefit.

I want to ensure that there will be regional development in science and technology. That is why I designated the south-eastern region as a pilot area for science and technological development. In case anyone might be under any misapprehension or illusion as to why the south-eastern region was chosen as a pilot area may I say it was chosen because we had carried out a recent technological audit of the entire country to ensure the south-eastern region was the most appropriate to be chosen as a pilot area. That is why we decided to start at the worst area first. If they can really do a good job it will be easier to develop the other areas as we go along. I am sure Senator McGowan is also aware that proposals are under examination under the international fund for Ireland, the Anglo-Irish fund, to establish a programme for science and technology development in the north-west region, which I am sure will be of enormous interest to him.

Senator Brendan Ryan made a number of points which I will endeavour to deal with. He said that in merging the two agencies reducing staff in science and technology was not a good way to go about it. May I say specifically that the purpose of merging the two agencies is not to create redundancies or to reduce staff. Its purpose is to ensure that we have one single agency that will work in an absolutely singular direction under my office so that science and technology and research and development are improved throughout the country. If there is duplication — which there is, there is no point in us pretending to deceive ourselves — between personnel in the two agencies as they at present exist, obviously there will be redundancies. At this stage I cannot say exactly how many redundancies there will be but they will be on a voluntary basis, and on the terms and conditions applying to the public sector in general. The only reason there will be redundancies — and voluntary ones — is that there is duplication at present. We hope that will be eliminated in the future.

Senator Ryan also compared the failure of low-tech indigenous industry with successful highly profitable, high-tech companies. He made the suggestion that taxation alone is not the reason many of our indigenous low-tech firms have failed. I agree completely with him. This is what the Government are dealing with. It is the reason I was appointed as the first Minister of State with responsibility for science and technology to ensure that we convince indigenous Irish firms that they must introduce new technology into their firms, that they must get involved in research and development. That is why we introduced the teaching company schemes so that we could place graduates in those firms. It is clear that the products that are good and profitable today will not necessarily be the products that will make money tomorrow, next year or the year after. Take for example the pharmaceutical industry, if no research and development had been done by pharmaceutical companies we would probably be still stuck with penicillin as the only antibiotic and I am sure millions of people all over the world would continue to die; we would not have any modern antibiotics that we have now. If we had not technological research and development in the motor industry we would still be travelling in antique cars, as Senator Daly agreed, at 10 m.p.h. unlike the magnificent types of cars which Senator Daly sells. If we were cycling we would not be going at the high speeds of the Stephen Roches and the Sean Kellys; we would be going around on three wheel bicycles. We must be prepared to respond to change in the new and developing world. Science and technology and research and development are the life blood of the new approach which we must have towards industry.

Senator Ryan referred to the OECD study which was carried out two years ago and pointed to the lack of an innovation culture in this country. I would agree with this. I want to encourage an innovation culture, placing young graduates in firms is one step towards this. Other methods are in place to encourage young people to think originally. For example we have the young scientist of the year competition, the national innovation awards which I presented only last Monday and which were put in place following the OECD report mentioned by the Senator. I hope to promote an innovation culture in every way I can. I assure the Senator and the House that that is the absolute intention of the Government and that is why we have this particular thrust and drive in this direction.

Senator Eogan referred to the development of a national programme in science and technology. This is provided for in section 8. I would like to reply to the Senator briefly on this programme and to say that it is my intention to ask Eolas to develop a strategic national research programme. As a small country we simply cannot afford to undertake all methods of research in all areas and disciplines. We will therefore have to make some choices. I will have to direct our resources towards those areas of opportunity which are appropriate to this country and its development. Senator Eogan was concerned about section 12 of the Bill. This was a power which the NBST had and the wording is taken unchanged from the National Board for Science and Technology Act, 1977. This actually is a gap filling function to be exercised only with the approval of the Minister to ensure that it will operate only as a function of last resort and that an over-ambititous agency will not lightly embark on work which might be carried out by other institutions. I hope that that allays any worries the Senator might have about that.

Senator Wallace was anxious that we would ensure that there was a real and continuing emphasis on the pre-earning aspects and in particular that there would not be any losses as a result of the establishment of the new agency. In this regard I would like to say that this income-orientated aspect, as she is aware, already exists. The international activities are referred to in section 8 (3) (g). Ireland has mainly through the good efforts of my Department and the National Board for Science and Technology been most successful in winning research for us from EC research programmes. The effort will be maintained to continue this good work. Only a couple of months ago we finalised the research and development framework programme for the next five years which unfortunately had been held up from the beginning of the year because of the intransigence of a Government in another country. Senators can work that our for themselves. We have done quite well and will do well over the next five years. We will get a grant agency benefit of approximately £30 million which we hope will benefit Irish industry and Irish development.

I consider this legislation to be very important. I see the establishment of Eolas as a major step in creating the vibrant science and technology base which will spawn off new industry and new jobs and will assist existing industry not only to survive but to develop and prosper. The Government recognise the urgent need for indigenous industry to intensify its use of the modern technologies and to upgrade the quality of its products. There is also an urgent need for the innovative skills of our people to be nurtured and allowed the opportunity to develop productively. The new agency will be spearheading the drive in both these important areas. I conclude by thanking the Senators for their support for the Bill. I hope this agency will be very successful.

Question put and agreed to.

Agreed to take remaining Stages today.