We shall open the chapter first and subsequently, if time permits, the Vote. I invite the Comptroller and Auditor General to introduce Chapter 11.1.
Chapter 11.1 of the report of the Comptroller and Auditor General reads:
11.1 Media Lab Europe
Background
Media Lab Europe (MLE) was established in May 2000 as a University level research and education centre to specialise in telecommunications and information and multimedia technologies, including the Internet and digital commerce. Contractual arrangements were outlined in a series of collaborative agreements between the Government, Massachusetts Institute of Technology (MIT), and MLE. It was envisaged that MLE would become self-sustaining within the ten-year timeframe of the agreements. This was to be achieved with the initial provision of Exchequer funding and subsequently by raising sponsorship and other income. Payments totalling €24.9 million and €10.6 million were made from the Exchequer to MLE and MIT respectively between 2000 and 2003. In addition the State leased property that had cost €22.5 million to MLE at a nominal rent and undertook to pay €1.27 million per annum for seven years to the Higher Education Authority (HEA) in respect of collaborative research projects between MLE and Irish universities. Table 25 shows the flow of funds over the years 2000 to 2003.
Table 25
|
Year
|
MLE
|
MIT
|
|
€m
|
€m
|
|
2000
|
8.4
|
9.4
|
|
2001
|
10.2
|
1.2
|
|
2002
|
5.7
|
—
|
|
2003
|
0.6
|
—
|
|
Total
|
24.9
|
10.6
|
Project Evaluation
The Department of the Taoiseach assumed initial responsibility for the management of the project. Responsibility transferred to the Department of Public Enterprise in May 2001 and to the Department of Communications, Marine and Natural Resources in June 2002. A Task Force chaired by the Department of the Taoiseach and comprising representatives of the Departments of Finance, Enterprise, Trade and Employment, Education and Science, Public Enterprise, the Office of Public Works and the agencies IDA Ireland, Enterprise Ireland, Forfás and the HEA oversaw the process which led to the signing of a Memorandum of Understanding in December 1999.
Concerns expressed by Task Force members in their consideration of the MIT proposal included
·The high cost to be borne by the Exchequer
·The disproportionate risk being carried by the Exchequer
·The minimal exposure of MIT which would not provide any guarantee in the event of project under-performance or failure
·The uncertainty regarding the replication in Europe of the US model, particularly in the area of sponsorship income
·The perceived over-optimistic financial targets with MLE projected to be self financing within a timescale not experienced elsewhere
·The lack of clarity regarding the exact work and output of MLE, leading to doubts over whether the project would meet Ireland's strategic needs or those of MIT
·The absence of any in-depth evaluation which would establish the credibility of, and justification for, the project
·The degree to which the success of the project relied on the personal commitment of key personnel and the corporate commitment of MIT.
In the course of the project evaluation the financial statements of MITML (MIT's research laboratory based in Boston) for a period of three years were sought. There was no evidence available in Departmental papers that these were ever received.
In 2000 the Department of the Taoiseach stated that, as regards the financial issues and balance of risk, the terms of the arrangements had been the subject of detailed negotiations and that MIT believed that its reputation would be enormously damaged if MLE failed. Key MIT personnel had indicated that between 30% and 50% of their time and energy would be given to MLE. The Department of the Taoiseach also stated that the objectives of MLE made clear what the overall areas of activity would be. There would be co-operation between MIT and MLE in selecting areas of work and a proposed Liaison Committee would provide a means for Government to have influence, if necessary. The multimedia village environment would further shape the overall character of MLE and its activities.
Following an approach from the Department of the Taoiseach, a respected international consultant reviewed the MIT proposal. While no written report appears to have been received, his views are recorded in Departmental papers by way of reports of meetings and telephone conversations in July and August 1999. These indicate that he considered that MIT, with its unrivalled international reputation, was uniquely placed to establish a facility on the lines proposed. He felt that the project would be an important anchor for a strategy to position Ireland as a location for this expanding industry. He did not consider the detail of the proposed financial arrangements to be very important. While representing a premium of about 80% on providing an equivalent number of places in a third level setting, resources sought from the State would, in his opinion, be money well spent, given the direct and indirect benefits that would arise. This was conditional upon
·MIT and MLE being equal partners
·MLE securing a clear brand identification with MIT
·The guaranteed ongoing substantial commitment of key MIT personnel
·Access to MIT for MLE staff and students
·Clear agreements covering fundraising from the private sector — fundamentally a shared MIT/MLE approach to raising funds from a common pool of sponsors
·Partnership arrangements between Irish universities and MLE.
Following negotiations, a series of collaborative agreements involving the Government, MIT and MLE was signed in May 2000. The core undertakings by the parties were:
Government
·provide funding of €24.9 million to MLE and €10.6 million to MIT
·provide suitable premises to MLE at a nominal rent
·pay €1.27 million per annum for seven years to the HEA in respect of collaborative research projects between MLE and Irish universities
MIT
·provide management expertise and technical support
·provide access to intellectual property rights
·grant right of use of the MIT brand
·guarantee exclusivity regarding the location of any similar venture in Europe
·secure corporate sponsorship and private contributions for MLE
MLE
·make further payments totalling €11.3 million to MIT in respect of MIT's involvement in joint research programmes
·pay MIT a percentage of sponsorship moneys which it received from year three onwards.
A Liaison Committee, consisting mainly of Task Force members, was set up under the agreements to deal with policy issues arising during their implementation.
Addressing the Risks
In light of the MLE going into voluntary liquidation in February 2005, I asked the Accounting Officer if he was satisfied that an ex-ante evaluation commensurate with the scale and nature of the MLE project was carried out and, in particular, how the specific concerns expressed by members of the Task Force, were addressed in the agreements concluded.
He informed me that the MLE model represented a unique and innovative approach in the area of digital content R&D that played a key role in positioning Ireland in the global digital media industry, in line with the goal of Ireland's long-term economic development as a knowledge-based economy. He pointed out that, at the time the project was being considered, the ICT sector was expanding rapidly and digital media was seen as a key high-growth segment. The digital media market is still a strategically important market for Ireland in which to establish an enterprise presence.
Taking account of the significant potential benefits to Ireland, he stressed that the decision-making process, itself, which addressed the issue of whether to invest in MLE, should not have been excessively risk-averse and, at the same time, should have continued to emphasise the attractiveness of Ireland as a location for high-value, knowledge intensive economic activities. Public policy that is unduly conservative and reluctant to try innovative approaches to support economic progress nonetheless incurs an enormous, albeit unseen, opportunity cost in terms of economic development forgone.
With this in mind, he felt it was clear that the decision to invest in the MLE concept was made in the light of identified risks, which were set out by the Task Force. The innovative nature of the MLE approach meant that existing benchmarks were of limited value when considering the proposal. The advice received was positively supportive of the initiative subject to particular approaches being taken.
However, the unprecedented global downturn in the ICT industry since 2000 undermined the Media Lab concept at an early stage of development. This dramatic reduction in research by industry had a severe impact on MLE's ability to reach a critical mass of sponsorship. It subsequently came to light that the MIT Media Lab, the role model for MLE, is not self-financing in this new industry climate. Despite the downturn in the ICT sector worldwide, he considered that Ireland fared better than most and the sector has improved since. He stated that the Digital Hub itself has been hugely successful in attracting companies and MLE has been a contributor to that.
In acknowledging that the Task Force chaired by the Department of the Taoiseach did raise some concerns, he informed me that it was considered that, conditional on MIT's full commitment, the project had significant potential. A number of these concerns, such as costs, financial projections and project risks, impacted on the making of a decision by the Government on whether to proceed or not. The agreements, themselves, did not set out to address the management of the project per se. The concerns of the State relating to the management and implementation of the project were therefore addressed through the Liaison Committee on an on-going basis.
Project Monitoring
The Liaison Committee met for the first time in September 2000 and regularly thereafter.
The Department of the Taoiseach, in November and December 2000, outlined a reporting framework for MLE. This comprised annual budget and accounts, together with a quarterly report of outturns, both financial and non-financial, as measured against projected figures.
In general, MLE submitted the required information up to the end of 2003, though it was often late and regularly led to Liaison Committee demands for further information. However audited accounts for 2003 and quarterly reports for quarters two, three and four of 2004 do not appear to have been received.
MLE itself commissioned two external reviews in late 2001 and early 2002. These were forwarded to the Department and reviewed prior to being returned to the company. As copies were not retained these were not available for audit inspection. MLE also informed the Department in April 2003 that it was conducting a review of its relationship with MIT. This was not available either.
Liaison Committee Sub-Group Activity
As a result of concerns over MLE projections for years 2001 to 2005, a financial sub-group of the Liaison Committee was formed in November 2001 to review MLE performance and to establish an early warning system for the Liaison Committee regarding potential financial problems. The sub-group immediately questioned the basis of MLE projections, including those relating to sponsorship and other income, on which the success of the project greatly depended. Subsequent reviews highlighted MLE's failure to raise the required level of sponsorship and other income and the effects of the consequent cutbacks in expenditure. As early as December 2001, the sub-group posted warnings regarding the potential fallout in the event of shortfalls in sponsorship and other income, who would underwrite such deficits, and indeed, the viability of the project if downsized. In January 2002 the sub-group reported difficulty in accepting that MLE revenue targets of €49.3 million for 2002 to 2005 were attainable, and predicted a shortfall of between €10.1 million and €15.2 million for the period. These misgivings were repeatedly expressed throughout 2002 and were borne out by MLE results for that year — €2.7 million sponsorship and other income received as against an amount of €6.9 million projected in December 2001. The sub-group concluded that the level of shortfall in such a narrow forecasting period, fifteen months, undermined confidence in MLE submissions. In October 2003 and April 2004 it repeated concerns about the accuracy of financial information emanating from MLE, all the while highlighting the seriousness of MLE's situation.
The Department wrote to MLE in October 2003 requesting its views on whether MIT was discharging its obligations and questioning the financial sustainability of MLE. No reply appears to have been received. On foot of December 2003 returns showing sponsorship and other income received of €1.9 million against a projected €3.8 million, the sub-group carried out a Status of Business review in April 2004. The review
·noted MLE's failure to achieve any of the income projections contained in its budgets from its establishment to 2004
·predicted that MLE cash reserves would run out in early 2005
·concluded that the time lag between initial start-up and the successful generation of sponsorship and other income to a level necessary to create a viable entity was far greater than originally imagined
·stated that, while the Exchequer was the main funding source for MLE, the Board was under effective MIT control and decisions were taken without reference to the Exchequer
·noted that substantial severance payments had been made to executives at a time of serious cash constraints
·concluded that the existing MLE model was patently not viable.
Review of MLE's Strategic Plan 2004
In response to a request in February 2004 from the Liaison Committee, MLE prepared a Strategic Plan.
The plan, which was received in May 2004, acknowledged the shortfall in corporate revenue and sought additional Exchequer funding of €9 million. The Department's initial assessment of the plan was that it appeared to be predicated on a level of performance not yet seen from MLE. An action timetable was drawn up pending a review of the plan and MLE performance to date by consultants engaged by the Department.
The review carried out in June 2004, concluded that
·MLE would run out of cash in 2005 without further funding
·MLE had failed to meet any of the income forecasts contained in the original ten year indicative projections and in the budgets set out at the start of 2002 and 2003.
·The plan envisaged a further funding requirement of €9m for MLE to reach long-term sustainability. Failure to achieve any of the assumptions underlying the plan could result in a funding requirement significantly greater than this.
·No operating surplus was forecast until 2009
·The forecast growth in operating cash inflows appeared unrealistically high
·The plan provided limited information on cost assumptions and how they incorporated many of the future activities identified
·Before providing any new funding to MLE the Department should give very careful consideration to the likely benefits, and the value for money, of such new funding and the sustainability of MLE in its current form..
Performance Review — September 2004
The Department commissioned an assessment of MLE's performance towards achieving its founding mission and objectives. This exercise was carried out in September 2004 by a consultant and was based on performance indicators supplied by MLE and high-level interviews.
MLE was considered to be a unique establishment, being different to the mainstream research and innovation infrastructure existing in Ireland. To best address the performance of MLE in relation to the creation of new knowledge, and the economic and social impact of the investment, indicators derived from its founding objectives were used. The study found that the evidence available suggested that the MIT approach to fundraising and sponsorship could not be replicated in the Irish environment. It concluded that MLE was not sustainable in its current form without significant and continued Exchequer funding.
The study assessed MLE performance against the following founding objectives
·Establishing Scientific and Technological Leadership
·Stimulating Increased Research and Development Investment
·Attracting High Quality Inward Investment and Human Capital
·Supporting Enterprise Development
·Supporting High Quality Human Capital Formation
·Collaborating with Institutions and Development Agencies
·Providing a Forum for International Exchange and Discussion.
Consultant's Findings
Working closely with its MIT connections, it was expected that MLE would fast track the build up of internet and digital media research and innovation capabilities and quickly establish an international scientific reputation for Ireland in this sector. However the consultant found that the scientific output of the laboratory could only be described as dismal with just 24 publications in international scientific literature since establishment. Productivity appeared to be very low — 15 refereed papers from 172 person years of research. Assuming MLE was not motivated towards publication of its work, it was difficult to see what alternative path towards international recognition in the world of science and technology was available or was being pursued by MLE.
It was intended that MLE would act as a stimulus for investment in R&D, attracting high levels of commercial sponsorship and winning research grants and contracts, nationally and internationally. Only 12 sponsorship agreements valued at €7 million were signed. For a laboratory of its size, and with its prestigious brand backing, this appeared to be a relatively poor outcome. There was virtually no research grant or contract income and it appeared none was being sought. Given the weakness of the sponsorship model in Ireland, it was difficult to understand why alternative sources of funding were not being more vigorously pursued.
It was expected that the MLE presence would help win additional high quality foreign investment and high skill enterprise for Ireland as well as attracting mobile, high quality human capital. However the impact of MLE under this objective appeared to be quite marginal. The company appeared to be of only peripheral value in the drive for foreign investment. It was expected that MLE would strengthen the prospects for emerging indigenous companies in digital media as well as providing a source for spin-offs and new start-ups emanating from the laboratory and its faculty. It was also hoped that MLE would engage Irish small and medium sized enterprise in its work. The study found that MLE's activities appeared to be having little or no impact on the development of existing indigenous enterprise or on the stimulation of new technology based start-ups or spin-offs from its research. There appeared to have been no collaborative projects of any kind or technology transfer agreements with either indigenous or multinational companies. There was little evidence of engagement with small firms in the Digital Hub with no migration of any MLE project into the Digital Hub and no immediate prospect of that happening.
MLE was expected to help in the training of Irish and European graduates and post graduates by providing research experience and formal academic qualifications with the MIT imprimatur. The laboratory was also expected to contribute to the teaching capabilities of Irish higher education institutions. However MLE appeared to be making little more than a token contribution to this objective with no appreciable engagement in education and training programmes of Irish third level institutions. Of serious concern was the lack of a formal degree-granting arrangement with MIT. An MIT based Masters programme was due to be introduced for the first time in 2004. It had been anticipated that the attraction of the MIT connection would bring in top students, nationally and internationally, to the laboratory.
It was expected that MLE would work co-operatively with development agencies and universities and other educational institutions in Ireland. Apart from collaboration under the HEA-funded research scheme with individual researchers in the universities, there was little evidence that MLE engaged in any significant way with either educational institutions or development agencies.
The ambition was that MLE would provide an attractive conference site that would help to bring together creative thinkers and innovators from around the world. Only eleven MLE international conferences (non-research) were held in the period under review.
Consultant's Conclusions
The consultant found that, after significant investment and more than four years of operation, the potential of this project seemed to be very far from realisation. The aggregate picture suggested that MLE was making very poor progress. The contribution of MLE in relation to its founding objectives appeared to be zero or very close to it, with little hope that it would meet its commitments in respect of these, even in the long term. The quantitative indicators pointed, in the consultant's opinion, to a flawed and largely failed entity in urgent need of remedial attention. Possible reasons underlying the laboratory's difficulties were the inappropriateness of the business model, management and governance failures and staff morale and motivation It was possible that the founding objectives were too ambitious and unrealistic in scope. It was expecting too much to have a self-funding operation at MLE in three years. As far as the Digital Hub was concerned, MLE's presence was felt to have a crucial role to play in driving ambitions for development of the Liberties area and the creation of Dublin's media zone. As indicated, MLE's contribution to these objectives had been marginal. The study also noted a negative perception regarding the quality of Board governance at MLE, including the frequency of, and attendance at, Board meetings.
Having regard to the findings of these reviews I asked the Accounting Officer if he was satisfied that the structures and arrangements put in place to oversee and monitor MLE were effective.
He replied that, in the first instance, the Chairman and the Board have responsibility for the effective and proper management of a company. The corporate governance model of MLE was unique in that the Board comprised three MIT nominations, three Government nominations and three joint nominations with the Chair being held by MIT. He pointed out that MLE was a unique arrangement based on a not-for- profit company with no shareholders and, as such, the more common governance arrangements of a semi-state commercial body would not have been appropriate and, therefore, did not apply. Oversight of MLE by the Government was the function of the Liaison Committee. The oversight role of the Liaison Committee was circumscribed by the agreements in place between the Government and MLE. In this context, there were limited actions that could be taken under the agreement but the Liaison Committee did monitor the financial performance of MLE effectively and, on foot of this, it communicated its views and sought further information and clarification from MLE. As a result of this oversight role, the Liaison Committee requested a Strategic Plan from MLE in February 2004 when it became clear that it was not performing adequately. This on-going monitoring by the Liaison Committee led in turn to a review of the business status of MLE and ultimately to the decision not to provide further funding.
Given that a key contribution from MIT related to securing corporate sponsorship and private contributions for MLE I also asked the Accounting Officer if any consideration was given to linking payments to MIT to the achievement of sponsorship targets as set out in the Memorandum of Understanding and specific deliverables.
He informed me that there is no evidence that consideration was given to linking payments to MIT to achievement of sponsorship targets. He stated that linkage to performance must be carefully considered in the early stage set-up of an entity in order to facilitate it reaching sustainability. Furthermore, the selection of performance criteria, which are based on the performance of an on-going, established entity, could be damaging in this start-up context. However, in the review that the Department undertook, and subsequent negotiations with MIT in the latter half of 2004, the linking of payments to specific deliverables was a key condition of a revised agreement.
MLE Closure
At meetings with MLE and MIT during June and July 2004 the Department conveyed its views that the business plan was low on substance and high on expectation and that MLE had produced no evidence as to how expected growth would translate into greatly increased sponsorship. MLE confirmed that cash would be exhausted by February 2005, that it had introduced pay freezes and had corrected ineffective expenditure, and cited, inter alia, recent changes in MLE management and overall improvements in the economy as the basis for strategic plan figures.
The Department
·expressed the view that Ireland had not received what it had originally expected from the contracts entered into
·asserted that MIT had not delivered on all its obligations under the contracts
·stated that there was a consistent feedback regarding a lack of engagement by MLE with the university sector
·argued that the lack of educational qualifications such as Masters and PhDs meant that MLE had become a paid work experience for students
·pointed out that MIT had continued to draw down payments from MLE despite the latter's serious financial situation
·stated that questions had been raised about the management and organisational ability at MLE.
Departmental papers indicate that MIT
·accepted that the original model for MLE was deeply flawed
·accepted that the initial business plan had failed
·accepted that MLE in its current form was unsustainable
·stated that as a freestanding activity, pure non-directed research was not viable
·would not defend the structures, the management or the way of doing business at MLE
·explained that MIT paid its faculty staff working at MITML.
However MIT re-emphasised its commitment to MLE.
The Department expressed concern at the revelation that MIT had paid its faculty staff working at MITML as the model that was sold to the Government was one that purported to be self-financing and it was the uniqueness of the model that helped get the third level institutions in Ireland reluctantly on board. The Department also asserted that it was now clear that, at the time of the agreements, MIT did not have the agreement of staff to offer their services to MLE and that, consequently, MLE had to pay for many of these fellowships on a consultancy basis.
With agreement on both sides that MLE could not continue in its current format, negotiations commenced regarding a restructured entity as a university-based research and innovation laboratory. MIT would not consider the repayment of any portion of the moneys advanced to it under the original agreements. The Department suggested a structure that altered unsatisfactory elements of the existing MLE. These centred on the areas of governance and the need for more specific commitment to academic awards and finance. The proposal did envisage further Exchequer funding.
Ultimately, negotiations failed with MIT unwilling to accept the Government terms. The Department informed MLE that it was unwilling to advance further funding and, in January 2005, it was announced that MLE would go into voluntary liquidation. I have been informed that the liquidation will be ongoing until January or February 2006. It is considered likely that, in addition to equipment, there will be a cash surplus of approximately €300,000 after liquidation. Under the terms of the agreements, this will be used for charitable, scientific or educational purposes and could be made available to the proposed National Digital Research Centre.
Compliance with Collaborative Agreements
In March 2004, a review of compliance with the agreements was carried out at the request of the Secretary General. It found that the Government had complied in the areas of finance, property and the Liaison Committee. It concluded in regard to degree-granting programmes that, aside from collaborative projects, progress on formal academic linkages with Irish universities had been slow. In respect of project review mechanisms, which allowed for changes in MLE funding arrangements in certain circumstances, it concluded that, while MLE had experienced a significant shortfall in revenue, it appeared to have adjusted its operating and capital budgets to take account of this, thus complying with the agreement.
The review found that, aside from the slow progress regarding degree-granting programmes, MLE had complied with the agreements with the exception of the late submission to the Department of required reports and documentation. In respect of MIT's agreements obligations, MLE had confirmed that gifts of €4.4 million, secured by MIT, had been received by it. No share of variable sponsorship, as set out in the agreements, had been received from MIT. MLE also confirmed that MIT had complied with personnel commitments, including the attendance of key personnel for the requisite number of days set down in the agreement.
A legal report, commissioned by the Department in November 2004, concluded that, in the event of a liquidation
·The Government had met its obligations under the agreements and no further obligations to MLE, MIT or any other body could be identified
·State exposure could arise if the Government had issued any letters of comfort or guarantees to banks, employees or third parties who had contracted with MLE. However the Department has confirmed that no such arrangements exist
·The Government was not a member of the company and was not, therefore, exposed to any potential liquidation liabilities.
I asked the Accounting Officer if he was satisfied that MIT had complied with all its obligations under the agreements concluded.
He replied that, in a legal sense, MIT had complied. A key role for MIT was to assist in getting sponsorship and this was not successful. It was disappointing that it was not possible to say that MIT took a more holistic perspective of the project. MIT's unwillingness to help fund the continuation of the project (although not required in the agreements) and its failure to participate financially with the Department in efforts to review and restructure MLE were disappointing since MIT itself supported the Strategic Plan submitted in May 2004.
Other Issues
Governance
A Departmental review of the MLE 2001 accounts highlighted an average salary cost, before PRSI, of €76,000. This was considered quite significant as, while high cost executive directors were included, so too were lower cost research scholars. During its short existence MLE employed four different Chief Executive Officers/Managing Directors. It is understood that severance packages were agreed for those who left MLE before contract completion.
I asked for details of
·staff numbers employed by MLE by year
·average salary cost per staff member by year
·annual remuneration of each Chief Executive Officer/ Managing Director and
·severance packages agreed in respect of each departing Chief Executive Officer/Managing Director.
The Accounting Officer informed me that the Department has requested this information on a number of occasions but, to date, the Company Secretary has refused to release this information.
Exclusivity
The Spanish Government contacted the Department in 2001 stating that MIT had approached it with a view to setting up a Media Lab in Spain. Following protests from the Department, the proposal appears to have been dropped. MIT denied that they had made any approach and stated that any discussions it had related to a Latin American based laboratory.
A joint MIT/Cambridge University project, partly funded by the UK Government, was not considered to be in breach of MIT/Government agreement in terms of exclusivity of operation.
Positive Outcomes
The Accounting Officer stated that there were some positive aspects to the MLE project. The interdisciplinary and demonstration ethos of MLE attracted significant international interest and the presence of MLE facilitated the growth of the Digital Hub in attracting enterprises to the area. There are approximately 50 companies located in the Digital Hub, employing over 400 people. He stated that at this stage of the Digital Hub's development, it is believed that the termination of MLE will have a negligible impact on the immediate performance of the project. However, the Government remains convinced that a high quality research and development centre, with a clearer commercial focus and educational remit, is necessary for the long-term development of a digital media industry in Ireland and particularly for the cluster based in the Digital Hub.
The collaborative research projects with students from Irish third-level institutions were also very successful. These had been independently reviewed by the HEA on behalf of the Department. The reviews had been positive and the scheme was seen as one of the successful aspects of the MLE project.
There was a very positive social benefit to the local community. There was also an on-going initiative providing children from disadvantaged areas with the opportunity to experience and to learn from digital technology.
He stated that presently it is not possible to ascribe a monetary value to the research work that was being undertaken in MLE at the date of closure. However, this was not to say that the relevant intellectual properties arising from MLE do not have value. At present, Enterprise Ireland is assessing approximately twelve items of intellectual property.
Lessons Learned
The Accounting Officer stated that it is important that the termination of the MLE project should not suggest a public policy that is adverse to innovation and measured risk-taking. Instead, Ireland must continue to work towards a public policy framework that is conducive to innovation and risk-taking in order to ensure that Ireland continues to be an attractive location of new enterprise development, foreign investment, and value-creating industries.
In the context of a project such as MLE, which is fundamentally a concept to promote multi-disciplinary research, development and innovation in this case in the digital media sector, it is clear that appropriate project evaluation is critical. The evaluation process needs to be rigorous. However, an evaluation process must be flexible and relevant where unique and ground-breaking proposals are being considered. In this light, a clear business strategy for the project is necessary in order to test its robustness. All parties should be expected to have some financial commitments in a project and the rewards should be linked to the risks taken.
At a broader level, governance, in terms of accountability, reporting, and strategic decision-taking, is critical. These governance structures should be appropriate to the type of project and while not necessarily a semi-state company governance structure, they should ensure that there is clear accountability and good governance. Finally, performance is central to the delivery of these publicly funded projects and, as such, payments should be linked to particular performance milestones or metrics.
