Conor Lenihan
Ceist:98 Mr. C. Lenihan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she has satisfied herself with the amount of money being spent by firms on research and development. [22868/98]
Written Answers. - Research Funding.
Conor Lenihan
Ceist:99 Mr. C. Lenihan asked the Tánaiste and Minister for Enterprise, Trade and Employment the amount spent by firms, and by foreign multinationals based here, on research and development. [22869/98]
Conor Lenihan
Ceist:100 Mr. C. Lenihan asked the Tánaiste and Minister for Enterprise, Trade and Employment the plans, if any, she has to increase the amount spent by firms on research and development. [22870/98]
I propose to take Questions Nos. 98, 99 and 100 together.
Business expenditure on research and development (BERD) in Ireland amounted to £400 million in 1995 — the latest year for which figures are available. This is equivalent to 1 per cent of GDP in 1995 and compares with an EU average of 1.15 per cent and an OECD average of 1.5 per cent.
The current rate represents a doubling of expenditure since the late 1980s or an average increase of around 20 per cent per annum.
The rate of growth has been similar for both indigenous firms and multinational firms. However, multinational firms account for the substantial proportion of R&D spend. Of the total expenditure of £400 million in 1995, foreign-owned multinationals account for two thirds or £256 million.
It is estimated that one quarter of manufacturing firms in Ireland perform R&D — approximately 1000 firms. The top 50 R&D spenders in the country account for over half of the R&D spend, although this is not unusual by international standards. Around 300 indigenous companies and around 180 foreign-owned companies spend over £1000,000 per annum on R&D on a regular basis.
Policy in this area, therefore, has concentrated on increasing the number of firms doing R&D and increasing the scale of R&D undertaken by firms.
The main vehicle to encourage the business sector's R&D activity has been the in-company R&D scheme, operated by Enterprise Ireland. This scheme — which was originally allocated £105 million for the period 1994-1999 — assists industry with the costs of in-company R&D. In 1997, in recognition of the success of this scheme in increasing the level of R&D within companies, an additional £28 million was provided to the scheme which was further refined to focus on introducing more first time R&D performing companies, particularly SMEs. Since 1994, grants totalling £116.2 million have been approved, which when coupled with the industry input will result in an overall increase of £320 million in business R&D expenditure. A total of £74.6 million of the grants were approved to Irish companies while the remaining £41.6 million grants were approved for multinational companies.
In addition to assisting with the direct costs of the development of new products and processes, I am also concerned with the need to develop the innovative culture at the level of the firm. This is the rationale for the R&D management scheme. This scheme, which is also managed by Enterprise Ireland, is designed to enhance the capability of companies to increase their competitiveness through the effective management of their R&D activities.
In summary, it is clear from the foregoing that the Government is committed to increasing the amount spent by firms on research and development. I will be making every effort to enhance that commitment.