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Dáil Éireann díospóireacht -
Tuesday, 16 Apr 2013

Vol. 799 No. 1

Industrial Development (Science Foundation Ireland) (Amendment) Bill 2012: Second Stage

I move: "That the Bill be now read a Second Time."

I will briefly outline the principal objectives of the Bill. The primary changes extend the remit of Science Foundation Ireland, SFI. Through funding supports via our higher education institutions, SFI will be able to fund applied research as well as continuing to support oriented basic research. This will allow SFI to take the outcome of the research closer to market through increased commercialisation, the development of new products, the generation of new services and technologies and lead to the creation of new sustainable quality jobs for Ireland. I stress that the foundation will continue to support basic research. The legislation will also allow SFI to broaden its programme offerings to cover the 14 priority and six underpinning areas identified by the research prioritisation steering group and approved by Government in March 2012.

Importantly, the legislation will also enable the foundation to provide funding on an all-island basis for the first time. Subject to the excellence and strategic criteria being met, SFI will therefore be able to fund researchers and institutions based in Northern Ireland. It will also allow the foundation to enter, subject to the consent of the Minister for Jobs, Enterprise and Innovation, collaborative arrangements with international partners and help Ireland leverage significant non-Exchequer research funding into the country. In doing so, it will also enable Ireland to support the wider EU research agenda through programmes being supported under the EU's Horizon 2020 strategy, which will have approximately €70 billion available in research funding from 2014 onwards. As Minister of State with responsibility for research and innovation, I am eager that Ireland should aggressively target Horizon 2020 funding and the extended SFI legislation should enhance our success rate.

The Bill also provides a legislative basis for SFI to stimulate the study and awareness of the STEM subjects: science, technology, engineering and mathematics. In addition, it includes a number of ancillary provisions that are not specific to SFI, but which relate to Enterprise Ireland, El, IDA Ireland and enterprise development functions in the Shannon free zone; amendment of the Freedom of Information Acts specific to our enterprise agencies; and strengthening Forfás's function to provide research data so as to fall in line with international best practice. I shall comment further on these later but I will first give a brief overview of the recent progression of our research and innovation system, of SFI and its role and of the rationale for the changes proposed in the Bill.

This legislation affords us an ideal opportunity to remind ourselves of the reasons governments around the world fund research and development. It is universally accepted that the private sector does not fund research and development at the optimum level for economic and societal benefit. There are many reasons for this but primary among them is the inherent risk and uncertainty of such investment. The commercial return from research and development investment, particularly in basic research, is often insufficiently clear-cut for the private investor. Another likely factor is that the direct returns to the private research and development investor are often eclipsed by the societal returns. Considering research in an Irish context, I do not subscribe to the argument that Ireland, as a small open economy, can simply avoid significant investment in research and development, particularly basic research, and simultaneously take advantage of and benefit from discoveries made elsewhere. Discovery, and the benefits it brings, do not exist in a vacuum.

If Ireland is to absorb externally generated new knowledge and take advantage of it, we must have the capability to understand and use this new knowledge. The best way of ensuring we can create new knowledge is to conduct excellent and relevant research and development ourselves. Ireland needs to be a "knowledge generator" if further creators of knowledge are to be enticed to the country. A constantly developing and changing global economy and society require Ireland to keep pace if our position in the international marketplace is to be maintained and enhanced. We must continue to invest appropriately in creating and innovating to ensure we can successfully compete in global terms. These are just some of the reasons the Government needs to encourage and supplement private investment in research and development.

In Ireland, there has been significant public investment in science, technology and innovation since the late 1990s - primarily to address a number of critical deficits. Following decades of under investment in research and development we lagged well behind our competitors. Our research capabilities then were well below the OECD norm. We lacked a core of talented, high quality research personnel, performing industrially relevant research. This combination of factors impeded our ability to attract and maintain large scale, knowledge intensive industrial projects to Ireland while we were simultaneously failing to develop indigenous, internationally competitive, high growth firms. Our industrial policy in the latter part of the 1990s, therefore, came to be based on the conclusion that we needed to move up the employment value chain by generating our own research talent pool to create the jobs of the future and diversify from low cost, low end manufacturing.

In this context, in 1998, the Irish Council for Science, Technology and Innovation undertook a technology foresight exercise, which sought to identify emerging areas that would be the key to our economic development and enhanced competitiveness. The resulting foresight report recommended that Government should establish a fund to enable Ireland to become a centre for world-class research excellence in a small number of niche areas. Subsequently, SFI commenced operations in 2000, and was formally established through legislation in 2003. SFI's mission was to support research excellence in the strategically important areas of information communications technology and biotechnology. In 2008, a third research pillar - sustainable energy-energy efficient technologies - was added.

A core aspect of what SFI does is the development of a talent pool of Irish-based scientists who, through honing their significant scientific skills here, help to develop the good jobs of the future for Ireland. Significantly, SFI does not provide research grants to industry. That is done through other State research and development supporting agencies such as Enterprise Ireland, IDA Ireland and so on. The foundation provides grants to researchers and research groups based in our higher education institutions, on the basis of competitive calls for research proposals. It uses a rigorous international peer review process to ensure that only the best proposals receive support - typically 15%-20% of all applications, which is in line with international norms.

The foundation's annual grants budget, which is in the region of €150 million, directly supports a cohort of 3,000 researchers in our universities and institutes of technology. These SFI funded researchers are connected to close to 650 distinct companies that employ more than 90,000 people in Ireland. The researchers also leverage significant research funding from non-Exchequer sources, such as the EU and industry - usually between €80 million and €90 million per annum.

Debate adjourned.
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