Joint Committee on Enterprise, Trade and Employment díospóireacht -
Wednesday, 3 May 2023

IBEC and Science Foundation Ireland: Discussion

An Cathaoirleach

Apologies have been received from Deputy Matt Shanahan. I ask all those present in the committee room to exercise personal responsibility to protect themselves and others from the risk of contracting Covid 19. Members who are participating in the meeting remotely can only do so from within the Leinster House complex.

Today we will have a discussion on two reports, Future of the National Training Fund and Creating Our Future. The National Training Fund, NTF, was established by the National Training Fund Act 2000 as a dedicated fund to support the training of those in employment and those seeking employment. The Act also provides for the funding of research to provide information on existing and likely future skills requirements of the economy.

In recent reports, both the Irish Business and Employers Council, IBEC, and Science Foundation Ireland, SFI, have highlighted the importance of utilising the NTF in providing adequate funding to develop research talent and skills that will be crucial to the healthy development of the economy and society. I am pleased that we have the opportunity to consider these matters further with representatives from SFI and IBEC. From SFI, I welcome Professor Philip Nolan, director general, Dr. Ruth Freeman, director, and, joining us online, Professor James Gleeson, director and head of department of mathematics and statistics at the University of Limerick and director of the SFI centre for research training in foundations of data science.

From IBEC, I welcome Ms Claire McGee, head of education and innovation policy, and Ms Meadhbh Costello, policy executive.

I will explain some limitations to parliamentary privilege and the practices of the Houses as regards references witnesses may make to another person in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to both the Constitution and statute, by absolute privilege. Witnesses are again reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that may be regarded as damaging to the good name of a person or entity. Therefore, if witnesses' statements are potentially defamatory in relation to an identifiable person or entity, they will be directed by me to discontinue such remarks and it is imperative that they comply with any such direction.

The opening statements have been circulated to members. I invite Professor Nolan to make his opening remarks on behalf of SFI.

Professor Philip Nolan

I thank the Cathaoirleach and committee members. It is a pleasure to be here. As members are probably aware, SFI is the largest competitive funder of research in Ireland and has been such through its 20-year history. We fund basic and applied research that makes a real difference to society and the economy. A primary and vital output of our research funding is talented people, such as talented doctoral graduates and highly skilled scientists and engineers. Understanding the skills needs of our economy and society and responding accordingly in a balanced manner at all levels of training is essential. The need to grow and nurture our skills base so that we may respond to economic and societal challenges is a priority area for SFI and I look forward to discussing our efforts in respect of training, particularly at doctoral level.

We warmly welcome the opportunity to share with the committee information on our experiences of a critical piece of work the agency carried out on behalf of the Government, namely, Creating Our Future. It is an award-winning public engagement campaign led by the Minister for Further and Higher Education, Research, Innovation and Science, Deputy Harris, and operationalised by SFI in partnership with the Department of Further and Higher Education, Research, Innovation and Science. It was introduced for us to understand where the public believed research could or should play a part in addressing the challenges the people of Ireland experience in their lives. That is something of which the political system would be aware but of which scientists may not be as aware. It created an open conversation with the public on the role research plays in addressing those challenges and we learned a great deal from it. The question we put to the people of Ireland was, "Tell me what researchers in Ireland should explore to create a better future." What set the initiative apart from other campaigns was our commitment to ensuring we reached all corners of society. We gathered a large network of partners to help us to reach that goal. Whenever possible, we removed barriers to participation by always considering the needs of the population at large. We were delighted to receive more than 18,000 submissions from the public. We expected to receive approximately 10,000 submissions, based on international norms. There was a massive public response to the campaign. The submissions were analysed and synthesised into 16 thematic areas. We were overwhelmed by the response from the public. Those 16 thematic areas and the guidance and interest we got from the public are shaping the detail of our strategy for research funding.

I turn now to talent, creativity and the future of the National Training Fund. One of Ireland’s most competitive differentiators on the world stage is our talent and creativity, broadly writ. In 2022, there were 8,766 people working on teams under the guidance of SFI award holders. That is almost 9,000 researchers funded by SFI in 2022. Just under 60% of them are postdoctoral researchers and PhD students. In essence, these are people training and developing their skills. Those skills will largely be applied outside academia, that is, in industry and the public service. These talented individuals are being trained alongside senior researchers, technicians and research management professionals. They are the lifeblood of our research and higher education system and the talent pipeline for enterprise and the public service.

Education, research and innovation are interdependent processes in our ecosystem. Research does not stand alone; it is deeply connected with education. The researchers who are working at the frontiers of research and fuelling innovation are inspiring, teaching and training the next generation of creative citizens, knowledge workers and economic and social innovators. A stable and secure career track and progression for these individuals is essential, from their earliest career stage right through to leadership roles across society, in all disciplines. A well-trained cohort of researchers and educators with an innovation mindset greatly supports the research system to respond to the challenges and opportunities as voiced by the public in Creating Our Future.

The demands for those with STEM skills, which is Science Foundation Ireland's current core competence, is accelerating and is projected to continue on an upward trajectory with demand expected to grow by around 8% between now and 2025. That is compared to expected average growth across all occupations of 3%. Employment in STEM-related sectors is also expected to rise by 6.5% between now and 2025. Everyone should have an opportunity to benefit from these career opportunities. We need an inclusive approach. Our agency has been at the forefront in developing initiatives to remove and mitigate any existing or perceived factors that may limit the participation of women in particular in STEM careers at fourth level. Our new equality, diversity and inclusion, EDI, strategy broadens that out to other grounds on which people might be excluded from such careers.

Much work remains to be done in this space. Since 2011, 70% of applicants and awardees were men. We recognise that it is important to continue progress. Things have improved. The percentage of women funded in our early career frontiers for the future programme rose from 20% to 45% over that period. We acknowledge and know that we need to do more. Our forthcoming strategy will address that.

Aligning higher education with skills needs for a successful economy makes sense. Technical capabilities within specific domains are required. Let me be clear. The technical capabilities are fundamental. We must continue to scale our training and education of apprentices, bachelor's, master's and doctoral graduates and have an appropriate balance across those different types of training. We must provide for people to move and progress between those different types of training. At postgraduate level, people need to be educated and trained at the very frontiers of current knowledge by researchers who are internationally connected. The technical skills that one forms during a postgraduate degree or doctoral programme are essential but so too are the skills that enable individuals to navigate the business environment. Competencies such as stakeholder engagement, creative problem-solving, leadership, change management and collaboration are all vital aspects of a talented and agile workforce. We have been working very hard with partners in enterprise and the public service to develop our skills base with these competencies being nurtured alongside and complementing the technical knowledge.

A major example is that in 2018, SFI launched the SFI centres for research training, CRT, programme. The purpose of the SFI centres for research training is to build on pre-existing research excellence but to provide cohorts - rather than individuals - of academically outstanding future research leaders with the skills and knowledge required to address the future challenges of an ever changing work environment. We are currently funding six CRTs that will train a total of 700 PhD students. These ones are focused on data and ICT skills for the future. That was a major enterprise need at the time of launch and continues to be so. The CRTs are working closely with industry partners who are informing the shape of the programmes with an awareness of industry needs and the ever-changing work environment. One in five students on these programmes is funded by an industry partner with very close connections to that partner and a collaborative research programme. All students must complete a work or international placement. The cohort-based model is uniquely purposed to equip students with transversal, cross-sectoral and discipline-specific skills, developing individuals with skills and talent that can attract and retain enterprise investment, and support modern, sustainable public services. This model of PhD funding has been cited as world class. Countries around the world are looking at this model and seeing how they might adapt it to their own environment or change their own model on the basis of what we have learned here. They create networks of principal investigators, researchers and postdoctoral researchers who are working together to train PhD students with deep technical skills while also providing opportunities to nurture the aforementioned competencies.

Looking to the future, we do not currently have a confirmed budget to launch a new phase of this programme, which will end in about two years' time. It is our ambition to secure budget so that we may build on the success of the investments by running future calls in broader areas. This is quite focused on one important area but there are many other areas in the economy and society that require this level of skills. It is our view that the allocation of a small component from the National Training Fund would be a justifiable and effective investment in advanced skills for the digital and green transitions.

I am delighted to be joined today by my colleagues, Dr. Freeman and Professor Gleeson. Professor Gleeson is well placed to share his experiences of this model of training, particularly the experience of the impact it is having on industry partners.

The CRT programme is just one way that SFI is contributing to building our skills base. The SFI industry research, development and innovation fellowship programme supports academia-industry interactions to address industry-informed challenges simply by facilitating the mobility of people between the academic and industry environments.

The network of 16 SFI research centres are also a major mechanism by means of which we train PhD students, although there are PhD students across almost all of our grant programmes. Later this year, SFI will launch a new SFI research centres programme. Given what we have learned about the centres for research training, those new centres will have a centre for research training embedded at their core with this renewed focus on a cohort-based approach to PhD training. This recognises that in addition to the research work we do and the collaborations and partnerships that that talent pipeline is vital to the industry partners.

In July of last year, a new partnership between industry and the Government to recruit and retain research talent was announced. Innovate for Ireland is a novel training programme that aims to establish Ireland as a destination of choice for doctoral research with a focus on sustainability and innovation, with funding coming from the public and private sector. It is one of the initiatives on which Dr. Freeman is concentrating. The initial phase of the innovate for Ireland initiative will seek to attract up to 400 high-calibre PhD students to undertake research in Ireland that tackles national and global grand challenges such as climate change and climate adaptation, global health and pandemics, water poverty, digital society and cybersecurity. SFI is working with the Government make this vision a reality, building on our proven expertise in funding cohort-based PhD programmes.

It is worth stating that SFI research programmes overall provide a vital talent pipeline for industry. SFI data shows that about 250 PhD and 340 postdoctoral students graduated from SFI teams in 2022. Approximately 30% of both immediately moved into industry. When we follow our graduates over their full careers, about 60% of our doctoral graduates move to work fairly quickly in industry or the public sector soon after graduation and a further 30% after a longer period of postdoctoral training, bringing their highly sought-after knowledge and skills.

I thank the committee for inviting SFI to participate in this conversation. The message I would like to leave the committee with today is that equipped with an understanding of our skills needs, there is a need for training and skills at all levels: from apprenticeships to micro credentials right through bachelors and masters to doctoral training. In the context of numbers, the doctoral training is a small but very important component of the overall need. It is the recommendation of SFI that consideration is given to exploring mechanisms to invest a small percentage of the National Training Fund fund to enable the continuation and growth of the SFI CRT programme to deliver the appropriate percentage of individuals, with deep research and technical skills, trained to doctoral level.

Ms Claire McGee

I am head of education and innovation policy at IBEC. I am joined by my colleague, Meadhbh Costello. We are here to discuss the National Training Fund. Education, skills and talent development consistently top the priority lists of the businesses that IBEC represents. Digitalisation, automation and globalisation are transforming the world of work at an unprecedented pace, with significant impact for education and learning. This is the European Year of Skills, the aim of which is to give a fresh impetus to lifelong learning, empowering people and companies to contribute to the green and digital transitions and supporting innovation and competitiveness. Let us use this new focus to our advantage.

Ireland is rich with high-tech, highly innovative business sectors with a global outlook, from technology, financial services, pharmaceuticals, medical technology, agriculture and food, engineering and manufacturing. The challenge for Irish industry is to retain its hard-earned size, scale and reputation by continuing to deliver world-class performance in all aspects of current and future operations.

Sustainable and inclusive economic growth will rely on gains in labour productivity and closing the productivity gap between multinational and indigenous companies. Labour productivity in supporting the adoption of game-changing technologies in Irish firms in both the digital and green sectors as well as ensuring that businesses have access to the necessary skills.

Lifelong learning will be essential to sustain and develop a skilled workforce that can adapt and respond to changing skills needs. This requires appropriate levels of strategic planning and financial resources.

The National Training Fund, NTF, is a strategic asset that can deliver a step change in skills and talent development. A lack of key skills remains a challenge for almost 81% of employers in Ireland. While businesses continue to face difficulties in filling vacancies across all industry sectors, the emergence of new technologies and megatrends, such as climate change, are fuelling a rapid transformation of the skill needs across the workforce.

Accessing the surplus of the National Training Fund to invest in digital skills, green skills, management skills and transversal employability skills will be critical for building the resilience of our workforce to the future of work. The surplus in the NTF is an opportunity to leverage the increasing interest from employers in lifelong learning to drive innovation and, again, a step change in skills delivery.

The National Training Fund is resourced by a levy on employers via the PRSI contribution. The NTF levy has increased by 0.1 percentage points of the total wage bill in the State in each of the years 2018, 2019 and 2020. This represents 1% of the total national wage bill. At a workplace level, this means the average spend on the NTF for companies per euro of wages has increased by 42% over the last four years. For 2023, the income of the NTF is forecast at €1,020 million, with expenditure forecast at €900 million, giving rise to an expected annual surplus of €120 million. This, in turn, will increase the accumulated surplus to €1.5 billion.

The scale of the NTF surplus has reached a spending stalemate. Now is the time to approve a short-term investment campaign with one-off mechanisms to utilise the existing surplus to prevent the year-on-year increase of unspent employer contributions. It is untenable that employers’ contributions would continue to accumulate while the demand from business for upskilling and reskilling goes underserved, particularly in the context of a tight labour market where strengthening the skill base is critical to leverage opportunities presented by digitisation and enhance the transition to a greener economy.

I will set out some of IBEC’s key priorities for the National Training Fund to increase business innovation and productivity. No. 1 is to introduce a national training voucher scheme to encourage more employers to engage in upskilling and reskilling of their workforce. The Indecon review of the NTF, published in 2019, called for a new innovative pilot initiative to increase in-company training, thereby increasing productivity and innovation capacity, particularly in SMEs. The introduction of a national training voucher scheme has the potential to boost in-company training and widen participation in upskilling and reskilling to include all businesses and all employers. Based on the principle of cost reimbursement, businesses should be able to claim back expenses for training costs incurred during the year undertaken with an accredited education and training provider. Such a scheme is highly attractive to business as it provides greater flexibility and freedom to plan and source relevant training directly without the burden of national administrative scaffolding or programmes which may or may not align with their strategic need at that particular time. There is a successful precedent in Ireland for using voucher schemes to encourage greater education and enterprise engagement with the Enterprise Ireland innovation voucher scheme.

No. 2 is to support the dual investment in technology and talent to help businesses, in particular SMEs, boost their productivity, support their digitalisation and introduce more sustainable business practices in areas such as energy efficiency and carbon emissions reduction. Businesses need support in adopting new technologies and in ensuring workers have the necessary skills for their operation. A new initiative is needed which links technology adoption, innovation and skills development in a practical way for business. A dedicated programme to support dual investment in skills and technology for the twin transition will support this as well as continuing to provide infrastructure investment in further education centres of excellence and research and innovation infrastructure and equipment in Ireland’s higher education institutions and research centres.

No. 3 is to invest in industry-academia collaboration to respond to industry skills needs and drive innovation in teaching and learning across that system. Industry-academia collaboration in skills provision is critical to responding to the existing and future skills needs of business, providing opportunities for work experience and work-based learning and enhancing the overall employability of education and training programmes. Funding should be utilised to strengthen industry-academia collaboration across institutions and develop innovative models for collaborative education and skills delivery. A funded graduate placement programme, for example, would support SMEs to attract and retain high-quality graduate talent and build a connection with an education and training institution.

No. 4 is to incentivise more SMEs to engage in apprenticeship programmes by addressing the high cost barriers. We are now reaching a critical phase of generation apprenticeship where more employers and business will be needed meet the targets set out in the action plan for apprenticeships. While the introduction of the €2,000 employer incentive scheme is welcomed by employers, businesses continue to face significant cost barriers in employing apprentices related to recruitment, training, mentorship, backfilling of positions and subsistence.

These costs can be particularly challenging for SMEs. To encourage more smaller businesses to take part in apprenticeships, the existing employer incentive should be increased to approximately €7,000. As SMEs often have limited HR functions and capacities, additional supports around the recruitment of apprentices should also be developed.

No. 5, very importantly, is to be more strategic around the National Training Fund to implement a lifelong learning strategy for Ireland to prepare individuals for these twin transitions. While Ireland’s lifelong learning participation rate stands above the EU average of 13%, we still continue to fall behind our international counterparts such as Sweden, Finland and the Netherlands, which are the economies with which we want to compare ourselves. The National Training Fund is an opportunity to financially underpin a strategic approach to lifelong learning and upskill Ireland’s workforce to prepare for digital and green transitions across all sectors of the economy. Further investment in upskilling, reskilling and lifelong learning opportunities in critical areas should be supported through Springboard+ and other positive initiatives. A new lifelong learning strategy will provide a renewed focus for the National Training Fund to meet its policy objectives and avoid the accrual of annual surpluses.

No. 6 is to future-proof Ireland’s openness and attractiveness as a destination for talent. IBEC’s latest CEO survey highlighted that 70% of companies identified the availability of housing for staff as a challenge to their business operations in 2023. Other quality-of-life issues related to healthcare, childcare, etc., are also impacting Ireland’s attractiveness for future investment. Construction, healthcare, childcare and education all require a proficient and quality level of service to continue and will require continued investment in skills. Unlocking the National Training Fund can address these skills bottlenecks to meet strategic challenges facing Ireland and deliver on Government strategies related to Housing for All, the national development plan and Sláintecare.

With the unrivalled pace of technological change and an increasingly globally competitive environment, there has never been a more urgent need for a talented, enterprising workforce, constant innovation in products and services and a quality and well-resourced education, training and research system. The digital transformation of business is changing how people work. New technologies and new business models are altering skills profiles for existing roles and creating new roles. Investment in people, technology and innovation needs to be a top five investment priority for Ireland to build resilience and readiness across the economy. Now is the time for Ireland to really consider what our new economic narrative should be. A strategy for lifelong learning and workforce development, financed by the National Training Fund, can provide the answer and put innovation, research, talent, and skills at the heart of our economy and society.

Ms Costello and I look forward to supporting the committee's work in this important area and welcome any questions.

An Cathaoirleach

I thank Ms McGee. I invite members to discuss the issue with the officials.

Deputy Louise O'Reilly

I thank our guests for their information this morning. I want to talk a bit about investment in research, development and innovation. The White Paper on enterprise rightly talks a lot about innovation, as it should. When we look at European and global indicators, however, we can see that in some we are doing well and in others not so much. Therefore, in terms of innovation scorecards and international competitiveness, we have moved in the right direction. We are classed as a strong innovator on the European innovation scorecard, which is very positive. However, we are not yet on the innovation leader tags with countries like Belgium, Denmark, Finland, the Netherlands and Sweden. The European scorecard shows we are at 118.9%, which is a percentage my mathematics teacher told me was impossible when I was in secondary school but there you go; life moves fast. Our lead over other European Union counterparts is actually getting smaller. We have gone from 12 to 19 in the global innovation index.

There is a very heavy emphasis in the White Paper on the need to improve and for us to become innovation leaders. Will the witnesses tell me what can be done to ensure we actually go that last mile to capitalise on the progress to date and move us from the "Doing well; could do better" category into the "Doing very well; not much room for improvement" category?

Professor Philip Nolan

I will make a very short intervention. I would be interested in what both Ms McGee and Professor Gleeson have to say on this.

The innovation scorecards are really important. The Deputy is absolutely right that we are not where we want to be. We are not where we should be. I have a couple of comments. First, these things take time. Let us be honest. The history of Irish investment in research and innovation is relatively short, at 20 to 25 years, compared with other countries that have been investing since after the Second World War. The other thing is that we will not be able to hit all the indicators. We have to play to our comparative advantages, which, frankly, are talent and collaboration. What should we be doing? We are significantly short of where we need to be on overall investment in both basic and applied research. We have done very well in the context of the part of the innovation scorecard that looks at how one translates all of the excellent fundamental research into useful collaborations and applications. That is an area we are performing well in. We perform well in talent development, although we have to invest in those involved and support them appropriately throughout their careers.

One of four big things involves scaling up our investment in fundamental research and in talented people and collectives of talented people. That lays down an investment with a rich yield over a long period. If we are not at the frontiers now, we will be searching to compete at the application stage in five or ten years. Continuing to invest in the mechanisms that support this, such as research centres and partnerships that translate that into benefits for the economy and society, is another issue. Significant investment in doctoral education and training to attract people in all disciplines into the practice of research is another issue. Many will practise research and innovation outside academia, but we need to train them within academia and in partnership with industry.

The other thing that is critically important for investment is infrastructure. If we are going to do good research, we have to have equipment and facilities. In areas such as health, the clinical trial infrastructure is needed to do research as well here as it is done anywhere else in the world.

The four things include investment in fundamental research, investment in people, investment in the partnerships that link that to enterprise and society and investment in the infrastructure to support all of this. There is no getting away from the fact that the fundamental thing that brings us down in those indicators is the quantum of public investment in the overall research system.

Deputy Louise O'Reilly

I thank Professor Nolan.

Ms Claire McGee

I thank the Deputy for her question. Professor Nolan articulated the challenge clearly. Our position is similar in the sense that it has been more of a developing ecosystem for research and innovation capacity. We are really at a point where, as was highlighted, those scorecards may flatter our output, and we have underinvested. We know that if we build a strong, publicly backed education, research and innovation system, it would enable high-performing companies to invest in Ireland. It is a win-win scenario. By having a really strong publicly backed system, one would then leverage that to be able to make businesses more innovative and more resilient. One of the challenges, which Professor Nolan articulated, is about collaboration. We have major productivity gaps within our firm base, with multinational investment companies, some strong, innovative Irish-grown businesses, and then others which are not participating in the ecosystem whatsoever. Some investment is probably needed in that to ensure that they can be participants in our broader innovation ecosystem.

That brings us back to one of the recommendations that we highlighted about graduate placements. Maybe a funded stipend or opportunity for graduate researchers or graduates to be able to go into a small or medium enterprise and focus on a specific project, with a connection back to the institution, would springboard a company's focus on innovation and potential for innovation capacity.

If people read our policy documents or submissions, they will see consensus across the system about the need to prioritise focus on a strong higher education system in order to be able to build the networks to give them the capacity to be able to focus on international revenue streams, grow those international networks, bring research talent into Ireland, collaborate with industry and build a symbiotic relationship with industry. Institutions can then help with bringing the translational element relating to what is new, what is innovative and what is coming downstream into industry, and vice versa. We need to focus on powering up the fundamentals in our innovation ecosystem to be enable us to better leverage it for the future.

Deputy Louise O'Reilly

I am sorry to cut across Ms McGee. There is an issue with SMEs not being part of the ecosystem in question. This bridges that gap. I am regularly contacted by PhD students who simply cannot exist on the stipend as it stands. They want to be part of that. Ms McGee highlighted this in her submission. We could use the words "challenge" or "disaster" when referring to housing. I will use the word "challenge" for now. Ms McGee also referred to healthcare and childcare. These people receive nothing in their stipends that they could live on. If the emphasis is going to be on bringing people through PhD programmes and linking them with SMEs, that is fantastic. It is a good idea. Members of IBEC would look at this and think it would be brilliant if they could get into that, but we are talking here about someone who is the HR person and the receptionist and who does the door and the cleaning. That person is responsible for making sure everyone else gets paid before them. In the other 15 minutes of the day, they try to deal with all of their family matters and everything else. How can we reach those people? They all know the benefits. They can see them. I have spoken to these people. They want to be part of it. There is a sense that this could not be for them. They ask how they would manage that person or do it. Ms McGee refers to supports and an avenue being needed.

Professor James Gleeson

To go back to the point about graduate placements that Ms McGee made so well, they are really important for innovation. PhD students are the driver in these workplace programmes, one of which is the centre that I co-run with my colleagues in UCD and Maynooth. We have a mandatory 12-week placement for all the students, so they all go and spend three months with one of the industry partners as part of their PhD. That is part of the CRT programme. That helps to build the networks and partnerships that Professor Nolan mentioned in order to create the network and base around which people can work.

I will defer to Ms McGee to answer the Deputy 's question, but I will echo the sentiments on the PhD stipend. We have made our own submissions to the review. It is vitally important. Working with SMEs that we seek to do with our partner Skillnet Ireland, which is keen that we get involved in skill development across the spectrum of multinationals and SMEs. Deputy O'Reilly made a good point that it is difficult for SMEs to engage. We have found the innovation voucher from Enterprise Ireland useful in the past for similar programmes. That is one of the recommendations from IBEC in this case too. I will pass back to Ms McGee.

Ms Claire McGee

I thank the Deputy for the question. She has really highlighted the challenges that SMEs have. We have presented about apprenticeships here but it is the same for engagement with the innovation system. First, I frame SMEs as the true innovators. They spotted a gap in the market and built a business around it. How do we encourage them to continue on that innovation journey? The other part is that many SMEs in Ireland are parts of global supply chains. The challenges of the supply chains are always pushed back onto those SMEs to solve. They are continually trying to address some of the bigger issues which the partner companies that they engage with are always trying to address.

We need to ensure that the decisions SMEs are making are helpful and that they understand and can see an avenue into this system. That is why the innovation voucher scheme is helpful. It is why we have presented a voucher scheme for training, in particular. The programmes currently funded under the National Training Fund involve a lot of administration and scaffolding. They may not acutely align with the strategic missions of SMEs or their need at a particular time. SMEs have a particular problem that they may not realise is a skills issue. Using a voucher system to engage with an institution, be that an ETB, technological university or research centre, gives them the opportunity to see beyond their front door and to see that perhaps their acute need could be solved by the extension of a workbench. SMEs get to use equipment within those institutions. They may require to hire a particular researcher. There could be graduate opportunities. They may require particular management or digitalisation skills. The provision of a voucher scheme gives ownership and power to SMEs.

Deputy Louise O'Reilly

I am sorry to cut across Ms McGee. From her engagement with SMEs, does she believe that is where they are at?

Ms Claire McGee

It is at this time. The challenges are great. Considering the scale of the surplus we have in the National Training Fund, it would be a powerful statement of intent to support SMEs to engage with the system. It would be a short and sharp intervention over a two- to three-year period that would help SMEs to springboard their engagement with the system. One never knows what that might lead to next in respect of what happens in the CRTs or Enterprise Ireland technology centres. It is a starting block. It is not going to be a panacea but it is a good start.

Dr. Ruth Freeman

I echo what has been said. We run a programme called the industry research, development and innovation fellowship programme, which fully funds a researcher to embed in a company. What has been said about administration is the key point. That is what companies say to us. There is time and effort involved when SMEs have 500 other things to do. We have tried to cut down the administration of that programme. We have tried to make the calls faster and more flexible.

Deputy Louise O'Reilly

Are SMEs responding to that or is it just bigger companies?

Dr. Ruth Freeman

SMEs are definitely responding and we are going out of our way to try to engage with them. As Ms McGee said, if we can get in the door and break down the barrier, we can unlock possibilities. Perhaps the problems that SMEs think they have are not the problems they actually have. We are finding that we need to build on that base of researchers. We need enough researchers in the system to respond. They are also busy and doing 100 things, including teaching and everything else.

Deputy Louise O'Reilly

That is absolutely the case.

Dr. Ruth Freeman

We are trying to align two busy cohorts. It is challenging but we can see the benefits when we do it. Researchers are often hired and relationships and collaborations are established.

Deputy David Stanton

Our guests are welcome. I was listening on the monitor but was involved in another meeting with the Open Doors Initiative, which is also concerned with training and focusing on a cohort of people who find it hard to get employment. There is a little bit of an overlap with what we are talking about today.

I am astounded at the amount of money in the National Training Fund. It is colossal and I had no idea it was that big. There are opportunities to do positive things when that amount of money is available. It is heading for €1 billion. That is mind-blowing. It shows how well things are going, in one sense., that people are able to contribute to the fund.

I am interested in STEM and in how SFI is assisting women in that space. Professor Nolan mentioned SFI has been at the forefront in developing initiatives "to remove and mitigate any existing or perceived factors that may limit the participation of women in STEM careers at fourth level". He might expand on what those initiatives are. In my former role as Minister with responsibility for equality, we did a lot of work in that space and it is good to see it developing. Professor Nolan or Dr. Freeman might be able to tell us a little more about what SFI is doing.

Dr. Ruth Freeman

I thank the Deputy for the question. I would characterise our approach as tipping the playing field to level it.

We know that academia has historically been a very challenging place and we see considerable deficits in the numbers of women and particularly the numbers rising into leadership and professorship roles in the STEM areas. We have taken a number of approaches that are all evidence led. The key mechanism we use to decide how funding is distributed is international peer review. We send research proposals to international scientists, engineers and specialists and they give us recommendations as to the quality of that research proposal. Evidence shows that women are judged marginally more harshly through that process. What we now do is when we look at applications and round scores, we fund the women that score equally first in an effort to redress that balance. That has been a big driver in changing the numbers of women who are receiving grants.

We also work with the institutions to encourage more women to be put forward. For a number of our programmes, particularly for early career researchers, we have quota systems. We increase the size of that quota if there is gender balance in the submissions to us. That, of course, drives behaviour to find more women and encourage them to apply. Once we do that, we do not make any other interventions during an objective review process. We run that early career call in partnership with the pathway programme of the Irish Research Council and every time we have run that call, we fund at least 50% women. We are seeing that with the right interventions, success is happening in a much more balanced way and those individuals are coming through.

There are other aspects. Appropriate supplements must be in place for researchers with caring responsibilities who take time out of their careers at any point. We have extended those supports to PhD students as well as the staff in the institutions. As Professor Nolan mentioned earlier, those objectives we have been trying to achieve through our initial gender strategy are being rolled out by means of our much more expansive EDI strategy. We recognise, for example, that very few people with significant disabilities go on to have significant research careers. The Travelling community is under-represented in research and academia. We are now trying to broaden the lens to see can we use the same methodology to help broaden the numbers coming into research. As Creating Our Future, the broad survey, shows, it is critical when we think about innovation to have a broad set of voices in the room. It is not only about EDI. It is about getting the best outcomes for Ireland and society globally for the challenges we face.

Deputy David Stanton

When I met with companies in the past, that message about the importance of diversity in ways of thinking came across. I am happy to hear about that. IBEC has been supporting balance within business, with the 30% club and so on, which seems to be going well.

Ms Meadhbh Costello

Across the board, businesses increasingly recognise the growing importance of having diverse workplaces. In the context of a tight labour market, where we have more than 2.5 million people in employment and an unemployment rate of around 4.3%, employers are increasingly looking to diversify the workforce they have in place. This is an opportunity to look at alternative sources of challenge that are under-represented in the workplace, including women, members of the Traveller community, etc. We have seen that employers are increasingly engaging in a number of different programmes and initiatives to make their workplaces far more inclusive, including by looking at things such as how they attract and recruit workers. They are considering the systems they put in place to ensure their recruitment processes are more balanced and making posts more attractive to people have not put their names forward for positions in the past. Self-selection may be a result of people going for certain positions. Employers are also considering mentorship, career opportunities, training and investment. There is an opportunity with the National Training Fund to address some of the challenges around skills participation for under-represented groups because we know that in respect of, for example, digital skills, it is not only important to have ICT graduates at the highest level. That is critical for many businesses in our economy but it will be important for us to invest in the whole scale and gamut of digital skills.

Deputy David Stanton

It would be remiss of me if I did not ask Professor Nolan to comment on the debate about artificial intelligence. The SFI's centres for research training cover machine learning, research training in the foundations of data science and research training in artificial intelligence and digitally enhanced reality.

Reports in the media in recent days have stated that AI is going to change everything, challenge how people are employed and take jobs from people. There are strikes ongoing in America at the moment, with people in the film industry worried that their jobs will be taken and so on. The situation seems to be moving very fast. I ask the witnesses to comment on that in the context of the topic under discussion. What is the up-to-date thinking of SFI on AI in Ireland?

Professor Philip Nolan

I am certainly not an expert on AI and, unfortunately, nor is Professor Gleeson, although he knows more about it than I do. I am quite cautious in this regard because, as researchers, we know one must be careful about commenting outside one's field. I am not going to comment on when or if ChatGPT will become self-aware but there is an important point relating to the previous point on diversity. Much of the research we are doing in artificial intelligence relates to precise applications that would have everybody's support, such as whether AI can support the interpretation of medical imaging. Rather than looking at cervical smear slides or mammograms in the way it was done in the past, AI could scan the slide and draw attention to certain features or pre-process them. There is a significant amount of positive opportunity in AI. A second area in which a significant amount of our research is being carried out is not about the technology but, rather, its societal impact and adoption.

That brings me back to the issue of diversity. In addition to what Dr. Freeman has said, we need to think about the issue of class in research. If the research system is dominated by middle-class people or accessible only to them, the concerns of that class will be represented in the outputs but the concerns of the excluded will not be represented. I am proud that there is a significant amount of work going on in Ireland with regard to privacy, security, reliability and transparency - all the things that will mean the positive and safe benefits of AI accrue but we avoid the pitfalls. I do not know whether Professor Gleeson wishes to comment further. The big challenge is how fast things are moving and the need for us, as researchers, and for committee members, as regulators, to keep pace with that.

Deputy David Stanton

As regards a requirement for regulation, the committee may need to do a full session on that issue.

The witnesses from IBEC referred to increasing the incentives for apprenticeships from €2,000 per employer to €7,000 for SMEs. If I am correct, SMEs have fewer than ten employees, or perhaps five or fewer. I am not sure how it is defined. I ask the witnesses to comment on the need for that €7,000 and how IBEC arrived at that figure.

Ms Claire McGee

Ms Costello has been doing research on that this week.

Ms Meadhbh Costello

The new national action plan for apprenticeship sets out an objective of developing a single model for apprenticeships, which would bring together craft and consortia into one model. The intention is that this would move towards a consortia-led model. One of the biggest differences for employers in their level of engagement with apprenticeships between the two models is the cost, particularly the cost of off-the-job training, which must be carried by consortia-led employers but not by craft employers. If we want to bring the two models together, that is the funding gap that must be addressed. Some of the research we have done recently suggests that this cost is approximately €7,000 to €8,000 for a consortia-led apprenticeship training. Our suggestion relates to closing that gap and developing a single model for apprenticeships. That is the approximate level of funding that would be needed to address that piece of training. There are additional costs faced by consortia-led apprenticeships, particularly with regard to things like mentorship, backfilling positions, subsistence, technological investment and so on, and that must be borne in mind. This is a challenge for SMEs in particular, which do not have the capacity of larger companies, especially when it comes to HR, which would manage a lot of these functions. That is why we need to focus on closing the gap as part of this new apprenticeship model.

Deputy David Stanton

I thank Ms Costello.

Science Foundation Ireland has a very interesting sentence in its presentation, that "Competencies such as stakeholder engagement, creative problem-solving, leadership, change management and collaboration are all vital aspects of a talented and agile workforce." It is interesting that Science Foundation Ireland focuses on those particular softer skills rather than the technical capabilities that it mentioned earlier. Professor Nolan might expand on that thinking for a moment because it is something many people miss in the debate about skills, employment, etc. It strikes me as being particularly focused in many ways the way Science Foundation Ireland has it here.

Professor Philip Nolan

I will make a brief comment and then Professor Gleeson might give the Deputy a closer-to-the-front-line example.

To be clear, the kind of technical skills that one learns during a doctorate in philosophy, PhD, remain critical. If you graduate without those you are no use to anybody, but what Professor Gleeson is trying to do is - we talked about placements of students in the work - scaffolding that placement in order to develop those skills that means that the graduates are work-ready. Does Professor Gleeson want to expand on how it works?

Professor James Gleeson

I thank Professor Nolan. In our centre for research training, CRT - this would be common across the six CRTs - there is a structure of PhD training within a structured PhD programme which means the students all take certain modules in certain areas. As part of the CRT programme, we have bespoke modules in, for example, entrepreneurship, explaining research impact, communication of skills, explaining how your research is relevant to the stakeholders. That was part of Science Foundation Ireland's, SFI's, original plan. I give credit to SFI for putting that into the original programme.

It has been hugely successful. As I said, all our students go on placements in the summer of their first year. They have taken most of those modules in advance of doing so. Our programme is co-created with our industry partners and with Skillnet Ireland. The feedback from them at the start was that we need technically excellent fundamental thinkers who can help us develop the argument into the future and help deal with the coming artificial intelligence, AI, debate but we also need them to be able to communicate with managers, colleagues and peers across the organisation. In truth, some PhD students in the past may have been not as well equipped in that space as they could have been. We are very much aware of that.

The list of skills is extensive and growing. We constantly get feedback from our industry partners on areas such as project management or data storytelling - those are new names in the field that are constantly important to us.

It is a huge part of the programme. It is safe to say that it has changed how PhD training is happening in Ireland.

Deputy David Stanton

I thank Professor Gleeson.

An Cathaoirleach

I thank Deputy Stanton and thank Professor Gleeson. The next member who has indicated to speak is Senator Marie Sherlock, who has seven minutes. The Senator will be followed by Senator Garvey, with seven minutes as well.

Senator Marie Sherlock

I thank Science Foundation Ireland and IBEC for attending the hearing this morning. I am sorry that I have come late to the hearing here.

I have quite a narrow and specific question. The question relates to apprenticeship and I suppose it is very much directed to IBEC.

I would say at the outset it is incredible to think that we have such a surplus in the National Training Fund. There are very serious structural flaws that need to be got right with regards to the fund and it is great that we are having this hearing today.

With regards to IBEC's proposals here with regards to apprenticeships, obviously, we have two types of apprenticeships now in terms of the consortia-led and the craft apprenticeships. IBEC might walk us through the difference that the €7,000 employer incentive scheme relative to the €2,000 employer incentive scheme will make. I am sorry I only caught the end of what they said to Deputy Stanton there. In terms of teasing through the extent to which that will have a dramatic impact on firms taking on apprentices, I would like to hear more from IBEC about that.

Ms Claire McGee

Between the two of us, we will try to answer that question. I thank the Senator.

The important thing is we have made major strides in the development of the apprenticeship programmes in Ireland. The introduction of the consortia-led apprenticeships in 2016 really was a game-changer for apprenticeships in this country. It brought in companies which had no experience of apprenticeship and sourcing immediate talent into their businesses. It was a powerful thing to do.

Now we have a few years, a first review and some hindsight on that. We must also remember apprenticeships start and fall with employers.

That is why we need to bring as many employers into the system as we possibly can. The demand is out there for learners. Apprenticeship is a great opportunity to gain a high-quality education, work with fantastic and innovative companies and be able to use one's skills in practical day-to-day experience.

We have craft and consortia-led models. There is a difference in the financing of those. The craft model is very much part of the businesses' DNA in terms of how they grow and evolve and how they bring people into their organisations. The consortia-led apprenticeships are in new areas. They are in insurance, financial services and manufacturing and are brand new. In a sense, it takes a significant amount of change within an organisation to bring in an apprenticeship cohort because HR and operations must be structured appropriately to be able to mentor and train those people on the job and then release them for the off-the-job training. In order to support that and grow that type of talent development within those companies, which are used to hiring from universities, for example, PhDs, may be more familiar with hiring directly from ETBs and have traditional systems in place and for which, therefore, this is new, they need support to be able to offset some of the costs associated with hiring an apprentice.

We have done analysis with some of the companies that are currently engaged in apprenticeships. Having an apprentice can cost over €40,000, which is a significant amount of money. What this potential €7,000 could do is help offset some of those costs. They are like on-boarding costs. It is how the company brings in a new person when it has had no experience of apprenticeship of apprenticeship function in the past. It is really about trying to scale the number of companies involved in apprenticeship. This payment would incentivise more employers, particularly SMEs which need that quality talent now, by helping to offset some of the costs associated with delivering a high-quality apprenticeship at a company level.

We can send the committee more detail on that because we are doing some strong analysis with it. We are developing a paper on a single apprenticeship model to bring to SOLAS and the Department of Further and Higher Education, Research, Innovation and Science and to spearhead that development. The gap is widening between the two models and we need to try to bring them into one, which has been the plan from the beginning.

Senator Marie Sherlock

I very much support a single model.

Ms McGee is absolutely right that apprenticeships do not happen if there is not an employer in place. There are two aspects to that. The first is employer size, and I do not know whether IBEC believes that is an issue in certain sectors. The second is the issue apprenticeship pay. We are hearing from certain sectors that, particularly in the first and second years of an apprenticeship, there are significant issues with regards to retention of apprentices. In fleshing out that apprenticeship piece, does IBEC have anything to say on apprenticeship pay and keeping people within apprenticeships?

Ms Claire McGee

With the consortia-led apprenticeships, pay is set by the employer. That was unique and separate from how the craft apprenticeships developed where the pay is agreed across different unions and engagement with that.

The retention of apprenticeships is indicative of a tight labour market and that is the challenge. How we help those companies that have already invested significantly in an apprentice to retain him or her is where the €7,000 or possibly more or an additional stipend could help to ensure the apprentice remains with the company so that he or she can see out training. There will always be challenges but the issue of pay is one where we want to ensure the company is able to afford it and continue on that journey of apprenticeship. That is where this increased incentive would enable companies, particularly smaller ones which are challenged when competing on pay with larger companies.

Senator Róisín Garvey

I thank the witnesses for their time. I had to leave the meeting to attend another committee and I hope my questions have not already been asked.

Which Department funds SFI? Is SFI a State agency or a semi-State agency?

As regards STEM, when I visited the SFI website I saw very little on climate. I would love to hear about SFI focusing on STEM and getting people to look at the green economy, green jobs and all the things we will need to be a resilient country as we face an unpredictable future. We saw what happens when we lose access to wheat and gas, for example. The country is moving towards a green economy. What is being done specifically on that issue? Does SFI have a unit focusing on the skills that will be needed to face the climate and ecology emergency?

For IBEC, a matter I raise it at every committee meeting and everywhere else I can is that nothing has improved with regard to giving guidance counsellors access to new information on apprenticeships. When they visit apprenticeship.ie, it literally tells them to ask their guidance counsellor. There does not seem to be a good one-stop shop. There is no access to information on private businesses that are looking for apprenticeships. I met the vice-president of the Institute of Guidance Counsellors. It keeps hearing about all these new apprenticeships and improvements but it has no way of finding out about them. There is a need to increase apprenticeships but it is difficult to do so if guidance counsellors do not have the information. There is something missing in that regard.

I would love to hear more about the surplus in the national training fund. Is it something on which ETBs can draw down? For example, there are six centres of excellence - new training centres on climate and energy stuff - but they are not necessarily in counties where lots of people can access them. I would like there to be further outreach in that regard. Is that something for which that fund could be used? When an ETB tells me it does not have the funding it needs, I could suggest accessing the national training fund. There has been an effort to cut down on the number of people driving to college. The more outreach training courses that are provided, the less distance people have to drive. I know some courses are online but the best form of learning is in-person learning. I would like to know more about that fund.

Professor Philip Nolan

I will be brief. Dr. Freeman may also wish to comment. SFI is a State agency founded 20 years ago under the Industrial Development (Science Foundation Ireland) Act 2003. It is funded through the Department of Further and Higher Education, Research, Innovation and Science, which is led by the Minister, Deputy Harris. The budget for SFI is approximately €230 million per year investment in research across the system. As regards the surplus in the national training fund, we believe approximately 4%, or €40 million, of the annual income to the fund should be invested in doctoral research. A significant amount of the surplus could be invested in doctoral students and research infrastructure, which was mentioned earlier.

A significant amount of our current research effort focuses on questions that are likely to be of benefit to society and the economy. Our researchers are heavily directed towards the twin digital and green transitions and the interaction between them, whereby the digital transition has to be green and vice versa. There is a very large research effort behind climate and biodiversity. At the top end, we have a call open at the moment for an all-island research centre in climate and biodiversity. Bids in that regard have been received. That will be a major investment through the next eight years in that space. The national challenge fund is run by Dr. Freeman but I can talk about it. It is a €69 million challenge fund under the European recovery and resilience facility looking at green and digital transitions.

There is a huge emphasis on climate, biodiversity, water and many other things right across our portfolio. Dr. Freeman will expand on that a little.

Dr. Ruth Freeman

I thank the Senator for the question. As we said, we fund people across the system. As Professor Nolan said, those people are addressing questions of relevance to them, to society and to the economy, many of which now relate to climate across all areas. We have that fundamental base of individuals we need to support. On top of that, we are building strategic instruments. Some of those are research centres. As Professor Nolan said, we have the new all-island centre but we already have a number of research centres addressing the dual challenges we talked about, including MaREI and iCRAG, which are looking at different aspects of renewable energy and the impact on our geological structure.

The national challenge fund takes a different approach. It ask researchers to respond to specific questions and come up with solutions. One of the earliest challenges we funded was Farm Zero C. That was a programme led by Professor Kevin O'Connor in University College Dublin, UCD, to try to develop a carbon-neutral dairy farm. That programme has gone from strength to strength since we funded it and is the foundation for the national challenge fund now, where at least two thirds of the investment coming from the EU through the national recovery and resilience facility will be invested in projects that relate to the green transition, sustainable communities, sustainable food and waste. It is a massive area of interest and investment for us. As was said, it is possibly now the key issue that science needs to turn its attention to.

Ms Meadhbh Costello

I will quickly answer the question on career guidance. One of the opportunities with the national training fund is that it is an opportunity for once-off step change and delivery of investment. One of the areas we identified is the issue of career guidance. In Ireland, we have many high-quality education and training opportunities but it can be very difficult for a learner or business to understand what the best one is for them. One of the things we proposed is the idea of a centralised careers portal that could bring some of that independent information together and also provide information on the changing rate of skills and emerging technologies, etc. that impact the future of work, with two other broader challenges around career guidance, namely, an underinvestment in the system and an under-resourcing of career guidance. If we want people to engage in lifelong learning, particularly as they will change careers and need to upskill more often, we need to see a significant step-change in investment for career guidance.

Senator Róisín Garvey

I am aware of that. I am working on a Private Members' Bill on that next month. That is not what I am asking about. I am asking about the current cohort of guidance counsellors who are very enthusiastic about promoting apprenticeships but are finding it very challenging to get access to information about all the new apprenticeships that have come online. That is something I would like somebody to solve. I do not know whose problem it is to solve. That is just what I was saying.

SFI gave a very good answer but as somebody who looks up the website-----

An Cathaoirleach

The Deputy's time is well up.

Senator Róisín Garvey

-----there is no mention of climate anywhere until about four clicks in. Maybe that is something that could be put more towards the front to attract researchers on climate issues.

An Cathaoirleach

I thank the Senator. Her time is up. She is well over time actually. Senator Ahearn is next up followed by Deputy Bruton who have seven minutes each.

Senator Garret Ahearn

I have a range of questions so I might come in twice. Professor Nolan mentioned removing barriers to participation by always considering the needs of the population at large during his contribution. Gender is a very important part of that. Dr. Freeman spoke about disabilities and trying to get more people with disabilities to play a role. Ireland has one of the lowest rates of participation for people with disabilities in the European Union. It is only just more than 30% compared with the UK, France and Germany, which are all at the mid-fifties, at least. Is SFI working with groups such as Rehab and others - this question is also for IBEC - on looking at that sector, where there can be real participation from people who have lifelong disabilities but can play a key role in employment? When we are at the stage of almost 2.6 million people in the workforce, this is a group that can certainly be supported, if we reach out to them.

Professor Nolan talked about how, through a new programme it is hoped will be funded in two years' time, SFI will branch out to other areas. Will he expand on the type of areas he thinks it will be important to focus on in future?

For the benefit of Professor Gleeson, I am a former UL student, as is my wife, so I know it well. One of the amazing opportunities it gives is participation in the workforce while a student is an undergraduate and postgraduate. Where workplace opportunities are given to undergraduates, it is almost done for them. At postgraduate level, however, is it up to students to find the 12 weeks of employment assigned at UL or does the college have relationships with businesses to provide that employment? If it is up to the students, is there a challenge for them in finding that employment? I will come back with more questions for IBEC.

Dr. Ruth Freeman

There are probably two different issues. Professor Nolan mentioned this. If only a certain cohort of people become involved in research, it is the questions of most relevance to them that will be researched. That is one aspect. A big driver behind Creating Our Future was going out and asking a broad range of people what was important to them in order that we can inspire and deliver research in those areas. We worked with a large number of groups. We had an advisory forum that crossed all sections of society, including groups representing those with disabilities. One element we are trying to build on is how we make sure that questions of relevance to different communities are researched.

On supporting researchers with disabilities, particularly those with significant disabilities, to do research, we are working with bodies such as the national disabled postgraduates union. We have already brought in policies where we will pay additional costs for those researchers, if they need supports while they are delivering a project with us, whether that is additional personal assistant support or, if they are travelling to conferences, they may need modified work stations. We are putting that in place with the institutions at present so we enable broad participation. We are trying to address the issue from those two angles. However, I agree with the Senator that there is more to be done.

Professor Philip Nolan

The CRT programme that Professor Gleeson runs is called foundations of data science. We will need two types. One is foundational or the very basic research and skills that have a very broad range of applications, including things as broad as advanced materials and immunology. These are the very basics of future applications. There are then applications areas that are very likely to be focused on the digital and green transition. These include energy systems, food systems, biosciences, biodiversity and those kind of things. We are doing a capacity analysis and needs analysis in that regard. That is the basis on which those other areas will be founded.

The one other thing I advocate for relates to there just not being enough work on societal innovation and adoption of new technologies. How do we use these things? This includes all those areas around regulation, privacy and so on. Those are also amenable to doctoral study. Many of the solutions Europe is implementing in these areas arose out of research investigations conducted when these issues were just coming over the horizon. I argue very strongly for a range of doctoral research on what might be called socio-technical problems, or the interface between technology and society.

Professor James Gleeson

On Professor Nolan's points, flexibility is very important for researchers. That comes back to an earlier point about climate. We found that our investigators within the CRT, while they are engaged in developing fundamentals of data science, the actual areas of application and interest have very much pivoted towards climate over the past few years, in particular, ecology. We have seen many people work in the area of the data science of ecology. The flexibility of a large cohort-based programme such as this will enable investigators to look at directions as they emerge and as the debate on artificial intelligence heats up fast. To be able to switch quickly into those areas is important.

On the specific question regarding placements, I am from UL. I am proud to work there. The CRT is jointly run with UCD and Maynooth University. It is not specific to UL. The UL co-op programme is very successful for undergraduates. On how we run our graduate placements, again, these are essentially organised through the CRT. We have a programme manager who engages with our industry partners. We have a group of industry partners called the enterprise alliance.

Each of them is willing to take a student as part of the membership of the programme. There is an arrangement where the students and the enterprise partners meet on a regular basis and network. We run a matchmaking algorithm, namely, the Gale-Shapley algorithm, if the Senator is interested, to ensure that the matching between students and industries is optimal. That is how it is organised. It is essentially done for the students; the students do not have to find their own placement.

Ms Meadhbh Costello

On the issue around the inclusion of people with disabilities in the workplace, there is an under-representation of people with disabilities in the workplace. IBEC and, more broadly, employers are engaging with a number of representative bodies to ensure that effective and inclusive practices are more widely used among employers to support more people to enter and stay in work. For example, the Employers for Change initiative is an initiative that IBEC and a number of NGOs that operate in this sector support. It provides a number of guidance tools as well as information and additional resources for employers on how to recruit, retain and attract people with disabilities into the workplace. I can also think of a number of different models, including, for example, the Oireachtas work learning, OWL, programme, which is run in the Oireachtas, which provides opportunities for people with disability to move into employment.

Senator Garret Ahearn

I thank the guests. I might come in again in the next round.

An Cathaoirleach

Yes, the Senator can come back in again.

Deputy Richard Bruton

I thank out guests for their interesting presentations. I see there is a proposal to merge SFI with another body. It raises this issue of what the proper balance between applied and relevant research versus blue sky is. Under SFI’s approach, it has targets around relevant industrial partners and spin-outs. Is there a risk that we will see research move away from the more pressing issues, such as digital or green transition, that are immediate and need support, to a more a blue sky approach to research? While one can see the argument for it, I think Ireland’s scale makes it difficult to make impact in that area.

Turning to IBEC’s presentation, I come from the dismal science. I do not know whether the surplus should have been €120 million - in the text it was €12 million. We are probably spending 90% of the annual turnover and the €1.5 billion is non-recurring – the surplus there. While I am keen to see pilots and I welcome the suggestions, it seems that we should be looking to the performance of some of the areas where we have already made substantial investments, such as Skillnet, Springboard, the human capital initiative and apprenticeships. Those are not being exploited to their full. While we should look at new vouchers or the likes, we need to make sure that those mainstream interventions are achieving their full potential before we start setting up new institutions and initiatives.

In that context, leaving aside the craft apprenticeships, what is the present take-up of apprenticeship by companies within IBEC and the Small Firms Association, SFA? The impression I get is that the new apprenticeships are struggling to get employer involvement on the scale that was hoped. Should IBEC be looking at creating some of the management overhead for the participation of these companies? We need to move to a situation where apprenticeships are not about who one knows to a central application. If there were sectoral networks that would recruit centrally and allocate to participating employers, perhaps that would take away some of that overhead that was rightly indicated as falling on small businesses that are very busy. Can we see IBEC and similar sectoral organisations putting greater resources into making a success of Skillnet, Springboard, the human capital initiative and apprenticeship, which were all designed to be flexible, employer-led and employer-responsive?

I suggest a slight tipping of the balance to make what we have work before we think up new ideas.

Professor Philip Nolan

The Government has decided that Science Foundation Ireland and the Irish Research Council should merge and create a new agency. The explicit decision is that this new thing should be greater than the sum of its pre-existing parts. I am confident that the values, experiences and what each of those agencies has been able to do well will be maintained through the transition. I completely agree with the Deputy. Ireland, as a small country, has been more successful per unit investment in building strong connections with enterprise, the public service and civil society to address the important issues that face us.

I will make three comments. I do not worry that we might get distracted away from what one might call the immediate grand challenges – green and digital. The principal reason is the one that Professor Gleeson already highlighted. Researchers are citizens too. Not only is it Government and agency policy that these issues are priorities but they are priorities for the researches themselves. Researchers have pivoted towards these issues well in advance. Professor Gleeson works on the foundations of data science. During the pandemic, he and his colleagues built one of the basic models that we used to navigate our way through the pandemic. These are colleagues who are keen to apply their expertise to the challenges that we face.

Second, enterprise and Government share the view that we must also invest in fundamental research and talent. What our enterprise partners want to talk to us about is some immediate applications but - I am sure Professor Gleeson will confirm - they are also interested in what is next and what is coming over the five- and ten-year horizon. We can only know that if we have researchers, academics, post-doctorate fellows and PhD students working at the frontiers and telling us things such as the direction artificial intelligence might go and what the next generation of semiconductors or photonics might look like. Our enterprise partners want to be able to have those conversations as much as they want to have a conversation about an immediate application or thing that might be realisable as a service or product. They are both important and we need both.

The other important thing is that the basis of the Government decision was that we need to work together across silos and disciplines. We cannot have a system where an engineer works in this part of the system, a sociologist works in another part of the system and never the twain meet. Again, when it comes to those digital and green transitions, as the Deputy well knows, it is how society reacts to the technological change and how much ownership and trust they have in this change in the way services are delivered or we operate as a society. The pandemic taught us that matters more than the technology. How people use it and how it impacts our social and community structure is as important as the technology itself.

In one sense, I agree that we have to be razor sharp in our focus that the strong connections that we built up between our research system and our enterprise system are maintained and that it is extended to the public service and civil society in a strong way. Nonetheless, I am confident that through the transition we will do that, reap those benefits and build those connections more broadly across the research system.

Professor James Gleeson

Professor Nolan is completely right. The focus of the PhD training supervisors is largely on what is coming over the horizon in the future. Our industry partners and, in particular, Skillnet Ireland are very happy with that focus. While we have industry support and our students do go out on placements in industry, industry does not tell the students what to do for their PhDs. These are PhDs that are driven from the bottom up which gives the researchers freedom to pivot and to be aware of what is coming over the horizon. Our partners are very bought into that. They understand it is an important skill for their future employees to have. They are really bought into this programme because it is a talent pipeline and they know there is a need for PhD-level talent for employability and to keep Ireland competitive in the future.

Deputy Rose Conway-Walsh

I listened to some of the discussion in the office before I came down. It is a subject that really interests me. Many of the things that were outlined including career guidance, silo thinking and the architecture that is needed to address this can be done through the National Training Fund. We need to really look at this. I have been looking at it deeply for the last two years. We are not making the most of it. The Minister with responsibility for higher education said last October that the National Training Fund was over €1 billion and is likely to be €1.5 billion this year. He stated that the challenge for the Government is to show how it is done as any expenditure from the National Training Fund is categorised as the equivalent of general Government spending, reflecting similar conversations that he had with officials within the Department. It appears that even at the highest level they do not know how to or even if they can access the National Training Fund that employers have been paying into and continue to pay into.

It is not a technical or legal challenge, as the Minister for Public Expenditure, National Development Plan Delivery and Reform responded even last week. He stated that the only reason this surplus was off limits to the Minister for Further for Further and Higher Education, Research, Innovation and Science was down to a decision made by his Department and the Government to keep the National Training Fund within the 5% increased expenditure level. This is despite the fact that billions were spent outside the 5% last year. Are there any real barriers to Government investing this money in further and higher education? What engagements has IBEC had with the relevant Ministers and what explanation have they provided for not being able to invest that money?

Do our guests have concerns regarding how the National Training Fund is stored in Exchequer notes, creating an incentive for Government not to access the funding as it requires the corresponding payment by the Government? We have to get to the bottom of this fund. There is €1.5 billion sitting there while we have these enormous challenges in the labour force, research and development and all of these things that are urgent in terms of our competitiveness into the future and many other things across society. Has IBEC any news for me?

Ms Claire McGee

I thank the Deputy for her question. If time permits I might come back to answer Deputy Bruton's questions as well because they are quite important. They are connected. We have been highly engaged on this topic. It goes back to when the increase was first announced in 2017 or 2018. It was ring-fenced at the time, supposedly to support the underfunding in higher education. As things have evolved, with the buoyancy in the labour market coupled with the increase, the surplus has accrued. What we now also have is a spending gap of approximately €120 million per annum. There is an error in my paper so I hope the clerk will allow me to resubmit it and correct it. The spending gap is adding to the surplus year on year. We are now in what I would call an enviable position with approximately €1.5 billion that we can invest in skills development for those who are seeking employment and those who are in employment and trying to avail of new opportunities.

The challenge is presented in that kind of ceiling or cap within the 5% of each Department's spending allocation. However, given the scale of the challenge and the scale of the surplus, I think we are now at a point that we need to be able to find flexibility.

Deputy Rose Conway-Walsh

I need to know what IBEC has been getting back from the Minister on this; take all of that as a given. What have each of the Ministers given to IBEC on this?

Ms Claire McGee

Late in 2021 and into 2022 we were told there was this cap and that the Government was unable to do it. Given the exponential increase there has been we are at the point where no one can continue to focus on that. There is pressure on the system because I understand that the Office of the Comptroller and Auditor General has focused its thinking on this and I have seen that. There is pressure and I understand that the Minister feels the pressure to be able to spend this money in an appropriate way. There has to be some change in it and it is no longer tenable to say we have a ceiling cap given the scale of the challenge we have. Knowing that the fiscal rules and space are changing all the time, given different windfalls through corporation tax etc., we have this significant challenge that is external to the system and therefore it has to be spent. That is why IBEC has been forthright in its ambition to be able to draw down this National Training Fund money and to provide recommendations for the surplus to be spent in these short and sharp interventions.

We cannot wait for the downturn, which will come as that is the natural cycle of economics. We need to invest this now so that we are resilient when that downturn comes. If we are going to operate a go-for-broke strategy it takes much longer to reinvest that money. That is why we are probably quite well-aligned across many different stakeholders in this sector to be able to say we have this strategic asset, let us see it as a strategic asset and let us spend the money. The common theme we want to focus on are those large challenges around digitalisation, addressing climate challenges and supporting the workforce to be able to take the opportunities that are presented by those.

Deputy Rose Conway-Walsh

We are on the PhD researchers and the review that is coming up and what is needed there in order to be able to solve the issues. We talk the talk - and I know there is a difference between the third level institutions and what IBEC and SFI do - but we have to better support PhD researchers in Ireland, both nationally and internationally, if we are going to remain in that space. I am afraid we are falling behind because we are not supporting our PhD researchers in the way we should be.

Dr. Ruth Freeman

We spoke about this before. We have endorsed the need to increase the stipend to a level people can live on because the stipend has not increased for a number of years. In the interim we have put some measures in place for our non-EU students who have additional costs for things like visas and mandatory healthcare. We are covering those issues while we await the formal review from Government, which we anticipate coming soon. The unified recommendation across the system is that we need to act quickly and that as an interim measure we need to support those students urgently. That is a top priority issue for us.

Deputy Rose Conway-Walsh

There is a €307 million gap. We are talking about €1.5 billion here and there is a €307 million gap in further and higher education. Surely it is not beyond the wit of everyone to be able to match those two things up and get on with what we need to get on with.

Senator Garret Ahearn

I refer to the contribution Ms McGee made at the start of the meeting. She made a number of good points that she thought we should focus on and the second one was in support of the dual investment in technology and talent and to introduce more sustainable business practices in areas such as energy efficiency. If I go back to Tipperary and say that we should focus on that, the first thing businesses will say is that the Government has given them no money at all to put into solar panels to be more energy efficient. Is IBEC hearing that from businesses? Only yesterday we reduced VAT to 0% for solar panels for homes and €30,000 is being given to homeowners. We are making changes to be more energy efficient but I know of two businesses in Tipperary that have spent over €50,000 to be more energy efficient and they get zero from the State to help do that. Does IBEC see that as an issue?

If we are going to get them to change their ways in terms of digitalisation, energy efficiency and carbon emissions reduction, the very least we could do is financially support them from the very start.

Ms Claire McGee

The reason we implemented that is because businesses are investing in those areas. For the two businesses the Senator mentioned, with €55,000 put into their solar panels, they probably changed practices elsewhere across their systems. They need to be able to make sure they understand how they are used and how they can use the data coming out of the new systems to improve and change their behaviours. That is where we are coming in, particularly on the National Training Fund, to say that if businesses are introducing new technology, they need to be able to support staff and themselves to be able to use that technology and get the best out of it and out of the data and information.

I have a good example from one of our member companies recently, a small SME within the experience economy. It looks after a lot of the laundry that comes through hotels and bed and breakfast accommodation. They put in new washing machines to become more energy efficient, but after the investment, they had no means to train the staff to be able to do it. There is no programme under the National Training Fund currently to support that business to be able to use the technology better. They are not going to get it through an apprenticeship or Springboard+ programme. However, a training voucher coupled with external grants through other areas would probably weave together very nicely. That is where we are coming from, to be able to support companies to make a technological investment. Business owners can only make a technological investment if they are supporting their employees to be able to use it to its full purposes to make the positive outcome. That is our position for today around the National Training Fund, to be able to complement that investment into the future.

Senator Garret Ahearn

I can see most of the things Ms McGee has talked about today. My home town is Clonmel. I can see it being hugely beneficial to our town. We now have a university in the town. We are building a university on the Kickham Barracks site in conjunction with Tipperary Education and Training Board, ETB. It will be a dual campus for further and higher education together. We have many multinational companies in Clonmel, such as Abbott, Boston Scientific, or Merck Sharp and Dohme. We have a really good SME sector. The average industrial wage in Clonmel is much higher than the national average and the average in rural Ireland in particular.

Our guests were talking about having a collaboration between education and businesses. I see that happening with the multinationals in Clonmel but I do not see it with the SMEs. It is almost like we have to go out to them to convince them to do it. Can we see strong, industrial, rural towns like Clonmel benefiting dramatically from that kind of collaboration? The local enterprise people do good work. There is a place in Clonmel called the Questum centre which is totally full at the moment. They are building a second phase onto it. Businesses have gone from one employee to 100. They have not had that collaboration with what was previously Limerick Institute of Technology, LIT, and is now a university. Can Ms McGee see a benefit for rural towns on the back of something like this?

Ms Claire McGee

Absolutely. The way the Senator has presented Clonmel there, it really represents the power of investing in high-quality education and research. The fact they will have a university and a strong ETB on their doorstep is attracting those large companies into that area. That makes Clonmel a nice place to live and work, which supports all the smaller businesses such as coffee shops, hairdressers and food enterprises. It is circular. That is what we are trying to achieve. We can see the really solid foundation of a good education and research system in the regional areas. We can see how the technological university process has been a success for regional areas to keep people living and working in quality jobs within that area. The company that started with one employees and is now at 100 is a scalable business. We want to help such companies continue to scale and continue to reach their ambitions. That company is probably now at a crossroads.

Where does it go next? That is perhaps where collaboration with a research centre, an Enterprise Ireland technology centre, the ETB and technological universities can help those businesses to move into the next frontier, whether that is workforce development or innovation capacity, and to try to solve some of the bigger challenges. Putting a voucher scheme system or seed funding in place is required to help those conversations to move to the next level.

Senator Garret Ahearn

The last thing Ms McGee said was "a destination for talent". I also see that in Clonmel. People do not come only because they are given an offer or a wage. They look for quality of life. The Covid-19 pandemic played a key part in that. They look at the quality of life their family might have as regards education, health and recreation almost more than anything at the moment. One of the good examples I see of that is a new sports hub on the outskirts of Clonmel. It received an investment of €10 million. It will be opened next month by the Taoiseach. One of the driving forces behind it was that businesses financially supported the building of the sports hub in collaboration with Tús and the local authority. They did so on the basis of attracting employees to come to Clonmel. That seems to be one of the biggest challenges since the Covid-19 pandemic. They will not only give a certain wage to convince people to come. They offer the wage and show what the town and region can provide for employees and their families or people who come with them to set up a base and have a future here. The challenge for businesses now in areas like where I am from - it is easier for multinationals - is how to attract people to come to the area and show that it offers them and their families a future.

Ms Claire McGee

That demonstrates again Professor Nolan's point that researchers are citizens too. People want to be healthy, they want to solve the biggest challenge we face, namely, climate change, and they want to live in nice places. Solving that is a great ambition for us as a collective, including the Government, to have. Investing in the building blocks to enable that - today we are talking about education, research and innovation - is fundamental to being able to deliver that aspiration. It also requires dual investment in housing and some of the other quality-of-life issues. That comes back to skills and having the people who are able to do it. It comes full circle back to education.

An Cathaoirleach

Before Deputy Bruton contributes, Ms McGee wanted to answer some of his questions from the previous round.

Ms Claire McGee

I fully agree with Deputy Bruton's assertion that we should be ensuring we are investing well in the programmes that are successful. Skillnet Ireland and Springboard probably have a 20% approval rate for their programmes but they are not being funded, yet we have this scale of investment in the National Training Fund. That leads me to believe we are under-serving these programmes. We should ensure the spending gap of €120 million does not continue and we must not add to it.

IBEC has been upfront and committed to the concept of apprenticeships. At the early stages, in 2016 and 2017 when the initial consortia were being convened, we hosted a number of roundtable discussions to facilitate the idea. However, the costs we have outlined will continue to be borne by companies. IBEC shouldered other development costs in the past to enable some of those discussions to take place but we are now beyond the infant discussions and moving into a greater level of maturity. We will continue to be an honest broker in discussions around apprenticeships and we are proud to be able to do so. We have done some positive work and service around that. However, we still need more employers to come to the table. For example, apprenticeships are in the DNA of the ESB. That is how it grows much of its future workforce. If we want other companies to do the same, we must be able to support companies to be able to make the change from their current hiring practices to a new practice around apprenticeships. I would like to see much more money being targeted at employers and incentivising their uptake. I hope that addresses the Deputy's question.

Deputy Richard Bruton

It does to an extent, but apprenticeships are for providing skills to employers. The State is putting a considerable amount of money into these programmes. I am not saying it is the perfect level of funding but it seems that the only sector that sought to create a central recruitment process was the financial services sector and it succeeded in developing apprenticeships. Some of them went to level 9. An environment was created in which it was much easier for students who were interested to see a pathway. They did not need to know people in the know to get in. A club of employers was also created which made it easier for employers to get on board. My question is why that has not become more extensive. Some of the biggest and most progressive sectors operate out of Ireland but we do not seem to have succeeded in getting that level of engagement from them.

I wonder whether pushing the grant up to €7,000 is what makes some of those bigger companies tick. As Ms McGee stated, it is in the ESB's DNA. It does not do it because it gets €7,000 from the Government. It does it because it sees it as part of its good business model and its corporate responsibility. I am all for more investment, but we must find ways of creating something deeper than simply providing another grant to cover the costs. That is what I feel is missing. We will never get apprenticeships to be seen on a par with going to the college Ms McGee's colleague led for so many years because parents see it as a status thing, whereas the reality is that you can get just as high a level of qualification and earn as you learn. It is a good model. People can go on and do a degree afterwards if they wish. We need to find a wider network than the old model we had.

The Government has done a fair amount. It has created apprenticeships so that there are 61 now whereas there used to be only 24. We need to see the sectors come forward to make this more viable. Skillnet Ireland is a good model. Rather than creating a new voucher, it would be better to look to our established networks to get small companies that want to do something different to do it together. It is not a grant. It is a more engaged process. Enterprise Ireland already offers vouchers in the area of research with support from Science Foundation Ireland, SFI. I wonder about a shopping list when we have a lot of stuff out there already.

Ms Claire McGee

The point about employers engaging more with apprenticeship programmes is valid. One of our recommendations as part of the review of the action plan for apprenticeships in 2021 was that a strong focus was needed on the promotion and development of the capacity of employers to take on apprentices. We communicated that strongly to SOLAS. One of its priorities from now until the delivery of the next plan is the prioritisation around employers and championing the opportunity that exists in apprenticeships. It is a challenge. I think that is because it is new ground for many employers.

The Deputy mentioned the financial services programme, which was led by IBEC, where a consortium of different financial services companies came together and centrally hired apprentices who then went into different companies. Different industry sectors took on different models to be able to do that, probably reflecting the nature of their businesses. That is probably one of the challenges we have with education and enterprise engagement. We tend to see enterprise as a homogenous group in which everyone has exactly the same challenges and the same issues to solve and that we will fix it with one grant programme, whereas Actually in different industry sectors there are very discrete and distinct needs depending on the nature of the company within that industry sector.

Some degree of flexibility is perhaps required on it, but we would like to see a lot more focus from the National Apprenticeship Office being geared towards employers and promoting this opportunity amongst employers. It takes a lot of shoe leather, many cups of coffee and collaboration talks to be able to say it is new ground for an employer and to offer to help enable them to champion it. I would also like to see more universities engaging with the apprenticeship programme. I liked Dr. Freeman's analogy. Let us tip the playing field to demonstrate perhaps how we can actually bring more people into the apprenticeship system. We only have one level 10 apprenticeship programme, which is run through the University of Limerick. There is a really strong history of apprenticeship style learning across the university system, whether that is through medical or legal training. It exists, but we do not actually call it an apprenticeship programme. The knowledge, capacity and experience is there. Perhaps if apprenticeships were seen more through the more traditional university system, we might see more engagement from employers. There is probably more work that needs to be done with prioritisation around engaging employers with the system. That is noted. We can take that back into our system and speak about it further.

Deputy Richard Bruton

That is great. If the financial services operation could promote its best practice model among some of the others, that would be great.

Ms Claire McGee

There is a point on that. As an organisation, we facilitate those conversations between organisations and share best practice of what has worked well in one apprenticeship area to see if it can be tweaked and rolled out in another apprenticeship area. It is not as if the two or three are operating in complete silos from each other. There is a lot of cross-sharing of knowledge and experience to show how we can build the right consortia, how we can team them and resource them with the right people, how we can make sure we make them attractive for employers and businesses to engage with the system, and how we get the right education partners involved. There is a lot of sharing of information around that.

An Cathaoirleach

That concludes our consideration of the matter today. I thank all of the representatives, including those present in the committee room and Professor Gleeson from the wonderful university of my home city of Limerick who is joining us online, for contributing to the consideration of this important matter. The committee will consider it further as soon as possible.

The second item on the agenda is the report of the joint committee on the pre-legislative scrutiny of the general scheme of the co-operative societies Bill 2022, which has been finalised. Hard copies of the report are available in the committee room. The report will also be circulated electronically to members today. I thank members for their collaborative work in finalising the report.

That concludes the committee's business in public session for today. I now propose that the committee goes into private session to consider other business. Is that agreed? Agreed.

The joint committee went into private session at 11.33 a.m. and adjourned at 11.41 a.m. until 9.30 a.m. on Wednesday, 10 May 2023.