Léim ar aghaidh chuig an bpríomhábhar

Joint Committee on Jobs, Enterprise and Innovation díospóireacht -
Tuesday, 4 Feb 2014

Research and Development Landscape: Minister of State

I welcome the Minister of State, Deputy Sean Sherlock, to discuss the research and development landscape in Ireland and related issues. The Minister of State has responsibility for research and innovation at the Departments of Jobs, Enterprise and Innovation and Education and Skills. I welcome the Minister of State's officials from the Department of Jobs, Enterprise and Innovation, Ms Pauline Mulligan, Mr. Aidan Hodson, Ms Anne Coleman Dunne and Ms Fionna Hallinan.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a person or an entity by name or in such a way as to make him, her or it identifiable.

I am very pleased to have the opportunity to speak to the members of the joint committee on the research and development landscape in Ireland. I thank them for inviting me to do so.

The importance of investment in science, technology and innovation to Ireland's ongoing and future economic and social development and wellbeing has been well recognised by this and previous Governments. Our focus has been very much on prioritising public investment in research while better exploiting results in order to lead to an acceleration of growth and job creation.

Over the past decade we have expanded and consolidated our research and innovation system considerably and investment in research and innovation has grown substantially. This investment has been based on an ambitious strategy of investing in people, infrastructure and associated facilities to build the science base across many areas of scientific research in both the higher education institutions and other public research organisations, notably through the Programme for Research in Third Level Institutions, PRTLI, as well as Science Foundation Ireland and other research agencies. This investment in scientific research is having many positive impacts, including powering an innovative and enterprising economy, creating high-value jobs, attracting, developing and nurturing business, scientists and talented people and ensuring Ireland is connected and respected internationally.

We can draw much encouragement from the fact that Ireland has enhanced its standing in global research by steadily building a very credible research base, particularly over the past decade or so. Our publication rates have doubled, for example, with Ireland's citation rates now surpassing EU and US averages.

Ireland is now ranked in the global top 20 in all scientific fields and, specifically, by way of example we are ranked first in molecular genetics, and genomics, second in probiotics, third in immunology, sixth in nanotechnology, eighth in materials science and tenth in computer science. Across the EU we are ranked third, according to the new indication of innovation output, which measures the extent to which ideas from innovative sectors are able to reach the market, providing better jobs and making Europe more competitive. This proves we are investing smartly in this area and that our investment is delivering jobs.

Enterprise Ireland and Science Foundation Ireland, SFI, will continue to drive commercialisation form State-funded research, facilitating the emergence of new products and services that underpin export growth and employment. In 2013, in excess of 30 spin-offs were generated and more than 120 licences, options and assignments were agreed. Enterprise Ireland will fund in the region of 80 research and development projects for client companies that are valued in excess of €100,000, while investment in the multi-annual programme for research in third level institutions will continue to improve Ireland's competitive offering in terms of research capability through the delivery of key physical infrastructural projects, that is, buildings and equipment, and research personnel.

I hope that I have touched on the more salient points. The Government recognises that research, development and innovation form a major plank and we are smartly investing in and prioritising key areas. We are leveraging industry involvement, bringing in-kind benefits and cash to the table, in partnership with our research infrastructure in a way that will deliver an economic impact. This is the kernel of our approach.

The Government is very much seeking to support, embed and realise a return on investment in science, technology and innovation for national competitive advantage. Enterprise Ireland, along with the IDA and Science Foundation Ireland, provides a spectrum of science, technology and innovation development programmes that deliver financial, technical and experiential support to help companies become more innovative, encourage and support competitiveness, and help them grow their sales and exports to create a climate in which sustainable employment will grow and expand. Employment by companies supported by Enterprise Ireland increased by a net 5,442 in 2013. This represents the highest level of job growth in a decade and is another positive indication of us moving very much in the right direction. Similarly, IDA Ireland saw a fourth consecutive year of employment, with in excess of 7,000 net new jobs in 2013 and 164 new investments won, 27 of which were specifically in research, development and innovation. Science Foundation Ireland is a key part of the enterprise ecosystem, and in 2013, it had links to 41%, or more than 2,500, of the 6,400-odd jobs, or 90 company announcements, announced by the IDA in all fields.
We remain committed to using research and innovation to build competitive advantage. We have implemented a number of initiatives to accelerate the economic and societal return on our STI investment, to strengthen further enterprise engagement with and take-up of public research, and to drive commercialisation. Implementation of research prioritisation, under way since March 2012, is seeing the majority of public research funding aligned with 14 priority areas where we are most likely to get economic and societal returns, particularly in the form of jobs, over a period stretching to 2017 and beyond. The priority areas encompass energy, food, health, ICT and innovation in business processes and services. They are reflective of Ireland’s strengths and future opportunities in various areas of industrial activity.
In line with a recommendation in the research prioritisation report, the adoption of the intellectual property protocol outlines a clear, robust and industry-friendly policy for the commercialisation of intellectual property arising from State-funded research. As a result of this, the central Technology Transfer Office, cTTO, has been established and the director, Dr. Alison Campbell, is in place since September of last year, along with support staff within Enterprise Ireland. The cTTO's primary role is to be the identifiable access route to the wealth of technology opportunities and academic talent that exists in research performing organisations. It will provide a one-stop-shop for entrepreneurs and industry, signposting them towards the relevant sources of knowledge and capability within Ireland’s research performing organisations. The aim of the cTTO is very much to encourage the commercialisation of intellectual property arising from State-funded research, with a view to achieving more job creation from our investment in the area.
The remit of Science Foundation Ireland has been extended recently to enable it to fund applied research as well as oriented basic research. In response to the specific recommendation that research centres should be more industry focused, he largest ever State-industry co-funded research investment, which is €300 million in total, comprising €200 million in Exchequer funding and €100 million co-invested by 156 industry partners, was announced by the Minister for Jobs, Enterprise and Innovation and me in February of last year. Seven world class SFI research centres will be funded over six years. They will support key growth areas and research will be undertaken into major social challenges, including health, ageing, communications and energy. The centres will directly support more than 800 jobs while also acting as a key attractor for foreign direct investment. There are also 14 existing industry-led research centres, namely, technology centres, which are undertaking research in specific areas in the joint Enterprise Ireland–IDA Ireland technology centres programme. The centres are based in a university with support from partner colleges to deliver on the research needs of enterprise. The Government is also supporting a pilot health innovation hub in Cork that is enabling the development and commercialisation of new ideas from domestic enterprise that will benefit the health care system.
European research framework programmes have always been an important element in providing international links and enhancing the excellence of the Irish research and development system. With a budget of almost €80 billion covering the next seven years, Horizon 2020 is the biggest ever European research and innovation programme and the largest in existence worldwide. Agreement on the programme was a central plank of the Irish Presidency’s theme of jobs and growth, given the crucial role research and innovation play as key drivers of growth and job creation. I saw this at first hand because the team who accompanied me to this meeting was central to the negotiations and getting the programme over the line, as it were. Horizon 2020 offers major opportunities to researchers, research organisations and industry in Ireland to engage in cutting edge research. This has the potential to power both Ireland and, in a broader sense, Europe towards economic recovery. The programme maps out the EU’s strategic vision for European research and innovation over the next seven years. The challenge for us in Ireland is to build on our successful experience, to find new research and funding opportunities we can exploit, to reach out to new participants and to increase our level of participation.
The national launch of Horizon 2020 took place last December in the National Convention Centre in Dublin in the company of Commissioner Máire Geoghegan-Quinn. We have put in place a very effective national support framework to maximise the benefits in preparation for our participation in the programme. The challenge we have set ourselves for Horizon 2020 is to build on our successes in the seventh EU framework programme. To this end, the Government has set an ambitious target for Irish researchers to win funding of up to €1.25 billion over the lifetime of Horizon 2020. We have proved that we have an excellent science base on which to compete successfully with the best. We have every confidence we can achieve the target and boost our research capacity and competitiveness over the lifetime of the programme. Just as is the case with our own national perspective, good ideas being turned into good jobs is the stated essence of the European Union’s recovery and growth strategy, and it is one we will vigorously pursue.
With regard to higher education reform, my colleague the Minister for Education and Skills, Deputy Quinn, announced on 30 May a forward-looking re-organisation of the higher education system and a new framework for system governance. It is clear that if the system is to meet increasing demands for knowledge, innovation and human capital, higher education institutions need to have a strong strategic focus and mission direction, underpinned by a new relationship of accountability with the State. Funding of the higher education system will be closely related to the delivery of performance outcomes that are aligned to national priorities and key objectives of the system as a whole. These, as well as key performance indicators for 2014 to 2016, have been outlined clearly in the higher education performance framework.
The Higher Education Authority will report each year to the Minister for Education and Skills on the performance of the system as a whole. A process of strategic dialogue is under way, as part of the new framework, to agree individual institutional performance compacts with higher education institutions that will reflect each institution’s contribution. This will form part of a new higher education system designed to respond to the future needs of the economy and wider society. Much earlier in the education system, the discover programme, known formerly as the discover science and engineering programme, is now part of Science Foundation Ireland. It aims to increase the number of students studying science and mathematics to ensure there is a pipeline of young people who are prepared to pursue third and fourth level qualifications in STEM disciplines for the purpose of securing employment down the line.
In terms of key research, development and innovation initiatives for 2014, Science Foundation Ireland will establish two or three new large-scale research centres, supporting between 200 and 300 jobs, in sectors of national strategic importance such as medical devices, software, diagnostics, telecommunications, smart grids, sustainable food production and processing, among others. It will fund 3,000 researchers and more than 20 world class research centres. They are a key magnet for foreign direct investment and will help to ensure Ireland becomes one of Europe’s most attractive locations for foreign direct investment.
Enterprise Ireland will support 95 innovative high potential start-up companies this year with an associated 2,100 jobs across a range of sectors. These companies are potential star performers and each one will create at least €1 million in export sales.

I thank the Minister of State for his presentation and for attending. Following our discussion last June, we decided to put this topic on the agenda as a major issue for 2014. I will now turn to members for questions.

I welcome the Minister of State and his officials. The committee had the chance to spend some time in Brussels at the beginning of the year. One of our meetings was with the directorate general driving Horizon 2020. It was effusive in its praise for the Minister of State and the officials who had been handling our Horizon 2020 applications for EU funding. It is important that we acknowledge this. I also welcome the Minister of State's acknowledgement that the architecture for much of the investment was put in place by previous Governments. Some good things were done in that time.

Given the level of investment in research and development and science in recent years, is the Minister of State satisfied that we are maximising job creation opportunities? They will not appear overnight, but will the Minister of State provide a brief overview of the situation?

The Minister of State mentioned that in terms of indicators of innovation output, we were ranked third, that we were investing smartly and that our investment was delivering jobs, yet the number of patent applications last year was at a 30-year low. Is there a gap between the research and its commercialisation?

The Minister of State referenced the IDA's figures of 7,071 net jobs and 164 new investments. Only 27 of the latter are specifically in the field of research, development and innovation. The jobs in the Googles and Facebooks are in sales or marketing. Will we land an actual research and development centre, the heartbeat of innovation? Microsoft's research and development centres are not based in Ireland, but in Israel, China and India. We share the Minister of State's ambition for Ireland to be a driver of innovation. What plans has he in place to see this done?

The Minister of State cited €300 million in State-industry co-funded research, comprising €200 million in Exchequer funding and €100 million from 156 partners. Is the €300 million locked down and in place and has it been ring-fenced?

We have very ambitious targets under Horizon 2020, for example, €1.25 billion. This is welcome. Is a roadmap in place? Is the Minister of State confident that, come 2020, we will have exceeded that target? How much of the €1.25 billion will be spent on innovation, research and development, that is, real research, as opposed to salaries for academics and programme managers and buildings?

I will do my best to answer as coherently as possible. If I miss something, the Chairman will pull me up on it.

Have no doubt I will.

The central aim is to maximise job creation. The investment by successive Governments in research, development and innovation is recognised. Less than 20 years ago, our capacity was much less than it is now and those Governments had the vision to build it. We are now at a juncture. We have a highly evolved infrastructure in which those in the oriented, basic research landscape and those in the applied space co-exist well.

In terms of the potential for maximising job creation, we have designed an infrastructure that is supra-institutional. Traditionally, the universities and institutes of technology operated inside their own silos and collaborated on specific programmes that had thematic areas of interest, for example, pharma. We have put together a fund through SFI under which the seven new centres that have been created must collaborate outside of their traditional institutional frameworks. We have identified 14 areas, including big data and data analytics. We have co-principal investigators, co-PIs, from six, if not seven, institutions. The potential for job creation lies in the industrial engagement. I cannot give the Deputy an exact figure of the number of industrial partners in an entity, but the investment of the industry's money in these new infrastructures is being done with a view to delivering an economic impact, by which I mean job creation. The philosophy has been to create the seven new infrastructures with more to come this year, to accrue in-kind benefits - people from industry or cash investment - and to get the scientific community to act above its traditional institutions on specific themes and create a vital economic impact.

The Horizon 2020 target investment is attainable. By creating new, large-scale infrastructures that supersede individual institutions and by attracting 156 industry partners and €100 million, one creates a leveraging effect that puts one in a stronger position vis-à-vis the €80 billion available in the Horizon 2020 pot. While UCC or any other institution that the Deputy cares to mention may have been successful under framework No. 7 in its own right, larger infrastructures based on specific themes, strong industrial engagement and targets for small to medium-sized enterprise, SME, engagement in Horizon 2020 strengthens one's leveraging position. Therefore, one's ability to attain the target becomes more realistic.

The investment in research, development and innovation is primarily an investment in human capital, for example, excellent scientists. I do not have an exact breakdown of how much has gone towards bricks and mortar, equipment or human capacity.

By and large, it is about investment in the very best people in the world in order to create impact.

Perhaps the Minister of State would address the patent issue.

A review of patents is currently under way. The Deputy will be aware of the technology transfer strengthening initiative. A review of patents under that initiative is currently under way. We have created an infrastructure which includes a central technology transfer officer and Enterprise Ireland supported technology transfer officers, TTOs, in the individual institutions, all of whom are tasked with pulling out that intellectual property and creating from it the economic opportunities arising for economic or societal benefit. Let us take, for example, business investments in research and development. During periods of economic downturn, it is less likely that companies will engage in research and development because of the cost element. In other words, during periods of retrenchment companies will engage in a battening down of the hatches. There is a direct correlation between that and the reduction in the number of patents. This is being addressed through the national research prioritisation exercise.

Let us imagine we had all of the research funders in one room going through action plans for each of the priority areas. Working with Forfás, we have set out metrics in terms of how the institutions should perform, in particular those funded through Science Foundation Ireland, SFI. I anticipate a behavioural change in this regard from the institutions in the context of what the State expects from them in terms of job creation. The usual measures within academia are the numbers of publications and citations. We are driving new metrics in relation to job, patent and licence numbers, etc. There is a clear expectation among the research community in terms of what Government expects of it.

A review of the patents is, as I said, under way through the technology transfer strengthening initiative. The dip in economic activity-----

I would like to pursue this issue. Some €24 billion has been already invested in this area over ten years, which may appear high when inflation, etc., is taken into account. Despite that we have invested considerable money in this area, only 27 of the 164, or 16% of new investments last year were in research, development and innovation. Apple is considering locating its new research and development centre not in Ireland, but in Israel. While I welcome all of the companies located here, most of them are engaged in marketing sales rather than research and development. Are we lacking in something that these companies are not looking at locating their engines here, which, in turn, might drive job creation here?

The Minister of State might also respond to my question in regard to the 156 partners, the €100 million they are investing and the €200 million being provided by the Exchequer. Is that funding tied down?

Yes, it is. I apologise if I did not answer that question correctly. The funding is tied down. Commitments have been given. There is potential for further industrial engagement. For instance, in terms of the seven centres across the seven seams that have been created, there is further scope for industry to tack on to that. We have created a type of hub and spoke model. In terms of the current landscape, we are moving into the applied space. There are greater flexibilities being created in terms of how industry maps on to or partners with academia in relation to creating spin-outs and so on.

I do not know if we can compare ourselves to Israel per se. Account must be taken of the manner in which Israel does its business through Government investment or external investment, which is quite heavy in research, development and innovation. It is very well financed and resourced. There are also a lot more freedoms inherent within that system for individual researchers to draw down pots of money. They also have flexibilities in terms of how that money is used. We do not have those freedoms because of the economic constraints on us. We are moving to a system which ensures that technology transfer is not carried out in a haphazard manner. I am not suggesting that up to now it has been carried out in that way. However, sometimes technology transfer within individual institutions could be a matter of whether I, as the technology transfer officer, had a positive or negative relationship with an individual principal investigator. We are trying to disrupt that dynamic positively. Bringing in the 156 industry partners means that dynamic cannot but be positively disrupted. This is because the industry is investing its own money in thematic areas such as, for instance, the pharmaceuticals sector, particularly in Ireland in the context of the move from what are called molecules to medicines, which sector is partnering with academia to sustain jobs already in the system while creating new innovations in relation to how medicines are delivered, thus sending the message from Ireland's pharma sector to parent companies that the Irish Government is not only serious about maintaining investment in pharma here, but also in leveraging new opportunities to strengthen those individual entities relative to the mothership. That is part of the philosophy, which I accept does not necessarily answer the Deputy's question.

By setting clear metrics we are setting clear expectations. If these expectations are not delivered upon, the State agencies or taxpayer then has to review the operations of each of the centres. There is no ambiguity about that. I hope I have answered the Deputy's question. If not, he may challenge me further.

There has been a great deal of investment in this sector. For small businesses who are not interested in exporting, those which are not relevant to Enterprise Ireland or Science Foundation Ireland, there is not a lot going on. I support this investment but we need to start challenging this sector. It is not good enough that only 16% of the 164 companies in this sector are engaged in research, development and innovation. IDA Ireland needs to be challenged. Is the Minister of State going after the low hanging fruit? We have so many people in institutions abroad who are superbly qualified having come through our third level institutions. Is that brainpower being utilised?

I must ask the Minister of State to give only a brief response on this occasion as there are two other members wishing to ask questions who have to leave soon.

Some 40% of foreign direct investment wins are predicated on relationships with Science Foundation Ireland. By any standard, 40% is a significant amount. More than 40% of IDA new client wins in 2012 have direct links with Science Foundation Ireland funded researchers. That translates into 4,500 jobs, which I contend is not insignificant.

If one looks at the metrics - I refer to licence, option or assignment agreements - and at the trajectory from 2006 to 2013, there was a dip between 2011 and 2012 but we are now back up. In 2011, the figure was 118, in 2012, it was 87 and in 2013, although this is only a provisional figure, it was 120. In regard to spin-outs, the indicative figure for 2013 is 34, which is the highest it has been since 2006. There is a dip in regard to invention disclosure and in patents. Licensing is something which one is monetising. It is an income stream. I agree that we want to see more spin-outs coming from the investments in research. We have laid down very clear expectations in regard to the investments the taxpayer is making. If industry makes investments, it must ensure there is a return on its investment. I agree with the tenet of the point but we are taking very concrete steps to engage.

I welcome the Minister of State and his officials. It is good to see there is a healthy gender balance in his Department. I thank the Minister of State for coming back to the committee. He made a very interesting presentation the last time he appeared before it and he gave a commitment to come back to discuss the broad issue of research and development.

We all recognise the importance of research and development to economic development in the future and currently. That is taken as a given. I have a number of questions about different areas. The Minister of State mentioned the reforms in the higher education sector and made the interesting point that funding of the higher education sector should be closely related to the delivery of performance, which I accept. Obviously, we have to fund excellence whether it is in third or fourth level institutions or in research and development.

Part of the higher education reforms is the formation of a number of technological universities. In the south east, there is the potential to a merger between Carlow IT and Waterford IT. I hope that will create new opportunities for research and development but how significant will that be for those institutes because even though they punch above their weight in terms of the ArcLabs and the TSSG in Waterford, which we have discussed previously, there is no baseline funding for research and development for ITs while there is for universities? There was a perception that a region which did not have a university was operating with one hand tied behind its back and that there was not a level playing field. If Waterford and Carlow ITs are successful, will they be on the same playing field as other universities in terms of getting baseline funding for research and development? How will these technological universities sit in the Department's overall plans for research and development?

In regard to regional supports, obviously I support the need to fund excellence. I think the Minister of State made the point that any research and development entity of any third or fourth level institution can put forward an application for funding based on whatever the project is and that the Department has to fund what it sees as excellence and the best applications which come before it. However, there is a need to ensure, as best we can, that we have balanced regional spend. What targets, if any, are set by the Department in regard to reaching regional targets and ensuring there is a regional spread and to maximise that?

A previous speaker touched on trying to measure the success of research and development generally. It can be difficult to get to grips with that in terms of what we spend and the return to the State. The Horizon 2020 target was 3% of GDP but my understanding is that we will reach 2%. This State measures a percentage of GNP whereas Europe said it should be GDP but even leaving that aside, we are still behind the target. I presume those targets are based on outcomes. How do we measure the funding which goes into research and development? The Minister of State touched on it in terms of job creation and growth, which are obviously part of it. Do equity shares come into it? If there is State-sponsored research, is it shared publicly and measured in terms of a benefit to the State generally? It is important for us to get a flavour of how the Department measures the benefit to the taxpayer because a significant amount of taxpayers' money is going into research and development. While it obviously supports the development of companies and enterprise, which we support, there must be a return to the State. We need to be able to quantify it. However, for us to understand and measure that, we need to understand how the Department arrives at it.

We discussed the Unified Patent Court in the past. Currently, there are approximately 138,000 people working in knowledge-intensive industries, whether in high-end technology or in the pharmaceutical sector. Last year this State signed the EU agreement in respect of the Unified Patent Court. That will be a good thing because it will mean there will be a single patent for companies across Europe rather than having to apply to each member state. In the coming weeks, the Department must decide whether it will host a local division of the UPC or whether it will cede to a regional division of the court, which would probably be based in London. What are the Minister of State's and his Department's thoughts on that because we have been lobbied on it by a number of organisations, or least my office has been? I am trying to find out what the Minister of State believes would be best? Would having a local division of the court sitting in Dublin cost less for us? Would it be more accessible for SMEs, in particular? At what factors is the Department looking? What criteria will the Department use in terms of making that decision? Will it consult and take on board the views of the SME sector and the technology sector generally? Before it makes that decision, would the Minister of State be in a position to come to this committee with his recommendations on what he believes would be best in this area because it is an important decision? It is important that this committee has an opportunity to discuss it. What is the timescale for that decision?

I welcome the Minister of State and his officials. I concur with Deputy Calleary's comments on our recent visit to Europe and the compliments paid to the Minister of State's staff on the great work that is being done. I refer to the technology centres, which are currently linked to universities. This is the only country in the OECD which does that. In other countries, the technology centres are partnered with industry. The IDA and Enterprise Ireland can draw down money individual without being attached to a university. Why can we not do that if we are spending all this money on innovation, which is hugely important to economic recovery and on which we all agree.

We spoke about Israel which has a more open way of doing research and innovation. In terms of its funding models, it is very open to state funding and diaspora funding. We talk about the 70 million Irish diaspora around the world but Israel has nailed down funding very well with the Jewish community. It is something about which we are now talking.

There is no reference to second level education and the possibility of entrepreneurship, which is a direct link to research and innovation, as a subject that people could study and which could be part of the new curriculum. That would certainly focus the mind on entrepreneurship.

There is a huge issue with lack of funding in regard to third level education which is directly related to entrepreneurship. If a young person has a PhD or otherwise, it is very hard to get funding to stay in that space and to try to develop a business unlike in other jurisdictions. Could we put some funding into a pilot scheme in that area?

The Minister of State will be familiar with Dr. O'Shea, a fellow Corkonian, who is head of business development and running Washington University which has a budget of $500 million. Of that sum, $84 million goes directly to driving research, innovation and entrepreneurship. If one has an idea that gets vetted, one will get $50,000 to bring the concept to the next stage. One will then get another $100,000 to work on the project before it becomes commercialised. We are placing the emphasis on industry, in particular the multinationals, which is very welcome but we should look at developing some homegrown talent and make it a little easier for them to pursue their ideas.

I welcome the Minister and his team and thank him for all the information he has supplied. I am very interested in the position that Ireland has managed to attain. However, have we identified the competition and what they are doing differently?

I visited Singapore, Panama and New Zealand in comparatively recent years and all three countries seem to have done things differently from us. Are they better able to attract more business on that basis? New Zealand has been successful in food production, and I think we should be capable of a great deal more than we have done in the past. Let me give an example of innovative companies linked to food production. One such company, Nualight, was set up in UCC and another, IdentiGEN, was set up by Trinity College.

To what extent we are able to learn from other countries? Are we able to copy what they do and learn from them? Are they doing things that we should be doing as well?

I believe Springboard offers a great opportunity for those with third level education in areas where their skills are not in demand at present, for example, construction. How can we coax these people to consider working in research and development, which is not dull and boring but exciting and risky, rather than pursuing the normal career paths with few prospects in their field? How do we manage to encourage these graduates to get involved in research and development?

The Minister of State has to deal with many questions.

I probably will not be able to deal with all of them, but the committee can revert to me.

On the question of targets, the Commission allows member states to set their targets in line with conditions. I know there is an aspirational target set for 2020 and ideally we would like to be hitting it, but current conditions do not allow us to do that. Small countries have to be smart and specialise in very specific areas of opportunity. I think that is what we are doing. We have identified 14 core areas, and food is identified as a national priority. Already one of the new SFI centres is very much mapped on to the potential for food. The Alimentary Pharmabiotic Centre, APC, is a research company led by Professor Fergus Shanahan and his team of researchers in UCC with investment in the region of €40 million. They are exploring the next wave of opportunity in the area of food, probiotics and functional foods. They are currently mapping the human digestive tract at microbial level with a view to distinguishing between the good and bad bacteria and creating medicinal products that will be vital to sustain humanity. Their work has a global focus. The researchers from Teagasc, the dairy and pharma industries are mapped into the activity.

We are focused on the next wave of potential in areas such as food, pharma and medical devices. These are our inherent core strengths and will allow us to compete with industries in other countries, such as New Zealand. We are lagging behind Singapore in terms of the delivery of education, particularly in relation to STEM subjects, science, technology, engineering and mathematics. We have programmes such as the "Smart Futures" and "Discover". There is flexibility in the new junior cycle curriculum to introduce STEM related activities.

In my role in the Department of Education and Skills, I have responsibility for the policy of STEM. We have set up a STEM educational review group, comprising academia and industry partners - chaired by Professor Brian MacCraith - and operating at arms length which is doing a complete mapping exercise on all STEM activity throughout the country, whether it is industrial engagement, the National Council for Curriculum and Assessment, NCCA or the State agencies delivering education. If we can collate all of the activity, we can then create an impact through the primary and post-primary schools by inculcating an even greater sense of the potential of education in science, technology, engineering and mathematics in terms of the jobs that need to be created downstream.

I have a real personal interest in pedagogical research. The primary school teachers have to be given the skill sets and have the tools that allow them to have complete confidence to teach mathematics and science related subjects. Teachers at primary school level have to teach across a myriad of subjects. An idea emanating from the STEM committee is the need to spend more on research to assist teachers so that we can achieve higher scores on the PISA and other international ranking tests and to adopt the methodologies that are inherent in places such as Singapore, Finland and Estonia. That will allow us to create economic opportunities down stream and enable us to compete with other centres. That is the philosophy that is guiding us. The review group will report to me very soon.

I will now respond to the questions on the regions. Senator Cullinane mentioned TSSG, Telecommunications Software & System Group. One only has to look at how many successful applications that have come from TSSG, a company formed as part of the Waterford Institute of Technology, in the south east, to see how well they have done on FP7. They have done very well because there are excellent people in TSSG. What must drive research and development is excellence and not regional considerations.

I accept that point. However, I was making an argument for the potential a technological university would bring to the south east. When I speak to the excellent people in TSSG, they make a case that as an institute of technology they are at a disadvantage because an IT does not get the baseline funding for research and development that universities get. If the two ITs in Waterford and Carlow are successful in becoming a technological university, will they then benefit from the same level of baseline funding that other universities get?

Through the Chair, those two colleges are tied into NUI Maynooth.

The Minister has many other questions to answer and we will come back to that issue later.

I take the point that has been made about baseline funding. The calls from SFI are open to any institution and are based on the ability of the institution to attract the right personnel. I am very familiar with the work that is going on in Cork Institute of Technology, CIT, and how the IOTs compete with the universities. The recent Irish Photonics Centre is led by the Tyndall National Institute comprising UCC and CIT. The excellent research base in light and photonics in CIT has allowed it become academic partners and win when the call was put out by SFI.

The process of creating a technological university is under way. The issue of baseline funding will have to be teased out. The targets for research performing organisations are set out and we have mapped out where SFI, the Health Research Board and Teagasc spend money. We have conducted a research prioritisation exercise and established the priorities. If we are to set out what we call compacts for each institution in terms of performance, we must have a level playing field. A research entity may have expectations but in the case of a dearth of baseline funding, the question of performance has to be considered in the light of circumstances. Let me sound a warning and say, without prejudice, that this is still an evolving process. It must happen in a collaborative way and through a conciliatory process. Some of the issues have still to be teased out.

Deputy Áine Collins raised the question of RTOs. I acknowledge the point she makes on the 2013 review by the OECD. This view echoes that of the Advisory Council for Science Technology and Innovation In Ireland in its report on the sustainability of research centres published in 2012. Forfás will carry out a study on research and technology centres and we will look at best practice in the area to see what that will bring in.

The issue in relation to the unified patent court, UPC -----

I think there is a potential for a referendum to take place on whether it would be based in Dublin or be a regional body based in London. If we had a UPC in Dublin, what benefit would it be for the SME sector?

The concern is that the referendum will not take place until 2015 but the Department will have to give an indication next month on whether we will have a local unified patent court based in Dublin. Has the working group been set up?

We have no information on the thinking of working group or what it is doing.

We are alive to the challenges that are being voiced. The Department is currently examining all the issues and looking at all of the options in terms of Ireland's participation in the unified patent court. One must look at the implications of each policy option and one must look at cost. There are probably other issues that may apply to individuals or certain representative organisations, which Senator Cullinane was referring to in terms of the lobbying on this issue. One must have due regard for the positions that are being put forward by various entities and their views have to be taken into account.

With respect, that is a "Yes, Minister" response. What is the Department's own view on it?

On the assertion of a "Yes, Minister" response, I am a Minister of State and I am giving the answer from the horse's mouth. To be frank, one must take all views into account. That is currently under way. I am giving the Senator a straight answer. We are not blind to the issues. The officials who are led by Ms Anne Coleman Dunne are very proactive in this area.

Is it correct that the Department must give an indication in the next couple of weeks?

There is absolutely no deadline in respect of this issue.

Will the committee members have time to discuss it after the inter-departmental group has come to a conclusion before any major decisions are made?

Yes, absolutely. I will not express a personal view on it.

The Minister of State has covered many of the areas that I am interested in and it was good to hear his response. Will he comment on the question of the unitary patent system? There is EU funding and State funding for businesses. I remember a previous review of the money spent on research in which there was always a suggestion that more could be done to leverage funding other than State funding. Is there too high a dependence on State funding rather than setting about leveraging private or EU funding? Will the Minister comment on that?

The Minister of State, Deputy Sherlock, said he was considering whether Ireland would become a member of the scientific research institute, CERN. Is he still considering it?

I was waiting for that.

I did flag it.

Let me respond to Senator Clune first. Industry has always been a partner with academia on outputs from research, be it economic, development or specific industrial or SME needs.

The creation of the SFI centres has seen industry put up significant resources in kind and in hard cash contribution so industry is very much taking a punt and becoming active stakeholders in this process. The €100 million is a direct investment by industry - with two thirds coming from the taxpayer and one third from industry. If one looks at the revisions to the research and development tax credit, we have tried to improve the system in a way that allows for an increase in the amount of expenditure on what we call a full volume basis. It used to be based on a base year but now we are increasing the limit from €200,000 to €300,000. We are trying to encourage more SMEs to participate in research and development. We have put in place an increase, from 10% to 15%, in the limit on the amount of qualifying research and development expenditure that can be outsourced to another company. If one examines the OECD average on the balance between public and private investment, we are ahead of the average. If one considers the OECD average as an universally accepted metric, we are doing well.

I hope that answers the question.

What about the unity of patents?

We are examining the options and engaging with the stakeholders. An agreement was reached in February 2013. We have a decision to make on Ireland's position with regard to a local or out-of-state court, and that decision will be made in due course. The process of engaging with stakeholders is arguably still ongoing.

On CERN, I make the point that the European Space Agency, ESA, is not often heard about in the public domain. If one was to measure the column inches on the ESA versus CERN, CERN would garner many more inches. However, if one considers our membership of ESA, an area for which I have particular policy responsibility, we have carried out an analysis of our investment of €17 million and found it has directly impacted on turnover to the tune of some €250 million for Irish and FDI-related companies because it has allowed those companies to win contracts. For example, Radisens Diagnostics is a company that, through its engagement with the ESA, has won significant funding nationally and is now winning serious funding rounds internationally. The position is similar with Treemetrics, a company that has also won grant aid from the ESA and a company this committee might be more familiar with in terms of the impact it is creating in regard to global forestry solutions.

It has been said we can get an associate membership of CERN for €1 million. The reason we are carrying out the review is that we need to kick the tyres on that statement. We are carrying out a review of our membership of all international organisations. However, it is only fair, if we are carrying out a review of our membership, to do so in the best interests of the taxpayer, which has to be the bottom line in all of this. The question in my mind, given there is now a campaign, which we all welcome, is whether it is the case that individual researchers are barred from accessing CERN as a facility by virtue of the fact that Ireland has not paid its €1 million associate membership. I have not seen any evidence to suggest they are barred. As I understand it, although I stand to be corrected, individual academic institutions can pay a particular fee, whatever that is, or they might have an arrangement with an external university which will allow Irish researchers access to the facility of CERN.

We are being very honest about our approach on this and we have an open mind on it. Before making the decision to invest €17 million in the ESA, we undertook an economic analysis. It is only fair that we undertake an economic analysis and, potentially, a societal analysis of the impact of our membership of CERN. To be fair, while I do not want to be facetious, I have heard it said that CERN has been great for humanity and it has brought us the Internet. However, the Internet was coming anyway, and it is not certain whether we would have had an influence on that, or perhaps there were Irish researchers already there who had an influence. If we spend €1 million on associate membership or €12 million on full membership, will it have a quantitative impact on our interaction with CERN? That is the question that has to be asked.

I believe we should have the review. I take absolute cognisance of the bona fides of those who are campaigning on this issue. They are excellent researchers who are part of international consortia which have access to CERN. However, the question has to be asked what is the benefit in real terms and what kind of contracts will Ireland get from it. I would like to look at countries of a comparable size to Ireland and see what benefits they have derived from their membership of CERN in terms of various contracts.

To follow on from that, CERN is the result of a collaboration among a number of European countries. At present, the Commission is looking at a number of locations where similar CERN-type projects could be established for other topics within the research and development sphere. Are we actively pursuing Ireland as a co-location or a location for a collaboration on one of these projects? Senator Quinn mentioned the agrifood sector in particular.

The Deputy raised this point the last day. Is it in regard to the European Research Infrastructures? Is that the specific area?

I hope they are talking about it.

We already have an interest in some 48 European Research Infrastructures projects.

It is not the projects per se. It is the question of the centre being based here in Ireland. Perhaps I need to go into it in a little more detail.

We might need to tease it out more.

I am aware there is one in northern Italy at present, and it happens to be in the middle of nowhere, or that is what I am told.

It is ESFRI, which deals with nuclear research, if I am not mistaken.

It is in the middle of nowhere. It is the collaboration of a number of countries coming together and selecting this site where the research will be done. Are we actively pursuing this, perhaps in the agrifood sector or in related research? At the time, what was mentioned to us was the marine sector, although I would have pushed the agrifood sector.

That is correct. The marine sector was mentioned by the director general, Mr. Daniel Calleja Crespo.

It was not Mr. Calleja Crespo. It was Mr. Schmidt.

Yes, that is correct. I was mistaken.

Are we actively pursuing such a centre?

I now fully understand the point. Yes, we are looking at it. It may not be music to the Deputy's ears to say that we are looking at the marine area.

I am fully supportive of that. The point is that we are doing something about it. It is potentially a huge investment with a lot of associated jobs, not alone with the facility itself but also with spin-off jobs.

We are looking at it.

I wish we could all keep our answers that simple.

Will the Minister of State keep us informed when he can?

I know it is a bit of a cliche but if the Deputy wants to put down a parliamentary question at some stage, it would keep us active and keep the fire lighting on the issue.

That is good news from the Minister of State. I thank the Minister of State and his colleagues for their help and for being so informative. It is an issue we will hear more on. We will consult with the Minister of State during the year. I recognise his genuine interest both as Minister of State and personally.

The joint committee adjourned at 3 p.m. until 1.30 p.m. on Tuesday, 11 February 2014.