Competitiveness Council: Discussion with Minister for Jobs, Enterprise and Innovation

I welcome the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, to the committee meeting.

Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, 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 they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

I invite the Minister to make his opening statement.

I thank the Chair. I am accompanied by Mr. Philip Kelly, assistant secretary, EU and trade division, Mr. Thomas Murray, principal officer, EU affairs unit, Ms Imelda Hardiman, assistant principal officer, intellectual property unit, Ms Florence Kelly, higher executive officer, intellectual property unit, Mr. Aidan Hodson, principal officer, science and technology unit, and Mr. Pat Kelly, assistant principal officer, science and technology unit.

The forthcoming EU Council of Ministers' meeting on competitiveness will take place over two days, 5 and 6 December, which coincides with budget day. On the first day, Ireland will be represented by the Minister of State, Deputy Perry, and on the second day, the Deputy Permanent Representative of Ireland to the EU, Ambassador Tom Hanney, will attend on behalf of the Government.

The most significant item on the agenda on the first day is the reform of the patent system which will allow a much cheaper way for companies to get patent protection across 25 EU member states - two have declined to participate. It will simplify the procedure for language translations and will be a more satisfactory arrangement, a reform the Government supports. To make the proposals work, there will have to be an EU system of enforcing patent rights which will be in the form of a common court between the member states involved. They will have an international agreement on this and finance the court. This innovation will require a referendum in Ireland some time in the future. In the past, there have been successful referenda in this area so the principle is already there.

The European Commission has proposed a directive on interconnecting registers of companies in EU member states, arising from the need for national registers to communicate with each other with regard to cross-border mergers and branch activity. Again, the Government supports this proposal.

Another item on the agenda relates to a Single Market forum held under the Polish EU Presidency. It made a declaration recommending speedy passage of the proposed Single Market initiatives. The Council has agreed 12 priorities to be progressed under this initiative by the end of 2012. Many of these are in areas of interest for Ireland such as tackling red tape, enhancing opportunities for small and medium-sized enterprises and electronic commerce. These are supported by the Government.

One interesting initiative is the proposed establishment of a business and competitiveness programme for small and medium-sized enterprises. It will be new under the multi-annual framework from 2014 to 2020 with up to €2.4 billion from the EU dedicated to it. The negotiations for the programme's development will intensify under the Danish EU Presidency. Ireland has an interest in the shaping of this programme and the opportunities it will throw up.

The second day will be dominated by the debate on the future of the Horizon 2020 EU research programme which will operate from 2014 to 2020. It will replace the Seventh Framework Programme, FP 7. The new programme, which will be under the Commissioner for Research, Innovation and Science, Máire Geoghegan-Quinn, will be 30% larger than its predecessor with funding of up to €80 billion. There will be significant changes such as putting a greater emphasis on problem-solving in society as opposed to basic research, greater industry involvement in the shaping of research priorities, more emphasis on downstream activities such as pilot-testing and obstacles to commercialisation, all of which will be of interest to Ireland. Just as the Department is doing its own research prioritisation under Jim O'Hara, hopefully we will be able to exploit the more commercial and problem-solving orientated aspects of the new programme. All Europe faces the same dilemma of seeking to get more value out of this important platform which has been created in Europe. Compared with the US and others, Ireland would not be sweating off scientific assets as effectively in terms of patents and disclosures.

There will be a discussion on the EU Space Council. Many may ask if this is relevant to Ireland. It is in the sense that the systems involved can be used for the support and protection of fisheries, flood protection, volcanic ash cloud monitoring as well as emergency and disaster responses. This would also be of clear commercial relevance because several Irish companies have successfully developed business opportunities out of the Council's programmes. It is not only of relevance in terms of global significance but it has been of commercial value to Irish business. That gives members a bird's-eye view of the Council's agenda.

I call on Deputy O'Dea.

I welcome the improvement in the framework programme for research and innovation. Would it be possible for the Minister or a person in the Department to do a note as to what precisely can be accessed under this programme? I note what the Minister had to say on the extension of the ambit of the programme to new areas. I would like some detail on that.

In regard to business competitiveness and the SME programme, how will that apply and what funding will we be able to access under that programme? There is a unitary application process for patents but there is no unitary European patent. How far away are we from that?

I can provide a briefing for the joint committee on the Eighth Framework Programme. The Seventh Framework Programme was €59 billion and over the period, Ireland will get approximately €600 million of funding from it, which is a little higher than 1% of the fund, or a little higher if one excludes some of the additions in which Ireland did not participate. We have been boxing to our weight, if not above our weight in terms of getting access to the existing research programme.

The new research programme has provided broad direction so there will be issues around aging. They have three or four headings, such as excellent science, industrial leadership and societal challenges. The new element arises under societal challenges, including health; demographic change and well-being; food security; sustainable agriculture; bio-economy; secure, clean and efficient energy; smart green and integrated transport; climate action; resource efficiency and raw materials; and inclusive, innovative and secure societies. The extent to which we participate depends on the details of the programmes developed and the extent to which we can compete in competitive bidding to get involved in different programmes. I will arrange to provide details on that but clearly, the reorientation of the programme suits us. The details are to be announced on 30 November by the Commission so we will soon have more details of that.

The second question relates to SMEs. That programme is to be developed. The details are only forthcoming, for example, activities to improve European competitiveness; developing SME policy and promoting SME competitiveness in line with the goals of the small business act; tourism; new business concepts for sustainable user-driven design based goods; and supports towards the internationalisation of SMEs. Again, we will compete for funding under the programmes. Clearly we would have an ambition to play a significant part in that programme. It is a new area as hitherto there has not been a similar one focused on SMEs.

When will the details of that be publicised?

The details are being negotiated. It is not starting until January 2013, so it will be developed in the course of next year.

When can we get more detail on it?

We can send the Deputy what we have but the detail will become clearer later. We have had the Eighth Framework Programme broad prospectus for some time but it will only gain traction on 30 November when one sees what it contains and where one might position oneself to take advantage of it. It is at the fairly high level, but we will send the Deputy whatever we have.

The ambition is that the Patent Court will apply in 2014-15. This directive, which we support, is going through Parliament. It has had its first reading. There is a desire to move rapidly. It was held up, as members may know, for a very long time because two countries were not willing to support it and eventually they moved ahead as 25 countries under the enhanced co-operation provision. I believe there is momentum behind it but it will require each of the 25 member states to ratify it. There is many a slip between the cup and the lip.

Is the Minister saying that the unitary patent will enable Irish holders of patents to seek protection for them, and save them €15 million per year? Is it the case at present that when one is lodging a patent one must do so in each separate country? Is that where the savings will be made?

Did the Minister give a date? Does one apply on a yearly basis or is it to the lifetime of the patent?

Is the Deputy asking about the saving element?

No. How long does a patent last?

About 20 years is the norm. One has to renew it.

Will the saving be made from a unitary patent applying across the European states, rather than having to lodge a separate patent application in each country?

Exactly, and requiring translation. There are now three standard languages, so one does not have to translate it into, say, Greek or Bulgarian.

The Minister referred to a dedicated €2.4 billion programme for the SMEs. That sounds great but how do Irish SMEs access this programme, and will it be more accessible and easier to access? Will there be supports for companies that will try to draw down some of this fund? When one is running a small or medium enterprise, the focus is on the product and the difficulty is finding the time to draw down the funds. Will there be support to make it easier? People talk about the form filling. SMEs would like to hear a signal from the Council meeting that the application process will be made easier. It is good to have a fund of €2.4 billion but if one feels that one does have the resources to access it, it makes no difference. Will there be supports to do that?

Let me give the Deputy some statistics on translation costs. Translation of patents costs Irish industry approximately €6 million and in respect of an individual patent, validating it in 13 countries could cost €20,000. Of that, almost €14,000 will arise from translation costs. In practice, companies would not undergo the cost of translating it into the language of every state, effectively making their patent vulnerable because they have not covered all states. The 25 member states grouping cuts out costs and leaves them in a win-win situation.

When the Deputy asked about access by Irish SMEs to the fund, it will be something like access to the research programmes in that they will develop programmes following which Ireland, through Enterprise Ireland, county enterprise boards or existing structures, will seek to access them and integrate them into programmes that are made easily available to SMEs. It will not be a question of companies having to apply to Brussels for their access.

Is there any way of beefing up the support in Ireland for the SMEs so that they will be able to access the fund? The one criticism is that people would love to be able to access the fund but the amount of paperwork and the time and energy required to complete it means the business will suffer. Some businesses have indicated that this is actually the case.

That is a valid point. The Minister of State, Deputy Perry, recently brought forward a report by the advisory group on small business, the membership of which comprises individuals involved in the area and also those from organisations which represent small businesses. Much of the thrust of that report focuses on the need to reduce red tape, streamline processes, carry out an audit of licences and remove obstacles. The report will make a significant contribution in respect of this matter and its recommendations will be implemented over time. The work of the Minister of State and the group to which I refer is at an advanced stage. We hope to use the report to make matters easier for businesses. The need to simplify matters is the most recurrent theme.

In the context of the forthcoming Council meeting, would it be sensible to make that point as part of the overall discussion?

Yes. The Minister of State will also be present at the meeting and he and I will ensure that it is made.

Does Senator Clune wish to add anything?

No. I thank the Minister for his replies.

The Minister is getting a decent run at this meeting.

As Deputy Crowe indicated, it is going to be extremely difficult for SMEs to access this funding. That is particularly the case when even we cannot discover what is intended.

That is a fair point. At present, all we really have is an envelope with the figure €2.4 billion written on it. Until we open the envelope - which will not be until next year - the relevant details will not be available to us.

I am asking about this matter because I thought I heard one of the Minister's officials state that it is due to commence in January.

The Danish Presidency is due to commence in January. The money relates to the period 2014 to 2020. The shaping of the programme will take place next year.

The committee can discuss that matter and provide the Minister with feedback in respect of it. Does the Minister wish to make any concluding remarks?

No. I merely wish to thank the committee for its interest. As with all European meetings, progress is slow. It is similar to building a wall brick by brick; with every brick one puts in place, one is creating something permanent. It is important that we should take an interest and shape matters in our interests and those of the wider EU.

It is probably more a case of paper by paper rather than brick by brick.

I thank the Minister for engaging with the committee today. The programme for Government sets out that we should try to receive briefings in respect of all Council meetings. According to the Minister's officials, he is obliged to attend 11 or 12 such meetings each year. We will not ask him to address the committee in respect of every one of those unless he really wants to do so. However, perhaps it would be good if we met on two or three occasions per year in order to discuss all issues relevant to the work of the Council. I hope we will be able to build on what has been achieved today. On behalf of members, I thank the Minister.

I thank the Chairman.

The joint committee adjourned at 10.55 a.m. until 9.30 a.m. on Wednesday, 7 December 2011.