The importance of innovation to Ireland’s on-going and future economic recovery has been well recognised by the Government as being crucial to growth in both our indigenous and FDI sectors. IDA has transformed its investment profile with RDI projects increasing from €80m in 2004 to €700m in 2011 - representing some 50% of IDA investment wins. It was most encouraging to see that the recent European Commission’s Innovation Union Scoreboard, published in spring 2013, shows Ireland retaining its position among those EU Member States with above average performance in their research and innovation systems. In addition, improvements have taken place in Ireland’s cost competitiveness, reflected in the fact that, in 2012, Ireland’s international competitiveness ranking improved four places from 24th in 2011, to 20th in the IMD World Competitiveness Yearbook for 2012.
IBM’s Global Location Trends Report of 2012 places Ireland:
- 1st in the world for inward investment by quality and value;
- 1st in Europe for jobs created in Research and Development;
- 1st in Europe for investment in the pharmaceutical sector; and,
- 2nd is Europe and 4th globally for the number of investment jobs per capita.
In a modern economy, highly innovative sectors deliver high returns. In Ireland, we have some of the largest and most dynamic medical device and pharmaceutical companies in the world. Nine of the top 10 pharmaceutical companies in the world have a base in Ireland, as do eight of the top 10 medtech companies. The life sciences sector in Ireland accounts for over 50,000 jobs and €50 billion worth of exports. High value added, productive manufacturing is increasingly dynamic, sophisticated and innovative and requires investment in research and development. Statistics show that exports from R&D performing companies have increased from €44bn in 2003 to €111bn in 2011, while for non R&D performing companies, exports decreased from €48bn to €30bn over the same period. This clearly demonstrates the significant contribution investment in R&D makes to the national recovery effort.
There are a number of factors which are likely to affect growth in industry; export-led growth is essential for a return to sustainable economic recovery and it is identified as a key component of the Programme for Government. Cost competitiveness is a critical foundation of international competitiveness and we are cognisant that we must use research and innovation to build a competitive advantage. Irish cost competitiveness has improved markedly over the last three years and we need to ensure this improvement continues. Continued innovation in products and services is also crucial in building a competitive advantage. Measures designed to support industry growth are set out in the Action Plan for Jobs 2013 and include improved access to finance by SMEs, further improving our skills base, encouraging entrepreneurship and supporting startup activity, assisting our businesses to grow, and developing and deepening opportunities from global investment. Building competitive advantage is also a key driver of growth and the Action Plan includes a particular focus on using Research and Innovation to drive job creation.
In this context, the Government’s strategy is to accelerate the economic and societal return on our STI investment, especially in terms of sustainable jobs. In particular we aim to further strengthen enterprise engagement with and take-up of public research and to drive commercialisation. A number of initiatives are being rolled out across Government in support of this strategy. Implementation across Government Departments and agencies of the recommendations in the report of the Research Prioritisation Steering Group seeks to maximise the impact of our spend by focussing the majority of public competitive research funding on 14 priority areas which are most likely to deliver societal and economic impact. Other initiatives include expanding the remit of Science Foundation Ireland to cover applied research; a new Intellectual Property Protocol which gives more clarity and certainty around ownership of IP emerging from state funded research; the establishment of a Central Technology Transfer Office to act as a one stop shop providing an effective interface between industry and the research community; and the R&D tax credit scheme which continues to encourage business to invest in research.
