retuning the growth engine · 2012. 6. 5. · g rad ute s il op n eonmy, wd tl k ur bas f sc e nad...

Retuning thegrowth engine-Developing an innovation base to secureIreland’s future_

Retuning thegrowth engine-Developing an innovation base to secureIreland’s future_

Sponsored by:

6Wilton Place, Dublin 2, Ireland Tel: +353 1 661 6201 Fax: +353 1 661 6217 Web: www.amcham.ie

The American Chamber of Commerce Ireland_

Copywritingby

SixDegrees/DesignandprintbyArtH

aus

The American Chamber of Commerce Ireland_

American Investment in Ireland-US companies have a US$61.5b (approx€50b) investment in Irish based operations (7.6% of all US investmentin the EU & 3.5%worldwide). Today, an estimated 100,000 people are directly employed in over 580 US firmsin Ireland while indirect employment in sub-supply industry & services has been estimated at over 225,000.

US firms contribute over€2.4b to the Irish Exchequer in corporate taxation and a further€13b in expenditureto the Irish economy in terms of payrolls, goods and services employed in their operations. The US is Ireland’stop export destination and US firms based in Ireland export an estimated€57b of products and services fromIreland into world markets.

B_Foreword-

_03Retuning the growth engineA_Profile-

02_ Retuning the growth engine

Message from our sponsor-

Bank of Ireland Corporate Banking has been providingbanking services to international companies in Irelandfor over 35 years. Companies setting up in Ireland arelooking for an Irish bank with the highest level ofexpertise, flexibility and overall service. We have theability to understand and the experience to delivercreative financing solutions. This has ensured that Bank

of Ireland continues to be the Bank of Choice for international companiessetting up in Ireland.

Innovation is amajor enabler to the successful growth of businesses andthe economy in Ireland. As a nation wemust deliver best in class practicesand a culture that embraces and supports development so that Ireland isbest placed to encourage foreign investment.

Bank of Ireland is proud to be associated with the American Chamber ofCommerce in Ireland in developing this paper. Through this research wesee that with the right innovation framework in place Ireland will continue tobe best placed to support the flow of new opportunities for US companies.

Contact :Derek CollinsDirector New BusinessBank of Ireland Corporate BankingLower Baggot StreetDublin 2

Tel: +353 1 604 4130Fax: +353 1 604 4012Email: [email protected]/corporatebankingBank of Ireland is regulated by the Financial Regulator

I would like to thank all of the people who haveparticipated in or contributed to the work of theResearch and Development group. Many have givengenerously of their own time and continue to do so.The effort has of itself brought together a broad baseof enthusiastic professionals with the energy and visionto drive change. While the paper will not representevery individual view it builds a coherent propositionon the back of excellent contributions and thoughleadership across a broad spectrum.

Mike Devane, Chairman

Editorial Team:-Helen Keelan, Peter Hetherington, Finbar Dolan,Colin Sainsbury,

Members of the American Chamber of Commerce:-Helen Keelan, Peter Hetherington, Finbar Dolan,Colin Sainsbury, John Hickey, Keith Cienkus, Alex Ingle,Barry O’Brien, Anna Scally, Mary Gallagher, Glen Poor,Jenny Patterson, Trevor Holmes, Paddy O’Boyle, MikeO’Keeffe, John Doody, Michael Green.

Regional Chairs of the American Chamberof Commerce:-John Condon, Kevin McSweeney, Gerry Kilcommins,Mike O’Hara, Fraser Logue.

Members of the Public Service, GovernmentAgencies and Education:-Enda Connolly, Mark Keane, Gearoid Mooney,Pat Howlin, Seamus Bannon, Fergal O’Morain, EileenSharpe, Christine Kelly, Garret Sheehy, Carol Gibbons,Ron Immink, Martin Mullin, Dan O’Mahoney,James Cunningham, Mike Casey, Michael Ryan,Tom Flanagan, TomásMac Eochagáin VeronicaMcCauley, Ingrid Hunt, UnaMurphy, Michael Tully,Sheila Gilheany, Peter Cullen, Rhona Sherry.

Members of other Representative Groups andOrganisations:-David Duffy, Derek Collins, Barry Moore, John Sheils,SeamusMcArdle, Caroline O’Neill, Mark Glynn,Bernie Calinan, Gerry Jones, DanMaher, ReginaBrehney, Shay Garvey, Niall Carroll, Malachy McElroy,

The American Chamber of CommerceIreland-The American Chamber of Commerce Ireland is thecollective voice of US companies located in Ireland.The Chamber membership is proactive in promotingthe importance of US investment to the Irish economyand keeps Irish decisionmakers focused on the factorscontributing to the continued attractiveness of Irelandas a location for foreign direct investment (FDI).

The Research & Development WorkingGroup-The American Chamber’s Research and DevelopmentWorking Group was established in 2005 to developa sustainable and compelling R&D proposition forIreland that will attract significant investment fromUS companies and create a dynamic betweenMultinationals and SMEs, which contributes uniquevalue to both.

Acknowledgments-

_A new phase in oursuccessful relationshipUS companies have played a vital role inIreland’s economic success, and are a crucialpart of the country’s leading-edgemanufacturing and services economy. Thesecompanies have enjoyed strong rates ofreturn on investment here, and will continueto invest for as long as the economic rationaleis clear. With this large stake in the country, UScompanies want Ireland to perform to thebest of its ability to sustain current levels ofeconomic activity and present new ‘return oninvestment’ opportunities.

This is why the American Chamber ofCommerce Ireland is keen to drive thestrategic partnership between ‘Ireland Inc.’andmultinational companies to developIreland as an attractive European location forinnovation and commercialisation. A newdimension to this phase of US corporateengagement will be the relationship withsmall andmedium-sized enterprises (SMEs).

At the core of this ‘Innovate Ireland’ initiative isa dynamic partnership between themultinational companies, indigenous SMEs,academia, the Government and the people ofIreland. It proposes that we jointly address theimmediate need to develop a strong researchbase in Ireland, restructure the educationsystem required to support it, and build thecommercialisation infrastructure needed tostrengthen the economy.

This report sets out the actions we believeneed to be taken in five key areas:

� Education – investment in education is thestrategic enabler of the new knowledgeeconomy. Our goal is to see oureducation system in the top decile ofOECD countries. Its ethos should beinnovative, integrated, inclusive and drivenby a desire to offer every individual theopportunity to contribute – at every stageof their lives – through ongoing investmentin their development.

� Research – Ireland will continue tosucceed in the global economy only if itcan establish research and innovation asthe basis of value creation, to provide anengine for economic growth. This requiresa robust fourth level that underpins a

significant strategic investment incollaborative strategic researchplatforms. The ecosystem should offer aprogressive IP environment, withincentives for innovation, risk-taking andentrepreneurship.

� Commercialisation – here the focus is tosecure a return for Ireland on theinvestment made in education andresearch. This requires an innovativefiscal, legal and commercial frameworkto create robust global ventures, byencouraging value creation andcollaboration between large and smallenterprises and education and researchinstitutes.

� Convergence – the best opportunity forIreland to exploit our base of existingForeign Direct Investment (FDI) andindigenous resources is to identify andexploit emerging areas of technologyand market convergence. An examplemight be new intelligent medical devicesdrawing from themedical and informationcommunications technology (ICT) sectors.

� Fiscal policy – Ireland’s tax and incentiveregime should support and encouragerisk-taking, capability development,exploitation of IP, commercialisationand the investment by individuals intheir own development.

There is much work to be done to create thenecessary vibrant innovation andcommercialisation infrastructure. But if westart today, we believe Ireland can have this inplace in the next 10–15 years. What is requiredis the buy-in of all stakeholders, together withthe firm commitment from the Government.

While we have benefited significantly from theceltic tiger we can also understand thechanging nature of this economic transition.The significant gains of the export drivenphase has given way to themore uncertainconsumer driven phase that we are currentlyexperiencing. It clearly signals a need tomove quickly to the next ‘innovation-driven’phase, so that we canmaintain the tigereconomy. A strategy for an all-islandapproach, when building our innovationdriven economy, provides unique andcompelling opportunities and advantages.

-

1_Introduction-

_05Retuning the growth engine

Extended Researchand BuildCommercialisationInfrastructure

Collaborative Research Platforms

Science Parks andInnovation Centres

GlobalIP Trading Hub

Restructure & Investin Education Systemand Establish4th Level

Focus Investmenton Convergence& IP Trading

MNC & State InvestmentEstablish Global Research Institutes &Innovation Eco System

Leading InternationalResearch &CommercialisationCentres

Step 1 Step 2 Step 3 Step 4

2007 2008 2010 2015

1Introduction-Like all western economies,Ireland is at a crossroads inits economic development.In today’s global tradingenvironment, intensecompetition from emergingeconomies means we needto look to new areas ofinnovation and added value tosustain our economic successstory. Put bluntly, Ireland needsto continue to offer somethingdistinctive in order to attractmultinational companies’innovation investment.

The Irish Government has already committedto creating the conditions for an advancedknowledge economy through initiatives suchas the Strategy for Science, Technology andInnovation (SSTI), and the NationalDevelopment Plan (NDP) 2007–2013. Now isa time of implementation to achieve thesestrategic aspirations

The American Chamber of Commerce Irelandbelieves the time is right for a new type ofpartnership between ‘Ireland Inc.’, the IrishGovernment, and the USmultinationalcompanies (MNCs) who have togetherenjoyed such successful workingrelationships to date here in Ireland.

This paper sets out our blueprint for this futuresuccess, which we’ve called ‘InnovateIreland’. It offers a vision – together with keyaction areas – for building an innovation andcommercialisation base that should ensureIreland stays on the path of sustainableeconomic growth. The aim is to create a‘virtuous circle’ built on positive action in fivekey areas: education, research, convergence,commercialisation and fiscal policy (Figure 1).

The American Chamber of Commerce Irelandbelieves it can be a powerful ally and catalystin making this happen.

_It’s all about tradeAs an open island economy, Ireland is wellused to playing the role of a global tradingcentre, with its unique gateway position in thetrade of manufactured goods and servicesbetween the US and Europe. As globalisationdrives more establishedmanufacturing andservice industries to best-cost bases outsidethe developed western economies, Irelandmust evolve into new areas of innovation andcommercialisation.

At the same time, Ireland has a greatopportunity to maintain its close ties with USbusiness and leverage its pivotal role in theEuropean Union, fulfilling and ultimatelyexceeding its commitment to R&D specified inthe Lisbon Agenda. The aim is to evolve thecountry into a vital global intellectual property(IP) ‘trading post’ in a number of areas ofinnovation that will make a real and lastingcontribution to the economy by generatingvalue, wealth and exports

1_Introduction-


Figure 1. Creating a virtuous circle of innovation in Ireland Figure 2. Stepwise process to address creation of ‘Innovate Ireland’ environment

_Ireland’s new innovationopportunityThe Irish Government has demonstrated itscommitment to the continued development ofIreland as amodern, knowledge-basedeconomy, through the National DevelopmentPlan (NDP expenditure of€184 billion 2007–2013) and the National Strategic ReferenceFramework (NSRF). The approach outlined inthe Strategy for Science, Technology andInnovation (SSTI expenditure of€8.2 billion2007–2013) report offers valuable pointers tothe nation’s future direction.

The sharing of ideas and best practice isfundamental to an innovation culture. Wewant to make it easier for corporates tolicense technology to smaller companies, andprevent good ideas falling by the waysidethrough lack of funding or managementexpertise. Strong relationships betweenIreland’s small companies and US corporateswill not only ensure that good ideas come tolife, but also gain access to a wider market.

With the right innovation framework in place,Irish SMEs and US corporates, with their owninternational ‘intelligence’, will find it easier toidentify and exploit their collective asset base.Contract negotiations will also be speeded upso that innovations are commercialised andon themarket quicker.

The new relationship we are proposing willgive all stakeholders amutually beneficialinnovation environment. It will attract andencourage people with the right skills todevelop, commercialise and trade the righttechnologies at the right time.

_Benefits for multinationalcompaniesA new innovation ecosystem in Ireland alongthe lines we are proposing will providemultinational companies, wherever they areheadquartered, with a unique valueproposition for their research andcommercialisation expenditure.

Corporates can extend their innovationcapability, without any need for highinvestment in new facilities. Taking aproportion of their R&D budget (targeted at upto ten per cent) they can immediately access aportfolio of world-class research beingundertaken by leading scientists andresearchers. This access to a wider researchecosystem gives companies a strategicadvantage and an opportunity to create newand disruptive technologies*.

One of the hallmarks of this researchenvironment are the framework IPAgreements and fiscal incentives whichencourage cross-industry collaboration onkey research projects. It is a uniqueopportunity to explore new frontiers arisingfrom convergent technologies and newemergingmarket needs.

Given the profile of past inward investment,Ireland is strategically positioned to exploitcross-industry and technology convergenceopportunities for example, betweenmedicaldevices, ICT and pharmaceutical sectors.

The new innovation ecosystemwill enablemultinational companies to access worldclass research at reduced cost and willenable the funding of innovation projectswhich would otherwise be un-affordable. Indoing so they will increase the R&D substanceof their operations in Ireland, in line with taxregulations, to improve profit retention.

Ireland’s unique commercialisationenvironment offers shared utilisation of assetsand resources, as well as shared risk throughthe supportive fiscal and legal framework.This provides revenue creation opportunitiesthrough licensing, technology transfer andextends the commercial reach through jointventures or other contractual arrangements.

_Benefits to Ireland Inc.A robust and progressive innovationecosystem in Ireland will attract investmentand encourage entrepreneurial risk taking –resulting in wealth creation and sustainedeconomic growth. The base of MNCs will bebroadened, as global enterprise seeks outinnovation capacity in Ireland. A key featurewill be the unique partnership with the USA –and the extension of the relationship with USmultinationals into strategic long-termpartnerships. These partnerships will includestrategic alliances and joint ventures betweenMNCs themselves and betweenMNCs andSMEs; spin-out enterprises fromMNCs andspin-ins from innovation and researchclusters as newmodels of value creationemerge.

In any knowledge economy, success is builton deep capability. As a location that fostersinnovation, Ireland will not only retain anddevelop its indigenous talent base, but willalso be an attractive destination forresearchers in search of a step-up in theircareers. Entrepreneurs will be attracted by theopportunity to realise and harvest the resultsof innovation.

Building on the success of Science FoundationIreland (SFI) in establishing Centres of ScienceEngineering and Technology (CSETs), wemustextend the basis of collaborative researchbetweenmultinational companies, SMEs anduniversities. The creation of the proposedcompetence centres should further supportthe innovation and commercialisationecosystem and IP trading environment, andbegin to facilitate the creation of a globallyorientated and vibrant indigenous SME sector.

Turning this vision into reality is certainly a bigchallenge, but it is achievable. How does theAmerican Chamber of Commerce Ireland seethis innovation framework developing overthe next 10–15 years?

-

2_State of the nation-


2State of thenation-Over the past ten years or so,Ireland has enjoyedunprecedented levels ofeconomic growth – per capitaGNP growth increased three-fold between 1994 and 2004 –and set new levels foremployment and standards ofliving. The country has turnedaround a decades-long trendand become an immigrationdestination.

In its Medium-Term Review 2003–2010, theEconomic and Social Research Institute (ESRI)projected an average annual GNP growthrate of 5.4 per cent for the Irish economythrough the second half of this decade; a viewsupported by Ireland’s Department ofFinance.

A key goal, as stated in the SSTI report, is that:“Ireland by 2013 will be internationallyrenowned for the excellence of its research,and will be to the forefront in generating andusing new knowledge for economic andsocial progress, within an innovation-drivenculture.” The American Chamber ofCommerce Ireland’s ambition is to supportand accelerate the achievement of this goalby meeting the targets set in the LisbonAgenda. Specifically, these include achievingfour per cent GERD (approximately€6 billion)by 2013 – with half being BERD (BusinessExpenditure Research and Development) andhalf being Government spend – comparedwith€1.9 billion GERD (Gross ExpenditureResearch and Development) in 2005.

Now is the time to look towards the nextphase in Ireland’s economic development.

_Time to build a new valuepropositionAs the global economy develops, there is astrong shift towards services as amajor driverof economic growth. Knowledge, and itsapplication, are becoming increasinglyimportant as a driver of economicdevelopment.

The pace of globalisationmeans that newly-industrialised economies have an amplesupply of skilled labour, with much lowercosts, that are competing for globalinvestment. At the same time, westerneconomies’ cost bases have risensubstantially in line with economic success.According to the National CompetitiveCouncil, Ireland’s balance of payments hasshifted to a deficit of 3% of GNP in 2005 and isexpected to drop to 5% in 2007. Of furtherconcern is an inflation rate above the EU25average of 2.2 per cent.

Ireland’s competitive rate of corporation tax(12.5%), which has been one of the factorsthat has helped attract so many businesseshere, is now being emulated by governmentsin competing economies. Changes to EUstate aid limits will restrict the amount of aidIrish enterprise receives from 2007 onwards.

While these globalisation challenges havebeen recognised from a trading point of view,they also need to be recognised and actedupon in terms of innovation andcommercialisation. We need to evolve ourvalue proposition.

Large corporates today are truly globallyresourced enterprises (the AmericanChamber of Commerce Ireland estimates thatthere are 580 US firms and affiliates inIreland): they are global economic players intheir own right – often larger than somenational economies – they are decentralised,multi-cultural, and go where the talent andmoney are. They are free to make use ofpillars of knowledge around the world, andbring together skills and expertise into across-cultural economic entity.

This makes it all the more important tomaintain strong and sustainable pillars ofknowledge in Ireland, with good qualityhuman capital and an attractive work andsocial environment – all working in harmony.

2_State of the nation-


* A technological innovation that overturns the existing dominant technology in themarket.

3_Contributing to a shared vision-


3Contributingto a sharedvision-By 2020, we see Ireland as aleading global economy thathas secured its position on thebasis of significant investmentin human capital, resulting in avibrant base of global industry,research and commercialenterprise. The successfultransition to a global hub forresearch andcommercialisation across arange of new convergenttechnologies will havecontributed to sustainedeconomic growth andpositively reinforced the cultureand value system thatunderpins a balanced society.

Ireland will have developed significant‘brand equity’ as a location forinnovation in its strategic sectors,which include nanotechnology,pharmaceuticals, biosciences, medicaldevices, communications andrenewable energy. The country will beknown for innovation excellence ina number of these technologyconvergence areas, in which it willhave built distinctive knowledge andcapability. It will be a preferred globallocation for trading IP and technologyand well recognised within the globalinnovation network.

Ireland will have successfully appliedits cultural traditions of collaboration,co-operation and communication tothese new areas of innovation. Thisculture will support a seamless andlinked investment strategy across allstakeholders. People will be naturallyprepared to innovate andcommercialise; they will not be afraidto try new things.

Overall, Ireland will be an attractiveplace to live and work in terms ofrewards, values and lifestyle.

The American Chamber of Commerce Irelandbelieves now is the time for bold policies to beput in place to ensure that the SSTI, the NDPand NSRF are a real success. The Chambersees its role in this transition as positivelyengaging with the stakeholders and otherindustry groups; providing an objective,global perspective and being a catalyst forchange.

This section of our paper offers our view ofthe steps that can be taken in each of thefive priority action areas we have identified(education, convergence, research,commercialisation and fiscal policy). For eachaction area, we offer a vision of how Irelandwill look in 10–15 years’ time, together with theunderlying principles and interventions thatwill help us get there.

_Education – learningas a way of lifeBy 2020, structured investment in educationwill have delivered a high-quality, flexibleworkforce that enables and transitionshuman resources as demand dictates.Ireland’s education systemwill be morescience-oriented and global in outlook, andin the top decile of developed nations. It willbe accessible and flexible, enabling theworking population to move into and outof the system as it adapts to changing skillrequirements. The education ethos willprovide every individual with life-longinvestment options in their own educationand career development..



Strategic intent chart

Education system in the top decile

Lifelong learning as a strategicinvestment

Human capital investment alignedto economic growth

Empower transformation fromwithin

Interventions required

> Establish the quality of curricula and assessment in aglobal context

> Reform of education system, including structure,governance, curriculum and performance

> Investment in infrastructure and professionaldevelopment

> Specific policy required to increase third levelparticipation in science, technology, engineering andmaths (STEM) subjects

> Provide for ongoing adult education to support thenational strategy for science, technology andinnovation (SSTI).

> Investment in adult learning needs to be inclusive,available and flexible to benefit all

> Invest in adult education to increase graduate andpost-graduate levels in support of targeted scienceand technology investment

> Target skill gaps by promoting career conversionprogrammes

> Interactive and inclusive planning of education to adaptto changing economic drivers

> Inclusive career system to encouragemobility betweenteaching, research and industry

> Industry participation in the education system andinvestment

> Promote wider population support for the doubling ofeducation investment

> Ownership by teaching professionals to align qualityand output with the needs of a knowledge economy

> Provide appropriate funding for outreach programmesin the promotion of STEM

> Empower educationmanagement to creativelyoptimise facilities and resources

> Engage teaching bodies in a renewed focus onprofessional development and targeted improvementin teaching standards

> Encourage lateral thinking and innovation in schools

> Invest in a science-literate society

_Education system in the topOECD decileIreland needs an education system thatdelivers high-quality innovation in a globalcontext. That implies having a high-qualityeducation system that is in the top ten percent of the OECD education league table andmore closely aligned to the future needs ofIreland Inc. The Expert Group on Future SkillsNeeds report shows Ireland having the lowestlevel of educational attainment of 12 keycountries, based on 2004 OECD statistics.

In particular, we would like to see Ireland’sthird-level graduate output in the top decileof OECD countries, with a target to increaseparticipation rate and specifically to increasethe numbers of young people going fromsecond to third level from approximately60 per cent to 90 per cent by 2013. At thesame time, we should set a target of creating30,000 places in third-level education foradult learners to acquire primary degreesand progress to other targeted postgraduateor conversion programmes. A conservativeestimate of the increased total spending oneducation would suggest a doubling of thecurrent annual investment. The NDPinvestment must ensure a balancedapproach to education and learning in thetotal population, focus on improved teachingmethods and competence, and ensure aperformance-drivenmanaged system.

Since 1999, there has been an alarming dropin the number of children taking chemistryand physics – this trend has to be reversed toprotect our innovation base.There must be a specific focus onmathsand science at all levels, with therecommendations of the Taskforce onPhysical Sciences (2002) fully implemented.

Generating the necessary interest in STEMsubjects, and encouraging the re-entry ofadults into the education system, requires aconcerted effort to develop a widerappreciation of the value of science andengineering to our economy. The associationof STEMwith Ireland’s future economic well-being is critical, and is a prerequisite for thepublic support needed to double the nationalinvestment in our education system andinfrastructure.

_Empower transformationfromwithinEducation is the cornerstone of the newknowledge economy. The education systemand infrastructure must be flexible and agileenough to respond to new challenges.Change needs to be prompt, withoutundermining the standard or principal ofeducation, yet embracing the wider supportand interests of all stakeholders.

The education system should facilitate andsupport the alignment and integration of alloutreach and support initiatives that promoteSTEM as a genuine career path. It is essentialthat students make an informed choice aboutthe broad range of opportunities available –and this requires effective industry–educationengagement.

The funding formulamust recognise the costof training STEM students, and enableappropriate investment by the third-levelinstitutes (estimated to double per head from€7.5k per annum to€15k per annum, toreach the top decile), so that the quality andquantity of graduates are improved throughbetter standards and additional resources atpostgraduate level. Facilitating an ‘academic’and ‘technical’ stream through the third-levelsystem and aligning the Institutes ofTechnology and the universities are absoluterequirements. At the same time, we need tomaintain the focus on the development of theteaching professionals themselves. We needto develop realistic opportunities for teachers’ongoing professional development, andreward participation.

Additionally we should recognise andcelebrate themany excellent scienceteaching professional at all levels who

demonstrate significant and extraordinarycommitment to science. We should considerhaving specialist maths and science teachersat secondary level.



Exciting students about careers in sciencerequires a significant overhaul of thesecondary system and, in particular, thecurriculum. Specifically, we want to stop thetrend towards ‘dumbing down’ in coursecurricula. We need to get children excitedabout science and technology, and ensurestudents choosingmore difficult subjects arerewarded within the current points system.Ideally, a more creative solution is required toreward students’ creativity and provide aninherent incentive for choosing sciencesubjects in the first place.

Teaching standards andmethods needto be significantly improved, especially byrewarding performance and initiative.The systemmust provide ease of access,optimum use of all assets, practicalmodernisation/upgrade (with high-qualityfacilities and equipment, not just buildings),and technology that supports e-teaching.Investment in new laboratories and otherfacilities should be balanced with newwaysof delivering education – including upgradingtechnology and integrating ICT and teachingmethods into our schools.

Initiatives in this area – such as the use ofMP3 technology to distribute lectures at theSligo Institute of Technology – can beemulated at both second and third level,allowing students pick up lectures at aconvenient time. The availability of techniciansto support laboratories or the development of‘super-labs’ where state-of-the-art resourcescould be shared would be of great value toteachers, reducing time spent on preparationand enablingmore effective teaching.

Consideration should also be given toproviding a flexible remuneration system thattakes account of critical knowledge andexperience in line with market reality. Inabilityto deal with the required flexibility within thepublic education system should prompt adebate on themerit of developing a privatealternative.

_Lifelong learning as astrategic investmentImmediate correction of the second-levelsystemwould still leave amajor shortfall ofstudents, graduates and post-graduates tosupply the fourth level and industry (the SSTIsuggests a cumulative increase of 1050researchers and 350 principal investigators inpublicly funded research by 2013). There is anurgent interim requirement to fill the gap atboth third and fourth levels, to double thenumber of science graduates.

While the current focus on attracting the bestinternational students, graduates and post-graduates is critical to supporting oureconomy, we need to look to our own base ofscience and engineering professionals.Ireland needs to make lifelong learning anattractive option for working people. Ireland’sparticipation rate in the 25 to 64 year-oldcategory was approximately 20 per cent inthe higher education category, comparedwith 50–60 per cent in other key economies,including the UK, Finland, Sweden, Denmarkand the USA (OECD 2005), while our overallrate was below 10 per cent (compared with20–30 per cent in other key economies. Weneed a new and realistic approach to adultlearning for people seeking new andalternative qualifications. This will involvecompensation for displaced income, andcompany and individual tax incentives will bekey to encouraging every citizen to invest intheir own development.

A national programme that focuses on the‘re-profiling’ of Ireland’s workforce is urgentlyneeded in support of the investments outlinedin the SSTI and NDP, and to ensure anintegrated set of initiatives and investments.The investment should take account of theindustrial, social and personal requirementsand promote a sharing of the investmentbetween all the beneficiaries. Thisprogramme could be based on themanyexcellent initiatives already under way – suchas the Future Skills Group, or the Programmefor University and Industry Interface (PUII).Such a focus on rebuilding the infrastructureto make it flexible andmodular is importantas we develop new third-level courses.

With an ever-changing knowledge economy,opportunities should be provided for an easierinterchange of science and engineeringdisciplines, without devaluing the necessaryskill level required for that discipline. The timespent obtaining the necessary additionalqualification should beminimised throughappropriatemodular education in specific,relevant areas. Continuing education inparallel with employment should beencouraged and facilitated.

_Human capital investmentaligned to economic growthOver the next 15 years, we believe Ireland cango through a process of discovery – bothamong children and adults – to build asociety that is familiar and comfortable withscience, engineering and technology. Theeducation system, together with the newinvestments in an Interactive Science Centre(Kilmainham Science Exploration Station) anda National Science Gallery (Trinity College), willprovide a forum for public debate, andencourage children to think laterally andinnovatively, and promote and rewardcreativity in science and related subjects.

Our future success in science education willdepend on how quickly we canmove awayfrom rote learning and instead focus onexciting students about the subject andrewarding thinking, learning and innovation.

We need good science andmaths teacherswhose practical experience is current andrelevant, and we believe that industry canplay a greater role in supporting goodteaching. Developing an integratededucation–industry programmewillencourage industry experts (current or retired)to commit to a part-time teaching regime,contributing lecture hours out of their workschedule in return for a teaching qualification

Industry should be encouraged to extend andintegrate its existing outreach programmesand providemore ‘practical’ education supportprogrammes. A good example is the DublinInstitute of Technology’s Infinity Project, whichlinks science andmaths teaching tomoderndigital technology, provides resources forteachers and students, and significantlysupports the teaching of science andmaths.



_Research – a distinctglobal brandBy 2020, Ireland’s innovative research andindustry base will have expanded andaligned with its strategic imperatives,benefiting from collaborative engagementand focused investment. ‘Innovate Ireland’will be a distinct global brand for research

that drives innovation and commercialisationand fuels economic growth. The State’scommitment to research through SFI,PRTLI*,SSTI and the investment in fourth-leveleducation will have created a rich mix ofpublic and private, globally recognisedresearch institutes. Significant investment inscience and research will have positionedIreland as a science and technology leader,within an informed society.

Strategic intent

Global reputation

Collaborative researchenvironment

Develop network of science parks

Top decile in fourth-levelqualifications


> Promote ‘Innovate Ireland’ research brand globally

> Establish collaborative links with global researchnetworks

> Ensure integrity, transparency and efficacy of global IPmanagement and environment

> Create a framework for commercialisation of research

> Develop and expand the CSET model

> Intensify and increase support for MNC/SME partneringin research and innovation

> Further enable and accelerate incentives and supportfor industry/academia collaborative research

> Establish Public–Private Partnership (PPP) to invest inresearch infrastructure, encouraging individual andlocal investment

> Focused investment in cross-industry research

> Encourage industry–academia research partnership tofocus on high-quality research

> Provide ‘Innovate Ireland’ research network throughinvestment in Science and Technology Parks

> Strategic investment to structure fourth level

> Attract, develop and retain world-class researchers

> Focused investment in infrastructure for basic andapplied research

> Investment in global technology, market and socio-economic intelligence to enable informed selection ofresearch priorities

> Establish meaningful career paths in research

> Address HR gap by targeting key strategic skillsinternationally

* Programme for Research in Third-Level Institutions in Ireland.

_Global reputationIreland needs to capitalise on themanyexcellent ongoing research initiatives, bycapturing all such activities under a single‘Innovate Ireland’ research brand. This wouldenable effective global promotion of thebrand and encourage increased inwardinvestment by MNCs. We need a nationalfocus for international and national interest inthe brand, so that the interest can be directedand responded to rapidly, and interestedparties encouraged to participate and invest.

The development of Science and TechnologyParks, centrally co-ordinated through aNational Science and Research Institute,would greatly enhance our capability andreputation as a ‘go-to place’ for high-calibrecollaborative research. This development –together with a unique IP and technologytransfer environment that will ensure theintegrity, transparency and efficacy of globalIP and technology protection andmanagement – will accelerate internationalcollaboration with other global researchnetworks.

The ‘Innovate Ireland’ brand would provide aretuned growth engine with a unique identity.This would provide an inherent networkingand bridging capability across numerousscience disciplines, ultimately bringingresearch output to commercialisation. Thiswould embrace the essential qualities ofconvergence, collaboration, connectivity,agility and flexibility that would set Ireland’suniqueness apart.

As an element of the proposed ‘InnovateIreland’ brand campaign, funding from theNDP (targeted at€8.2 billion for scientificresearch) should support an integratedpublic–private strategic ‘research-to-commercialisation’ plan that will articulatehow the total investment will result in a worldclass commercialisation framework.

_Collaborative researchenvironmentWhile endeavouring to develop its reputationas a ‘go-to place’ for research, Ireland needsto take its size and future resource base intoaccount when determining research focusareas. Ireland cannot cover all technicalareas in the research spectrum, and needsto balance available ‘hot-spot’ opportunitieswith resources and the potential forcommercialisation.

The concentration and location in Ireland ofmanymultinationals from a diverse set ofscientific and engineering disciplines providesan excellent platform to develop such nichecollaborative and convergent research.

The current investment in centres ofexcellence such as Tyndall and NIBRTprovides a focus for research that is strategicin Ireland. Moreover, they present muchneeded resources and infrastructure toengageMNCs and particularly SME’s incollaborative research.

The CSET model further demonstrates thesignificant industry interest in developingcentres of expertise and investing in world-class explorative research ventures. Themodel has been very effective despite itsrelative infancy, and it will further benefit froma continuous review of best practice acrossthe CSETs – enabling further development ofits effectiveness and significantly expandingits capability. Enabling Science FoundationIreland through the NDP to invest€1.4 billion,from a total allocation to scientific research of€8.2 billion makes a significant statementabout the national intent and the opportunity.This activity will help intensify and increasesupport for partnerships betweenMNCs,SMEs and academia for research andinnovation

There is an immediate need to use the baseof US firms in Ireland as ameans of growingthe indigenous SME base (Ireland currentlyenjoys 3.5% of global US FDI: BEA, 2006).Substantial investment by US firms can triggera new commercialisation ecosystem, whichwould also engage the third- and fourth-level

education system as well as the SME sector.An early opportunity to seed credibleresearch activity and build critical mass andlong-term sustainability will be provided bythe strategic engagement of US firms throughinitiatives such as the CSET programmes,specific joint ventures in research with publicinstitutes (universities or State research),industry-led research networks and uniquesupport for bilateral research ventures.

However, significant investment must bemade in the development of thecommercialisation infrastructure. One way toachieve this would be through Public PrivatePartnerships (PPPs), which could beestablished to invest in research infrastructureand encourage individual and localinvestment. Research capacity should alsobe strengthened within higher educationinstitutions and institutes of technology.Existing infrastructure should be fully utilised,while investment in new buildings should beminimised in favour of upgrading facilitiesand investing in state-of-the-art equipment.Investments should not only address issues ofnational strategic importance, but should alsoexamine how public programmes and publicexpenditure can be delivered efficiently andeffectively.

The commercialisation of R&D by industry,specifically SMEs, requires significantadditional funding at the productdevelopment and early marketing stage. Thefunding alternatives should include directfunding from: Enterprise (the NDP allocates€3.3 billion for enterprise development); theEU Seventh Framework Programme (theAmerican Chamber of Commerce Irelandsuggests a bold target for Ireland of at leastthree per cent of the planned FP7 spend of€50 billion); and government departmentssuch as Health, Communications, Marineand Natural Resources, Environment andAgriculture & Food. It is important thatinvestment is well targeted and not spread tothinly.


_13Retuning the growth engine3_Contributing to a shared vision-


_Develop a network ofscience parksIn the new research environment, a nationalnetwork of next generation Science andTechnology Parks (Figure 3) should be built toreplace today’s industrial parks as themaininfrastructure for the new knowledgeeconomy. These parks could be co-locatedwith academic and/or MNC innovationcampuses to enable IP and technologytransfer, facilitate collaborative appliedresearch, and provide the infrastructure forproduct realisation and commercialisation.Co-location with third-level educationinstitutions could also support the emergenceof new graduate colleges and boost researchresources and capabilities.

The Individual Science and Technology Parkswould act independently from, yet retainstrong and visible links to, third-level institutesand State research centres. Investment insuch parks would be in line with IDA policy forthe development of large serviced sites andsupport the national spatial plan. IndividualScience and Technology Parks couldspecialise in one or more particular researchareas, but should all link to one central Irishscience and research entity (Figure 4). ANational Science and Research Institute(inclusive of SFI) could act as the strategic corefor ‘All-Island’ research activity, funding andco-ordinating our activities both nationallyand internationally. In addition, this institutecould showcase collaborative researchactivity from its network of research centresand associated science and engineeringdisciplines, represented through world-classprojects. In essence, it would be a campusacting as a connection point for all theindividual centres of excellence.

Each Science and Technology Park wouldhouse an Innovation Centre and support thedevelopment of new ventures through accessto large corporates, research laboratories,prototyping facilities, as well as supportservices such as finance, IP and legal servicesandmarketing.

Figure 4. Central point of connectivity for Innovate Ireland and Science & Technology Parks

Figure 3. Next-generation Science and Technology Park

High-Value Human Capital

International Investment

Science and Technology Park

Y

Commercialisation of Research

Start-Up Companies

Global Reputation

GovernmentResearch

MultinationalCorporations

Small andMedium

Enterprise

Education andResearch

NationalInstitute Science

& Technology

S&T ParkMCNs

SMEs

VCs

S&T Park

S&T Park

S&T Park

This model would provide an excellentplatform for MNCs to access a concentrationof collaborative R&D activity in Ireland withconfidence. In addition, the research andcommercialisation expertise generatedwould likely lead to new high-valuetechnology spin-off companies.

The foundations for this proposal are in placethrough the successful evolution of the CSETmodel, and we need to build on thisdevelopment and bring that model to the nextlevel, so that we can attract the desiredinward research investment.

_Top decile in fourth-levelqualifications Ireland should provide a base for world-classresearch and be a preferred location forcareers in science and research. Researchprogrammes should be aligned with the SSTI,be industry informed and linked,internationally credible, and led byinternationally recognised researchers.

The targeted acquisition of researchprincipals into Government-funded initiatives(Science and Technology Parks and CSETs)would help provide a world-class base ofscience and supervision for postgraduateprogrammes, building towards criticalresearch mass and sustainability. ScienceFoundation Ireland, or a new NationalScience and Research Institute, shouldspecifically focus on the search for top talent,with the necessary increased funding tobroker deals to attract the best researchers.

The presence of eminent researchers will helpto attract substantial investment from industryand venture capitalists, as there is a higherprobability of success. These researchers canin turn attract high-quality peopleinternationally to further their own research –currently Ireland has a substantial challengein achieving the desired number ofresearchers required for a critical mass of aresearch activity to make Ireland Inc a viableentity for meaningful collaborative research.

The research environment should support theregeneration and transition of Ireland Inc. to anew technology and knowledge base. It canprovide a basis for research integration withinEurope and the establishment of a Europe-wide network of SMEs, connected by uniquejoint ventures in research.

Different qualification and skill enhancementprogrammes (for example, in marketing andintellectual property) should be madeavailable to help generate a multi-skilled andflexible scientific workforce. Fourth-level post-graduates could acquire appropriatequalifications through the research centres,and integration of skills and technologiescould be achieved through bridging withinand across industry and academia. Thiswould help differentiate the fourth-levelqualification and associated skill sets inIreland

Major amendments need to be made to thecurrent employment contracts for post-doctoral positions. In order to attract andretain the necessary high-quality students forinnovation and commercialisation, theresearch structure needs to be developed toallow for permanent research positions.Students at all levels in the education systemwill not be attracted to scientific andtechnological research if there is no security ofemployment or meaningful monetary rewardfor the skills being provided.

Assuming we generated the necessaryinterest in science now at junior level, there isstill a major shortfall of students between nowand when these students would transitionthrough the education system to be availablewithin the fourth level. Recognising thatIreland cannot wait nine years for thesestudents to come through the educationalsystem and qualify as postgraduates, there isan urgent requirement to fill the gap at boththird and fourth level in the interim. Thismeans Ireland must make research anattractive option for international students,graduates and postgraduates.

To do this, Ireland needs modern up-to-dateresearch capabilities, together with attractiveterms of employment and recognised globalresearch leaders. The Irish model needs to beunique and attract the widest range of skillsand talent necessary to support the Scienceand Technology Parks and facilitate thedevelopment, IP management and themarketing and sales of new products andservices.

3_Contributing to a shared vision -

_15Retuning the growth engine3_Contributing to a shared vision -


_Commercialisation –exploiting IP, people,assets and enterprise By 2020, Ireland will be globally recognisedas a high-competence environment forbusinesses and entrepreneurs seeking toexploit IP assets and resources. Ireland’sunique collaborative environment will offer an integrated research-to-commercialisationprocess. It will foster a diverse and dynamiccommunity of partners including MNCs;SMEs, entrepreneurs, higher educationinstitutes and other publicly funded researchbodies. This entrepreneurial environment willprovide a vibrant hub for trading IP,transferring technology, securing strategicalliances and managing high-risk investment.

Strategic intent

Global exchange and foundry forexploiting IP and new technology

MNC advantage and increasedinvestment

Flexible funding models

Accessible infrastructure


> Create internationally recognised centre for IPbrokerage and networking hub for strategiccollaboration

> Create hub for international finance for technologycommercialisation

> Establish advanced commercialisation infrastructure –including international commercial law, marketingcapability – to identify, build, exploit and prosecutesynergies

> Encourage corporations to engage and exploitentrepreneurial activities within the Innovate Irelandecosystem

> Develop MNC operational mandates to exploit ‘high-reward’ disruptive business opportunities

> Locate corporate capability to quickly build and exploitsynergies, adapt to markets and adopt new businessmodels

> Leverage combined collaborative resources to rapidlyidentify, adapt to and advance new opportunities

> Provide extensive funding for all stages and levels ofinnovation to bring proof-of-concept tocommercialisation for MNC and SME companies

> Develop new business models and investmentmechanisms to support different geared businessventures

> Develop accessible innovation centres both real andvirtual campus models.

> Leverage existing facilities and convert underutilisedindustrial infrastructure




The new ecosystem would help MNCoperations in Ireland to adopt a leading rolein the development of products and marketswithin their organisation. It would support theinitiation and development of world-classindigenous companies in technology throughparticipation at a higher level in the world ofinnovation. This will require MNCs tointroduce new corporate capability that canquickly build and exploit synergies to buildtheir mandate in Ireland. This strategy willappeal to existing and new companies andcater to international and indigenouscompetitors and collaborators alike.Developing an infrastructure that supports a future focus and the exploitation of variousresearch platforms, while concentrating onworld-class execution in the globalmarketplace, will create an additionalattraction – particularly for the internationalinvestment community.

Engagement in this ambitious andprogressive environment will enable MNCs toexplore and expand new business modelsand commercial arrangements that will leadto new forms of investment. Missing theopportunity to engage could inhibit theirgrowth and mean they miss a market orproduct opportunity.

_Flexible resourcing modelsIn the envisaged ecosystem, research andcommercialisation stakeholders wouldoperate in synergy. Entrepreneurs, individualsor companies would interact efficiently withsuppliers and markets to quickly andprofitably commercialise the ideas,innovations and IP that emerge from theresearch ecosystem, with the support ofInnovation Centres (Figure 5). Key to creatingthis unique business environment will bestructured partnering and collaborativeagreements supported by flexible resourcingmodels.

Collaborative interaction in the ecosystem will create a more informed and supportiveenvironment. It will increase the probability of success for new ventures through informedtechnology selection, availability of keycompetence and access to market channels.It will dramatically improve the risk–rewardprofile, encourage earlier investment andincrease the size and effectiveness of seedcapital investment.

The funding requirements of a new orgrowing enterprise can be reduced throughthe provision of technology or IP through afavourable commercial licensingarrangement that is encouraged throughnovel tax incentive schemes.

_Accessible infrastructure Providing an advanced integratedinfrastructure – enabled by an enlightenedand proactive leadership and organisationwith the relevant technical and businesscompetencies – is essential in founding aneffective commercialisation system. By beingeffective at commercialising R&D, thisinfrastructure will differentiate Ireland’s brandin the global league of knowledge economiesand attract individuals and corporations.

This strategy will appeal to existing and newcompanies and cater to international andindigenous competitors and collaboratorsalike. Developing an infrastructure thatsupports a ‘future-focus’ and the exploitationof various research platforms – whileconcentrating on world-class execution in theglobal marketplace – creates an additionalattraction, particularly for the internationalinvestment community.

_Global exchange andfoundry for exploiting IP andnew technology Focusing on commercialisation through theScience & Technology Parks and InnovationCentres, particularly in areas of technologicaland market convergence will yield a return onthe investment on basic and applied researchand create wealth from knowledge andintellectual property. This focus andentrepreneurial ethos will differentiate Irelandamong knowledge economies, and enablethe country to create a global brand as a‘foundry’ for technology translation.

While the concept of an IP trading hub issimple, it requires a sophisticatedinfrastructure that extends from IP creationand management, through sophisticatedcommercialisation models and, whereneeded, an efficient legal system to addressissues such as validity and enforcement of IP.There is a window of opportunity for Ireland toestablish leadership in Europe as a global IPtrading hub and gateway. Currently Ireland’sparticipation in this activity is well belowcountries such as Germany, UK, USA andJapan.

This will attract investment and provide animpetus for MNCs to exploit the infrastructure.It will require the broadening of existingcompetencies and expertise to cover patentlaw, international commercial law andIP/technology transfer and management. It would provide the capacity to identify,structure, exploit and assert IP licences andagreements internationally. The ability tobroker IP, proactively facilitate trading of IPand supporting innovation would be core toestablishing Ireland’s credibility as a tradinghub.

_MNC advantage andincreased investmentThe development of a uniquecommercialisation environment wouldpresent a distinctly different proposition toMNCs considering investing in Ireland. Theparticipation of new and existing MNCs andSMEs, coupled with the availability ofentrepreneurs and funding, would provide acommercialisation ecosystem to complementthe innovation environment outlined in theprevious section.

The new commercialisation ecosystem wouldassist companies of all sizes who want toextend their strategic reach or mandate. It would provide access to other technologycompanies within the network who couldmarket and license their IP and technology, incombination with various legal instruments,arrangements and strategies for acquisition.It would also enable MNCs to enhance theirportfolio of products and technology efficientlyand enable them to quickly identify and adaptto new technologies and applications thatsupport competitiveness and marketadvantage. Further, it would support thedevelopment of indigenous companies andmultinationals, and would support theachievement of the targets set in the SSTI(Table 1, below).

To gain unique competitive advantage, theecosystem would need to be formed quicklyand so build quickly on Ireland’s investmentsin R&D innovation and IP laws. It would needto market the distinct value propositions toMNCs as to how and where they could investin IP internationally. It would need toencourage the participation of new andexisting MNCs and SMEs, empowerentrepreneurs and fund innovativeenterprises. In view of the convergence inscience and technology, it would need to offeran ecosystem capable of exploitinginnovation across a broad spectrum oftechnologies and markets.

The commercialisation ecosystem would helpexisting enterprises extend their strategicmandate. It would provide networks forcollaborative innovation and provide accessto research institutions and other companies,offering technologies or services to facilitatethe marketing their capabilities and exploit orlicense their IP and technology. The newecosystem would enable MNCs to adaptquickly and through their Irish subsidiariesand operations provide a way to enhancetheir portfolio of new technologies and adaptthem to existing or new applications in a waythat extends their competitiveness andmarket advantage.

High-Value Human Capital

International Investment

Science and Technology Park

Year 2003 2013

Business Investment in R&D (BERD)(constant prices)

€1.076 billion €2.5 billion

Number of Indigenous Companieswith meaningful R&D activity (>€100,000)

462 1050

Number of Indigenous Companiesperforming significant R&D (>€2m)

21 100

Number of Foreign Affiliate Companieswith minimum scale R&D activity

213 520

Number of Foreign Affiliates Companiesperforming significant R&D

60 150

Commercialisation of Research

Start-Up Companies

Global Reputation

GovernmentResearch


Small andMedium

Enterprise

Education andResearch

Table 1. R&D performance and targets to 2013 (source: SSTI).

ResearchLabs

Features:

Venture Executives

Venture Creation and GrowthGovernment FundedIndustry-led/co-locatedRebranding Industrial Parks

Analysis & TestingLabs

ProductPrototyping

Manage Relationships, Broker Dealsand Provide Global Access

Brokering

Finance

LegalEngineering

TechnologyMngt

Marketing

Figure 5. Innovation Centre within a science park.




_Convergence – uniquevalue propositionsBy 2020, Ireland’s substantial investment innano-science and its application in ICT,biotechnology and materials will havepositioned Ireland as a leader in uniqueareas of innovation. The careful, market-oriented selection of convergent technology

and application opportunities will haveprovided the impetus for a significantincrease in foreign and indigenousinvestment in research, innovation andhuman capital. Convergence will haveenabled Ireland to further exploit its assetbase in health, environment, agriculture &food, marine, and energy in support ofdeveloping new indigenous industries.

Strategic intent

Differentiate and focus researchand innovation

Create new enterprise

Creative development of keynational assets


> A strategic national programme of research acrossscience disciplines and industry sectors

> Select areas of nano science and technology that candeliver unique solutions from converged technologies

> Invest in multi-disciplinary teams to research newapplications and products based on cross-sector IPand technology

> Promote collaborative applied research that attractscompanies from different industry sectors

> Provide licensing incentives and seed capital to smallventures exploiting new convergent applications

> Invest in international market intelligence to exploitconvergent technologies

> Provide specific infrastructure to enable cross-sectorand State investment to generating enterprise throughconvergence

> Share technology, human capital, equipment andfacilities in support of new enterprise

> Identify convergent technology roadmaps appropriateto agriculture & food, marine, health, environment andenergy

> Extend Ireland’s innovation system to link the abovesectors

> Promote convergence return on investment opportunitythrough public–private partnership

Core to the proposal is an upgrading andconversion of existing industrial parks andfacilities to extend the science and researchcampuses already described to includeinnovation centres and technology parks.These Innovation Centres (Figure 5) willprovide a ‘sandbox’ environment with a set of tools and practices that facilitatecommercialisation and provide the necessaryexpertise and experience to complementeffective exploitation. They will focus on thebuilding of an ‘Innovation Pipeline’ that seeksto maximise the assets and value added andreduce barriers to the success of newventures (Figure 6).

The centres would pre-screen programmesto better align the product of research towardcommercial outcomes – for example,identifying market opportunities andtechnology gaps that might warrant or matchplanned research investment. The centres willoffer a full range of skills and servicesrequired in areas such as IP management,finance, market screening and technologyevaluation.

The innovation centres would offer enterprisementoring – for example from an MNC to anSME, or vice versa – through executivesponsors and exchange with complementarybusiness backgrounds, or through executiveshadowing. They could manage the humanand other resources to support new start-upventures and empower enterprise andinnovation.

The innovation centres would provide linkageand encourage innovative approaches torisk- and reward-sharing. They would beresourced to exploit synergies and identifycomplementary needs, introduce partnersand explore commercialisation opportunities.They could be closely linked to and partnerwith many competing or non-competingcorporations and academic institutions on theIsland and overseas.

The commercialisation ecosystem should becapable of deploying best practice, even inhighly regulated sectors, while being able toadapt to changing technologies and businessmodels.

There is an immediate need to empower astrategic group to develop and design thecommercialisation infrastructure – includingits incorporation and governance structures.Such a group would greatly facilitate andenhance the establishment of an advancedcommercialisation infrastructure, andincrease the chances of strategic objectivesbeing met – both for the country and industry.

Market and technology convergenceprovides the opportunity for Innovate Ireland,enabling a more balanced, viable basis forsustained growth from commercialinvestment and indigenous assets.

Ireland’s asset base provides excellentconvergence opportunities, and a chance tofocus the country’s innovation environment asglobally unique. Opportunities forconvergence across the public and privatedomains exist in agriculture/bioenergy,energy/marine, digital/personal health,pharma/hospital care and renewableenergy/regeneration. These will all exploitIreland’s new-found ability to work flexiblyand collaboratively across disciplines andinstitutions in a way that is tightly connected toindustry.

Critical to differentiating Ireland’s researchportfolio will be identifying niche areas whereIreland can establish leadership andexcellence. One key opportunity to furtheranchor the existing FDI base lies in takingadvantage of existing CSETs and acceleratingtheir expansion and integration. Ascollaborators in this cross-industry research,corporate partners have a unique opportunityto explore new applications and commercialopportunities.

A good example of a collaborative andconvergent opportunity is already emergingthrough the cooperation between three majorCSETs:

� Biomedical Diagnostics Institute (BDI) atDublin City University (to advance the nextgeneration of bio-medical devices that willimprove the quality of people’s lives)

� Centre for Research on AdaptiveNanostructures and Nanodevices(CRANN) at Trinity College Dublin (toadvance the application of nano-scienceand nano-technologies, through a multi-disciplinary team, to support other areasof R&D)

� Centre for Telecommunications Value-chain Research (CTVR) at Trinity CollegeDublin (to advance the next generation of telecommunication technology,techniques and tools, in the context of thefuture value-chain).

Poor QualityIdeasEliminatedEarlier

Greater Flexibilityfor Investmentand Funding

More EffectiveManagement –Mobility ofHuman Capital, Training, etc.

Market AccessMore EasilyAvailable Through Corp.Channels

New Output:• Flow of New Ventures• Accelerates Convergence of Technologies• Synergies Spawn New Growth Business


New Start-Upsand New Entrants

Research Institutes

EuropeanSMEs

Time

Formal Funding Programs and Dedicated Resourcesto Support Building Businesses

Figure 6. Innovation Pipeline.

The programmes – individually andcollectively – provide rich opportunities forIreland to develop emerging convergentsolutions in health and nanomedicine.

The advanced biodiagnostic applicationsbeing researched by BDI, enabled throughnew nanotechnologies researched byCRANN and supported by new radiofrequency (RF) communications applicationsdeveloped through CTVR, together presentnumerous commercialisation opportunities innew emerging markets such as telemedicine.

Harvesting this investment means addressingthe complex issues of IP and technologytransfer. The process of exploitation alsoneeds to be supported by an evolved infrastructure and new models for collaborative exploitation.

New enterprises will be created through thedevelopment of novel enterprise models thatexploit robust collaborative relationshipsbetween research institutions, MNCs andsmall indigenous technology companies.

Ireland’s unique relationship with MNCs willcreate the opportunity to access relevantinternational market intelligence in order toexploit convergent technologies effectively. It also provides insights to future technologyand downstream access to global markets.

Engagement in collaborative research –through direct and ‘in-kind’ investment –enables MNCs to contribute IP, technologyand other corporate assets (such asequipment, facilities and people/expertise) tothe exploration of innovative convergentsolutions. The application and delivery of thesolutions will often be through a newenterprise initiative, opening the way forfurther corporate investment anddiversification in Ireland and the developmentof new indigenous SMEs.

The new innovation environment asdescribed earlier will help accelerate thedevelopment of a new base of small hightech ventures who will require proactive‘brokering’ and support in areas such asfunding, deal making and the scaling up ofinfrastructure (as described in the earliersection on commercialisation). Focusedinvestment in convergent technologies willdrive the growth of spin-outs, SMEs and start-ups and can usefully leverage nationalresources in areas such as Marine,Agriculture, Energy and the Environment. Theopportunity for evolving technology venturesto leverage resources and apply theirtechnology solutions to national challenges –in areas such as sustainable energy, cleanenvironment and affordable health – willcreate a beta-test environment and increasethe opportunity for the venture to be asustainable global enterprise.

The development of convergent roadmapsthrough public and private engagementprovides a basis for attracting new industryinvestment and focusing public investment. A development strategy that is in lock-stepwith the technology convergence roadmapsrequires the strategic alignment of all theState agencies (including the IDA, EnterpriseIreland, SFI and Forfas).

_Fiscal policy –continuing the pro-business traditionBy 2020, Ireland’s fiscal policies will have builton its pro-business tradition and evolved atax and incentive system that supports rapidgrowth of human capital, intellectual assetsand R&D capability. The public–privateinvestment model will have evolved to attractsignificant private investment in world-classinfrastructure for education, research andcommercialisation. Fiscal policy willencourage high-risk global investment andcontinue to encourage a new base oftechnology enterprise that sustains economicgrowth

As a small, open economy, our overallcompetitiveness relies on a number ofelements. We know at first hand that the basisof our competitive advantage in Ireland isshifting. The elements that served us well ingetting to where we are today will not inthemselves be enough to sustain andenhance our competitive position.

_Incentivise innovation Our tax system has underpinned economicgrowth in the past. We have low corporate taxrates; we have an established, pro-businesspolitical environment; and we currently enjoya regulatory environment that is conducive toeconomic growth. We must maintain theseadvantages, which have underpinned ourresponsiveness and flexibility to date. Thecurrent corporation tax rate of 12.5 per centmust be maintained with certainty as to itscontinuity into the future to 2025, and beyond.Any uncertainty or suggestion of a change inpolicy in this area would have a detrimentaleffect on our perceived competitivenessrelative to other countries that are emulatingIreland’s low direct tax regime.

The incremental R&D tax credit, which wasintroduced in 2004, was intended toencourage investment in R&D and to supportthe higher level of risk-taking implicit in R&Dinvestment. The low corporation taxenvironment does not support undertakingR&D in Ireland and from a competitiveperspective, many countries offer attractiveR&D tax credit incentives. Evidence to datesuggests that the take-up of the tax credit hasbeen slow. Companies find it cumbersome toadminister and are doubtful about itseffectiveness over time, given its incrementalnature. Extension of the base year to 2009, is a stop-gap measure and does not assistcompanies making long-term investmentand tax planning decisions. The AmericanChamber of Commerce Ireland recommends

that the R&D tax credit be reviewed in acomprehensive evaluation and competitiveanalysis of what measures should be taken toensure Ireland is a preferred location for R&D,intellectual property ownership, licensing andtrading.

Historically, Ireland has not been a preferredlocation for US MNCs to locate, register andtrade intellectual property (IP). The PatentRoyalty Exemption has been used in certainsectors, but not widely enough. We believethere is greater potential to use thisExemption for its original purpose ofencouraging and rewarding innovation.Individuals and teams who create, accessand leverage IP that results in commercialgain, should be entitled to share the rewardsin a tax-beneficial way.

Furthermore, fiscal measures in respect of IPshould be used as an incentive to US MNCsboth to locate IP in Ireland and to provideaccess to IP to SMEs – which would supportrecent initiatives by Enterprise Ireland. Werecommend that a new approach to the fiscaltreatment of IP should be evaluated as part ofthe comprehensive evaluation of the R&D TaxCredit recommended above. In the same waythat promotion of research is critical to fill thepipeline, support for commercialisation isessential to create the right dynamic forwealth creation.

_Expand human capitalBuilding human capital in science andtechnology is the single greatest challengefacing Ireland Inc. Up-skilling needs tobecome part of our culture and lifelonglearning ethos. Many professionals inscience, engineering and other disciplines,along with middle and senior managers inindustry, would be prepared to invest 2–3 years in undertaking a degree, mastersdegree or PhD if they could survive the loss

of income. One simple and effectivemechanism to encourage the pursuit of firstdegrees, master degrees and PhDs would beto provide a tax rebate of up to €50k perannum for a maximum of two years forsomeone who is prepared to undertake andqualify in a prescribed third- or fourth-levelqualification. Since these individuals wouldreturn to the workplace and command highersalaries, the scheme would become self-funding over time. Furthermore, to encouragethose who are not in the workforce to take theopportunity to pursue relevant qualifications,the rebate should be provided in such a waythat the funder or sponsor (spouse, parent,etc.) of an individual who themselves cannottake advantage of relief can claim the rebate.

The IMD World Competitiveness Report 2005stated, “A sound environment forcompetitiveness can be defined by taxation orbusiness legislation. It is not howeversufficient. The real engines of competitivenessand economic success remain science,innovation, technology, education andentrepreneurship: all are intertwined.”Ireland, with its unique MNC/SME industrybase profile, has the opportunity to promoteresearch and innovation and throughcollaborative partnerships betweenacademia, SMEs and MNCs – particularly inconvergence sweet-spots – to harvest thelong-term benefits of commercialisation.

-




Strategic intent

Incentivise innovation

Expand human capital


> Maintain 12.5 per cent corporation tax

> Extend R&D tax credit system

> Incentivise dynamic IP trading environment

> Leverage patent royalty exemption scheme

> Extend public–private partnership funding model toresearch

> Incentivise individual and corporate investment in nextlevel up education

4_Summary – a stepwise process of engagement-


4Summary – a stepwiseprocess ofengagement -Achieving the vision set outin this paper requires a lot of work in several key areas.This cannot be doneovernight, but is eminentlyachievable. The AmericanChamber of CommerceIreland envisages astepwise process ofincreasing engagement(Figure 7).

We believe this is a realistic and attainableprocess to take us from today’s R&Dinvestment levels of 1.4 per cent of GNP (2004)to a world-class level of four per cent of GNPby 2013.

A guiding principle is to build on what isalready working today – the new innovationecosystem must be a logical extension ofwhat we already have in place. While currentsupport and funding models are a necessarypart of the picture, they are not yet sufficient toencourage the step-changes we are lookingfor.

We have a good working model thatpromotes collaboration between industry and academia in the form of CSETs. Thesecollaborative research platforms togetherwith the research centres of excellence (suchas Tyndall & NIBRT) need to be substantiallyextended and bring in other smaller researchplayers and investors. The model needs to bemore sustainable and evolve into a moreindependent infrastructure that can sustainitself and be an engine for growth.

4_Summary – a stepwise process of engagement-


CollaborativeResearchPlatforms

TechnologyCampusMNC-centred

Global Hub IPTrading and ConvergentTechnologies

InternationalResearch and CommercialisationCentre

BilateralCollaborationMNCs and SMEs

State/MNCInvestment in Convergence

CorporateInvestment

2007 2008 2010 2015

1.4% GNP

c4.0% GNP

Figure 7. Stepwise process of increasing engagement

Central to this model is an ability tocommercialise the IP and technologyemerging from next generation InnovationCentres and Science and Technology Parks.Harvesting the R&D investment andextending it through the routinecommercialisation of human capital, assetsand technology, creating enterprise andeconomic growth through a virtuous circle.

The State will be able to directly support theendeavour by identifying real opportunitiesand looking for real solutions, in areas suchas health and the environment. Partnershipswith multinational companies can provide thewin–win situation we are all looking for. TheState can gain the benefit of the innovationitself while supporting start-up ventures thathave the ambition and potential to be global.These ventures, together with globallyrecognised research centres and hubs, willdrive high-value employment and taxrevenues.

With our desired innovation infrastructure inplace, Ireland will create a sustainable flow ofnew opportunities by accelerating theconvergence of new technologies. Innovativethinking in the public and private sectors,together with synergies between industries,government and academia will help tospawn new growth businesses.

Realising this vision will require new supportsystems and strategic agreements between anumber of parties. Innovation Centres will beat the heart of new Science and TechnologyParks, securing strategic agreements,attracting investment from corporates andspawning new ventures. They will provide theproactive support and brokering to build newstart-ups, attract other new entrants, providethe opportunity to spin out companies fromlarge corporates, and populate the newScience and Technology Parks with a host ofSMEs – both indigenous and international.The result will be an exciting playing field forthe creation, trading and exploitation of IP thatattracts higher levels of investment, bettermanagement and higher-quality human

capital – and reduce Ireland’s dependenceon specific large multinational investments.

The American Chamber believe that Irelandhas an opportunity to position itself as theinnovation hub of Europe. Having built oureconomy on the export drive of the 90’s andmanaging the current consumer boom, wemust firmly set our minds to theimplementation of the policies that will sustainthe national economy ahead. As US multi-nationals we have both contributed to andbenefited from the Celtic Tiger, and it is in ourmutual interest to ensure its continuation.Discussion and debate on strategy mustquickly give way to collective action by all thestakeholders. The creation of a new dynamicknowledge economy requires not only visionbut determined leadership from within, totake bold steps, make hard choices andinvest for the future.

The American Chamber and its members willdo our part.

-

ArtHaus is a visual communications consultancy thatcreates powerful visual solutions which help our clientsachieve their business goals. We specialize in business-to-business communications in the science, FMCG andtechnology sectors. Core services include brand identity,printed collateral and electronic media.

Six Degrees is a specialist public relations agency thathelps world-class companies – large and small – buildreputation and market share through award-winningcommunications campaigns. We specialize in business-to-business and business-to-consumer PR in the science,engineering and technology sectors. Core servicesinclude media and industry analyst relations, internal andexternal publications, marketing communicationscampaigns and collateral, crisis management andcorporate communications.

Co-sponsored by:

www.sixdegreespr.com www.arthaus.co.uk

retuning the growth engine · 2012. 6. 5. · g rad ute s il op n eonmy, wd tl k ur bas f sc e nad...

Documents