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From Technology Acquisition and Absorption to International R&D–based Strategies – the Ireland Case – D. O'Doherty June 2004.

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Presentation on theme: "From Technology Acquisition and Absorption to International R&D–based Strategies – the Ireland Case – D. O'Doherty June 2004."— Presentation transcript:

1 From Technology Acquisition and Absorption to International R&D–based Strategies – the Ireland Case – D. O'Doherty June 2004

2 Context Strengths & Weaknesses Implications for Policies/Players

3 Irelands place in the global economy % of GDP

4 International FDI Flows , 2001 & 2002

5 World trade in highly R&D-intensive industries, 1990 and 2000 (% of GDP)

6 Investment in knowledge as % of GDP, 1991 and 1998 (R & D, Software, Higher Education)

7 Technology balance of payments, 1998

8 Sweden, 4.3 Finland, 3.4 Denmark, 2.2 Netherlands, 1.9 United Kingdom, 1.9 Singapore, 1.9 Ireland (GNP), 1.4 Portugal, GERD as % GDP/GNP GERD as % GDP/GNP for Ireland and selected countries, 2001

9 Strengths of the Irish model Ireland has been able to transfer and absorb state of the art technology and its exports take up a disproportionate share of world markets, especially in ICT and pharmaceuticals Irelands flexible, English-speaking workforce continues to be a major attraction for US companies in particular Ireland has embraced global change and made good use of its own and EU resources

10 Weaknesses of the Irish model Irelands ICT, pharmaceuticals and medical devices exports in particular embody technology largely generated overseas by FDI Investment in research and education lags existing and potential competitors Irelands expenditure on ICT as a % of GDP (ICT intensity) also lags other OECD countries

11 Implications for Ireland Risks – Lack of new FDI, particularly in the medium-long-term ; lack of innovation capability; lack of integration Requirements – More R&D/Innovation; indigenous capabilities; focus on overall Knowledge Economy/Systems of Innovation approach

12 There is a strong link between investment in the research and innovation base of the economy and sustained economic growth… The accumulation of knowledge capital will facilitate the evolution of the knowledge-based economy. National Development Plan Policy Response

13 Productive Sector OP - Expenditure by Sector RTDI (EUR 2.47bn) Industry (EUR 2.41bn) Marketing (EUR 0.43bn) Fisheries (EUR 0.06bn)

14 The NDP has meant a major increase in Research, Technological Development and Innovation (RTDI) investment: to strengthen the capacity of Irish third level institutions and other research establishments to conduct research relevant to the needs of the Irish economy to strengthen the capacity of Irish firms to assimilate the results of R&D into their products and processes to provide support for sectoral research in agriculture, food, marine and the environment

15 National Development Plan RTDI Industry R&D: IDA/Enterprise Ireland(EI) Industry-University: Science Foundation Ireland (SFI)/EI University Research: Higher Education Authority/PRTLI Government Research TOTAL EXPENDITURE: 2.47 billion

16 Industry R&D – FDI Approach Ireland's competitiveness is based not on tax benefits and costs alone, but on knowledge, innovation, flexibility, and connectedness - how everything works together – IDA Statement IBM to invest 22 million in its Dublin R&D Software Laboratory – Tánaiste 11-May-2004 Development in line with policy for R&D growth - Harney

17 Other recent international R&D-related decisions GGoogle, Ebay/Paypal and Overture decided to establish new European centres, joining organisations such as MITs Media Lab Europe in the digital media sector AABB established a new R&D, marketing and manufacturing operation, serving the paper and pulp industry worldwide RR&D announcements were made by Olympus Diagnostica, GlaxoSmithKline and Intel WyethMedica is constructing one of the worlds largest biopharma plants - a $1.5 billion investment - while Intel is completing its most advanced microchip facility in Europe Over 50% of the 1,000 + overseas companies have added some element of R&D

18 Industry R&D – Enterprise Ireland -Budget CCompetitive Research, Technology Development & Innovation (RTDI) Scheme million RR&D Capability Scheme million Also Innovation Management & R & D Awareness 20% Tax Credit from 2004

19 Industry-University: Science Foundation Ireland (SFI) – Budget : 646 million Vision : People, Ideas and Partnerships for a Globally-Competitive Irish Research System By making the largest investment in scientific research in its history through SFI, Ireland joins the growing number of countries that recognise that this investment is required to keep modern economies competitive SFI and its strategic orientation are central to….Irelands goal of becoming a leader in the global knowledge-based economy SFI will focus on fields that underpin biotechnology and information and communications technology. Irelands affiliation with leading industries in related fields gives it strategic advantages in these areas

20 SFI & R&D Commercialisation Centres for Science, Technology & Engineering (CSET) Partners include international companies such as Hewlett Packard & Medtronic SFI also works with Enterprise Ireland & Columbia University's International Innovation Initiative (i-cube) - a world leader in technology transfer – on commercialisation issues

21 Creating and Sustaining the Innovation Society - The Higher Education Authority – Ireland needs to move from a situation where our economic growth relies, to a very considerable extent, on foreign direct investment and imported technology (an 'Investment- Driven' economy), to one where the basis for growth arises, to a much greater extent, from indigenous innovation (an 'Innovation-Driven economy) In order to reach this goal a paradigm shift in public policy is required which puts innovation at the centre of the policy agenda Higher education and research will be central to achieving the paradigm shift

22 HEA Programme for Research in Third Level Institutions Cycle 3: 2001 – 2006 Involves NDP funding of 205m & 115 capital. Objectives are: To enable a strategic and planned approach to the long-term development of research capabilities To provide support for outstandingly talented individual researchers and teams within institutions and the encouragement of co-operation between researchers both within the institutions and between institutions, nationally and internationally

23 GOVERD m Current Prices GOVERD m Constant Prices Source: Derived from State Expenditure on Science & Technology, 2001 (Forfás);

24 Public Funding of R&D Finland 2003Ireland 2002 Total Public Funding of R&D 1446m391m % GDP/GNP1.00%0.38%

25 Challenges Will the scale, quality & institutional aspects of Irish-based R&D activities allow them to be internationally competitive? Will Ireland have the indigenous and sufficiently rooted foreign companies & clusters to identify and take up the commercial opportunities arising from an R&D-led strategy? Will the Irish political and administrative system have the patience to wait for long-term dividends from current & future investments?

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