Dr. Willie Donnelly:

Waterford Institute of Technology welcomes this opportunity to speak to the joint committee.

Economic growth is increasingly related to the capacity of regional economies to change and innovate. Regions and cities have become the primary spatial units where knowledge is transferred, innovation systems are built and competition to attract investment and human talent takes place. The EU innovation flagship emphasises the smart specialisation of regions as key to future competitiveness. The economic development of the south east requires investment in research and development infrastructure, the creation of human capital and the enticement of experts and entrepreneurs to the region. Strategies are required to create an innovation culture which will drive the growth of indigenous industries, attract foreign direct investment and support the commercialisation of research and the professionalisation of manufacturing and services across a range of sectors. The challenge for the south east is to mesh these activities together in a cohesive, co-ordinated, collective manner to drive sustainable regional economic growth. Fragmentation of effort must be overcome through the production of an integrated regional development strategy. This strategy should incorporate an investment plan to attract the best scientists, engineers, professionals and entrepreneurs to the region which will, in turn, attract multinational industries and high potential start-ups.

Waterford Institute of Technology plays a pivotal role as a catalyst for regional economic development, mainly through the innovation of its research and the creation of an effective knowledge transfer framework. In the past 12 years the institute has secured €112 million in research funding through competitive bidding. The guiding principle behind our research strategy is the development of research centres of critical mass and international reputation which support the economic development of the region. However, building competitive advantage through research and innovation requires the creation of a sustainable innovation environment. An open innovation environment is an environment that interconnects research, innovation and development investment to deliver high quality, sustainable growth.

Further strengthening of investment in the research and innovation infrastructure and the intellectual capacity of the south east is crucial to its future. Investment should focus, first, on sectors that have the capacity for regional economic growth, particularly in the ICT, bio-pharma and advanced manufacturing areas.

However, as mentioned by previous speakers, the region must also leverage its natural resources, maximising opportunities in agriculture and tourism and planning for new associated industries such as ICT for agriculture, tourism and eco-innovation. The TSSG and the associated ArcLabs open innovation model is a blueprint for regional economic development. The model embodies the institute's stated research philosophy of driving regional economic development through our global reputation for research and innovation excellence.

A key component of the model is the co-location of entrepreneurs, business start-ups, researches and students promoting the translation of IP know-how into new products and services. At the core of the TSSG model is a traditional academic focus on international peer reviewed scientific research and postgraduate education. This is a key point. Research has to be at the highest level and it has to be internationally benchmarked but we must extend this through collaborating with industry and enterprise incorporating reference points to state-of-the-art industry and engineering challenges to drive the creation of new products and services. For instance, the TSSG has created 11 spin out companies in the south east, including FeedHenry, which recently received VEC investment of €7 million and will create an additional 100 jobs in the next year. The TSSG has also created a mobile services cluster in the region employing more than 200 engineers where no such industry existed previously. The ArcLabs entrepreneurial development programme, new frontiers, previously known as the south east enterprise platform programme, has created 84 new businesses in the past six years with a combined turnover of €29 million, of which €8.5 million is in export sales. There are 249 jobs in those companies.

We also discussed previously the industrial landscape. It is unfortunate that the south east has attracted only 8% of the overall FDI investment in Ireland. We, therefore, need to have a targeted approach to FDI investment. Multinational companies seek locations that provide access to state-of-the-art research through centres of excellence, a ready supply of highly qualified staff and access to international networks of people and ideas. WIT, through its research centres, is providing the type of research capacity and people skills required by FDI. Further development in this regard is key to the development of a technological university. The traditional IOT system is not fit for purpose in the context of where the south east needs to go and that is why there is a need for change.

The majority of indigenous industries in the south east are micro-industries. We need to encourage such industries to scale. However, in the present form they have limited capacity to take up an integrated research input directly into their businesses. We in WIT have overcome this limitation, particularly in ArcLabs, by customising the IP and know-how generated from our research in a way that is directly applicable to business where technology challenges these micro-industries. In many cases, we have worked with companies to redesign their products and services in line with new technologies and business opportunities, for instance, companies wanting to move into cloud computing. The demand for support in the SME sector is evidenced by the fact that WIT has completed more than 240 EI supported innovation voucher projects with SMEs.

The flow of highly qualified graduates and staff from the research community is an important means of enhancing industry's innovative capacity. Ongoing continuous proactive engagement between academia, enterprise support and research funding agencies and indigenous industries is essential to sustained growth. WIT and ArcLabs support the concept of a one-stop-shop for entrepreneurs and industry. The incorporation of academic researchers, entrepreneurs, high potential start ups and multimedia industries in a shared network creates the optimal innovation environment to which I referred, driving the free flow of ideas and transferring IP and know-how to new products and services. However, it is imperative that the IDA, the regional authorities, local government, industry representatives and WIT and ITC, as higher education providers, work together to ensure the physical and intellectual infrastructure of the south east attracts and sustains both indigenous and multinational industries in the region. Reference has been made to the profile of the workforce in the region.

WIT has a strong track record in supporting vocational and labour market oriented education at all levels. Addressing the needs of the unemployed is a crucial requirement for the economic development and social renewal of the region. The institute has practically led initiatives to support the reskilling and upskilling of the unemployed, such as ex-Waterford Crystal and TalkTalk employees. We need to plan ahead and upskill the workforce before a crisis emerges. We need to have an infrastructure that continually trains and develops the workforce in the workplace. One area that is important is the Springboard programme, which provides people with the opportunity to reskill and return to work. Increasingly, we see the importance of lifelong learning. The typical profile of students is changing. It is not about four years; it is about continuous education and upgrading.

The technological university for the south east will not forget its origin and its role as a driver of innovation and employment in the region but it must deliver new models bringing together education, technology, research, business and entrepreneurship to produce industry ready graduates and innovation models such as that in ArcLabs to drive the economic development of the region. WIT and ITC formally affirmed their intention to create such a university.

There is a need for the development and implementation of an integrated investment strategy for the south east capable of building an open innovation region. Such a strategy requires a great alignment of the role of the stakeholders, including Government, industry and higher education. The creation of a technological university is paramount to the development of the innovation capacity and knowledge base in the south east. WIT's research and innovation model has proven its ability to create an economic impact. We now need investment to scale this model and to continue the economic development of the region.