Tony Killeen (Clare, Fianna Fail)

I am taking these two together, but separately from Questions Nos. 76 and 96.

The research agenda is one of the most important elements in the Department's drive to grow competitiveness and quality employment. As the Deputy has identified, several recent reports, including those of the National Competitiveness Council, the enterprise strategy review group and the national research and development action plan have pointed to our strong economic and commercial need continually to develop our research and development potential.

At the European Council in Barcelona in 2002, the Heads of State agreed that overall spending on research and development in the Union should be increased from the current EU average of 1.9%, with the aim of Europe approaching 3% of GDP by 2010, and with two thirds of that new investment coming from the private sector. In consequence, each member state was asked to set a target for its research and development spending to 2010 and to draw up an action plan for its achievement.

Ireland's action plan has been developed under the aegis of the Department by a group involving representatives from industry, venture capitalists, universities and institutes of technology, Departments and agencies. The plan was published in August 2004. It sets a target of spending on research and development of 2.5% of GNP by 2010 and makes a range of high level recommendations in pursuit of that aim.

I very much support the action plan targets and recommendations. They are ambitious but represent the kinds of actions that Ireland must undertake to continue to be competitive in a fast-changing, globalised economy. While public expenditure must increase to meet the 2.5% target, it is important to recall that in line with the overall Lisbon and Barcelona strategy, the critical change must occur in industrial involvement in research and development. In that regard, achievement of the target requires that industry research and development spending increase from €917 million in 2001 to €2.5 billion in 2010. While industry must drive the process, we are fully conscious of the vital supportive role that the Government must play in developing the environment for research and development.

In that regard, the National Development Plan 2000-2006 aims for a significant increase in support for research and development, with total spending of €2.48 billion planned for the period. In this Department, expenditure on research and development rose from 8.9% of gross public expenditure in 1999 to over 21% in 2003. In particular, Science Foundation Ireland's investments have made a significant impact in marking Ireland out as an attractive location for excellent researchers from around the world. Similarly, in education, the programme for research in third level institutions has impacted strongly on bringing the research infrastructure in our universities up to the standard expected for carrying out world-class research and development. Under the NDP it is intended that funding for SFI will continue to increase in coming years.

As regards fiscal measures, the Finance Act 2004 for the first time provides for the introduction of a research and development tax credit. The 20% credit provides an effective incentive to industry to increase research and development and help enhance our competitiveness as a location for new internationally mobile research-related investment. In addition, Enterprise Ireland and IDA Ireland provide direct supports to firms to increase their research and development capability and in promoting collaborative research involving companies and the third level institutions. The Department is working with Forfás, SFI and the enterprise agencies, reviewing existing schemes and incentives to ensure that they are optimally tuned to the goal of significantly growing enterprise investment in research and development.

Becoming a truly knowledge-driven and innovation-driven society requires a whole-Government approach. That is why we are putting in place new structures and mechanisms to bring all key research funders and policymakers together. Those include a dedicated Cabinet sub-committee on science, technology and innovation, supported by an interdepartmental committee, and the appointment of Ireland's first chief science adviser. I am asking the interdepartmental committee to ensure that the principal funding agencies be brought together to achieve genuine inter-agency co-operation and a consensus response to the action plan targets.

We must move rapidly from analysis to enhanced action based on the significant achievements of recent years. It is intended that the approach just outlined to the House should result in firm recommendations on the shape and scope of our science and technology programme initiatives and the level of investment required being made available to the Cabinet by the interdepartmental committee by mid-2005.

See this speech in context