Jimmy Devins (Sligo-North Leitrim, Fianna Fail)

We all acknowledge that we are coming through a tough period as the impacts of the international recession begin to manifest themselves as daily occurrences. As we face the biggest economic challenge for some time, it is no consolation to know that we are not alone and that we share these difficult times with most developed western economies. If anything, this compounds our problems.

However, we must weather the storm of negative international economic factors by facing our problems realistically, keeping cool heads, adopting prudent responses and rebuilding well grounded hope and confidence in the Irish people and the economy. Guiding our thinking and actions will be the belief that we will come through this period of upheaval. We should not lose sight of the fact that we have confronted challenging economic circumstances before and have won through. There are factors we can and must influence and control, and we must lose no time in getting to grips with this task.

The challenge before us is to achieve a transformation of the economy in the current difficult circumstances. We must play to our strengths in so doing. We must have the right people, in the right place, doing the right jobs. As an open economy, Ireland must establish a positive enterprise environment, one which promotes the development of indigenous companies as well as being attractive for foreign direct investment. We must be an entrepreneurial economy with tangible competitive advantages, an economy which focuses on utilisation of the knowledge, skills and creativity of its people and their ability in translating ideas into useful processes, products and services. In achieving this vision, innovation must be the watchword.

In the course of this debate, my Government colleagues have identified that the key elements of recovery will be secured by stabilising the public finances, improving competitiveness, supporting both Irish businesses and multinational companies and assisting those who have become unemployed. In delivering these objectives, we must keep faith with our investment in Irish enterprise and continue to support high-value innovation in products and services that will create thriving companies and support significant numbers of dependable jobs.

We must build for the future by continuing our strategy of supporting research and development, incentivising multinational companies to locate high-value activity such as research and development capacity in Ireland, and ensuring the commercialisation and retention of ideas that flow from that investment. In the last two years, the Government has been implementing a strategy for science, technology and innovation, the key objective of which is to ensure that Ireland is to the forefront in generating and using new knowledge for economic and social progress within an innovation-driven culture.

We must hold fast to our plan in the conviction that we are on the right strategic path by investing in world-class research of the highest quality. We must maintain this investment, even in these economically difficult times. Countries that have taken this road have achieved sustainable competitiveness. Investment in science, technology and innovation is not a luxury. Rather, it is an essential part of building our international competitiveness and our future. It is not an easy road. It is built on turning the hard slog of our brightest minds into knowledge, ideas and technologies we can bring to the marketplace.

This State has trebled research and development expenditure in the past ten years from a very low base, reaching an intensity ratio of 1.56% of gross national product, GNP. However, we are nowhere near the leading countries in terms of such investment, including Sweden, Finland, Japan and Korea whose intensity ratio is more than double our own. In the last decade, China has more than doubled its intensity from a low base and now spends more than Ireland on research and development as a percentage of GDP. This is an indication of the competition we are facing and the urgency with which we must act.

As Minister of State at the Department of Enterprise, Trade and Employment, I am responsible for the development, promotion and co-ordination of Ireland's science, technology and innovation policy. Fundamentally, this strategy seeks to create a competitive edge for Ireland on the global market by building a new competitive advantage based on an increased capacity to generate, protect and use new knowledge by developing mechanisms to translate knowledge into jobs, exports and growth. The enterprises that will survive and grow are those that deliver innovation, quality and value, whether in goods or services.

To this end, the Government's strategy provides a co-ordinated suite of interrelated programmes. My Department funds investments through the enterprise agencies, Science Foundation Ireland, Enterprise Ireland and the Industrial Development Agency, IDA. IDA and Enterprise Ireland promote the use of research in enterprises and use this strong research base to commercialise the outputs of research through intellectual property licences and start-up companies. These two agencies are working closely with companies to strengthen the research and technological base of the enterprise sector in order to drive productivity, competitiveness, exports and jobs. Enterprise Ireland has developed a range of schemes to ensure that we have the capacity to capture and transform the ideas and advances coming from higher education research into commercial reality. Backed by this support, companies are opening up new markets with innovative products and services.

In order to tap into the capacity and talent available in our third level educational institutions, Enterprise Ireland has funded strong technology transfer to ensure the commercial outputs of publicly funded research are realised and to help industry collaborate with the third level sector to find solutions to the research problems it faces. We are growing our higher education research base through Science Foundation Ireland investments linked to industry needs and to the activity of the IDA and Enterprise Ireland. Taking advantage of the physical infrastructure provided by the Higher Education Authority on third level campuses, Science Foundation Ireland is providing world-class researchers working in strategic areas allied to the needs of industry. Science Foundation Ireland is also building large-scale research centres, known as centres for science, engineering and technology, and strategic research clusters with various industry partners. Thus, we are building a strong research base which is directly aligned to industry needs, while maintaining a strong connection with higher education in order to produce top-quality graduates armed with the skills the economy requires.

The success of this connected approach is clear. In 2008, some 56 IDA research, development and innovation investments, valued at €420 million, were won, almost one third of which involved collaboration with Irish third level institutions and research institutes. Enterprise Ireland client companies are opening up new markets with innovative products and services that are directly linked to advancements in innovation, research and productivity. Payback will come in helping Enterprise Ireland companies meet a target of securing €4 billion new exports in the next three years.

Delivering on its mandate to transform research and development activity in Irish enterprise, during 2008, Enterprise Ireland assisted 757 companies to undertake research and development investment. These include top companies such as the Kerry Group, lona Technologies, Trinity Biotech, Glanbia, Kingspan, Greencore and Datalex. New high-potential start-up companies yielded sales of €638 million and exports of €344 million and generated employment of 5,500 over a six-year period. The campus incubation programme, which funds centres for the incubation of emerging business ideas and enterprises, has put in place business incubation centres on every institute of technology campus in addition to six business incubation facilities in the universities. At the end of 2008, there were 240 companies located in such centres, employing more than 1,000 people.

During the last eight years, Science Foundation Ireland has focused on building a high-quality research environment in an effort to establish Ireland as an international location renowned for the excellence of its scientific research. The agency has been successful in this ambitious objective, with the number of research teams working in strategic areas having grown to 336 at the end of 2008. Science Foundation Ireland-funded projects involve interactions with more than 300 companies, both indigenous and multinational. In addition, 103 companies are involved in formal, cost-sharing collaborations. There is a degree of overlap between Enterprise Ireland research and development clients attracted to Ireland and Science Foundation Ireland investment such as IBM, Boston Scientific and Beckman Coulter.

The Government's investments in research and development through the IDA, Enterprise Ireland and Science Foundation Ireland are central to its science strategy. In any period of change, there are opportunities for those who are alert and visionary. It will challenge us to innovate, change and to reinvent what we do and how we do it. We must hold fast to our aim to be among the leading locations for business innovation and to be a country where there will be a critical mass of companies creating the products and services of tomorrow. We must provide the best environment for the commercialisation of innovative, leading-edge products and services. Despite the current circumstances, we will face up to the challenge of funding the necessary increased investment in this area in the difficult years ahead to ensure a secure future.

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