Seán Sherlock (Cork East, Labour) | Oireachtas source

The researchers funded by Science Foundation Ireland, SFI, are connected to close to 650 distinct companies that employ more than 90,000 people in Ireland. These researchers also leverage significant research funding from non-Exchequer sources, such as the EU and industry, usually in the order of €80 million to €90 million per annum.

The SFI also supports more than 20 research centres across the country in fields such as the future Internet, food for health, energy, biomedicine and nanotechnology. Virtually all of the blue chip multinational companies in Ireland are connected to SFI in some way, for example, IBM, Cisco, Pfizer, Roche, HP, Intel, Merck, Microsoft and EMC. Many indigenous firms are also connected, such as the Kerry Group, Creganna and Sigmoid Pharma.

The significant investment made through the SFI by successive Governments since 2000 has been complemented by the ramping up in research investments by others in our national innovation system, for example, the Higher Education Authority, HEA, Enterprise Ireland, IDA Ireland, Teagasc and others. The impact of this concentrated investment has been a major contributory factor in Ireland coming to be internationally regarded as a credible research-performing nation and is linked to why we have nine of the top ten big pharma-life science companies in the world, 15 of the world's top 25 ICT and technology companies and virtually all of the social media giants, with Dublin arguably now being the Internet capital of the world. Ireland ranked as one of the leading countries in the world for research and development investments.

The sustained research investments of the past decade or so are feeding through to the attraction of foreign direct investment, FDI. Last year, more than 40% of IDA jobs announced were in companies with links to SFI research teams, accounting for 4,575 of the new IDA client jobs. This trend has continued in the first quarter of 2013, with the SFI being linked to 600 of the 1,100 new IDA jobs announced thus far. Already this year, major research and technology-related announcements have been made by the likes of McAfee, Yahoo, Nypro and Zurich.

Since 2004, we have seen a fivefold increase in the proportionality of research-related IDA FDI wins, from approximately 10% worth €120 million to an average of €600 million per annum for each of the past four years of the fiscal crisis, typically representing close to half of all new IDA wins. This State investment is also paying off for indigenous firms. Forfás data in the past three years show that the exports, employment and sustainability of research and development-performing firms consistently outperform those of firms not engaged in research and development. We have also seen a marked improvement in Ireland's international scientific rankings, from 36th in 2003 to breaking into the global top 20 in 2009. Despite our fiscal crisis, we have remained in the top 20.

We have caught up and surpassed many of our OECD competitors, but we cannot stand still. Ireland has reached a stage at which it is appropriate to define more precisely the areas wherein critical mass and concentration of our research effort will maximise further returns. This Bill will play an important part in that process.

To date, the SFI has focused exclusively on oriented basic research for enterprise development. Oriented basic research is defined as: "Research which is carried out with the expectation that it will produce a broad-base of knowledge likely to form the basis of the solution to recognised or expected, current or future problems or possibilities". Basic research is expected to produce results that form the basis for future applications, but which are, generally, some way off the commercial market.

The harsh realities of our current fiscal and economic crisis have made us all aware that there are competing and equally compelling demands for Exchequer investment, yet it is imperative that we ensure now, more than ever before, that we achieve the optimum impact from our research investment. Extending SFI's remit to support applied research will be a contributory factor in this regard. Applied research is usually undertaken either to determine possible uses for the findings of basic research or to determine new methods or ways of creating practical applications.

I will briefly refer to the 11 sections of the Bill and I will then elaborate on some of the more significant sections. Sections 1 and 3 set out the definition of terms used in the Bill. Section 2 relates to the expenses incurred by the Minister via the annual financial allocation being made to SFI - to be paid out of moneys voted on and provided by the Oireachtas. Section 4 sets out the revised functions of SFI, which include supporting research priority areas, applied research and science, technology, engineering and mathematics, STEM, activities. Section 5 relates to the provision by the foundation of funding on a wider geographical basis - and seeks to include researchers and institutions based in Northern Ireland, as well as participating in certain international collaborative projects.

Section 6 provides for a consequential amendment to the 2003 Act governing SFI's reporting requirements under its annual reports. Section 7 provides for the repeal of the provisions relating to compilation of the so-called science budget by Forfás. Section 8 repeals the restrictions on Enterprise Ireland, EI, and the IDA in relation to the Shannon region. Section 9 provides for the new provisions for collection of research and development data by Forfás in place of the provisions repealed by section 7. Section 10 facilitates the amendment of the confidentiality provisions applying to El and SFI on the Freedom of Information Acts. Section 11 provides for the Short Title of the Act, and related citation and commencement provisions.

The critical sections of the Bill that are intended to facilitate the realignment of Ireland's research and development policy and that are most relevant to SFI actions are sections 3, 4, and 5. Section 3 provides for the amendment of section 2(1) of the Act of 2003 in respect of the terms used in same, particularly as regards the introduction of a definition of "applied research". It will also enable SFI to refocus its funding towards the priority areas as identified in the recommendations of the research prioritisation steering group chaired by Mr. Jim O'Hara, formerly of Intel. The group identified 14 priority areas of opportunity for Ireland and six underpinning technologies and infrastructure to support these priority areas. The priority areas were chosen on the basis of the existing strengths of our enterprise base, opportunities that exist in terms of the global marketplace and those which are most likely to deliver economic and societal impact and ultimately good jobs for this country. The report of the group was approved by the Government and published in March 2012. The Bill will assist the implementation of some of the research prioritisation recommendations, which involves a process I am currently chairing across 14 prioritisation action group areas.

Section 4 lays out the revised functions of SFI. It provides for amendments to section 7 of the Industrial Development Act 2003, in particular in respect of extending SFI's legislative remit to enable it to fund applied research. Applied research is defined as: "Work undertaken in order to gain scientific or technical knowledge and directed towards a specific practical application." Enterprise Ireland administers a number of research and development programmes involving direct grants to companies to develop and support industry-led, market-focused applied research. However, these El programmes start at a stage in advance of the point where many researchers find themselves, as the possible uses for their basic research results have not yet been explored. Therefore, a gap exists within our existing research ecosystem that impedes the pursuit of the potential applied research opportunities that often arise from oriented basic research. By extending SFI's remit to include applied research the Bill will take the outcomes of the oriented basic research funded by SFI closer to market, increasing the potential of our research to yield commercial opportunities, jobs, and other societal benefits.

At this juncture I will refer to some recent misinformed commentary in various media on research prioritisation and the extension of SFI's remit into the applied research arena, for instance, that such actions signal a so-called death knell for fundamental basic research in Ireland and that the Government is no longer committed to science, technology and innovation. This commentary does not reflect what is actually happening. On 25 February 2013, we had the largest ever research announcement of its kind in this country, involving seven large-scale research centres, supporting 800 researchers, and representing a total investment of €300 million over the next six years, €200 million of which will be provided by the Exchequer via SFI and a further €100 million coming from more than 150 industry partners. At the end of January, we also had €60.8 million of new SFI investigators awards across a range of fundamental research areas, primarily the life sciences, ICT, mathematics and energy. In November 2012, SFI also announced €30 million in key research infrastructure awards. All three of these significant research announcements by Government, through SFI, are underpinned by talented basic research scientists. All of the above is of direct relevance to supporting basic research excellence in this country that is directly relevant to our economic and societal development. One can add to those examples the fact that SFI's budget for 2013 was maintained at very close to 2012 levels, as was the basic research funding allocation of approximately €35 million being provided to the Irish Research Council this year.

To return to section 4, this section also includes a new function to enable SFI to promote and support awareness and understanding of STEM. That was originally a function of the discover science and engineering, DSE, programme initiated by Forfás in 2003, the objective being to heighten STEM awareness so as to increase the number of students studying the physical sciences and mathematics; promote a positive attitude to STEM careers; and foster a greater public understanding of the physical sciences, engineering and mathematics, and their value to society. In March 2012, the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, transferred responsibility for delivery of the DSE programme from Forfás to SFI on an administrative basis. The Bill now puts SFI's science awareness activities on a proper legislative footing. Where appropriate, SFI will consult the Minister for Education and Skills on STEM related issues. The House will be aware that I am Minister of State in both of those Departments.

Moving on to section 5, under the Industrial Development Act 2003 as it stands, SFI at present does not have the power to directly fund research groups outside the Republic of Ireland. Section 5 will grant additional powers for SFI to provide funding to researchers and institutions based in Northern Ireland, thereby advancing opportunities for collaboration between research groups North and South. This section will also allow SFI, subject to the Minister's consent, to enter cost-share collaborative research arrangements with international partners in areas where Irish researchers have real potential to achieve added value from such arrangements. International collaboration on research brings together resources, pools knowledge, enhances scientific excellence, and thereby achieves greater success in addressing research problems and delivering greater efficiencies. It opens up access to external non-Exchequer funding, facilities and networking opportunities for Irish researchers that would not otherwise be available. When opportunities arise, it is important for Ireland, through SFI and other national funders, to be ready and available to participate in international programmes in areas where Ireland has research strengths.

The European Commission's proposals for research and innovation funding for the period 2014 to 2020, Horizon 2020, include allocation of co-funding for member state collaborations, subject to "clear financial commitments of the participating countries, including prior commitments to pool national and-or regional investments for transnational research and innovation". Therefore, as part of Ireland's efforts to maximise our drawdown from EU research funding, it will be necessary to be in the right position to engage in EU common-pot arrangements, where appropriate.

I will turn briefly to some of the other matters dealt with in the Bill, in sections 7, 8, 9 and 10. Section 8 repeals the restrictions on Enterprise Ireland, EI and IDA vis-à-visthe Shannon region. By so doing, the Bill will facilitate the reorganisation of enterprise development functions in the Shannon free zone. In 2011, in recognition of the severe financial difficulties that Shannon Development faced following the collapse of the property market, the Government agreed to review the future role of that agency. Deputies will be aware that Shannon Development engages in property transactions and, unfortunately, the crash has severely impacted upon the company's ability to raise revenue in this way. Following careful consideration of this matter, the Government agreed in principle in May 2012 to separate Shannon Airport from the Dublin Airport Authority and to merge Shannon Airport and Shannon Development into a new aviation-focused entity which would lead to the optimisation of enterprise development arrangements in the region. The Government decision also provided for the transfer of Shannon Development's functions relating to indigenous enterprise and foreign direct investment, FDI, to Enterprise Ireland and IDA Ireland, respectively, and directed that a plan for the delivery of those functions by these agencies be developed.

In September 2012, when seeking approval to draft the appropriate amending legislation to enable IDA Ireland and El operate in the Shannon free zone, the Minister for Enterprise, Jobs and Innovation, Deputy Bruton indicated he was happy to take this step in advance of any further legislative changes that would be required to create the new entity. Subsequently, in late November 2012, the Government considered further proposals submitted by Deputy Bruton and the Minister for Transport, Tourism and Sport, Deputy Varadkar. The Government confirmed its earlier decision that a merged, State-owned, commercial entity be established, NewCo, by 1 July 2013, comprising the Shannon Airport Authority and a restructured Shannon Development to exploit its combined assets as a catalyst for the development of sectoral opportunities, particularly within the aviation sector, including the creation of an international aviation centre of excellence centred on the airport. The process is ongoing and involves the drafting of comprehensive legislation to create the new aviation-focused company. I assure the House that this is a priority item for the Department of Transport, Tourism and Sport, working in consultation with my Department. Progress on this exciting project is being monitored by a high level steering group.

Sections 7 and 9 provide for reform of the legislation governing the collection of research and development data by Forfás. The Science and Technology Act 1987 provides for the preparation by Forfás of a science budget on a periodic basis and obliges bodies funded under the science budget to supply to Forfás such information in such form and at such time as it may require. The data, collated and published biannually by Forfás as the science budget, measures overall expenditure on science and technology in the Government sector. However, the areas of expenditure measured do not align with current international practice for the monitoring of science, technology and innovation, STI, expenditure. Consequently, the resulting survey is neither a useful policy tool nor an effective use of staff resources. Therefore, deletion of these provisions via section 7 is proposed for administrative efficiency.

Through section 9, Forfás will continue to compile, on an annual basis, a major component of the science budget, known as government budget appropriations or outlays on research and development, GBAORD. This is an internationally comparable metric carried out using harmonised concepts and definitions from the OECD and is required under an EU Commission regulation relating to statistics on science and technology.

Section 10 affords an opportunity to align the legislation governing SFI and El with the Freedom of Information Acts, specifically by facilitating amendment of the confidentiality provisions that apply to both agencies. While the FOI Acts apply to both agencies, at present section 16 of the Industrial Development Act 1998 in respect of El, and section 17 of the 2003 Act in respect of SFI, prohibit disclosure of confidential information by board members, staff and other specified persons. Through this Bill it is proposed to make these sections subject to the FOI Acts, thereby allowing for disclosure of confidential information in accordance with those Acts.

I commend the Bill to the House.

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