Seán Sherlock (Cork East, Labour) | Oireachtas source

The Government is committed to the vision of using research and innovation to generate jobs and economic growth. Within the constraints of our economic circumstances, we are maximising the funding available for research, development and innovation and, critically, maximising the impact of this investment on jobs and the economy. I am confident the 2014 Exchequer capital allocation, together with both the capital carry-over to be decided in November and reinvestment of income generated by agencies, will maintain research and innovation allocations in line with the 2013 expenditure. In 2014, Science Foundation Ireland, SFI, and Enterprise Ireland will continue to leverage EU and private sector funding for research programmes, building on the successes to date. In 2012, Irish researchers across the country both in industry and in the public research system leveraged over €100 million in funding from the EU's research and development funding programme, the Seventh Framework Programme, up from €93 million in 2011. To date in 2013, over €86.5 million has been leveraged from this funding source.

In the coming years, there will be a roll-out of the European Union's next research and development funding programme, Horizon 2020, which was negotiated during the Irish Presidency, and I had the privilege of chairing those negotiations. With a total budget of over €70 billion to 2020, our national research and development community is well placed to win significant funding from Horizon 2020, in the order of €1 billion over the period to 2020, along with funding from other non-Exchequer sources.

Significant improvements were made to the research and development tax credit in budget 2014, along with a statement of intent that the research and development tax credit base year will be phased out entirely over time as resources allow in order to improve the overall international competitiveness of the regime. These improvements, which include an increase in the amount of expenditure allowed on a full-volume basis - without reference to the base year - from €200,000 to €300,000 and an increase in the outsourcing limit from 10% to 15%, will increase Ireland's attractiveness as a location for research and development activity and result in additional jobs in 2014.

The evidence indicates that the Government's strategy of accelerating the economic and societal return from our science, technology and innovation investment is paying off, as Ireland has just been ranked third in the EU, according to the new indicator of innovation output, which measures the extent to which ideas from innovative sectors are able to reach the market, providing better jobs and making Europe more competitive. This proves that we are investing smartly in this area and that our investment is delivering jobs.

I will outline some of the research, development and innovation initiatives that will be supported through my Department in 2014. Science Foundation Ireland will establish up to three new large-scale research centres, supporting between 200 and 300 jobs, in areas of national strategic importance, such as medical devices, software, diagnostics, telecommunications, smart grids, and sustainable food production and processing. There will be significant industry engagement and co-funding, at a minimum of 30%, of these sectors. Exchequer funding for these new centres will amount to between €10 million and €15 million in 2014. Additionally, four or five research "spokes" will be established by SFI to enable the addition of new industry and academic partners and projects to existing SFI research centres to allow them to expand and develop in line with new priorities and opportunities. SFI will fund 3,000 researchers and over 20 world-class research centres in 2014. These are a key magnet for foreign direct investment and will help ensure that Ireland will become one of Europe's most attractive locations for foreign direct investment, and they underpin existing jobs with world-class research.

We have clear evidence of the link between research funding and job creation from foreign direct investment. To date this year, more than 45% of IDA jobs announcements have come from companies with links to Science Foundation Ireland research teams. That is over 3,700 jobs in companies linked to SFI-funded researchers.

Foreign direct investment companies play a vital role in the economy, with one in seven jobs being accounted for by foreign direct investment. In addition, foreign direct investment companies contribute €19 billion to the economy, generate more than 70% of corporation tax - some €2.8 billion in 2011 - and account for more than 70% of national exports - €115 billion in 2011.

Enterprise Ireland and Science Foundation Ireland will continue to promote and drive effective industry-academic collaboration which is essential for the successful translation of the best new ideas from the laboratory into innovative new products and services and, ultimately, the delivery of good quality, sustainable jobs for the people. In 2014 Enterprise Ireland and Science Foundation Ireland will continue to drive commercialisation from State-funded research, facilitating the emergence of new products and services which will underpin export growth and employment.

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