Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 94: To ask the Minister for Enterprise, Trade and Employment if he will implement any policy initiative that will redirect investment funding to manufacturing and commercialisation of new inventions; and if he will make a statement on the matter. [8586/07]

Micheál Martin (Cork South Central, Fianna Fail)
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The Government's primary responsibility on enterprise policy is to ensure the broad environment and essential framework conditions continue to underpin and support the development of a sustainable enterprise sector.

In line with the recommendations of the enterprise strategy group and small business forum, over the period of the next national development plan, 2007-13, financial incentives totalling €1.7 billion, and other supports, will be provided through Enterprise Ireland and the city and county enterprise boards to create more knowledge-based, technologically innovative, sustainable and competitive indigenous enterprises.

This will include specific initiatives to stimulate the establishment and development of high potential start-up companies across a range of high value sectors, including manufacturing; productivity improvement initiatives to support manufacturing companies to improve competitiveness through technology and training; a range of initiatives to develop management and international sales capabilities; supports in accessing early stage and development capital and financial planning and advice and mentoring; and supports for entrepreneurship and micro-enterprises, including the provision of local enterprise infrastructure.

The nurturing of a positive culture of entrepreneurship and promotion of the formation of new, particularly innovative, enterprises with growth potential will remain a key objective over the timeframe of the plan. Based on the development of their existing suite of interventions, the county enterprise boards will promote entrepreneurship throughout society through initiatives such as their Start Your Own Business training courses, schools enterprise programmes, awards schemes and networks, including the Women in Business networks, etc.

As part of the Government's overall policy to develop science, technology and innovation, as set out in its strategy on STI published last June, Enterprise Ireland will also continue to promote industry-relevant research and development and the commercialisation of publicly-funded research. The agency has brought together a range of supports under a commercialisation fund which seeks to support academic researchers in developing their ideas and bringing them closer to commercial realisation. Funding of €25 million was provided to over 150 projects during 2006.

By 2013, the strategy aims to double the number of companies with minimum-scale research and development activity, treble the number of enterprises engaging in significant research and development activity, increase business expenditure on research and development, increase gross expenditure on research and development and double the proportion of sales in indigenous firms of innovative products and processes. The number of new doctorates in science, engineering and technology will almost double from 543 in 2005 to 997 in 2013. The number of new doctorates in the humanities and social sciences will also double.

To compete successfully in the international marketplace Irish companies will need to develop world class management teams. The key focus areas for Enterprise Ireland will include human resource development, management development and mentoring. To encourage and develop international sales capabilities in client companies Enterprise Ireland will provide services and assistance, including market intelligence, in-market technical, legal and financial expertise, targeting potential buyers, buyer introductions and facilitating Irish companies to establish overseas.

Micheál Martin (Cork South Central, Fianna Fail)
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Recently, Enterprise Ireland launched a €30 million fund to strengthen the technology transfer offices in third level institutions and supports the construction of campus-based business incubation centres in all institutes of technology and universities.

Ruairi Quinn (Dublin South East, Labour)
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The Minister is time-wasting.

Micheál Martin (Cork South Central, Fianna Fail)
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To date, it has approved 25 incubation centres, 16 of which are in institutes of technology or equivalent third level colleges and a further nine on university campuses.

Ruairi Quinn (Dublin South East, Labour)
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The Minister is a time-waster.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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In a previous reply on manufacturing we noted declining productivity levels and higher costs, most of which are directly attributable to the Minister's policy. He disagreed with the Central Bank and the Department of Finance about export growth and the fact that many companies would not be based in Ireland were it not for our tax policy. Future job creation will be based on exploiting the talent of the Irish.

I agree with the Minister in that there has been much investment in research and development in the third level sector, but 16% of all funds, whether private or public, is being invested in property. Does he have initiatives in mind to redirect some of the incentives away from property to manufacturing and employment generation proposals? A figure of some 5% is the European average for investment of private and public funds in property. Notwithstanding the fact that the Minister referred to the Ahead of the Curve report and other initiatives and fora, has he studied specific financial incentives in the context of the Finance Bill or other measures to direct incentives to manufacturing and the commercialisation of research and development activities?

Micheál Martin (Cork South Central, Fianna Fail)
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I mentioned the commercialisation fund allocated by Enterprise Ireland to universities. It is substantial and will dramatically increase the capacity of universities and institutes of technology to commercialise their research.

The Deputy is aware that the budget was significant in terms of incentives to invest capital in new companies and businesses. In line with the recommendations of the Small Business Forum which I established and through which I was anxious to set a blueprint for small businesses, we enhanced the business expansion scheme significantly by raising investor limits and the amount of money that could be raised by companies. We did likewise with the seed capital investment scheme. We lightened the regulatory burden in respect of VAT returns for small to medium-sized companies. By developing an innovation voucher scheme for micro-enterprises and knowledge acquisition grant schemes for small to medium-sized companies we are also in line with the forum's recommendations.

Last year we launched the most significant venture capital fund in the history of the State. The Government provided up to €175 million through Enterprise Ireland for a new capital venture round which we hope will leverage a sum of approximately €1 billion in investment in new and start-up companies. In the budget we provided for an enhanced research and development tax credit to provide incentives for more investment, not just by multinational companies, but also by Irish-owned businesses. We want to see a greater participation rate in research and development in the manufacturing and services sectors, in particular. We have tried to switch investment from construction to production. The budget which received a warm welcome among the small to medium-sized business community delivered almost 100% on the forum's recommendations. Married with the venture capital fund and the research and development tax credit, we expect to see higher levels of investment.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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In the interests of saving time, I suggest we move to the next question.