Conor Lenihan (Dublin South West, Fianna Fail)

Ireland has heavily invested in information and communications research. Science Foundation Ireland has provided funding of more than €500 million in information and communications technology, ICT, since 2000 and will continue to prioritise such research. The output of skilled researchers is vital to the future of the country's ICT industry. The strategy for science, technology and innovation, for which I am responsible, recognises the importance of research in new technologies in the ICT area.

Ireland has a strong and highly innovative information and communications technology industry. This is an important strength which is relevant to the development of Ireland as a smart economy. Some 210 foreign owned ICT companies are located here, including most of the global leaders, for instance, Microsoft, Intel, Google, Apple, Facebook, EMC and others. Despite the negative overtones to the previous speaker's contribution, these companies continue to invest in Ireland and embed their investment by backing it up with research and development investments. Clearly there is an appetite among foreign companies which invest here to reinvest resources precisely because we have tripled expenditure in research and development in the past ten years, at Government, university and, most important, private sector level.

The Government prompts and funds about one third of expenditure on research and development, with the balance of two thirds provided by the private sector. Public sector investment is vital because it is the seed capital which prompts the private sector to do more. Ireland was highly successful in attracting multinational ICT manufacturers, which formed the first wave of ICT companies. After the Government made the crucial investment in the transatlantic fibre optic cable, Global Crossing, we had the necessary infrastructure in place to attract the subsequent wave of ICT companies, which includes Google and Facebook.

I omitted to mention that Ireland has 660 indigenous software companies ranging in activity from financial services, security, gaming and animation to health care and educational solutions. We have evolved a highly sophisticated ICT sector ranging from the global leaders to the indigenous competitors and players.

We are continuing to invest in the telecommunications network and I and my Department will shortly publish our policy paper on the next generation of broadband. The Government is investing €80 million in the national broadband scheme which will involve overall investment of some €220 million and will ensure Internet access throughout the country. The uptake of broadband continues to increase rapidly and 43% of households now use broadband compared with just 3% in 2004.

My Department has recently published a spectrum policy paper for consideration and will publish a final paper later this year. Meanwhile, ComReg is consulting on the opportunities that will arise when we switch from analogue to digital television in 2012. The freed up spectrum will support the development of new telecommunications and broadcasting products and approaches.

In 2008, my Department was given the responsibility for the knowledge society and we will publish in the next few weeks the first action plan on technologies to support the smart economy. Building Ireland's smart economy underlines the strategy of Ireland in developing its economy via low carbon approaches and high technology uptake. This is logical taking into account Ireland's dependence on imported fossil fuel and our commitment to lowering our greenhouse gas emissions.

We also face the fabled leap up the value chain in the next few years. This is something we would have had to do irrespective of whether we were in recession. We would have had to jump or make the great leap to produce more higher value manufacture and services, whether for export or for servicing domestic consumption. That is a significant challenge, at the heart of which is the smart economy document published by the Taoiseach in December last and being developed and rolled out by line Ministers and the Government as a whole, principally through the Cabinet Sub-committee on Economic Recovery of which I am the only Minister of State to be a member.

A good example is the development of the smart electricity networks grid. We are following an integrated approach involving smart meters, electric vehicles and the optimum use of ICT to ensure a smart generation and transmission of electricity. Ireland has a target of 42% integration of renewable energy into our grid by 2020. This is the highest target anywhere in the European Union and to succeed we will need to develop the smartest grid in the world. I am confident we will achieve this challenge and in doing so, we will develop world leading expertise which we can also export.

Ireland is a world leader in a technology related to the transfer of images and data using coloured light, what is called tunable laser technology, which requires significantly less energy than current technology. It also allows fibre-optic data to be transferred at much higher speeds and much more efficiently. The images and data are transferred in an ultra-fast manner with state-of-the-art quality.

This technology will underpin new advances such as mobile television, interactive video and a range of other technologies. Ireland has been granted worldwide patents relating to this technology and my Department, together with the development agencies, is working with the inventors of this technology, Intune Networks, with a view to developing a world-first communications network in this area. This is truly ground-breaking stuff. The promoters of this company, Intune Networks, set themselves the objective of becoming the Irish version of Nokia, whose impact on the development of the then challenged Finnish economy is well known. This will give Ireland a great advantage of having the first such network, which will attract worldwide industry to Ireland to develop and trial their products on this unique network.

We are also considering the establishment of an international content services centre which would allow Irish and international content owners in film, video, music and multimedia to distribute their content in a fair and equitable manner.

We are also aiming to establish Ireland as an energy efficient world centre for data and what is described as cloud computing centres. In the future most computers and company data systems will be housed externally in such centres. These centres will support international and European headquarters activity. This is where much of the innovation in the ICT sector is occurring at present.

We have developed a concept of intelligent travel and workflow where commuters will be able to pick the most rapid commuting time to and from work. This will lead to significant increases in work efficiency and a decrease in greenhouse gas emissions.

We have developed a pilot real-time ecosystem and marine monitoring system called SmartBay with the aid of advanced communication technology.

We are promoting the use of ICT in energy efficiency. A good example is where smart heaters coupled with motion sensors lead to high energy savings in the home and workplace. An Irish company called Glen Dimplex is the world leader in this technology.

We are promoting Ireland as a test bed for trial and further development of new products. Our size and young educated population, the availability of test and trial licences from ComReg and our planned advanced communications network make Ireland an ideal centre for such activity.

I have presented examples and approaches of how ICT technology can support Ireland's development as a smart economy, a sustainable low carbon economy where we will develop and export products based on our own ideas and creativity.

We must look beyond the current recession. We must plan now in terms of the imbedded investment we make in science and technology and our ability to innovate and be creative about the solutions we produce in the technology space. This is a significant challenge for Ireland. Nobody ever said it would be easy. We knew before the current downturn happened that we would face this challenge.

Over the past ten years we saw the departure of certain classes of manufacture to other cheap low labour cost locations. We knew this was coming and we planned for it accordingly. The Government followed a policy which was believed on a cross-party basis over the ten years that we needed to upskill our people and move to the production of higher value-added manufacture and services. It is not easy to re-tool an entire population. According to Forfás's studies, there are 300,000 people in Ireland who left school without the leaving certificate. Those are the people we need to target in the years ahead, particularly now that we are in recession and unemployment is rising. We need to target those people so that they will get access to state-of-the-art training and the knowledge that adds to ability to progress in the new forms of employment that will come in the years ahead. This will not be easy and I suspect that no matter who was in government, they would face a difficult challenge in this area. However, we would point out on the positive side that only 300,000 people are in that position of not being skilled up or trained for the type of economy we are describing.

How important the area of science and technology is to all this effort is dramatised by the fact that 40% of the inward investment gains we made this year and 43% of the inward investment gains we made last year were directly related to research and development in technology. We can see the future now in the profile of companies and the types of investments we are managing to bring to Ireland in these difficult times. One of the positive aspects of this is that by placing such emphasis on research and development and by pitching ourselves as a knowledge economy of the future, we in Ireland are able to imbed much of the inward investment of recent years. That is the evidence from companies such as Facebook. Such companies are imbedding and I hope in the future the companies we managed to attract over the past ten to 20 years which intend to stay here will do so because they have made a strategic investment decision to locate their research and development facilities here and to use Ireland, not just as a gateway to the European market in terms of the raw production or transfer of products and services into the euro currency zone or the wider European market, but also as a beneficial location within which they can situate leading edge research and attract people from their companies globally to come to live and work to produce and create in Ireland.

In many respects Ireland's advantages are enviable in this respect. A strong ecosystem is being constructed at present around innovation in the area of science and technology. Our universities are increasingly focusing their efforts on translating the academic and intellectual work of PhD students, scientists and technologists to hard product in terms of patents and discovered new inventions.

All the figures are available to prove this. Over the past five years there has been an effective doubling of the number of patents, spin-outs and new discoveries by way of new inventions by our university third level sector. That is directly as a result of the imbedded spend that we started ten years ago. As I stated, the research and development spend has tripled in the past ten years and we are now beginning to reap the rewards of the imbedded investment.

We must now go forward to 2013 and hopefully achieve the target we have set ourselves of improving the 1.66% of GDP spend on research and development to 2.5% by 2013. That will be a major challenge, not least because other countries, including the United States, South Korea and Israel are already ahead of us and are pledging to go well ahead of where they currently are. Some countries, including Israel, already spend 5% of their GDP on research and development and that explains many of the demonstrable industrial successes such as research and development, higher value added services, software and other areas Israel has achieved in recent years.

South Korea has committed to increasing by 10% every year the figure it spends on research and development for the next number of years. It aims to achieve figures of 4% or 5%. We are aiming for 2.5%, but should the economy come out the other end of the current difficulties of the recession and international downturn, we should look for even more ambitious targets in the area of research and development because our universities are in favour of it.

UCD and Trinity College announced recently that they will scale up their efforts, spin outs, PhDs, commercialism and participation in PhDs, especially in science and technology, and will create conditions for participation in those with strong business or commercially focused inputs into PhD training courses. That is an important part of this initiative so we can maximise, optimise and fully realise the potential of highly intelligent individuals in the area of science and technology and harness such intelligence for commercial and attainable gain by way of a patent and product that can ultimately be sold to the public in Ireland or abroad.

We have a very strong future in this area. We have a population that is well equipped for the challenge. However, we have a significant problem in what is described as the "pipeline" in our schools and universities. Only 16% of those who take the leaving certificate opt for higher level mathematics, which is a small number compared with other countries across Europe and the world. One would imagine those who take the subject are high achievers, but the reality of the results in higher level mathematics show a different story and despite the fact that a very small elite number of people take the subject, they are not high achievers within the scores they achieve in the leaving certificate.

It is presenting a significant problem as we try to move up the value chain in terms of the challenge we face competitively with the goods and services we export and produce. We have a significant problem in schools. The Minister for Education and Science, Deputy Batt O'Keeffe - I am also a Minister of State in his Department - will role out project maths from September. We need to look creatively at other things we, as a Government, a society, parents and citizens, can do to encourage more people to take up mathematics and science related subjects and how we can improve the results and teaching in this area.

Many, perhaps the majority, of those who teach mathematics in secondary schools are not fully qualified in it to deliver the teaching required, which is a significant issue we have to address. It is not just a question of getting more volume or people taking higher level mathematics through the system, but there is also a challenge to improve the quality of those who come out the other end after the leaving certificate.

Some universities and inward investors are privately very concerned about the standard of the university graduate we produce in the area of mathematics and science. Yesterday I spoke to people in NUI Maynooth who expressed great worries and concerns about the measures they have to take to improve the quality of computational and mathematical ability of graduates already on mathematics and science courses. They are investing a lot of their time in improving the quality of the people coming in so they can respond to the courses in which they have enrolled. That illustrates the challenges we face. They say they must take these measures to improve the quality of the people they produce with degrees in the subjects and areas to which I referred. The answer is to go back to primary and secondary level and improve the results there because we cannot expect universities endlessly to provide extra tuition or training to people who have already qualified for a particular course. It is a challenge. I look forward to hearing what Members have to say.