Seanad debates

Tuesday, 18 November 2014

5:35 pm

Photo of Sean BarrettSean Barrett (Independent) | Oireachtas source

I welcome the Minister of State and wish him well.

Some of the warning signs that Senator Craughwell has referred to came out of group think herd instincts in property which was a disaster. I see so little analysis of the research and innovation sector that I worry it could be the next herd instinct group think. I am afraid that we will all gallop in one direction that is without substance.

Over the years, and long before the Minister of State's time, this sector has shown a remarkable ability never to evaluate its performance, programme after programme. Economists were never let near them because people were afraid of what we would say. The insider guys gave themselves big grants and so on. They felt very good about doing so but they must be answerable to a stronger Department of Finance. We have spent an awful lot of money on this sector but I have seen remarkably little in the form of results. I see remarkable resistance by all the bodies concerned to ever being evaluated.

There has never been a response, that I can recall, to an bord snip nua's criticism of the level of bureaucracy involved in universities in administering research grants. I think 70 programmes, in both UCD and TCD, were paid far more than the lecturers and the people who carried out the research. I have confirmed those numbers but I could not get anybody to take an interest in the matter. This could be a kind of monster that the banking system proved to be in its time because nobody is asking questions. Nobody is saying "Where are the results? These are all huge inputs but when can we see the outputs?"

The report on innovation by the last Government was spectacularly short of any attempt to evaluate. Parliament cannot have people coming in with one wishlist after another. That is just bankers saying "Give me another €64 billion so I will feel richer and we will send the bill off later on." The time for results is long over as far as these programmes are concerned. I have mentioned an bord snip nua concerns about the matter. One does not want to divert market activities into subsidy seeking. Firms will be pretty skilful at transferring their research activities into some place that will be subsidised by the Minister of State which is great because the profits will look better. Some guy will give an after dinner speech totally in favour of research on condition that the Minister of State pays for it.

The success of the United States is due to a lot of the research being funded by firms that do not make after dinner speeches calling on the state to do so. We are looking now at the base being eroded by profit shifting - the new corporate tax mechanism. Part of the onus should be put on the members of the advocacy groups, including IBEC, to put in some money upfront and to stop saying we would like it all done for free. We have learned the lesson that we cannot give everything to everybody without borrowing vast amounts of money.

The Minister of State claimed that the EU aims to reduce red tape but that will be the day. The EU is built on red tape which has now been translated into 26 languages. I wish the EU well but I will not hold my breath.

Firms should not offload their research programmes. Mathematics is the basis of this issue. I have tried, in my education career and wider policy career, to interest people in improving mathematics in primary schools in Ireland but only a handful of people responded. The institutions are not interested and most mathematicians are not interested. The Hickman research from Harvard shows that studying maths in the early years is crucial. We have so many unqualified people teaching mathematics in Irish schools that it makes me wonder if this whole edifice is built on sand. The Minister of State, along with the Minister for Education and Skills, should make it their priority to address the problem.

When I was in primary school I was taught that úll agus úll eile equals dhá úll. A lot of primary teachers say they were not prepared during their teaching training even for that level of mathematics. That is to our disadvantage and means many IDA firms have to import staff. There is too much advocacy and too little analysis happening in this area which has occurred for a very long time.

In terms of research, I would go for flexible portfolio projects and maybe drop 20% of them ever year in order to keep the scheme moving. People get nailed into subsidies for research. They think it is their career but it is not because this is meant to be a dynamic sector.

One must also be concerned about the diversion of resources in universities away from lecturing which is what they are there to do.

The role of the universities is to produce the next crop of undergraduates. I have heard it said that one could use the money to buy out one's teaching. Why would I do that? My job is to train the next crop of students between 18 and 22. What I describe occurs a little too frequently. One person with whom I was debating this said he had not been teaching-centric in his career. The message has to go out to people like him that universities are teaching-centric. That is their job. This points to the hidden cost of the programme.

After what has happened to us, we really must be aware of the position of Europe, which led us into the currency. As Mr. Draghi said this morning, the equivalent of 85% of Irish GDP had to be given to keep the banks liquid. That policy came from Europe. This time around, we do not want another example of herd instinct where we gallop over a cliff.

May I say a word about my own subject? Economics departments in most Irish universities have been reduced in size. They were never more important. We need to evaluate policies, the single currency and every single item of public expenditure put to the Government for approval and appraisal. We do not have the relevant expertise. The Wright report showed that approximately 7% of the staff in the Department of Finance were qualified to Master's level, or above, in economics. The equivalent figure in Canada was 60%. We do not do project appraisal in banks either. There is insufficient economic expertise. Economists were used for PR purposes. We know the damage they did to the country.

The networks problem is solved. With the Internet, I can put a message through to San Francisco, to an individual on my campus or to the office next door in the same time. Therefore, stimulating networks may not be necessary given the changes in technology.

The Minister of State’s speech referred to a high-level group. Senator Reilly referred to mission creep, as did Senator Craughwell. The Minister of State referred to “A ... high-level group, chaired by my Department and comprising those Departments and Government agencies whose remit includes research and innovation”. The country is weighed down with high-level groups; that is the problem. We need the expertise to do the research and produce the results. The PR on the results is heavy. I recall the number of times, both North and South, that I have heard the cure for cancer announced on “Morning Ireland”. It is a regular event now. When will the product be in the shops, Mr. Researcher? The researcher would say he would need a bigger grant to tell me that. There is an industry that is diverting itself from producing the products the rest of us need.

The other point that worried me was the emphasis on large-scale projects in the Minister of State's speech. He said that if we do not get project appraisal right, we will have large-scale failures. The concept of being too big to fail could apply to research in addition to the banks, which are supposed to be too big to fail. The Minister said the strategic research proposals will focus exclusively on large-scale strategic projects. This results in a bigger risk.

Another point I am concerned about relates to the five new, large-scale, world-class research centres. My remarks are intended to be genuinely helpful and I would not want them to be made in a spirit that would undermine national purpose or morale. We heard about research centres before. There is hardly a plot of ground left on some university campuses as a result our having gone on a massive building campaign. Is this the dominance of scientific research or the result of the builder lobby, which had so much influence in bringing the country to the brink? What is the research? Where is it published and what does it do? Where is it commercialised?

One of my best students was the greatest innovator in European aviation. The Minister of State will know who he is. The individual in question, Mr. O’Leary, addressed three simple matters: price, product and productivity. He gave the lowest price by far of any of the airlines. He changed the nature of the product and achieved productivity numbers way in excess of those of competitors. He did so as part of a normal course. If we had set up an institution of aviation studies, it would now be costing the State millions or billions of euro. The Minister of State has to be wary of that.

We need evaluation in this area really badly. If we keep adding to programmes, nothing will ever get dropped and the country will never solve its public finances problem. We will just have incrementalism the whole time. If each new project has its PR agency and the budget goes up, nothing will ever get dropped and we will not be able to get out of the bind we are in.

The scientists and engineers have done remarkably well. It is time for them to produce some results for the rest of us and not fall into the previous pitfalls of an economy built on banking and building. There is a need for a more balanced portfolio. The lack of economic expertise in this area, many areas in the public sector and in banks has to be addressed as part of research programmes because the lack of it is one of reasons the country went on the rocks a number of years ago.

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