Ivor Callely (Dublin North Central, Fianna Fail)
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Question 354: To ask the Minister for Enterprise, Trade and Employment the level of research and development that Irish companies were spending as a percentage of GDP in 1987 and 1997 and the expected comparison in 2007; the expected ratio of business expenditures on research and development as a percentage of GDP over the next 10 years; the benefits of same; and if he will make a statement on the matter. [8302/07]

Micheál Martin (Cork South Central, Fianna Fail)
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A more meaningful reflection of spending on research and development in the business sector (BERD) is arrived at by using expenditure comparisons to GNP rather than GDP.

BERD expenditure in Ireland rose from €124 million in 1987 (0.52% of GNP) to €612 million in 1997 (1.03% of GNP). Latest data show that estimated BERD rose to €1,560 million in 2006 (1.05% of GNP), which represents a doubling in percentage terms of GNP on the 1987 figure. The recently published Government Strategy for Science, Technology and Innovation 2006-2013 (SSTI) sets a target to grow BERD to €2.5 billion by 2013.

Increased investment in Science, Technology and Innovation (STI), and in particular research and development (R&D), is a vital part of Ireland's plan to become a more knowledge-driven economy. Increasing international competition is creating pressure for improvements in efficiency, quality and productivity and a growing need to innovate. These pressures will increase and intensify. Increased and continuing investments in STI/R&D activities will be crucial to maintaining future economic stability, improving Ireland's competitive position on the international stage through higher productivity, and sustaining high levels of future employment.

Over the lifetime of the current NDP 2007-2013, the State will invest €6.1 billion in STI, of which Enterprise STI will account for €1.29 billion. The SSTI, which is a principal pillar of the NDP, sets out a vision of an Ireland in 2013 being internationally renowned for the excellence of its research and at the forefront in generating and using new knowledge for economic and social progress, within an innovation driven culture. Increased investment in STI, and in particular R&D, will enable Ireland to better compete internationally in the face of ever increasing globalisation and greater demand for customised products and services.

Developing new and better products and processes will be the drivers of future success for enterprise. R&D activity will help ensure high-value, knowledge intensive activities that will support high-value added jobs and prosperity in the future. Companies must undertake high quality, sophisticated R&D in order to internationalise into new markets efficiently and quickly. Enhanced R&D capacity is also essential to reinvigorating Ireland's attractiveness for Foreign Direct Investment.