Dinny McGinley (Donegal South West, Fine Gael)
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Question 40: To ask the Minister for Enterprise, Trade and Employment when the goals envisaged in the Lisbon Agenda on Research and Development and Innovation will be reached; and if he will make a statement on the matter. [19001/07]

Micheál Martin (Cork South Central, Fianna Fail)
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The Lisbon Strategy was adopted in March 2000 and aims to make the EU the most competitive and dynamic knowledge-based economy in the world by 2010. In relation to research and development the strategy's objective is that overall spending on R&D and innovation in the Union should be increased with the aim of approaching 3% of GDP by 2010 with two-thirds of this new investment coming from the private sector.

The goals of European research policy are consistent with Ireland's strategy to be one of the world's leading knowledge-based economies. Our ambition is to develop Ireland as a knowledge-based economy, renowned for the excellence of its research and to the forefront of generating and using new knowledge for social and economic progress within an innovation driven culture.

A recent EU report published in June entitled "KEY FIGURES 2007 ON SCIENCE, TECHNOLOGY AND INNOVATION" noted that EU R&D intensity, after a period of slow but continued growth between the mid-nineties and 2001, stagnated in 2001-2002 and even decreased slightly after that. In 2005, only 1.84% of GDP was spent on R&D in the EU-27.

As a result, R&D intensity in EU-27 remains at a lower level than in most of the other major world economies such as the US, Japan and South Korea. In these countries, and in spite of some minor, short-term fluctuations, the trend over the past decade has been much more positive, outpacing Europe's performance in R&D intensity growth.

The Report notes that 26 Member States have set targets for their R&D intensities (i.e. R&D expenditure as percentage of GDP — each target is not necessarily 3%) for 2010 or other years. If the Member States reach their objectives, the overall EU R&D intensity will have increased substantially to around 2.6% in 2010.

The report notes that recent evidence on trends up to 2005 shows, however, that the EU is not yet on track to meet these targets. Only a small number of Member States (Austria, Denmark, Ireland, Germany and Finland) have over recent years experienced rates of growth which, if they are maintained, would be sufficient to advance these countries significantly towards their targets.

While it must be acknowledged that Ireland is growing from a low base, the Commission report recognises that Ireland is amongst a group that is catching up. Total R & D spending across all sectors of the economy was €2.33 billion in 2006, up in constant prices from approximately €1.2 billion in 1997 and has increased by 14.3% over 2005. R & D expenditure in the business sector remained strong in 2005 and 2006, the increase in 2006 estimated to be 17.3% over 2005. Business Expenditure on Research and Development has increased in constant prices from €467m in 1997 to an estimated €1,560m. in 2006. The overall R & D intensity ratio climbed to 1.56% of GNP in 2006, compared to 1.48% in 2005.

This progress will be accelerated over the lifetime of the current National Development Plan 2007-2013 as the State will invest €8.2 billion, in implementing the Strategy for Science, Technology and Innovation, as follows:

The investment in human capital, physical infrastructure and commercialisation of research outlined above and amounting to €6.1 billion is complemented by investment in initiatives set out in the NDP allocations for Higher Education and the IDA. Taking account of these amounts, the global NDP investment in STI amounts to €8.2 billion.

By progressing this Strategy the Government will ensure that Ireland rapidly catches up and meets its targets and contributes positively, as noted by the European Commission, to helping the EU move towards the overall target of approaching 3% of GDP by 2010 with two-thirds of this new investment coming from the private sector.