Leo Varadkar (Dublin West, Fine Gael)
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Question 49: To ask the Minister for Enterprise, Trade and Employment the steps he will take to support the establishment of research and development units in manufacturing companies; and if he will make a statement on the matter. [18995/0]

Micheál Martin (Cork South Central, Fianna Fail)
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Research and innovation, in both product and process development, are critical to success in the increasingly global marketplace. The Enterprise Development agencies under the aegis of my Department encourage the establishment of sustained levels of R&D activity through a variety of R&D schemes offered from Innovation Vouchers to Innovation Management training to project and large-scale R&D grants. R&D awareness campaigns are also run to demonstrate the benefits of such investment.

The Enterprise Development agencies are committed to continuous evaluation and modification of their service delivery models in order to best meet the needs of client companies. As part of the development of the implementation strategy to achieve the targets set out in the Strategy for Science, Technology and Innovation 2006 — 2013 (SSTI), Enterprise Ireland and IDA Ireland undertook significant work in 2006 under the umbrella of the SSTI implementation group 'Technology Ireland' in rationalising and simplifying their R&D scheme offerings to firms.

The overall objective is to get more firms, including manufacturing firms, involved in doing research and development, to increase the amount of R&D that existing performers are doing and, to raise the quality and sophistication of the R&D they perform. This should facilitate a planned progression for companies doing R&D, thereby improving in-firm technological capacity and capability over time. The range of supports will be set out in an easily understood package for promotion to companies.

The newly designed schemes are each due to be launched by IDA and Enterprise Ireland in the third quarter of 2007 following completion of the notification process of the schemes under the new Community Framework for State Aid for Research and Development and Innovation to the EU Commission.

In addition, enhanced fiscal incentives are made available to encourage manufacturing companies to invest in R&D in the form of the Tax Credit scheme for Research and Development expenditure. The overall aim of the provision is to encourage an increase in the amount of research and development carried out by companies in Ireland and to make Ireland an attractive destination for foreign companies to commence or increase research and development, thereby allowing Ireland's industry to capture the higher elements of research and development. Critically, the tax credit applies not only to basic and applied research but also to experimental development, an activity of significant importance to Irish companies. The measure provides an effective incentive to companies to increase R&D and complements the various direct R&D grant supports which are also available through the enterprise agencies.

Manufacturing companies in the micro-enterprise sector, that is companies employing less than 10 employees, may also be supported by the County Enterprise Boards. Subject to meeting the general terms and criteria for CEB support, research and development activities within such companies may be eligible for financial support from the Boards.

The mix of supports and incentives offered is geared towards bringing about a qualitative and cultural change in enterprise in order to bring about the shift for Ireland from an investment driven economy to an innovation and knowledge-driven economy.