Charlie O'Connor (Dublin South West, Fianna Fail)
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Question 530: To ask the Minister for Enterprise, Trade and Employment the progress to date with regard to the Strategy for Science, Technology and Innovation; and if he will make a statement on the matter. [19761/07]

Micheál Martin (Cork South Central, Fianna Fail)
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The Strategy for Science, Technology and Innovation 2006-2013 sets out ambitious targets for placing Ireland firmly on the global map in terms of the excellence of our research and its application for the benefit of our people and our economy. We are investing in Ireland's R&D infrastructure and human capital as the cornerstone underpinning our future competitive place in the world. It is a challenging goal given that we were starting from a relatively low base vis À vis EU and OECD peers. The Strategy provides us with the means to achieve convergence, coherence and complementarity in our national innovation system and to ensure maximum economic and social benefits are derived from the Government's commitment of €8.2 billion to this area under the National Development Plan.

One year on from launch of the 7-year Strategy the early indicators are of success. Total R & D spending across all sectors of the economy reached €2.33 billion in 2006, up over 14% on 2005. Between 2004 and 2006 gross expenditure on research and development (GERD) increased by over 26% in nominal terms. Notwithstanding rapid economic growth, the overall GERD / economic activity intensity ratio rose to 1.56% of GNP compared to 1.48% in 2004. This suggests a real turning point has occurred which places research and development, innovative activity and the commercialisation of knowledge as a real driving force behind our future well-being.

It is very encouraging to see that R & D expenditure by business grew strongly in 2005 and 2006. R&D spending in the business sector (BERD) rose by almost 10% from 2004 to 2005, and is estimated to have increased by a further 17.3% in 2006 to reach €1.56bn. BERD intensity as a % of GNP is growing too (from 0.82% in 2004 to 0.90% in 2006). This reflects a robust R&D spending performance by both Irish and foreign-owned firms.

The establishment of a strong research base in Ireland by the research programmes of SFI, PRTLI and the IDA is proving to be a vital driver of major investment decisions by both overseas and indigenous companies. Investment in research & development continues to increase. In 2006 alone 54 R&D investment projects were supported by IDA Ireland involving a total investment of almost €470m. This has grown at a dramatic rate from just €140m in 2004 and €260m in 2005.

Ireland's investment through Higher Education R&D (HERD) was one area Government could impact directly and rapidly and has done so. The investments in building the science base through SFI, PRTLI and enhanced Enterprise Ireland and sectoral spending on R&D in the third level sector has seen the level of R&D quadruple from €153m in 1996 to an estimated €600m in 2006. Ireland's HERD spend of 0.4% of GNP has moved from well behind to the OECD average and now exceeds that of the EU27 average. The number of full-time equivalent researchers stands at 5,600 which places Ireland close to the EU27 average.

The point of the Strategy, of course, is that we do not want to be at EU or OECD averages but by the end of the Strategy to have caught up with the leading investing countries in each case. It is, undeniably, a challenge to realise the ambitious set of goals in the STI Strategy by 2013 but these goals are underpinned by a commitment of €8.2bn in the NDP, by a coordinated and proactive approach with buy-in from Government Departments, the enterprise agencies and the higher education sector, and by a strong political commitment to realise a competitive knowledge-driven economy in Ireland.