Bernard Durkan (Kildare North, Fine Gael)
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202. To ask the Minister for Jobs, Enterprise and Innovation the extent to which innovation and technology is likely to feature in the creation of indigenous jobs throughout the country in the next five years; and if she will make a statement on the matter. [33186/16]

Bernard Durkan (Kildare North, Fine Gael)
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203. To ask the Minister for Jobs, Enterprise and Innovation the degree to which investment in indigenous job creation and job creation through foreign direct investment is likely to avail of innovation, technology and EU support over the next three years; the number of jobs likely to benefit from such supports; and if she will make a statement on the matter. [33187/16]

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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I propose to take Questions Nos. 202 and 203 together.

Innovation support makes a critical contribution to enterprise policy, and to the goal of developing a competitive national economy. By encouraging the development of new economic activities, Research, Development and Innovation policy-measures strengthen Ireland’s competitive advantage and build potential new areas of economic activity. The impacts of our investment in innovation and research include increased competitiveness, the creation and maintenance of high-value jobs and the attraction of foreign direct investment.

We know that investment in R&D translates into improved job creation and enterprise performance. Firms that invested in R&D grew employment by 14% between 2000 and 2014 while those that did not invest in R&D saw employment decline by 40%. Similarly, R&D performing companies grew exports by 181% between 2003 and 2014 compared to a loss of 42% in exports for non-R&D performing companies over the same period.

Innovation 2020 the Government’s strategy for research and development, science and technology emphasises the importance of innovation and technology in driving productivity growth and fostering competitiveness in a global market place. The strategy also calls attention to the role of innovation in contributing to employment, export and investment growth, as well as to the competitiveness of indigenous enterprise and in attracting and embedding Foreign Direct Investment in Ireland.

Enterprise Ireland (EI) plays a particularly important role in supporting job creation in Ireland. In 2015 EI helped in the maintenance and creation of 300,000 Irish jobs both directly and in-directly. Support for innovation and technology played a crucial role in delivering this result.

Enterprise Ireland offers commercialisation and technology transfer supports directed at generating spinout companies, boosting entrepreneurship and increasing licensing into industry. These supports include EI’s Commercialisation Fund and Campus Incubators as well as the Technology Transfer Strengthening Initiative which is overseen by Knowledge Transfer Ireland.

In addition, Enterprise Ireland operates a range of supports to help companies engage with third level researchers to undertake collaborative research for the benefit of companies. These collaborations are delivering impact and creating significant opportunities. A direct correlation has been found between collaboration activities, increased entrepreneurship and quantifiable increases in job creation.

Enterprise Ireland supports collaboration activities through a number of its initiatives - innovation voucher schemes, innovation partnerships, Technology Centres and Technology Gateways. In 2015 Enterprise Ireland supported 896 collaborative projects between business and Higher Education.

Enterprise Ireland has recently launched its Small Business Innovation Research Initiative (SBIR), a mechanism which enables public sector bodies to connect with innovative ideas and technologies, to provide novel solutions for specific public sector challenges and needs. SBIR is particularly suited to small and medium-sized business as contracts are of relatively low value and operate in short timescales.

IDA Ireland’s main objective is to encourage investment into Ireland by foreign-owned companies. Investments approved by IDA Ireland in the first half of 2016 will lead to the creation of 9,100 jobs as companies roll out their plans over the coming months and years. This performance is on a par with the first half of 2015 which was one of Ireland’s best years for Foreign Direct Investment (FDI).

The area of research, development and innovation (RDI) is of strategic importance to IDA Ireland. A company decision to invest in RDI may be to support improvement in productivity; to develop a strengthened reputation for quality or to develop new products and services.

IDA Ireland’s strategy Winning FDI 2015-2019 outlines a plan to support clients in creating 80,000new jobs and increase employment in the client portfolio to 209,000 by 2019. Support for RDI will be key to achieving these targets. Research, development and innovation investments not only embed existing FDI operations and employment but pave the way for future investment, job creation and export growth. As the global battle for FDI intensifies, our investment in research and development will become even more critical to attracting and retaining FDI companies.

The increase in RDI investment since 2000 has improved our attractiveness as an FDI location. 60% (just under €60m) of IDA’s total grant-aid budget is allocated to RDI projects each year. This investment leverages RDI expenditure of €500m by IDA clients for these approved projects and an overall annual spend by MNCs of €1.4bn per annum on RDI. This has the effect of anchoring FDI clients and securing sustainable employment and related benefits to the Irish economy.

The National Support System for Horizon 2020, the EU Framework Programme for research and innovation, is coordinated by Enterprise Ireland. Horizon 2020 is part of the drive to create new growth and jobs in Europe, has a budget of almost €75 billion and runs over the period 2014-2020. Both Ireland’s indigenous and FDI companies are active users of Horizon 2020. Irish companies that compete successfully for funding from Horizon 2020 will boost their innovative capability and competitiveness which in turn will deliver strong national economic impacts, including job creation.

Demand for the Framework Programme from Irish companies has been high. In the first 33 months Ireland's draw down was €336.6 million, placing Ireland on target to meet its goal of securing €1.25bn from Horizon 2020 by 2020. Of this funding, over €104 million went to companies and €73.6 million of this went to SMEs. Ireland has the highest success rate in Europe for the Horizon 2020 SME Instrument with a 16% success rate, compared to a European average of 6%. Innovative Irish SMEs have secured €26.5 million. Enterprise Ireland client companies account for 56% of all company funding with IDA Ireland clients securing 21%.

70% of the Horizon 2020 budget (€52 billion) is to be allocated between 2017 and 2020, which gives Irish companies the opportunity to continue availing of these supports.

The recent national ex-post evaluation of the Seventh Framework Programme for Research and Technological Development (FP7) estimated that the European Commission contribution of €625M to Ireland from 2007 to 2013 would lead to an estimated 2,000 jobs created per year. It is expected that such figures will grow considerably in the context of Ireland’s current target to double participation in the period 2014-2020.