Bernard Durkan (Kildare North, Fine Gael)
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203. To ask the Minister for Jobs, Enterprise and Innovation the extent to which her Department continues to encourage and avail of job creation opportunities based on innovation and technology; and if she will make a statement on the matter. [14672/17]

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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My Department recognises the key role that innovation has played in Ireland’s economic recovery to date. It contributes significantly to job creation, exports and investment, and the competitiveness of the indigenous enterprise base, and also to embedding the foreign direct investment base in Ireland.

It is clear that a strong interdependence exists therefore between science, technology and innovation policy and enterprise policy. My Department has developed its Innovation 2020 strategy for Research and Development, Science and Technology and its Enterprise 2025 policy side by side. A critical objective for my Department is delivering on the actions and commitments set out in Innovation 2020.

A report published by my Department in October 2016, Economic and Enterprise Impacts from Public Investment in R and D in Ireland, focuses on the public R and D investments that are aimed at achieving enterprise impacts. These relate to investments by this Department, through Enterprise Ireland, IDA Ireland, Science Foundation Ireland, and also through the Irish Research Council and the Higher Education Authority.

This study has shown that investment in R and D translates into improved job creation and enterprise performance. Among the findings are:

- Firms that invested in R and D grew employment by 14% between 2000 and 2014 while those that did not invest in R and D saw employment decline by 40%

- Similarly, R and D performing companies grew exports by 181% between 2003 and 2014 compared to a loss of 42% in exports for non-R and D performing companies over the same period

- R and D activity was identified as being one characteristic of Enterprise Ireland and IDA Ireland client firms that has driven growth in sales and exports since 2003. During the recession these firms exhibited greater resilience than non-R and D active firms and have increased their contributions to sales, exports and employment

- For Enterprise Ireland client firms funded through its R and D scheme, there was an 8% growth in net employment (22,003 jobs to 23,739 jobs) between 2002 and 2012. In comparison there was a 6.2% decline in employment in the total Enterprise Ireland client base over the 2002 to 2012 period (131,144 jobs to 119,935 jobs).

Enterprise Ireland (EI) has played a particularly important role in supporting job creation in Ireland. Between 2014 and 2016 employment in EI backed companies reached 200,000. In its new strategy 2017 - 2020, Building Scale, Expanding Reach, EI is aiming to increase this further with a new target to create an additional 60,000 new jobs by 2020.

Enterprise Ireland’s Strategy for 2017 – 2020 also aims to drive innovation in Irish enterprise to unprecedented levels through new supports to reach the target of €1.25bn in R and D expenditure by its client companies per annum by 2020.

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. Again, evidence shows that R and D active firms who collaborate with the Higher Education sector do significantly better in terms of job creation and exports than those that do not collaborate. Through supports such as Innovation Vouchers; Innovation Partnerships, and its network of Technology Centres and Gateways, Enterprise Ireland is striving to ensure optimum industry collaboration with our Higher Education sector. In 2016 alone, a record number of 1,036 collaborative projects were supported by EI.

A major aspect of Enterprise Ireland’s work is to extract maximum value from Ireland’s investment in the research system – the objective is to secure commercial purpose, leading to jobs and sales by transferring technologies and ideas developed in Irish research institutions out into firms.

EI will continue funding its critical existing innovation supports while also developing a number of new supports which include:

- A new programme for Business Innovation to drive innovation beyond selling products based on technical innovations providing more customer focussed process and service solutions;

- A Small Business Innovation Research (SBIR) Initiative, a mechanism which enables public sector bodies to connect with innovative ideas and technologies and aimed at providing novel solutions for specific public sector challenges and needs.

- New initiatives to equip graduates and researchers in the higher education system with the key skills required by the enterprise base;

IDA Ireland’s main objective is to encourage investment into Ireland by foreign-owned companies.  The Agency reported a second, consecutive record year in 2016. 199,877 people are now employed in IDA Ireland supported client companies, up from 188,035 in 2015. This is the highest level of employment in the Agency’s history.

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 80,000 new 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 in 2015) of IDA’s total grant-aid budget is allocated to RDI projects each year. This investment leverages RDI expenditure of €600m by IDA clients for these approved projects and an overall annual spend by IDA supported companies of €1.53bn 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. 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.

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.

My Department is currently analysing more recent data in relation to Horizon 2020 and will publish updated results in due course.