The following OECD assessment and recommendations summarise Chapter 4 of the Economic Survey of Ireland 2006 published on 2 March 2006.
The functioning of the innovation environment is vital for Ireland’s future development. As part of the EU’s Lisbon Strategy, the Irish government has set a target of lifting economy-wide research and development (R&D) spending to 2.5% of gross national product (GNP) by 2013. This is ambitious. R&D spending by the business sector is low, and two-thirds of this is performed by foreign multinationals; consequently, the R&D intensity of Irish-owned firms is among the lowest in the OECD. In addition, after years of neglect universities have only recently had the resources to carry out high-quality research.
University funding is lower than in comparable institutions
Research funding per faculty member, 2004 for Irish faculties, 2002 for others,
in thousand euros
Source: Irish Higher Education Authority.
While public funding for research increased sharply in the National Development Plan for 2000 06, it has not kept pace with the growth of the economy. Before providing more money, however, the government needs to improve the science framework. The better the framework, the more chance it has of encouraging foreign firms to shift some of their research activities onto Irish soil. To ensure that R&D is more commercially focussed, public support for business R&D could be rebalanced away from direct grants and towards market-driven measures. The plethora of funding agencies poses risks for the efficiency and coherence of the system, so the structure of the system should be reviewed regularly. Co-ordination among the granting agencies will have to improve and in particular infrastructure spending should be more closely tied to the other funding streams. Research in universities is probably under-funded, making it harder to attract top international talent, even though the 2006 Budget foresees increased funding for doctoral programmes. It is also important that resources should not be spread too thinly. The government may not be able to afford the luxury of having research centres in all regions; it may be better to concentrate resources on a few world-class centres of excellence. Finally, competition can be a major spur to innovation in the business sector: thus, the pro-competition reforms that were discussed above could have the added bonus of boosting innovation as well.
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Return to the Economic Survey of Ireland 2006
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