BMW firms not innovative, says Cowen

FINANCE Minister Brian Cowen has accused Irish businesses of lacking innovative qualities.

His condemnation was made yesterday when he launched a new document, Audit of Innovation in the Border Midland and Western Region.

While being at the margins was a challenge, the report says, firms such as the Kerry Group are a prime example of how obstacles can be overcome.

Kerry is highly innovative as an Irish-owned firm. It’s a lead others should follow, said Mr Cowen.

One of our continuing difficulties is that too many Irish firms are still engaged in the traditional sectors that are highly vulnerable to international competition.

However it is not all bad news the minister said.

Irish companies have embraced both the high-tech sectors and the more traditional sectors in their drive for profits and expansion.

They are to be found across the country, not just in the highly developed Eastern region, he said.

“You have only to look at the Kerry Foods Group to see that with dynamic management and foresight, a company located in an area not dissimilar to many areas in the BMW region, can become a leading multinational company.”

Unfortunately the audit highlights the relatively low number of company start-ups in the BMW region, the absence of R&D in most companies, a weak entrepreneurial culture, a dependence on low value added activities and poor linkages between Third Level research and companies.

The Government and state agencies are playing their part to counter this situation through:

A new 20% tax credit for R&D introduced this year.

State aid approval secured from the European Commission allowing finance to be raised under the Business Expansion Scheme and the Seed Capital Scheme.

Schemes to come into effect on February 5, 2005.

Programme for Research and Technology in Third Level, which has created a core physical and human foundation for research excellence.

Enterprise Ireland (EI) is accelerating regional development. Propylon, a Software company in Sligo and Masonite in Leitrim are just two outstanding examples.

EI is also developing and supporting research know-how in industry through collaboration networks between firms, colleges and institutes.

EI has developed Seed and Venture Capital Funds to ease access to capital for new and early stage entrepreneurs.

IDA has a very high success rate in attracting, retaining and developing high technology, high productivity FDI projects to Ireland.

Mr Cowen stressed that regional economic development was and is a key part of the IDA’s strategy, a fact highlighted by the flagship projects brought to the regions.

Enough evidence exists to show that obstacles to development can and will be overcome, he said.