Spending on R&D must rise by €1.5bn

COMPANY spending on research and development (R&D) needs to rise by over €1.5 billion by 2010 according to a new report.

The report by an expert group set up by Tánaiste Mary Harney says spending on R&D, which was just over €900 million in 2001 must rise to €2.5 billion by the end of the decade if the country is to sustain employment and economic competitiveness.

The report said national spending on R&D was about two-thirds of that of our European counterparts at 1.4% of gross national product (GNP). In Sweden, the figure is 4.2% of GNP and 1.8% in Britain.

The group found that as a small, open economy, research was vital for the country’s employment prospects and the creation of jobs that required high skills so they could not be shifted abroad.

The report said the number of Irish firms engaging in R&D should increase and that at present two-thirds of research was carried out by multinational companies.

It found that, of the indigenous companies that carry out R&D, 85% spend less than €500,000 a year and just 26 spend in excess of €2m.

While the report recommended Irish firms spend more, it also said the government should increase its support as its funding was just over half of what other European countries invested.

The other main recommendations of the expert group were:

* increasing State investment in R&D to 1.7% of GNP

* increasing firms investing in R&D to 1,050 by 2010

* raising number of researchers to 9.3% per 1,000 people in employment

* Increase funding by education institutions on research from €422m to €1.1 billion.

Though higher spending was the main focus of the expert group, they also recommended a greater focus on developing a culture intent on innovating the economy.

“While the public attitude to entrepreneurship has been more positive in recent years, Ireland still lags behind other European countries in terms of an entrepreneurial culture,” it said.

It also said the country would have to create the right environment and career prospects to attract world class researchers from abroad as we could only generate about half the number required from our universities.

Ms Harney said yesterday that the report would be studied by the Government in the autumn.

The Government is also due to discuss measures proposed by the Enterprise Strategy Group, the body set up to develop a plan for the economy for the next 10 years.

Increased investment in R&D was one of the key proposals by the EU as part of its plan to implement the Lisbon Agenda on economic reform of Europe by the end of the decade.