R&D essential for firms’ survival

THE Enterprise Strategy Group report due out tomorrow will stress the need to develop the economy’s strengths.

It will also warn of growing competition for inward investment and the need for Ireland to be vigilant.

Chaired by Eoin O’Driscoll, former boss of Lucent in Ireland, the strategic review will highlight those strengths as information technology, pharmaceutical and services based enterprises. The report plays down the distinction between indigenous and foreign-owned companies.

In an earlier interview with this paper, Mr O’Driscoll said we will have to use every advantage we have, including the strong global industrial base created by US multinational groups that have contributed to the hi-tech, pharmaceutical and the internationally traded services.

In the review, Mr O’Driscoll highlights the pressure facing Ireland from places such as Singapore and Estonia. The latter is offering tax holidays to foreign investors. Faced with such stiff challenges, Mr O’Driscoll stresses the need for Ireland to build on its “key competitive advantages” of skilled, adaptable workers who provide providing indigenous and multinational firms with the workforces needed to give them a cutting edge in domestic and international markets.

The recent appointment of Dr Barry McSweeney as first chief science adviser to the Government and the Tánaiste and Minister for Enterprise Trade and Employment, Mary Harney, further indicated the seriousness with which the Government was taking science issues.

Under the NDP, up to €2.5 billion has been earmarked for investment in key areas of technology and biochemistry.

The enterprise body’s report is expected to endorse that strategy, according to a reliable source.

Research and development will also be highlighted as one of the key prongs of survival for Irish and overseas firms.

Indicating a shift in strategy in IDA, chief executive Seán Dorgan said: “our ambition is to have every multinational become masters of their own destiny and Ireland to become for them the development of their European, Middle East and African markets.”

This was no “pipedream” he said, and it is expected that the strategic report will point to the fact that in Ireland we have a who’s who of world leaders in pharmaceuticals, medical technologies. electronics, software etc.

Bell Labs announcement of a €69m R&D facility in Dublin is seen as part of the new strategy that will stress the need for bringing more R&D functions into Ireland.

While Enterprise Ireland has been stressing the need in its submissions to government for the development of bigger and more research driven indigenous Irish companies that has proved a hard goal to deliver.

And while the report will stress the need for a twin development strategy it is expected to blur the distinction between native and foreign investment.

What he government decides could have serious long term implications for the two state agencies Enterprise Ireland and IDA Ireland.