State falling behind in smarter job creation, EU finds

Ireland is falling behind other EU countries in the drive towards smarter job creation — the area the Government has earmarked for the country’s recovery.

The country has maintained spending on research and development despite the crisis, but Irish-owned small and medium sized businesses are not as involved as they should be.

Research commissioner Máire Geoghegan-Quinn warned that investment was key to creating more and better jobs, “not just more, but smarter investment”.

The south and east of the country is classed among the best in the EU on a range of indicators that show they are pushing ahead with new ways to create potential for growth.

The border, midland and west lags behind mainly in the numbers employed in knowledge intensive jobs although the business sector spends more on research and development, almost making up for the shortfall in State funds.

But the report, released by the European Commission, warns the country’s growth in this vital aspect to drive the economy was “well below that of the EU and their relative performance has worsened over time”.

This compared to three other countries that have experienced an economic crisis, Portugal, Latvia and Estonia, that improved most in the EU over the past few years.

Ireland excelled in license and patent revenues from abroad and knowledge intensive services exports, which may be a result of the number of multinational firms headquartered in the country.

Education and researchers also contributed well with an increase in the numbers with third level education, those with doctorates, and international scientific co-publications.

The study found that employment in fast growing firms and in innovation sectors had improved.

Ms Geoghegan-Quinn said that while the EU was closing the gap with the US and Japan, South Korea was still well ahead and China was catching up. Reaching the 3% target for R&D spending was crucial, she said. Ireland’s spend in 2011 was just 1.17%, lower than the EU average, and less than half of Finland, the biggest spender.

The countries that survived the crisis best were those that spent most in the area and were the leaders in innovation — Sweden, Denmark, Germany, and Finland, she said.