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An evaluation of the Science, Technology and Innovation (STI) Programme

 

American Chamber of Commerce Ireland

Submission to the

Central Expenditure Evaluation Unit

Department of Finance

on

An evaluation of the Science, Technology and Innovation (STI) Programme

15th July 2008
Submission to the Central Expenditure

Evaluation Unit, Department of Finance

 

Background

With over 580 US companies employing over 100,000 people directly, it is estimated that a further 225,000 jobs in Irish companies are directly supported by US companies based here.  The contribution these companies make to the Revenues of the State in terms of corporation tax, PAYE, Vat and other taxes is considerable. US foreign direct investment has been a diver of innovation and research in the private sector contributing and supporting the national enterprise support infrastructure through the transfer of technology & commercial know-how, skills development, and the injection of an ethos of change, innovation, continuous learning and a global perspective into working life in Ireland

Total US investment in Ireland is $87 billion.  Continued investment is crucial to Ireland's current and future success, both as an investor and a significant trading partner.

Ireland continues to face increasing competition from other economies for this investment.   The American Chamber of Commerce continues to work with its members to identify how, in the light of our rising cost base & knowledge based competition, Ireland can implement innovative policies and initiatives which will help us to remain an attractive location for foreign direct investment.

American Chamber of Commerce Ireland

6 Wilton Place

Dublin 2

Telephone: +353 1 661 6201

Contact : Brian Cotter, Government Affairs Manager , b.cotter@amcham.ie

https://www.amcham.ie//    

 

Submission

The Strategy for Science, Technology and Innovation has successfully transformed our economic aspiration to develop a credible base, in a global context, of research and innovation.

The Strategy set out in a tangible form the outcomes it seeks to create and develops a picture of what success might look like. Throughout, there is the underlying and critical objective that this investment in our future must create economic success.

While this later point is not expressed in great detail, we recognise that there is a challenge in translating the outcomes as they are expressed, into economic or social gains. This is perhaps intentional as it is well recognised that the fruit of research and innovation may take considerable time (5 to 10 years) to manifest itself in the usual fact-based economic evidence. That said, in a current period of investment consolidation and uncertain economic growth we can expect stakeholders and particularly the general public to raise questions about the merit of this significant sustained investment.

It is a reasonable expectation that we should now begin to articulate the gain we expect from the investment in terms of how it will transform the industrial base. That base should be increasingly acknowledged as innovative, as well as being knowledge/skills intensive and gain worldwide attention for the;

  • Unique global competence that we are building,
  • Expected effect of the new human capital in attracting new investment,
  • Number of new start-up companies in new areas of competence,
  • Increasing investment of multinational in sustainable research,
  • Number of venture or spin-out/in activity associated with the research.

Indeed, there are many other valid transformational measures that we can use and the American Chamber would be pleased to contribute positively to any deliberations to identify the most appropriate metrics. However, to date we are focused on a number of outcomes (mainly research) that are quantitative rather than qualitative, and unfortunately not always giving a true picture of our progress.

The more critical "transformational" measure is harder to make. For example; it would be wise to report on patents pending or filed and then associate licensing or the creation of new technology as might be expected to result from that patent. Equally when we measure the uptake of research positions we have to take a longer term view and evaluate how the current investment or mobility profile might affect the longer term sustainability of that population.

While there is increasing agreement that we should measure more of the transformational success, we accept that it is difficult to do. At the same time, we cannot wait to see the end-result to measure success/failure. We need an interim measure so we can correct or adapt our interventions if we are not achieving our goals. It is also possible to use the basic measures or outcomes, within the research to commercialisation continuum, to predict success or failure.

Critically we would point to three basic measures that currently indicate likely failure unless they are dealt with in a serious fashion. There are three that are of general and serious concern:

Education:  It is a central aim of the SSTI public awareness and education pillars that both the broad appreciation of science & the uptake of science & technology subjects by students is a necessary ingredient for Ireland's ambition to become an innovation-driven economy.

To support this ambition we need to address the challenges associated with our supply of students through the second and third level system in Science, Technology and Engineering. What would be of help amongst this sector of the educational system is to provide visible initiatives clearly aligned to the SSTI target of doubling number of graduates in generating momentum to support these targets. There has been no evident change in metrics to suggest the much needed reversal in recent trends. This is the most critical challenge for the longer term.

As we are continuing to build-out Irelands research base, we would be wise to note that a continued dependence on a highly mobile imported research population (up to 70% in some areas of post-doctoral research) with strong linkages to other global centres of innovation creates the potential for failure in the context of maintaining a sustainable resource in-country. Understanding that we now draw on a global pool of talent in this arena - improving financial incentives/pay for post-doctoral work and making longer term commitments to research programmes would be a step in the right direction to raise the attractiveness among graduates within the Irish education system of research as a viable career option. Initiatives in Life Long Learning/Upskilling can make a real contribution to the research base. In this context we believe that Government need to address the issues of displaced income & leave entitlements to support a significant programme to up-skill those in the workforce in targeted areas of engineering, science and mathematics.

Infrastructure: We have a significant infrastructure deficit as articulated by most of the Universities and Institutes of Technology who depend mainly on the PRTLI program that is often delayed and maintains no program continuity. The development of our infrastructure cannot be based on a lottery mentality but on a centrally planned and optimised investment for the country. If the upgrade of existing research infrastructure, the development of new facilities and the creation of sustainable and attractive career paths for researchers (especially those supporting PI's) is to happen at the appropriate critical-path to match our ambitions, we must make credible long-term commitments in this arena - especially in the current budgetary climate.

Commercialisation: This activity is largely unfunded and without the necessary infrastructure, competence and investment to make it successful. We feel that this under-funding stems from a chasm between policy makers and industry stakeholders view of what in takes to build-out the entire eco-system from research to successful commercialisation based on their international experience. We believe that this is reflected in the SSTI itself and supporting policy statements that take a narrow or silo view of the continuum that is dangerous to its own success. This presents a significant challenge. The investment in TTO's at the universities is a positive step but poorly resourced and, despite gallant efforts by an excellent set of new Directors, will fail if the further downstream infrastructure for networking, brokering, licensing, and investment is not made.

In implementing SSTI we need to understand the importance of this Academia-Industry interface. Existing weaknesses in this interface, combined with scarce/cumbersome sources of early stage funding, presents a real present-day threat to the survival rates of newly formed & incubated enterprises. This potentially scuttles much of the medium term economic value-add of the SSTI investment programme. We accept that the commercialisation of research is a shared test for innovation stakeholders in today's Industry Base, Government and Academia. Gaining credentials for Ireland's innovation eco-system in building relationships, fostering partnerships and research & business networks that break down stakeholder barriers would set us apart as a centre of innovation for corporate investors.

Other measures provide comfort. In particular we would point to the SFI/IDA led activity, particularly in respect of the Centres for Science Engineering and Technology (CSETs), as being a great success. It has established industry collaboration as a norm and set down an important cultural marker for the research eco-system in Ireland. It measures success in global terms, maintains a positive dialogue with all partners, accommodates enterprise and other organisation initiatives, and has established a strong base of research with globally credible principal investigators and research leaders. As in the Academia-Industry Interface, the inter-Agency hand-off between SFI & Enterprise Ireland for start-out enterprises emerging from the research process requires access to a similar portfolio of resources & innovation savvy development/project managers if they are to thrive.

Research activity is but one part of the continuum (education to commercialisation), but it is the central and most strategic part. It is our view that by working from the centre (research) out, in both directions we can address more of the challenges that we face. It will however require engagement from policy & programme management that is open and constructive and that has integrity and commitment from all the parties. This would recognise that innovation has no policy borders, and that support mechanisms must be ready to embrace new business models, new organisational structures and skills for innovation.

This engagement is critical if we are to address the primary challenge and that is simply that our investment in research, even when we double it as we propose, is still insignificant in the global scheme of Research and Enterprise. In order to make our investment count, we must be strategic in our intent, we must be aligned and we must focus on those areas of Science and Technology where we can be different and lead with a comparative advantage for Ireland. We would again make mention of our recommendation that we focus on the convergence of technology as a means of identifying strategic opportunity and building stakeholder alignment

Reflecting on this latter point, we would like to note the Recommendations of the ‘Aho Report' on EU High-Tech Research (EU Commission, June 2008) that Europe should be strategically selective in its research focus and avoid attempting leadership in too wide a spectrum of opportunities and the adoption of trust-based approaches to engagement between stakeholders.

In the spirit of partnership and engagement, we would again draw attention to the recommendations of our document "Retuning the Growth Engine" (attached) and our current sponsorship of a Technology Network that is focused on the convergence opportunity. We believe that this demonstrates our level and practice of engagement and will continue to work with the indigenous base, universities and institutes and with the agencies to enable change.

Finally in the context of this critical and strategic investment we see fiscal policy as an instrument of transformation, incentive and investment. It is important to measure the outcome of policy in terms of its strategic impact and not just in terms of interest or take up.