Budget 2010 Impacts on Science, Technology and Innovation
Briefing note from Minister Conor Lenihan’s Office on Budget 2010
Impacts on Science, Technology and Innovation
“This Budget has been framed to protect the significant public and private research capacity built in Ireland over the past decade. It will consolidate that investment, secure efficiencies and refocus for the future through the creation of a single funding stream in this area.”
Conor Lenihan, TD.
Minister for Science, Technology, Innovation and Natural Resources
Highlights -STI Cross-Departmental Overview
1. The delivery of this integrated package of public investment at this time of scarce economic resources reinforces the Government commitment to Science Technology and Innovation as an engine of economic growth. The net gain from the sustained R&D investment will be more and better jobs, and enhanced Irish competitiveness.
2. Within the core spend on STI (€600 million) investments to date are being protected. Elements of the IDA and HE block grant allocations further support this agenda.
3. A renewed focus is being placed on stronger commercial outputs and the efficiency of the spend. As in other areas of public spending the state is seeking more from less in relation to this spending item.
4. The decision to create a single funding line or stream for the STI will greatly enhance the efficiency of the spend and the State’s ability to re-prioritise as economic circumstances change when the economy recovers.
5. The nature of the spend on STI is in any event due to change given the fact that the tripling of the investment in this area over the past ten years was concentrated on built infrastructure and productive human capital development. The Exchequer funding must now focus on deriving maximum commercial benefit from the investment to date.
6. This area will also benefit from the reducing cost base in the economy.
7. The modest reduction in the allocation to the Science, Technology & Innovation budget must be seen in this context. It is significantly less than the overall reduction in capital spending in the budget. It is also significantly less than the cut contemplated by the McCarthy report.
8. A cross-departmental group of officials was set up last July to examine the priorities within the STI spend and has established a clear focus on areas of investment.
9. The oversight and co-ordination structures for the STI spending programme will also be streamlined and strengthened so that key research areas can be identified where Ireland enjoys or can attain a competitive advantage.
10. “Building Ireland’s Smart Economy” and the Renewed Programme for Government recognise the importance of productive public and private investment in R&D. The latter increased the previously stated target for national R&D investment from 2.5% of GNP to 3% of GDP.
Enterprise, Trade and Employment
An allocation of €297.3m has been secured for science, technology and innovation under subhead F of the DETE Vote. The reduction has been held at – 4.4% which compares favourably to a 12% overall reduction in Capital in this Budget
Enterprise Ireland is allocated €129m for STI activities–just 3.6% below 2009.
The funding provision will be used to put Irish companies at the cutting edge of development and ahead of their competitors. Supporting Innovation as a driver of export growth is critical to sustaining Irish enterprises, maintaining current jobs and driving job creation.
provide equity funding to high potential start up companies
continue its research and development grant programme for SMEs
support innovation partnerships between enterprises and universities
fund three competence centres announced and confirm funding to further centres during the year
continue the Innovation Voucher programme
provide support for near to the market commercilaisation and
support researchers and companies competing for EU Framework 7 Programme to leverage a target amount of €600m to 2013
Science Foundation Ireland has been allocated €162m which is just 4.9% below the core 2009 allocation and significantly better than the 14% reduction recommended in the McCarthy report.
Protecting this budget, the Government recognises the pivotal role SFI is playing in the framework for sustainable economic renewal as outlined in the Government’s “Building Ireland’s Smart Economy” policy.
– consolidate its investments to date
– leverage these for maximum outputs
– continue to support 29 major research centres (10 CSETS and 19 SRC)
partnered with 150 SMEs and blue-chip multinationals in Ireland.
The research strength built by SFI is proving to be a vital driver of major investment decisions by both overseas and indigenous companies. In recent years over 40% of IDA investment wins are RD&I, worth over €400m annually – a transformation.
This allocation will also allow SFI to continue to fund high-quality scientific research and researchers in recognition that they are the drivers needed to develop Ireland into a high-value, knowledge-based economy.
The Discover Science and Engineering (DSE) Programme will continue to promote an awareness and understanding of the importance of science, engineering, technology and maths in a modern knowledge-based economy, particularly among second level students.
Preparation for Dublin to host the European City of Science Event in July 2012 will commence in 2010. This event will provide a platform to showcase the best of Irish science and research across all disciplines and will boost the international standing of Ireland as a leading centre for scientific and research excellence. A new provision of €538k has been provided to kick-start preparations for this prestigious whole of Government event in 2010.
Education and Science
We are continuing to invest in research infrastructure and facilities in Third Level Institutions. The programme for Research in Third Level Institutions (PRTLI) provides funding for concentrated infrastructure and funding provided in 2010 will allow the completion of projects under Cycle 4 of PRTLI.
The Government’s smart economy strategy commits to a fifth cycle of PRTLI funding to provide concentrated infrastructure for delivering on SSTI objectives. It is intended that investments under cycle 5 of PRTLI will proceed as part of the Government’s commitment to focussed delivery of its STI strategy. The assessment process for PRTLI cycle 5 awards is currently continuing and is due to conclude in early 2010. In line with normal lead in times for the commencement of approved projects of this nature, the major elements of expenditure commitments under cycle 5 are anticipated to materialise from 2011 onwards.
Agriculture, Food and Marine
During 2010 the investment in Agriculture, Food and Marine research will enable support existing projects under the 3 competitive research programmes (FIRM,
Stimulus & COFORD), allow for an additional call under the COFORD forestry
Programme, allow Teagasc to maintain its dedicated long-term research programme at its current level, enhance the Teagasc laboratories, honour ongoing marine research commitments and initiate research programmes on climate change and SmartBay.
In the health sector our priority will be to implement the Action Plan for Health research to translate research outputs into tangible health, social and economic gains. Clinician, patient, researcher and enterprise objectives will be aligned through support for enhanced clinical, population health and health services research. The health research governance structure will be streamlined.
Almost €26m has been provided in the DCENR Vote for SSTI Funding in 2010. The provision includes funding for the National Digital Research Centre, ocean energy, geoscience initiatives and the national seabed survey.
In the area of the environment, the level of our research commitment, including climate change research, will be sustained. The Environmental Protection Agency’s environmental research programme will make a significant contribution to the development of Ireland’s Smart Economy.
Single Funding Stream
We are establishing a single funding stream for the Strategy for Science, Technology and Innovation to maximise the efficiency and focus of our investment and ensure that Ireland’s effort is strategically targeted on those areas where we can achieve greatest impact, including through close alignment with industry needs and a strong commercialisation effort. This responds to feedback from several stakeholders, including members of the Enterprise Feedback Group and Innovation Taskforce.
The details of this approach will be confirmed in due course, but as a first step it will involve combining the funds currently administered by Science Foundation Ireland, research funds administered by the HEA through the PRTLI, IRCSET and IRCHSS, the research funding of the HRB and, as appropriate, funds related to research calls of sectoral Departments.
Key Statistics on STI in Ireland
• Total Research and Development spending has almost trebled over 10 years.
• Total R&D investment across all sectors of the economy climbed to an estimated €2.6 billion in 2008, which is equivalent to 1.66% of GNP.
• The proportionate investment in R&D maintains a very desirable two-thirds private investment to one-third public investment.
• Business Expenditure on R&D (BERD) rose to €1.56 billion in 2006 – a 17% increase on the previous year – almost double the level recorded in 2000. It is estimated that BERD reached €1.68 billion in 2008.
• The ratio of BERD to economic activity as measured by Gross National Product increased from 0.96% in 2005 to 1% in 2007 and in 2008 rose to an estimated 1.08% of GNP.
• Higher Education R&D investment has almost quadrupled in current terms over 10 years and is now at the EU and OECD average levels. This increased investment in the higher education sector is having a significant impact in terms of human capital development, feeding through to attraction of Foreign Direct Investment and commercialisation.
• Ireland ranks 8th on the impact of research publications within a group of 20 comparator countries, including; Denmark (1), Netherlands (3), US (4), UK (6), Finland (8), Australia (10), Singapore (13) and China (17).
• Growth in researcher capacity, coupled with the enhanced R&D tax credit, continues to be a major attraction for overseas investors, and is resulting in a series of significant industrial R&D investments in Ireland by IDA supported companies. R&D projects represented 43% of all IDA projects approved for 2008 and IDA paid just over €47 million in R&D grants in 2008. IDA expects that R&D projects and investments in 2009 will be comparable with 2008.
• The number of firms performing significant R&D (>€2mn), rose from 118 in 2005 to 164 in 2007. There also appears to be evidence of firms who were smaller performers of R&D in 2005 stepping up activity to become larger performers in 2007.
• From 2000-2007 EI supported 430 High Potential Start Ups yielding sales of €638m, exports of €344m and employment of 5,500. HPSUs supported in 2008 will yield a further 1,000 jobs.
• By the end of 2008, EI’s Campus Incubation Programme had supported 240 companies located in Business Incubation Centres employing over 1,000 people.