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Kelly says cost of mortgage forgiveness ‘not enormous’ – The Irish Times – Fri, Aug 19, 2011

August 19, 2011 Leave a comment

Kelly says cost of mortgage forgiveness ‘not enormous’ – The Irish Times – Fri, Aug 19, 2011.

GENEVIEVE CARBERY

A DEBT forgiveness scheme to relieve homeowners in mortgage distress would cost “in the region of €5-€6 billion”, UCD professor of economics Morgan Kelly has said.

In a keynote address to the Irish Society of New Economists in Dublin yesterday, Prof Kelly delivered what he described as some “good news”.

“We are talking sums in the region of €5 billion to €6 billion which would be necessary to spend on mortgage forgiveness, which by our standards are not very large,” he said.

You read it here first, folks!

Where did it all go so badly wrong? (Part V – Language)

February 11, 2011

(V)

Language has the important property of ‘framing’ arguments and discussions.

The crime debate in the UK was dominated by the phrase ‘short, sharp, shock’, which relied on the folk theory that quick and severe punishment would shock teenagers out of criminal tendencies. (The pleasing alliteration of the successive sibilants was an important, but useless, selling point too). Short, sharp shocks, of course, predictably have no such effect, but why let data from the psychology of punishment and from criminology influence debate?

The phrase ‘cut and run’ was used to forestall debate about the palpably-failing US military strategy in Iraq, until empirical reality forced a change of direction.

The debate in Ireland over privatisation uses phrases designed to prevent discussion, such as ‘selling off the family silver ware’* or, much less analytically, that privatisation is ‘stupid’ (Ex-Minister Ryan). Who wants to be stupid? O course silver plates aren’t much good if you don’t have the food to eat from them. In the UK, the privatisation debate is about how a ‘war chest’ can be created for stimulus purposes. The consequences of the language used about privatisation frames very different outcomes. Unless one believes that the current configuration of Government ownership of assets is exactly optimal (an unfalsifiable position), then privatisation is reasonable to consider. It is our capital after all, and can be used to solve problems. By some estimates, the ESB is worth about €7.5 B**; there are perhaps 750,000 mortgages in the country. Privatisation would allow the quick writing down of these mortgages by €100,000 a piece, relieving enormous and growing distress, and giving the banks additional working capital to relieve other logjams in the economy. I am sure there are a thousand good reasons why this policy can’t be enacted, but there are 750,000 reasons why it could. And it is our money anyway, isn’t it?!

*This remark is in comment  # 1, not the article itself, which makes a good argument against privatisations. However, things have changed a bit since August 3rd.

**I can’t find where I read this estimate, but there are relevant numbers here.

The full series is available as an article:  Where did it all go wrong article in pdf.

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Funding for scientific research holding – Forfás – The Irish Times – Tue, Aug 16, 2011

August 16, 2011 Leave a comment

Funding for scientific research holding – Forfás – The Irish Times – Tue, Aug 16, 2011.

Funding for scientific research holding – Forfás

DICK AHLSTROM, Science Editor

STATE FUNDING for scientific research has held up well in spite of the recession, the head of Forfás has said.

Forfás, the policy advisory board for enterprise and science, has released the latest figures for State sector research funding, with detailed returns for 2009 and estimated figures for 2010.

Report available here.

#ECF11: Not doing more with less, but doing more of what we tell you | Stephen Kinsella

March 23, 2011 Leave a comment

#ECF11: Not doing more with less, but doing more of what we tell you | Stephen Kinsella.

#ECF11: Not doing more with less, but doing more of what we tell you

Imagine this:

Times are hard. A business gets into trouble, and begins to scale back its costs by telling its various departments to do more with less. Where last year, you had X for your budget, now you have 75% of X. No bother, the departments say, and off they go, doing more with less.
Now let’s say the CEO of the business says ‘actually lads, in addition to the doing more with less stuff, we won’t let you go out and get funds from elsewhere–certainly not the head division–which might actually make the business some money and take some of the pressure off others.  Not only that, we’ll make sure any incentive you had to do more with less is taken away. In fact, the
Sorry, what? That’s insane. Why wouldn’t they want a situation where the best people in the business did what they did best and brought in funds to allow it to grow? Why wouldn’t they incentivise non-core expansion with promotions, bonuses, and back slapping opportunities? Why wouldn’t the business accept that you can’t cut too much too quickly, especially at the bottom otherwise the business will die at its roots?
That’s exactly what is proposed in the revised and expanded Higher Education Authority’s Employment Control Framework (ECF), signed by the last Minister for Finance as he was cleaning out his desk.  Ireland’s universities receive a block grant from the Higher Education Authority on behalf of the government. The HEA has the purse strings, and the ECF is its way of tightening them.
More via link above.

Science and Innovation Policy in the ‘Towards Recovery: Programme for a National Government 2011-2016’

The Programme is available here.

The major section dealing with science and innovation policy reads as follows (pp 9 – 10):

Innovation and Commercialisation
We will implement innovation and commercialisation policies as outlined below subject to cost benefit analysis.
• We will progressively implement the recommendations in the Trading and Investing in the Smart Economy Report
• We will support our indigenous digital game industry by reforming R&D supports available to the industry, setting aside funding from Innovation Fund Ireland for a seed capital scheme for Irish digital gaming start-ups, introduce a digital media component to Transition Year programmes and promote Ireland as digital gaming hub.
• We will develop Ireland as a ‘digital island’ and first-mover when it comes to information technology by ensuring more progress on e-Government and moving Government services online, investing in ICT in schools, and investing in information technology in the healthcare sector.
• We will make Ireland a leader in the emerging I.T. market of cloud computing by promoting greater use of cloud computing in the public sector, organising existing State supports for cloud computing into a package to promote Ireland as a progressive place for I.T. investment, establishing an expert group to address new security and
privacy issues arising from the use of cloud computing and reviewing the adequacy of current legislation and identify what steps need to be taken to ensure a supportive regulatory environment.
• We will develop a National Intellectual Property (IP) protocol to give predictability about the terms on which business can access IP created in Higher Education Institutions and the wider digital sector.

• We will promote and support investment in technology research, development and commercialisation beyond basic research supported by Science Foundation Ireland, as well as removing barriers to innovation and accelerate exploitation of new technologies.
• We will target key technology areas and sectors where innovation can be applied including but not limited to high value manufacturing, advanced materials, nanotechnology, bioscience, electronics, photonics and electrical systems and information and communication technology. We will also focus on the application of technological innovation in established sectors of the economy like energy generation and supply, transport, creative industries, high-value services and architecture and construction by identifying challenges, establishing priorities and developing strategies which specify necessary actions to transition to more innovative approach.
• We will promote Ireland’s full engagement with the ‘Innovative Union’ proposals issued by the European Commission in October 2010 as one of the seven flagship initiatives under EU2020 Strategy, with the specific aim of refocusing R&D and innovation policy on major challenges and at turning inventions into products.
• The critical gap between basic research promoted and funded by Science Foundation Ireland and third level institutions and its subsequent development into commercial opportunity for investors can only be closed by making new technologies ‘investment ready’. We will establish a network of Technology Research Centres focused on
applied technological research in specific areas, to be linked to appropriate highereducation institutions. The centres will accelerate exploitation of new technologies by providing infrastructure that bridges gap between research and technology commercialisation. We will initially establish 3 additional centres foccussing on
biotechnology, nanotechnology and high value manufacturing. Further centres from a number of other areas will be selected at a later time.
• We will support the development of an International Content Services Centre to make Ireland world leader in managing intellectual property.
• We will pioneer within the EU a model of ‘fair use’ in European Copyright Law, like in the USA, which effectively permits the use of portions of a copyrighted work so long as the normal economic exploitation of the originating work is not undermined. This will allow internet companies and other digital innovators to bring their services
to market.

Subject to a cost benefit analysis, we will amend the R&D tax credit regime to make it more attractive and accessible to smaller businesses, in the following ways:
• Companies with R&D expenditures of under €100,000 will be entitled to full tax credit on those entire expenditures as opposed to just the increment over the base year, with marginal relief for companies with expenditure just over €100,000.
• We will allow companies to offset the R&D credit against employers. PRSI as an alternative to corporation tax.
• To cut down on red tape in the applications process, companies in receipt of a Research, Technology and Innovation (RTI) grant from one of the development agencies will be automatically deemed as entitled to the R&D tax credit.

Other relevant pieces:

Investment priorities will include education, health and science and technology (p. 16)

Undertake a full review of the Hunt and OECD reports into third level funding before end of 2011. Our goal is to introduce a funding system that will provide third level institutions with reliable funding but does not impact access for students (p 17)

Maths and science teaching at second level will be reformed, including making science a compulsory Junior Cert subject by 2014. Professional development for maths and science teachers will be prioritised. (p 40)

Third Level Reform (p 43)
We will review the recommendations of Hunt report on higher education. A reform of third level will be driven by the need to improve learning outcomes of undergraduate degree students, as well as providing high quality research.
We will initiate a time-limited audit of level 8 qualifications on offer and learning outcomes for graduates of these courses.
We will introduce radical reform in third level institutions to maximise existing funding, in particular reform of academic contracts and will encourage greater specialisation by educational institutions.
We support the relocation of DIT to Grangegorman as resources permit.
We will explore the establishment of a multi campus Technical University in the South East.
We will extend the remit of Ombudsman to third level institutions.
We will merge the existing accreditation authorities; National Qualifications Authority, FETAC and HETAC to increase transparency.

Battle looms over US science funding – science-in-society – 04 January 2011 – New Scientist

January 5, 2011 Leave a comment

Battle looms over US science funding – science-in-society – 04 January 2011 – New Scientist.

A quote:

As Republicans take control of the US House of Representatives, science could take a hit – despite a new Congressional measure to boost funding.

“There’s going to be a big fight,” says Michael Lubell of the American Physical Society in Washington DC. “The question is who blinks first.”

In one of its last votes before the holidays, Congress passed the America COMPETES Reauthorization Act. Contained in the act is a resolution to boost science funding over the next three years.

But with budget-minded Republicans now a majority in the House of Representatives, even maintaining science funding at existing levels could be a struggle.

Business Expenditure on Research and Development – 2009/2010 Preliminary Findings

December 18, 2010 Leave a comment

From the CSO:

Almost €1.9bn spent on research and development activities

Preliminary figures indicate that in 2009 almost €1.9bn was spent on research and development activities by enterprises across all business sectors in Ireland.

Estimates of expected expenditure in 2010 indicate that the research and development spend will be just over €1.7bn.
Small enterprises with less than 50 persons engaged spent €300m on research and development in 2009, while medium/large enterprises with 50 or more persons engaged spent almost €1.6bn. Estimated figures for 2010 indicate that the spend for small enterprises would be €425m, with a corresponding figure of €1.28bn for medium/large enterprises.

Preliminary figures for 2009 in this release also show that:
 Current expenditure on research and development activities was €1.54bn while capital expenditure was €326m. See Table 1.
 A total of 15,773 personnel were involved in research and development activities which equates to a full time equivalent (FTE) figure of 11,959. See Tables 2 & 5.
 There were 8,960 persons engaged as researchers working on research and development activities, while 3,572 persons were engaged as technicians and 3,241 as support staff. There were 7,732 FTE researchers, 2,599 FTE technicians and 1,628 FTE support staff. See Tables 3 & 5 .
 There were 11,601 male and 4,172 female research personnel engaged in enterprises. See Table 4.
 There were 1,282 enterprises engaged in research and development activities in Ireland in 2009 and almost a third of these enterprises spent €500,000 or more. See Table 6.
The figures in this release are preliminary and are subject to revision. Final results are expected in April 2011.

Report here: berdpre.pdf (application/pdf Object).

Science is Vital: The economic return argument in favour of investment in research

September 29, 2010 Leave a comment

Science is Vital (a new UK organisation opposed to cuts in the science budget there) offer a very interesting economic rationale for investing in research on their site [post reproduced in full]. Many of these points are just as important here in Ireland. There are lots of links below to actual evidence on the importance of investment in R&D.

Point 1. Investment in science and engineering skills and research yields broad and historically proven economic returns. Such investment, if made now, could drive the growth needed to secure a strong economic recovery:

  • By showing a strong and sustained commitment to science and engineering, the UK can attract and retain excellent and internationally mobile scientists and engineers and the industries that seek to employ them, which will give immediate gains through tax revenues and employment.
  • The UK’s economic climate, funding, and the reputations of its universities, all help to attract more and more overseas students – 250,000 in 2008/09, who contributed about £5bn to the UK economy. (BIS SET statistics)
  • 180,000 people gain from working in R&D. (BIS SET statistics)

Longer-term:

  • Finland and Korea responded to their economic crises in the 1990s by investing heavily in R&D while severely constraining public spending; these investments helped their strong regrowth in knowledge-based economies. The UK has not yet seized the opportunity, still available, to invest in science and engineering to accelerate the recovery
  • Multifactor productivity (MFP) reflects the extent to which an economy can derive GDP growth from a certain level of labour and capital.  A 2004 OECD analysis estimated that a 1% increase in business R&D increases MFP by 0.13% and a 1% increase in public R&D increases MFP by 0.17%.
  • A 2008 medical research report estimated that every £1 spent on public or charitably funded research gave a return of 30p a year in perpetuity from direct or indirect GDP gains, on top of the direct gains of the research.
  • Corporate investment in R&D brings a return of around 50% to the public. This compares to a private return of around 20% captured by investors themselves.

Point 2. The Government is keen to boost confidence in the UK by making decisive cuts. But cuts in the science and engineering sectors would have the opposite effect, damaging investor confidence, reducing levels of investment and impacting the quality of higher education:

  • Science in the UK already operates as a ‘Big Society’, with public investment and private enterprise strongly interacting. Cuts to academia  or innovation support could have unforseen and damaging consequences due to the links between them.
  • Investment in science cannot simply be turned off and then turned back on again a few years later. As former Science Minister Lord Waldegrave said, “If we cut science now, just as the benefits of nearly twenty years of consistent policy are really beginning to bear fruit, we will seriously damage our economic prospects.”
  • The total budget for R&D is an important signal to investors and researchers. If the UK is not perceived to support R&D then they move to more favourable countries, as UK business leaders have previously warned. The UK currently receives a very high proportion of its R&D funds from foreign owned firms (17%), which may be even more responsive to market conditions than UK-based companies.
  • If research projects are cut short, this wastes money that has already been spent and risks mothballing large-scale projects such as the Diamond Light Source or Isis.
  • Reducing investment in R&D would reduce the potential for economic growth. There will be fewer breakthroughs, and less development of them into beneficial products. The general public will notice falling productivity, given the level of media interest in and coverage of scientific and medical discoveries, as well as new (including green) technologies.
  • The UK’s reputation in science and engineering has already been damaged (e.g. physics funding crisis, and cuts already announced). We can recover with prompt action, but if not done soon, it will be hard to regain our previously enviable reputation.
  • Reduced funding for higher education teaching and research has already resulted in job losses. As the teaching of high-cost science and engineering courses is already under-resourced, and some universities have accepted unfunded places, further financial pressure is likely to lead to departmental closures.
  • Universities increasingly bolster their finances by recruiting overseas students, who bring with them high levels of fees. If the UK becomes less desirable, then this income will fall.

Longer-term dangers:

  • If the capacity and quality of the higher education system is reduced, a generation of less-skilled graduates is the result.  Without enough people trained in science, technology, engineering and maths, it will be difficult to retain industrial investment in the UK.
  • If university funding is lowered, universities will scale back on renewing and upgrading their teaching and research facilities, reducing the value of the skills of new graduates.

Point 3. UK science and engineering is already extremely efficient:

Nearly 30% of the UK’s Gross Domestic Product (GDP) is produced by sectors intensive in science, technology, engineering and mathematics. Yet the UK government spends a smaller proportion of its GDP on research than any other nation in the G7, bar Italy. We rank 14th in the OECD under the same metric – just behind Belgium and Canada, and on par with the EU27 average. Despite this, the UK:

  • Leads the world in a huge range of scientific disciplines.
  • Produces 12% of global citations with around 1% of the population.
  • Is home to 29 of the world’s top 200 universities, including three of the top ten (THE rankings).

This is possible through UK science being very efficient:

  • The UK is 3rd in the world in terms of citations per researcher
  • The UK is ranked first in the G8 for scientific papers produced as a proportion of GDP
  • We overwhelmingly focus on world-class research. About 90% of research funds (£980m out of £1095m) from HEFCE go to 3* or 4* research (defined as ‘internationally excellent’ and ‘world-leading’, respectively).
  • Research council grants are extremely competitive. For instance, success rates of 19% at the MRC (down from 21% in 2008-9) and 22% at the BBSRC mean that thousands of proposals are rejected. In 2003, the overall grant success rate across research councils was around 40% – it has now fallen to around 20% (in 2008).

While efficiency savings in R&D still need to be made, these savings must be reinvested in science and engineering.

Point 4. The Government needs to develop a long-term and stable policy framework to make the UK a country where people and companies want to do science and engineering, enabling researchers to innovate, and encouraging private investment:

  • Analysis of over 100 UK case studies by the Russell Group found that it took an average of 9 years from an initial discovery to produce a license or other measurable impact (e.g., significant commercial investment in a spin-out company). Given that the research cycle can have a decades-long timeframe, the public environment in which research plans are made needs to be of the same order.
  • Private investments, research programmes and careers are reliant on a long-term, coherent, and credible policy framework. Instability will reduce the ability of these individuals to do their most high-impact and valuable work.
  • A lack of long-term investment framework will compound
  • In spring 2010, the most important organisations in UK science urged the government to develop long-term plans. The Royal Society’s Scientific Century report urged the government to outline spending plans over a 15-year period to provide “a clear, long-term framework within which to plan, build, and compete globally”.
  • The House of Lords Science & Technology Committee recommended that the government adopt and articulate a long-term vision for UK Research, and the Council for Science and Technology talked of a vision for the future in which the UK research base is successful and globally competitive 20 years out. They urged that, “the Government needs to develop consistent, focused long-term industrial strategies”.

Point 5. Investment in science must be increased, or at the very least maintained,  it order for the UK to remain internationally competitive

  • The UK invested 1.8% of its GDP in R&D in 2007. This is short of the UK’s own target of 2.5%, and further behind the EU target of 3%.8. The new Government needs to commit to the challenging goal of at least 2.5% of GDP to be spent on R&D from all sources by 2014.
  • The UK has an excellent track record, with four of the world’s top 30 research universities. But this excellence is threatened by rapidly increasing investment overseas, particularly in countries such as Brazil, Russia, India and China, that could grow into research giants. Indeed, the UK’s share of scientific publications fell over the last decade, while China’s quadrupled.
  • Other world leaders have set out the case for investing in science and engineering.
  • The advantages that the UK built upon – including an early scientific and industrial base, the English language, and openness to international investors and workers – will not sustain our excellence without a strong new commitment to the future.