Minister for Enterprise, Trade and Employment, Micheál Martin, will today launch a €500 million package to stimulate private sector spending on research and development (R&D).
The new R&D package will comprise grants, tax breaks and other incentives for Irish- and foreign-owned companies. The scheme will be administered jointly by Enterprise Ireland and IDA Ireland and is designed to streamline the process whereby firms can access Government supports.
Up to now support for R&D has been through a a tax credit based on the increase in investment over the amount a company spent in 2003. In last month's Budget, 2003 was fixed as the base year for the 20 per cent credit for a further four years until 2013.
Lobby groups, such as ICT Ireland which represents the local technology industry, had criticised that move and called for an overhaul of the system. The scheme was seen as flawed as it only rewarded an increase in spending and not the overall investment. The new funding regime will address that issue.
It will also seek to encourage collaboration between private companies and third-level institutes. Research published earlier this month by two UCC economists said third-level research "has a limited effect" on business innovation and questioned why it was Government policy.
Funding will be available to companies of all sizes and stages of development with to encourage investment by firms who had not carried out R&D.
Under the terms of the EU's Lisbon Agenda, the Republic has committed to spending 3 per cent of gross domestic product by 2010. In 2006, the Republic's gross spend on R&D as a proportion of GDP stood at just more than 1.3 per cent, while the EU average is 1.8 per cent.
On a visit to Dublin last November the EU commissioner for research, Janez Potocnik, said the Republic needed to spend more on R&D to at least achieve the EU average. Public and private spending on R&D is seen as key in making the transition to a "knowledge economy" and is a key plank of current Government innovation policy. The €500 million is coming from the €8.2 billion spending on R&D to which the Government committed itself under the Strategy for Science Technology and Innovation.
