There is a serious national gap in our ability to innovate. Companies seeking to modify products or processes depend on sourcing bought-in applied research expertise, but there is a capacity shortfall here, Dick Ahlstrom reports

Those are the findings of a recent report by the Advisory Council for Science, Technology and Innovation, which highlighted the "applied research gap" in its latest publication, Promoting Enterprise-Higher Education Relationships.

The study examined the relationship between companies and third-level institutions here and identified "key areas which need to be addressed to ensure Ireland remains at the forefront of international trends in research and innovation".

Developing the connectivity between innovative researchers and innovative companies has been central to Government science and technology policy. Two-thirds of the €8.2 billion science budget is actually meant to come from investment in research by companies.

Company expenditure on R&D for 2006 reached a new high, topping €1.5 billion for that year. Yet most of the money and most of the research staff are found in our large multinational firms, primarily pharmachem giants. Research staff are usually missing from the personnel line-up in the majority of Irish firms.

For this reason the smaller indigenous firms that want to innovate must find the necessary skills elsewhere, and here is where the problem emerges, according to the council's study.

These firms are particularly dependent on research availability from higher education "given the relatively small number of applied and industry-focused public sector research institutes", the report states. Other comparable EU states, such as Finland and Denmark, have more capacity available in public laboratories.

And while companies requiring food and agricultural research backup or marine research support can count on Teagasc and on the Marine Institute, other areas are less well served.

When companies turn to the only other main outlet for contract research, the higher education sector, they find that the universities and institutes are not specifically geared to provide this kind research support.

We do have seven large-scale Science Foundation Ireland funded Centres for Science, Engineering and Technology (CSETs). These university-based centres help link scientists and engineers in partnerships across academia and industry to address research questions and foster the development of Irish-based technology companies.

However, the research gap remains and the council also points to problems with industry being able to incorporate research into its day to day activity. "The two key constraints to the deepening of enterprise-higher education research collaborations in Ireland are the low absorptive capacity of enterprises for research and a gap in the availability of applied research capability that enterprises can readily access," the report states.

The report indicates that company-third level collaborations operate "at a very low level", and that the existing structures meant to encourage the process "have failed to achieve the level of contribution appropriate to higher education expenditure on research and development".

The council argues that the development of an applied research capability here should be "prioritised" with funding from the Government's Strategy for Science, Technology and Innovation. Such a move would give small to medium enterprises "access to scientific and technological knowledge that they can apply to the development of their products and processes".

It also believes that fostering joint research programmes that link the two sides of the innovation equation is "a well established policy intervention mechanism" applied in other comparable countries.

The council argues for a structured and "holistic" approach which recommends a new initiative to develop in-depth competence in applied research and the creation of new research groups that can support innovation in enterprises.

It wants the agencies working with small companies to "strengthen the absorbtive capacities" of small companies, but also calls for a "change of culture" within the third level, countering an apparent indifference towards working with industrial partners.

This is not just a desirable progression, it is essential if Ireland is to remain competitive internationally. "In modern economies, closer interaction between public knowledge institutions and enterprise is increasingly important," says the chairwoman of the task force responsible for the report, Dr Lenora Bishop.

"Increasing global competition forces companies to specialise and strengthen their core areas and by working with higher education institutions, companies gain access to both the latest technologies and new knowledge bases."

BUILD AN INNOVATIVE WORK ENVIRONMENT

1 Share information with all employees.If they don't know the challenges they can't help find the solutions.

2 Encourage learning.Employees start opening up to new ideas and can put their own work into context.

3 Diversify the workforce.A homogenous workforce or senior management are more likely to take fixed positions. Employing a broader range of people will open up a greater range of ideas.

4 Reward innovation.Factor good ideas into performance reviews otherwise the ideas can dry up.

Source: Lucy Fallon Byrne, National Centre for Partnership and Performance