Ireland has developed an exceptionally strong engineering research and development (R&D) ecosystem which is supported by Science Foundation Ireland (SFI) and Enterprise Ireland. We explain how that ecosystem works and looked at the key partnerships which have been formed between industry and research-performing organisations around the country.
Indigenous enterprises
Ireland has a highly developed and sophisticated engineering R&D ecosystem, says Damien Flanagan, partner, R&D incentives practice, KPMG. “It has been developed by our indigenous enterprises and by multinational corporations who have located their sophisticated manufacturing and development facilities here over the years. The ecosystem is actively supported by our universities and development agencies like Enterprise Ireland, IDA, SFI and many others.”
Without a doubt the strength of Ireland’s engineering R&D ecosystem is because of the quality of our engineers, says Flanagan. “That quality has developed over time and is built off a strong educational foundation at undergraduate and postgraduate levels.
“Our engineers are highly educated with drive, ambition and ability to develop workarounds — they are highly resourceful.”
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Sectoral and regional breakdown
Engineering in Ireland comprises a range of companies with capabilities in different engineering areas, says Anne Fitzpatrick, who manages the engineering sector in Enterprise Ireland. “We have engineering original equipment manufacturers (OEMs) that make machinery or equipment such as cars, plant manufacturers, and airplane manufacturers. We have a range of OEMs for off-road material handling, forklifts, and equipment. Sectors such as agriculture, machinery, waste management, and engineering sub-supply sell into OEMs.
“They might sell the parts that go into off-road vehicles. They might make hydraulic cylinders, extrude plastic, or do precision engineering — which is highly technically precise engineering of parts and components.”
The sector employs about 27, 000 people and it’s highly regional — 90 per cent of employees are outside of Dublin. Sales in 2022 were €4.3 billion with export reaching €2.3 billion. In fact, the sector grew by 21 per cent from 2021 to 2022. “It’s an extremely important sector because of its regional footprint, where it can be the lifeblood of small towns.”
There are also regional clusters such as companies focusing on medtech in Cork and Galway, OEM environment in Shannon and Limerick, in the west of the country there is agricultural machinery and in the midlands there is advanced manufacturing. “There is a plan to develop the midlands as a centre of advanced manufacturing,” says Fitzpatrick. “There is a lot of work going on between different research bodies to support companies in those areas.”
Enterprise Ireland support
Enterprise Ireland supports a range of gateways and tech centres in universities, says Fitzpatrick. “Our clients would partner with research institutes and take a deep piece of research and work with these clients in identifying a specific solution. For example, in additives manufacturing, or developing a robotic engineered heart, where the tech centre helps with the development of the robotics, or in plastics, where they are partnering with a client to develop a more robust plastic.”
R&D is very important to enable our companies to drive profit, and R&D can fall into two areas — product, where new products are based on customer requirements and market-led, so people invest in the research and development to drive that product development. The other is process R&D which aims to optimise the way that they operate in their plants to be more efficient.
Industry challenges
Talent attraction and retention is the biggest challenge in the sector, says Fitzpatrick. “There is a demand to recruit and fill vacant positions at all levels of their organisations.”
In response to this need, the sector has had a big focus on developing its own training programmes and wants to offer career paths to employees, “so if you move in at entry level you can see a career, not just a job – there has been an investment made in you to develop skills”.
Peer-to-peer support
Fitzpatrick says there is a large focus in Enterprise Ireland on the area of operational excellence — leadership training, investing in new equipment and digitising factories. They have diverse companies as clients and try to ensure the larger and more experienced companies share their learnings with smaller companies. “It is also about continued investment, the importance of that, and encouraging companies to invest smartly, so they can have greater efficiency, and ultimately become more valuable.
“Companies have to have a lot of investment in plant and equipment, in terms of physical investment into for example, auto brakes, or robotics management, and in the sector it’s really important to focus on the parts of the value chain that are very profitable, so they can drive greater profits out of their offering, so they can invest that profit and ensure their offering is fit for purpose globally.”
R&D is also closely integrated into the value proposition of many companies. Some companies produce new products every year, or finetune processes on an ongoing basis to attract interest from potential new investors, says Fitzpatrick.
Future-forward funding
Attracting new R&D into Ireland and retaining the ongoing R&D projects that are here is critical to Ireland’s future economic performance, says Ken Hardy, head of R&D incentives practice, KPMG. “Many other European jurisdictions, including our nearest neighbour, are aggressively competing to attract mobile R&D. We need to be conscious that industries like pharma, biologics and medical devices are likely to locate their manufacturing capacity close to where the R&D happens.
“Government incentives like direct grants as well as tax-based incentives like the R&D tax credit are critical tools in allowing us to compete. They need to be continuously monitored and improved to respond to the competitive landscape Ireland competes in.”