The European Commission’s latest findings have revealed that research and development funding within Ireland is largely focused on multinationals, rather than SMEs. These findings come through research published in the commission’s latest report by the Research and Innovation Observatory, which also reveals that R&D on a whole in Ireland is below that of average spends by firms in other EU nations.
The recession played a large part in the reduction of R&D funding across the board, but with Ireland's economic productivity returning towards the levels it showed pre-downturn, there is now a renewed focus on forging ahead in the world of R&D. With this in mind there are a number of schemes which Irish companies can avail of to bolster their activity in this area, many run through Enterprise Ireland, the Industrial Development Authority and the European Union, which will provide €80 billion of funding through the Horizon 2020 scheme, in addition to the private funding this scheme will also attract.
A fear of red tape – and a lack of understanding of how to tap into R&D funding – are often the key obstacles for Irish businesses, but making R&D a priority is key to growth, according to Dr Alison Campbell, director of Knowledge Transfer Ireland.
“There are lots of schemes and State support for Irish companies to undertake R&D, lots of State support for SMEs all the way through to larger companies,” says Campbell. “The challenge is companies understanding that they are ready to take them up; this is about companies knowing about the schemes and engaging in the R&D journey themselves. It requires effort from management and an internal commitment from the companies.
Events and seminars
“There are a whole bunch of events and seminars around the country where companies can find out more about R&D, including those run by the Irish Research and Development Group. Enterprise Ireland also offers a lot of support on what R&D is available to them.
“The Knowledge Transfer Ireland website is a one-stop shop that will point companies in all kinds of directions about R&D funding, including how they can also work with Irish universities and institutes of technology on R&D. Enterprise Ireland will also help companies apply for the funding support, so they don’t have to do this on their own – there are supports there to help with the burden of doing so.”
When a company has committed to expanding their R&D focus, and put in place the structures in order to do so, identifying where to go is the next step in the process, according to Dr Lance O’Brien, Teagasc’s head of strategy and international relations, who also supports the idea that companies must invest in staff that are R&D-ready.
“The first stop for funding assistance is Enterprise Ireland. I often see in feedback that people are confused by the amount of schemes that are available, but Enterprise Ireland should be the first port of call,” says O’Brien. “The IDA also awards grants for R&D, and of course there are EU schemes like Horizon 2020.
“About two-thirds of R&D in Ireland is done by multinationals. The issue for many of the smaller Irish companies is capacity, and one way to get past this is for them to take on more graduates who can understand research processes, read research papers and can engage with researchers in the public sector on behalf of the company. Companies need to make sure they have people in their companies that can absorb new ideas and processes about R&D.”
Necessary documentation
Ian Collins, Ernst and Young head of tax services, advises those companies that are seeking to branch into R&D for the first time – or are re-engaging after a period of absence in the sector – to do their homework on what is needed in order to file submissions and to play ball in terms of supplying the necessary documentation.
“My primary piece of advice to companies is to know the rules of submitting a claim,” says Collins. “Don’t submit a claim and then complain about the documentation that is required to support it – because it’s necessary. It’s also worth noting that the Irish R&D funding systems rank up there with the best internationally in terms of the overall suite of incentives.
“One of the other problems we see is that companies have finance and R&D departments that are very siloed and are not talking to each other. Both departments will need to submit claims together, so ensuring there is cohesion there is vital.
“Companies should also try to capture information and evidence as they go, and not wait for a year down the road, when the deadline for submitting a claim becomes relevant. This can take the form of taking photos of whiteboards with research on it before erasing it, then storing it all in an R&D folder, that can all be evidence itself to be submitted with claims.”
When a company has successfully gone through the necessary steps to obtain R&D funding, they are eligible for tax breaks, an element that should be undertaken with third-party involvement, according to Collins.
“The other element worth remembering is that once a company has done R&D, they can claim 25 per cent back in terms of those costs, in cash,” says Collins. “That is done in terms of claiming your cash return with Irish Revenue. Because of that lucrative revenue, it’s crucial that companies talk to an adviser, or someone who knows the scheme and can give you a good steer in the right direction.”
What is Knowledge Transfer Ireland?
An initiative of the Department of Jobs, Enterprise and Innovation, Knowledge Transfer Ireland works as a directory where companies can find out the relevant information relating to the various public bodies that can assist in gaining access to R&D supports. The purpose of KTI is to grow Ireland as a global innovation leader, with a stable economy.
How can they help your company? KTI can assist in tax incentives schemes such as the R&D tax credit and the Knowledge Development Box. They can also help to access R&D skills for your company whether this be at graduate, post-graduate or highly skilled researcher level. KTI can also help to build collaborative research ventures at an advanced level, through schemes involving Enterprise Ireland, the IDA and Science Foundation Ireland, giving access to world-class research centres.
KTI also provides information on accessing European funding schemes, including Horizon 2020 – the European research-funding programme running from 2014 to 2020; and European Space Agency funding. KTI provides information on accessing EURAXESS – the online portal for accessing R&D funding.
How can you find out more about KTI? A detailed breakdown of how KTI can assist companies is available on the KTI website – knowledgetransferireland.com – with a directory of innovation supports, research centres and technology centres also available by logging into the “About KTI” section.