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Keeping investment Irish
15 November 2009 By Martha Kearns
The ‘smart’, or ‘knowledge’, economy has become one of the most ubiquitous catchphrases of the last number of years. As the budget looms, hose drafting their pre budget submissions will bear in mind the government’s commitment to this area.
In its framework for sustainable economic renewal, entitled Building Ireland’s Smart Economy, the government committed to ‘‘invest heavily’’ in research and development (R&D), incentivise multinational companies to locate more R&D capacity in Ireland and ensure the commercialisation and retention of ideas from that investment.
The Centres for Science, Engineering & Technology (CSets), joint ventures between industry and third-level institutions, are focused heavily on this goal. There are nine such Science Foundation Ireland funded centres and, between them, they have partnerships with around 50 companies. They focus on research, fostering new and existing Irish based technology companies and attracting industry to Ireland.
Last month, Wisconsin based software company Sajan, announced it was to establish a new subsidiary which would be headquartered in Dublin, creating 35 jobs in R&D and sales at the new entity, Sajan Software.
Páraic Sheridan, operators director for the Centre for Next Generation Localisation (CNGL), a CSet based at Dublin City University (DCU), said one of the challenges was ‘‘connecting the dots between cause and effect’’ - in other words, what influence the CSets had on companies’ decisions to locate here.
Last May, the IDA arranged for Sajan representatives to meet with CNGL at DCU, and with its researchers at Trinity College Dublin and the University of Limerick.
‘‘I would imagine it certainly had an impact. Our message that there is a centre of excellence here with a large critical mass of research around localisation [the process companies use to adapt products to foreign markets],which is exactly the area that Sajan Software works in, would have had an impact on their decision," said Sheridan.
Although based at DCU, the CNGL has 100 researchers at Trinity, UL and University College Dublin. Set up in December 2007, it has nine industry partners, from small Irish companies to multinationals like Microsoft and IBM. Sheridan said that it was important that CSets kept in touch with companies, even those which were not partners.
‘‘For example, I keep in regular contact with the localisation people in Facebook, even though that is not being done in Dublin yet. It is a company that is growing its presence in Ireland and I am constantly talking to them about the fact that localisation research is happening in Ireland and if they want to grow their localisation base, maybe this is where they will do it. It’s the same for Google," he said.
He said that CSets were mindful of the fact that they were being funded from the government’s enterprise and not education budgets, and were not just doing research for scientific discovery.
‘‘There is a focus on how this translates into a strategy for a knowledge economy. We are mindful of the needs of the multinationals and are constantly working with the IDA in trying to get foreign direct investment (FDI)," said Sheridan, who was speaking from Portland, Oregon, where he was promoting Ireland as a ‘‘centre of confidence’’ with a number of large multinationals based in Silicon Valley.
‘‘My role is also to make them mindful of the fact that the Irish government is investing in R&D in the universities, and working closely with industry to make sure there is a large body of knowledge and people well-attuned of the industry needs for next-generation localisation," he said.
Sheridan said that the knowledge economy was Ireland’s way of getting out the economic downturn. ‘‘I am very conscious of the rise of the rapidly developing economies - China, India, Brazil, Argentina and south-east Asian countries. Ireland’s future competitiveness has to be based on the high-value knowledge and technical skills, rather than on labour-intensive industries, where I don’t think we can compete on cost," he said.
Sheridan said that had started to happen, but more needed to be done. ‘‘I came back from the States last year, and what attracted me back was the huge investment around science and technology."
However, he added that more funding and focus needed to be put on entrepreneurship and innovation in order to transfer this research work into economic impact.
‘‘Innovation is the application of invention. It is taking inventions to business problems and finding solutions. This is now where I see more focus being put, and I think it is where the focus needs to be continued to be concentrated. I’m not suggesting that it is one without the other - but both need to be there to have success."
He said that he hoped the budget would not see the government rowing back on its plans for the sector. ‘‘What you want to see is a government guided by a strategic plan; it has set out its strategic plan around Ireland being a knowledge economy and being an innovation island. One would hope it would hold steady on that commitment and continue to fund that," said Sheridan.
Diarmuid O’Brien, executive director of another CSet, the Centre for Research on Adaptive Nanostructures and Nano devices (Crann), agreed. He said that, while no sector was immune from cuts, the right strategy had to be put in place for when the country came out of recession in order to attract the right companies and the right jobs.
‘‘Around the world, there are R&D stimulus packages being created. Ireland does not have the capability to invest, given the deficit we have, but we have to look at where we want to be when we come out of the downturn," said O’Brien.
He said there were signs that R&D as retaining companies in Ireland, pointing to Dell and Element 6 as examples.
‘‘We are beginning to see, through the companies’ actions, that Ireland is competing and succeeding around research. There seems to be a trend there, and we need to be conscious of it and learn lessons from it," said O’Brien.
However, he said that R&D should not be seen as a replacement for manufacturing, but rather as enhancing it and using manufacturing as a platform to create R&D jobs.
Founded five years ago, Crann is a CSet based in Trinity focused on nanoscience.
The centre has 200 researchers and 13 industry partners, including Boston Scientific, and much of its research is involved in the communication and IT sectors, and the biopharm and medical sectors. It does a lot of work around diagnostics and cancer research, with one of its researchers based at St James’ Hospital. Crann is working on new diagnostics for the earlier detection of cancer.
O’Brien said the whole R&D and innovation community was aware that research needed to deliver clear economic value. ‘‘There will be cuts, and no one is immune from that, so we have to focus on how to make clear the economic value of what we do. All CSets are really focused on that. CSets can be the tools that Ireland needs to become a centre of excellence for innovation and research."
O’Brien said that companies which were looking at locating in Ireland or deciding whether or not to stay here looked at a number of issues, including the cost base and the government’s approach to business.
‘‘But one of the key elements is whether or not the government is taking R&D seriously," he said. ‘‘When we go into partnership with companies, they want to see that world-class science - we are really being benchmarked against the best universities in the US and Asia."
He said that when Hewlett Packard, which works with Crann, was cutting back on its budgets recently it had to decide whether or not to cut back on research in Stanford University in California or in TCD.
‘‘It decided to cut back in Stanford. This is what we have to be able to do to hold onto companies - we have to be able to convince them that work is being done here in Ireland to a world-class standard," said O’Brien.
‘‘That’s the reality now - we have to be able to compete.
That type of investment in CSets is Ireland’s best opportunity to bring in FDI - and there are many examples of real jobs being created across the country."
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