Benefits of R&D projects that link third-level with industry

Proponents argue it attracts foreign direct investment and makes graduates more employable

Kieran Drain (right), chief executive of the Tyndall National Institute, with Damien English, Minister for Skills, Research and Innovation, at the launch of the Tyndall 2014 annual report. Photograph: Conor McCabe Photography

Kieran Drain (right), chief executive of the Tyndall National Institute, with Damien English, Minister for Skills, Research and Innovation, at the launch of the Tyndall 2014 annual report. Photograph: Conor McCabe Photography

 

Organisations involved in commercialising R&D argue that strong national R&D programmes that bring together third-level researchers and industry are critical to the economy. This matters at a time when the Government is considering its next five-year plan for State-backed science and technology research and development.

Such R&D programmes attract foreign direct investment, increase the sophistication of work done in the country and the quality of available jobs, and provide the training that makes graduates more employable, argue proponents.

“Fifteen years of R&D funding [via Science Foundation Ireland (SFI)] has really brought up the technology base for Ireland, ” says Kieran Drain, chief executive of Cork-based Tyndall National Institute, the country’s largest information and communications technology research centre.

The institute was developed as a partnership between University College Cork, SFI and the then Department of Enterprise, Trade and Employment. It has more than 460 researchers, engineers and staff.

Industry partners include Intel, which has invested in photonics research that will help develop the next generation of microprocessors.

The challenge of getting and maintaining such high-profile companies as industry partners ensures Irish research skills remain internationally competitive, Drain says.

Attractive to employers

“You’re working with the best, and they cause us to play at the top of our game. We have to deliver and perform at top standards for that to be repeat business,” he says.

Irish postgraduate researchers also come away with greater ability and an industry focus that makes them attractive to employers.

“Graduate researchers are definitely more hireable if they’ve done industry research. We’ve hired people from our university partners in this way,” says Domhnaill Hernon, technical manager for thermal management and eco-sustainability research at Bell Labs Ireland, whose US-based parent company is part of Alcatel-Lucent.

“We currently have 14 PhDs that we co-fund, and seven post-doctorates. If the Government wasn’t rolling in and supporting this, we wouldn’t be able to engage in that way. There’s no way.”

Bell Labs – which has relationships with a number of institutions including Trinity College, Dublin City University, University College Dublin and University of Limerick – came to Ireland a decade ago as one of the State’s first major R&D co-investments.

It carries out a range of industrial research in areas ranging from wireless technologies to battery productivity.

Hernon says some of the university researchers they have worked with also gain the commercial thinking that enables them to go on to form spinout companies at their institutions, helping to develop Ireland’s indigenous start-ups.

Thanks to a decade and a half of mostly increases in State-supported R&D funding, Ireland has gone from one of the most laggard countries in terms of R&D spend as a measure of GDP, to number 13 in the table of OECD countries, based on 2013 figures.

Ireland invests 2.4 per cent of GDP into R&D, the OECD average. By comparison, Israel, which tops the table, spends 4.21 per cent. The top European countries are Finland and Sweden, at third and fourth on the table. Finland invests 3.32 per cent and Sweden 3.30 per cent of GDP.

Most of the countries in the top 12 would be seen as global science and technology leaders. In recent years, Ireland’s R&D funding has remained flat.

Economists in Ireland have consistently debated whether a correlation exists between State R&D investment and economic benefit.

In 2009, the Special Group on Public Service Numbers and Expenditure Programmes (also known as An Bord Snip Nua, chaired by UCD economist Colm McCarthy) noted in its report: “In general, the group is strongly of the view that substantial reductions in funding are warranted given the significant amounts invested to date, the lack of verifiable economic benefits resulting from these investments and the inflationary impact of funding on research and administration salaries.”

On the other hand, a Thomson Reuters report at the start of this year looked at whether corporate success results from R&D spend, measured in terms of intellectual property results as demonstrated through patent filings. The study found a strong link between R&D spend and commercial return.

According to the report, the top 100 innovative companies on its table increased R&D spend on average by 17 per cent annually, and saw revenue growth that was twice that of other companies. The innovators averaged revenue growth of 12.6 per cent, compared to an average 6.85 per cent for companies in the S&P 500.

Substantial growth

A report from the European Commission at the end of 2014 found that R&D spend by Irish-based companies – heavily bolstered by the big US ICT multinationals here – was now five times the European average, and more than double the global average.

Investment by Irish-based companies increased to 13.6 per cent in 2013, compared to a world average of 4.9 per cent, and an EU average of 2.6 per cent.

Some have argued the actual value of such increases must be viewed in the context of State tax supports and benefits.

However, the figures represent substantial growth in multinational research centres that have also seen ongoing job expansion, such as IBM Ireland’s Software Lab, and its new Design Centre, which is now a significant employer of Irish design graduates.

Drain feels such increases are a testimony to the quality of third-level researchers in Ireland, because the US multinationals could instead place important research with the globally renowned universities on Silicon Valley’s doorstep, such as Stanford and the University of California, Berkeley.

“I think it’s a great testimony to the quality of research they see here,” says Drain. “I hope in time we’ll have even more FDI companies doing R&D in Ireland.”

Research boost: ‘If companies bed down R&D, that’s what keeps them here’

Damien English, Minister of State for Skills, Research and Innovation, would like to see the Government maintain, or even increase, funding for science and technology R&D in Ireland.

He argues there are strong economic gains for the State in doing so, although he recognises that the Department of Finance is under “intense pressure” as it considers where to focus spending.

“If you look at the companies that invest in R&D here, they as a group have doubled their exports,” which benefits the economy directly, he says. “The question is, how can we bed down companies and keep them here. If companies bed down R&D, that’s what keeps them here.”

He believes there’s strong evidence that providing State R&D funding attracts further investment from multinationals and “has driven the economy” , helped to grow talent in Ireland, and attracted top researchers from abroad.

He points to research centres such as Tyndall, which now does 10 per cent of all Irish research carried out by Intel.

Ireland has now “built up a very strong research ecosystem. We need to look at how we go on to the next level. We need to compete with Israel, Denmark and so on,” he says.

Such countries are ahead of Ireland on the OECD list of countries with the highest State spend on R&D, calculated as a percentage of GDP. Most spend more than 3 per cent, he notes.

Another concern is that a decline in spending on R&D by the State has mirrored a decline in PhD students at Irish universities, an occurrence he feels is related.

He believes that third level should be more responsive to industry, while industry should commercialise more of its joint research work here in Ireland rather than take it abroad. But he also says that R&D should not just focus on commercialisation, and that universities have a broader role in producing “the complete student”, not just well-trained employees for industry.

Following a lengthy consultation process this past year, which included a round of submissions from interested parties and a meeting of industry and academic experts at Farmleigh, Minister English will publish a science and technology strategy proposal this autumn.

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