Government's R&D spend biased against small business - Isme

The small business group Isme has hit out at what it says is a Government bias against small business in favour of universities in the allocation of research and development (R&D) spending.

Addressing Isme's annual conference in Bundoran, Co Donegal, yesterday, the group's chairman, Daniel Hickey, said that only 7 per cent of total Government spending on R&D projects was being allocated to small and medium-sized enterprises.

Mr Hickey said that levels of investment in innovation and research and development in the Republic lagged behind those of our competitors and had failed to meet the national target of 1.7 per cent of GNP by 2010.

Mr Hickey also criticised the emphasis on funding research and academic institutes.

"The real wealth generators are those who turn scientific ideas into products, sales and profits as opposed to those who come up with bright new ideas," he said.

Mr Hickey said that small companies had demonstrated that they were great innovators and called for more generous grants and tax reliefs, as well as for an end to mandatory co-operation with research institutes and universities.

"Creating ineffective and contrived alliances merely to qualify for assistance is both a waste of time and scarce funds," he said.

In a separate address to the conference, Friends First chief economist Jim Power highlighted the effect of Government policies on inflation and taxation.

"The State has been one of the key drivers of inflation in the past five years and benchmarking has imposed an unacceptable burden on the business sector," Mr Power said.

Former finance minister and Fine Gael leader Alan Dukes said that new EU member states and China were intensifying the Republic's competitiveness challenge.

"Some of the new member states are already proving to be redoubtable competitors. They are hungry and innovative and they have the ability to compete the socks off 'old Europe'. They are using the lessons of our success to get ahead of us," he said.

Mr Dukes said that Chinese capitalism would also emerge as a potent force.