Irish R&D spend lags EU average

Business expenditure on research and development in Ireland fell dramatically in the late 1990s, according to the latest data from Forfás. The R&D spend grew by only 11 per cent between 1997 and 1999, while the average for the 1990s as a whole was 15 per cent per annum.

Total expenditure on technological R&D in the business sector was €784 million in 1999, Forfás said, but Ireland still lags the EU average.

The 1997-1999 figure is expected to have remained largely unchanged since then, said Forfás manager of research indicators and evaluation Mr Michael Fitzgibbon.

Launching the survey Mr Martin Cronin, chief executive of Forfás, said Ireland spent just more than 1 per cent of Gross National Product on industrial R&D in 1999, in line with the figure for 1997. This compares to an EU average of 1.2 per cent and an OECD average of 1.5 per cent.

Mr Fitzgibbon said the key reasons Ireland lagged its European counterparts in R&D spend were:

The dominance of the food sector, which accounted for 50 per cent of output in the indigenous sector, and traditionally spent less on R&D both nationally and internationally;

The State's targeting of manufacturing industries, rather than those involved in R&D, in the foreign-owed business sector.

The Forfás survey found that the electronics, software and pharmaceuticals sectors accounted for almost 75 per cent of total expenditure on R&D. But there was room to raise R&D expenditure as a percentage of output in the electronics and pharmaceutical sectors. In these sectors the ratio of R&D to total output was significantly below OECD levels - 1.4 per cent compared to 5.6 per cent for electronics, and 2.7 per cent versus 11.5 per cent for pharmaceuticals.

While the number of indigenous-owned firms spending more than €1.3 million per annum had risen from 25 companies in 1997 to 43 in 1999, and Ireland now had 3.1 researchers employed per 1,000 of the labour force in industry compared to an EU average of 2.5, much remains to be done, said Mr Cronin. "The future of the manufacturing and internationally traded service sectors in Ireland needs to be driven by innovation," he said.