To transform and retain the multinationals we have to have the skills and research base that they need

IN A recent issue of The Irish Times, Dr Declan Jordan wrote dismissively about the policy engrained in the Strategy for Science Technology and Innovation (SSTI) related to “doubling the number of PhDs” in Ireland.

He also was quoted in Innovation on the same day casting doubt on the recently-established Innovation Task Force. A short time previously he opined that the Irish business sector was so adequately entrepreneurial that investment in research in universities and institutes of technology was unproductive.

Last year, he presented data that claimed the innovation level of companies was damaged by collaborating with higher education institutes. I addressed that latter paper subsequently (“A question of innovation”, Innovation, February 2nd, 2008) and contested the data on which that conclusion was based, but not the more recent contributions to debates on innovation policy.

In fact, it may be too restrictive to concentrate only on innovation, as there are different products from investment in research. The reverse is also accepted as a truism, ie innovation comes from very diverse sources and not only through trained researchers.

The contributions by Dr Jordan and, most recently, the Special Group on Public Service Numbers and Expenditure Programmes (An Bord Snip Nua) that examine critically the SSTI programme, are timely and discussion on this central part of Ireland’s plans for recovery are needed to ensure the plan is robust and understood by taxpayers.

It is clear, even with a cursory glance at exchequer revenue and expenditure, that there are inefficiencies across the public service, and these must be ironed out .

However, presented with the undeniable truth that Ireland has been successfully transforming its industrial capacity due to foresight in prioritising RD investment, any slash and burn reaction would inevitably entail a crash and burn consequence. That debate is, perhaps, one for another day.

It is also obvious that the over-riding question that faced Ireland when the plans that gave rise to the SSTI component of the National Development Plan were put in place was how could Ireland maintains and grow its industrial and export base and simultaneously increases the standard of living of the Irish people? Making the country attractive for higher tech industries and having a more innovative environment, in addition to quality manufacturing, was the solution. And I have not heard another one.

The only alternative would be to compete with emerging economies on cost – and that would require a decrease in Irish living standards – or to accept the underlying thesis of Dr Jordan that we don’t invest in the up-skilling needed for a smart economy. This has the theoretical possibility that it might work but it would be an experiment that other counties in the world have not undertaken. It also was not the collective view of the EU Heads of State when they put science at the heart of the future of the European economy. And it is not a view that I have heard at meetings on science and economic policy over the past 10 years.

The reaction of economies around the world, presumably informed by a range of economists with diverse opinions, have all rejected the Micawber “let’s hope something will turn up” plan, as leaders in all continents put more money into research laboratories.

Instead, the example of Finland is often referred to as a guide. In the early 1990s, when it had a sudden crisis brought on by the loss of their major market (the USSR), the Finnish government cut all expenditure and increased the investment on RD. The fruits of that courageous move remain abundantly clear and Finland has announced its intention to increase further the already high level of investment in RDI in the current crisis. But all of that does not address some of the core criticisms of the SSTI plan.

A primary driver of the SSTI multi-annual programme is, indeed, to increase the number of PhDs in Ireland. And, the sound-bite of “doubling” the number can indeed be challenged – why not a 50 per cent increase?

There is no absolutely correct number. I contend that it is an area where more are required. The “doubling figure” arose from Ireland having approximately five PhD graduates per 1,000 in 2003. And comparisons with high-tech countries suggested that this was too low. The US has approximately 10 and hence the doubling proposal. But there are intermediate figures in countries that have successful high-tech industries so there is nothing sacrosanct about doubling as a target.

The specific problem for Ireland is that 80 per cent of our exports come from multinationals whereas in some of the countries, with less than 10 researchers per 1,000, there are strong indigenous companies located there that contribute very significantly to these economies. The multinationals, being global, can go anywhere from Ireland. To transform and retain them here means we have to have the skills and research base that they need. Five PhDs per 1,000 does not deliver their skill needs and, hence, the programme to increase the numbers of PhDs available. Of course we could risk it and say we will stay below the international norm. But we should recognise it as a very strong statement to say that we can be more attractive with less to offer, and many countries can offer tax deals that are even lower than those in Ireland.

Professor Frank Gannon is director general of Science Foundation Ireland