State has much to do to keep pace in R&D race

Net Results: A new report from Forfás on research and development expenditure in the State makes for essential reading for anyone interested in science, technology or the future economy (well, that should mean pretty much everybody!).

Available at www.forfas.ie, the report make abundantly clear that much has been accomplished in the past few years, thanks in particular to Tánaiste Mary Harney's firm support for expanding Irish R&D. (There is a handy "at a glance" summary available on the home page)

But there's good evidence that, so far, it is still too little. With some nerve as well as verve, the Government can at least guarantee that it's not also too late.

Let's run the numbers. First, the good news: R&D expenditure in Ireland increased to €1,780 million in 2004, up 10.7 per cent on the previous year, and is estimated to reach €1,910 million in 2005. That's an increase in expenditure on R&D of 1.35 per cent of GNP (gross national product) in 2002 to 1.43 per cent in 2004.

It is also a 45 per cent increase in those years in the Government's budget allocation to R&D - a rise from €430 million in 2002 to €625 million in 2004. We also have a far greater number of people working in the research arena.

In 2002, the State had 2,695 people employed full time in research. In 2004, this number reached 4,152.

Of that 2004 figure, 33 per cent are women - a new indicator included this year by Forfás, and a welcome one.

Now for the bad news. The Irish figures for R&D overall remain well below both the European Union and OECD averages for national investment in these areas. The EU average (for the 25 member-states) is 1.85 per cent of GDP (calculated differently than GNP, but the trend is clear), and the OECD average is 2.24 per cent of GDP.

Breaking down such larger figures is also very revealing and seriously undercuts most of what seems at first glance to be the good news mentioned above. For example, business expenditure on R&D has risen 16.3 per cent in 2004 compared to 2002, up from €988 million to €1,150 million.

But in real terms this is a static figure once you account for inflation and also the fact that the gains only match the economic growth of the same period. More shocking is that the 2004 figure is a decline in percentage terms from 1994 expenditure!

In 1994, Irish business expenditure on R&D expressed as a percentage of GDP/GNP was 0.88 per cent (compared to an EU average of 1.06 per cent and an OECD average of 1.39 per cent).

In 1996 that rose to 0.93 per cent, in 1998 it fell again to 0.90 per cent, and during all of the last decade the percentage has continued to slump - to a measly 0.77 per cent in 2004. That is truly, truly worrying.

By contrast, higher education R&D has risen in both euro and GDP/GNP percentage terms.

Taken in GDP/GNP terms, higher education expenditure on R&D was 0.26 per cent in 1994 and 0.33 per cent in 2004. Again, this is shockingly low, though at least it is an actual increase.

What such figures demonstrate is that increases in expenditure on R&D are meaningless unless examined in these broader contexts, both across a European and OECD scale and, also, looking backwards to see whether a doubling of expenditure in 12 years means anything.

Going by these figures, we can see that mostly they don't. They do show that the Government has taken consistent steps in recent years to put in place new approaches to R&D, to create the funding and support mechanisms and oversight bodies to try to spur further R&D nationally, both publicly and privately.

For those efforts - largely due to Ms Harney - the Government deserves praise. Especially noteworthy are her efforts to structure R&D bodies in such a way that collaborative work between the higher education and business sectors is strongly encouraged. Partnering in this way is of huge benefit, enabling more complex and focused work to happen - and, crucially, more commercially viable work.

But there is not a single thing in this report that should make anyone feel goals have been achieved. We are always at risk of complacency - of seeing any small goal obtained as being a signal that we have arrived, so to speak.

The State has done much to become a global contender, but we are still at the back of the pack. More to do. Much, much more to do.

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