OVERVIEW:REDUCING THE effective corporation tax rate on "innovative activities" to 5 per cent is one of the main recommendations in the ambitous report of the Innovation Taskforce which will be published by Taoiseach Brian Cowen this morning.

The report suggests that at least 117,000 jobs can be created by 2020 if its recommendations are followed. The draft copy of the report seen by The Irish Times does not include costings for its recommendations but says it recognises “the difficult economic context and that some of the recommendations have significant resource implications at a time of serious budgetary pressure”.

In common with previous studies it calls for investments in broadband, research and development, and science education. But it recommends the establishment of a committee reporting directly to the Taoiseach to ensure “the recommendations are implemented in a dynamic fashion”.

The 28 members of the taskforce all met privately with Mr Cowen and sources say he was “highly engaged” with the process.

“Increasing our competitiveness by reducing costs, stabilising the public finances and waiting for a global recovery will not be enough to ensure we return to economic growth,” the report states. “What we need to do now is to place innovation at the heart of enterprise policy.”

The report says that entrepreneurs need to be at the centre of the strategy if it is to succeed. As a result it recommends modernisation of Ireland’s bankruptcy laws, a review of the number of enterprise support agencies and increasing the visibility of innovation and entrepreneurship in the media.

A scheme to give public servants relevant work experience in high growth business is suggested as a way to give them the skills needed to build a smart economy.

The report makes a number of recommendations about how foreign direct investment can be attracted to Ireland, and to ensure those firms already here become more embedded.

The country should rebrand itself as an “innovation hub” and establish a European Accelerator Programme, under which private US firms would be facilitated in setting up their European headquarters here.

It suggests that to “secure Ireland’s economic future we need to significantly increase our current rate of job creation and new company start-ups”. Incentives are suggested such as a tax break for company founders. The Scaling Incentive Scheme, which would allow founders get tax-free lump sums as a company grows, is envisaged so that Irish companies don’t sell out to foreign firms “too soon”.

The report calls on the Government to establish quickly the €500 million Innovation Fund Ireland suggested in its original Smart Economy strategy, in order to attract international venture capital. Multinationals operating in Ireland and the diaspora should also be encouraged to provided investment capital.

“An entrepreneur is at risk of spending too much time fundraising in Ireland for what will be, by top tier standards, a small amount,” the report notes.

Opportunities in food, pharmaceuticals, medical technologies, internationally traded services, financial servics, information and communications technology and environmental goods and services are highlighted as promising sectors for economic development.

The report also recommends that the National Development Plan be revisited so that investments in education can be protected. Third-level institutions will need a “diversity of revenue” streams to support the investments including increased commercialisation of research and “possibly tuition fees”.

Maths education should be prioritised as it underpins the ability to perform in science, technology and business. Bonus points should be awarded for maths grades from the 2012 Leaving Certificate.

Linkages between academia and business must also be strengthened. “Entrepreneurs and companies need a clear, consistent, speedy and predictable system to facilitate their engagement in research” with the higher education sector and there should be a national database of all research and intellectual property being generated by the institutes.

Members of the taskforce, chaired by Dermot McCarthy, secretary general of the Department of the Taoiseach, included senior business people, academics and public servants.