R&D support crucial in making Ireland a magnet for multinationals

What makes a company grow, instead of staying stagnant? Research and development (R&D) is how new products and services come to the market, and how companies maintain a competitive edge. R&D also provides the high-skilled jobs that keep economies competitive. But it’s not without risk as it can be expensive to carry out and doesn’t always result in success.

Ireland has built a strong infrastructure to support R&D. Most significantly, companies carrying out R&D in Ireland can claim a 25 per cent tax credit. And it’s particularly beneficial to multinational firms, including the many US firms based here, as the tax credit is “above the line” – meaning that it can be deducted from their gross income.

“As an established global hub for medtech, Ireland has become something of a magnet for major multinationals in the medtech space, particularly US multinationals – think Medtronic, Boston Scientific Abbott, 3M Healthcare, Stryker and Cook Medical,” says Eoghan Ó Faoláin, director of the Irish Medtech Association.

“These are just some of the medtech giants with significant operations in Ireland but there are also hundreds of SMEs located here, all working towards the goal of making life-improving – and life-saving – modern medical technologies.”

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Around the turn of the century most activity in the medical devices sector was driven by manufacturing and supply chain. Today innovation has driven change and there are 17 of the top 20 global medtech companies in Ireland, with more than 450 companies employing 48,000 people and global exports of €13 billion, making Ireland the largest employer of medtech professionals per capita in Europe.

However, R&D happens in a surprising range of firms and sectors. PepsiCo, for instance, works with a range of Irish and international supplier companies and research performing organisations (RPOs) across different projects and initiatives.

“This could range from very basic pre-competitive research and validating a new ingredient to end-to-end process development,” says Dave McDonagh, R&D director at PepsiCo.

“We collaborate on a formalised basis with a range of academic partners and RPOs such as Teagasc Moorepark, UCC, UCD and SETU, and SFI centres including APC, Tyndall and Amber on initiatives ranging from product characterisation, microbiome effects, sensor application and sustainable packaging development.”

McDonagh says Ireland’s R&D ecosystem allows PepsiCo to link in with EU Horizon and wider global programmes and that it is easy to work with excellent senior research personnel and to access and hire talented researchers as they leave academia.

“Agencies like InterTradeIreland, with their US-Ireland R&D partnership, as well as the American Chamber of Commerce Ireland, are among those that help us to collate US MNC research needs and focus arenas for discussion with Irish Government, academia and business agencies to help support policy and initiative development,” he adds.

Ó Faoláin, meanwhile, says Ireland’s R&D ecosystem, from academia to large multinational corporations (MNCs), supports convergence between life sciences, medtech and technology.

“[This enables] innovation and the development of new capability through self-guided, facilitated and funding-based collaboration. Such an alchemy of skills and capability has proved a key differentiator for Ireland,” he says.

The annual European Innovation Scoreboard shows that Ireland is a “strong innovator” and performs above the EU average, Ó Faoláin says, citing the recent €100 million expansion of Boston Scientific in Galway as an example of how R&D is thriving here.

But, even with all this, could we do better?

“The research ecosystem, funded programmes, Technology Transfer Offices, available state supports and benefits are relatively navigable for our local team but could perhaps be better enabled by a more “one-stop shop” single-agency approach both to highlight/promote and to facilitate interaction between the partners,” McDonagh suggests.

Ó Faoláin says that, to continue to effectively compete with competitor jurisdictions and solidify Ireland’s position as a global leader in life sciences, we need a co-ordinated, focused industrial policy, led by the Government.

“Cross-industry convergence is already on the rise as businesses partner, using their unique specialities to leverage opportunities for innovation and growth. Now the Government must follow international best practice to facilitate greater co-ordination of state-funded resources to drive innovation, support effective partnerships and foster collaboration to achieve our potential and overcome challenges.

“We are calling on the Government to develop a national industrial life-sciences and health-technology strategy that reflects international best practice in industrial policy by embracing clustering.”