A Special Report is content that is edited and produced by the Special Reports unit within The Irish Times Content Studio. It is supported by advertisers who may contribute to the report, but who do not have editorial control.

Innovation key to unlocking potential

Irish companies APC and S3 used Enterprise Ireland’s innovation supports to drive crucial progress

S3 Group’s chief technology officer James O’Riordan: “When we became an Irish company we became an Enterprise Ireland client. They provided funding to us through an R&D capability grant”

S3 Group’s chief technology officer James O’Riordan: “When we became an Irish company we became an Enterprise Ireland client. They provided funding to us through an R&D capability grant”

 

“A lot of headlines are around drugs that are just discovered, like a cure for the Zika virus or HIV or cancer. What people don’t hear is the difficulty around making those medicines. That’s what APC does,” says Dr Mark Barrett, founder of Applied Process Company (APC).

“We help pharmaceutical companies in the tech sector figure out how to manufacture these contents. From an engineering point of view that’s an incredibly difficult thing to do. We’ve been very fortunate to find ourselves in that market.

“In our early days as a company, we took a significant decision to spend a lot of revenues on internal research. One of the areas we focused on was continuing processing; essentially the technology to enable the continuous manufacturing of medicine. That was a relatively hot topic in the science community at the time. We reached some great milestones internally and that enabled us to approach Enterprise Ireland.

“They really listened to our ambition but also had a key insight in terms of our technology. Within the first year or two of the company, we received a large innovation grant which essentially allowed us to commercialise that idea. They have been with us all the way in terms of creating research and development to focus jobs through expansion and research grants.”

APC is just one of the companies to benefit from Enterprise Ireland’s innovation funding. The company was born of collaborations in pharmaceutical process and manufacturing optimisation. It has gone on to become a world leader in working with pharma companies to accelerate development and launch of new medicines.

Innovation is a broad term but from Enterprise Ireland’s perspective, it involves helping companies improve competitiveness by developing new processes, products or services.

In business, research, development and innovation (RDI) are the key components of a thriving business; they are essential to maintaining a competitive edge in the market and increasing output.

Enterprise Ireland’s annual business results survey notes that 91 per cent of respondents spend on innovation and 66 per cent used Enterprise Ireland research and development (R&D) grants to do so.

The figures relating to growth for those companies are impressive, with 25 per cent above-average employment levels and 30 per cent above-average export levels. Even more notable is that those same companies have export levels 10 times above the client average.

As the outcome of the Brexit vote forces Irish companies to look at R&D anew in a bid to protect their current exports in the UK and to explore different markets, innovation will continue to play a central role in growing exports. This is apparent considering that the average time span for product-design relevance is one to three years.

Where a company has in-house RDI capability, appointing a senior manager is advisable to ensure appropriate use of innovation. Collaboration is also an option for companies of all sizes and Enterprise Ireland’s supports include access to national and international research institutions and sources of funding.

S3 Group is another company in the tech sector that has teamed up with Enterprise Ireland in the innovation area. It was a Philips-owned company in 1986 and then bought out by senior management with the backing of venture capitalists in 2006, thus becoming Irish-owned and headquartered. It operates as two businesses: one in connected health and the other in semiconductors (design and supply of integrated circuits).

In healthcare, it is developing a system that enables people to adhere to prescriptions; in semiconductors it is an application-specific integrated circuit (ASIC) business, designing custom chips for customers.

“When we became an Irish company we became an Enterprise Ireland client. They provided funding to us through a large R&D capability grant in the form of a €2 million preference share. That allowed us to start the journey of developing products,” said S3’s chief technology officer James O’Riordan.

“We were already in the Czech Republic and Poland. We had a couple of guys on the west coast of the US. Since Enterprise Ireland came on board we began to expand.

“We acquired a company in Portugal, expanded in the US, and set up in Singapore and Brazil. Enterprise Ireland was extremely helpful in overseas expansion; it’s like being part of a big multinational company.

They organise trade missions, give you options to introduce your overseas customers to politicians, ambassadors and diplomats, which can make the difference in many countries. They help with logistics and they have offices so you can host meetings. They get you in there in a way that smaller Irish companies couldn’t do by themselves.

“They also provide grants for outside consultancy, which is very useful. In terms of innovation, those grants help you get an outside eye with an international view.

“We’ve brought in US consultants, for example, to help with strategy and market understanding. The R&D grants supplied by Enterprise Ireland are significant and combined with the R&D tax credits here makes Ireland a very competitive place to do R&D.”

“We are also a significant player in the satellite phone sector so Enterprise Ireland as the agency representing Ireland in the European Space Agency (ESA) helped us with that too.

Key drivers
High-tech products account for more than 40 per cent of Irish exports, and in 2015 exports by internationally traded Irish software companies increased by almost a third to €1.8 billion, making the sector one of the key drivers of the Irish economy.

Ireland’s 25 per cent R&D tax credit, combined with Enterprise Ireland grants and the EU’s Horizon 2020 programme to support research and innovation (with a budget of €80 billion), all tie in as key elements to the sector’s growth.

Another strand to the growth is the Enterprise Ireland Technology Sector Programme – run in conjunction with the IDA – that is aimed at building a competitive advantage for the industry. To date €125 million has been approved in funding through the programme.

All of these elements are part of an ecosystem that drives innovation and is helping to place Irish business as best-in-class in the sector, bringing in investors, and expanding constantly, with an overall Enterprise Ireland goal, led by the private sector, of increasing total investment in R&D to 2.5 per cent of GNP.

On current official projections that would translate to €5bn annually by 2020, an increase of more than €2bn compared to 2015.

Transnational collaboration
One the key implications of the Brexit vote is that Irish firms will need to find new international markets. Price is important but innovation creates much greater competitive advantage, according to Enterprise Ireland Divisional Manager for Research and Innovation Gearóid Mooney.

“The EU has increased the availability and accessibility of innovation funding. Enterprise Ireland has special units connecting companies to the European Space Agency and to the EU’s €80 billion Horizon 2020 fund, which often involves transnational collaboration.

Collaboration is a recurring theme with Mooney – and with good reason. He cites research showing that for every euro invested through the Enterprise Ireland Innovation Partnership programme funding collaborative research with Higher Education Institutes, €7.71 was delivered in net turnover.

Mooney also uses this statistic to emphasise that innovation must have a benefit.

“Enterprise Ireland offers a lot of innovation supports from feasibility study funding, to €5,000 innovation vouchers, R&D grants suitable for start-ups right through to seven-figure sums at the top of the innovation ladder.

“Separately, through Knowledge Transfer Ireland, we connect companies to the output of research teams at the country’s academic and research institutions with the aim of commercialising their work,” says Mooney.


For more on the Enterprise Ireland Innovation programme visit ambition.enterprise-ireland.com