Public innovation investment ‘has not kept pace' with private sector, Ibec says

Irish Times

2 days ago

Ireland's largest business lobby group,
Ibec
has called on the Government to increase the amount of public investment into research and development as Ireland drops below the European average for public spend per capita.
Ibec has described Ireland's national research and innovation (R&I) infrastructure as becoming 'obsolete and out of date', claiming it is limiting research and innovation capacity in the State.
As part of a series of policy position papers on Ireland's competitiveness and productivity, the group called on the Government to increase public investment in R&I to 1 per cent of modified gross national income by 2035 to 'fuel the long-standing ambition of becoming a European innovation leader'.
Ireland's national research and innovation strategy, Impact 2030, sets out the target for Ireland to be classified as an Innovation Leader under the European Innovation Scoreboard by 2030 by achieving a score in excess of 125 per cent of the EU average. In last year's scoreboard, Ireland's performance stood at 113.2 per cent of the EU average, against its 2021 baseline of 108 per cent.
READ MORE
As it stands, Ireland's public investment accounts for just 13 per cent of the €8 billion national spend on research and innovation. Ibec said, 'Simply put, public investment has not kept pace with the surge of financing provided by industry.'
The
Department of Further and Higher Education, Research, Innovation and
Science
estimated that public investment in innovation surpassed the €1 billion mark for the first time in 2023.
Despite this increase in spending, according to Ibec, the Irish State spends €199 per person on directly funding R&I compared to the EU average of €274.
The group called on the Government to simplify access to innovation supports, which it said are 'underutilised by industry due to the administrative burden and challenges in navigating the system'.
It said Ireland's research and development tax credit is 'too complex and time consuming to access for a lot of companies'. In addition to improving access to the credit, Ibec also suggested the credit's expansion to cover offshore related-party research.
[
EU warns it could accelerate retaliatory tariffs over US duties
Opens in new window
]
It said this measure would 'reflect the realities of how [intellectual property] is developed across global operations' and would 'incentivise the retention of [intellectual property] in the Irish tax base'.
To improve national research capability, Ibec has appealed for the creation of a new funding mechanism for
higher education
facilities in succession to the Programme for Research in Third Level Institutions which was launched in 1998.
The group has also called for the use of the
National Training Fund
to attract skilled research talent, as well as investing in developing the domestic workforce by 'expanding and subsidising pathways for skills development'.