Celtic tiger comes under R&D pressure from Asia

Brussels, 03 Feb 2006

While Ireland has experienced phenomenal growth in recent years, driven predominantly by investment in high-tech manufacturing, the country is now coming under pressure as countries in Asia target exactly these technologies.

The report from Forfás, the board responsible for providing policy advice to the Irish government on enterprise, trade, science, technology and innovation, notes that while Ireland has seen a strong upward trend in research and development (R&D) performance, 'it will be critical to our ambitions as a knowledge economy to actively promote further investment in R&D'.

This is because China, India, and countries in South East Asia and Central Europe are investing more and more in areas such as electronics, software and pharmaceuticals. Indeed, China's R&D investment as a whole increased from USD 21 billion (17.4 billion euro) in 1996 to an estimated USD 102.6 billion (85 billion euro) in 2004.

'Other knowledge economy indicators, such as early stage and high tech venture capital investments, patent applications and registrations and adoption of information and communications technologies (ICT), all confirm that Ireland still faces a significant challenge in bringing our domestic research and innovation capabilities to the levels that will be required to sustain our economic performance,' the report adds.

The report looks ahead to 2006, and Forfás outlines what it intends to do in order to help Ireland to meet these new competitiveness challenges. The board highlights four key areas for action:

• advancing coherent and dynamic enterprise development policies;
• improving framework conditions for innovation and enterprise development;
• human capital development to support an innovation-driven economy;
• capturing the economic benefits of public investment in research.

Under the last heading, Forfás pledges to advise on the policies needed to maximise the economic impact of public investment in scientific research, technology development and innovation, and to promote their implementation.

Business R&D expenditure in Ireland was 0.93 per cent of GNP in 2004, which was below the EU average of 1.17 per cent in the same year. R&D investment as a whole was also below that of the EU as a whole. Ireland increased its spending to 1.43 per cent of GNP in 2004, while the EU-25's R&D investment was at 1.85 per cent of GNP.

The Forfás report

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