Sunday 11 December 2016

Our R&D spend nears €3bn but still below EU average

Paul O'Donoghue

Published 01/12/2015 | 02:30

Peter O’Neill, country manager, IBM Ireland; Maria Ginnitty, strategic policy division, Department of Jobs, Enterprise and Innovation, and Stephen Merriman, PwC R&D group leader at the Dublin event yesterday
Peter O’Neill, country manager, IBM Ireland; Maria Ginnitty, strategic policy division, Department of Jobs, Enterprise and Innovation, and Stephen Merriman, PwC R&D group leader at the Dublin event yesterday

Ireland's spending on research and development is still well behind many other EU countries despite increasing by more than €1bn over the last decade, according to new data.

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A report from European statistics agency Eurostat shows Ireland's expenditure was €1.84bn in 2004, which represented 1.2pc of gross domestic product. This rose to €2.87bn in 2014, which was 1.55pc of GDP.

But the statistics show that on average European Union countries spent 2.03pc of GDP on R&D, up from an average of 1.76pc a decade ago. And 23 of the 28 EU member states increased spend over the decade.

The highest R&D intensities were recorded in Finland (3.17pc), Sweden (3.16pc) and Denmark (3.08pc). The lowest intensities were recorded in Romania (0.38pc), Cyprus (0.47pc) and Latvia (0.68pc).

The business enterprise sector continued to be the main sector in which R&D expenditure was performed, accounting for 64pc of total R&D conducted in 2013, followed by the higher education sector (23pc) and the state sector (12pc).

Overall, the 28 EU member states spent about €283bn on R&D last year, up from €275bn in 2013. The EU's R&D spend is much lower on a proportional basis than many other large economies such as South Korea (4.15pc in 2013), Japan (3.47pc in 2013) and US (2.81pc in 2012).

The EU aims to boost that spend in the coming years, and make an R&D spend of 3pc of EU GDP one of the five headline targets of the Europe 2020 strategy.

Meanwhile, a briefing held yesterday by the American Chamber of Commerce heard that Ireland still has work to do .

Speaking at the Dublin event, PwC R&D group leader Stephen Merriman said: "Significant strides have been made but room for improvement exists for Ireland to be at the cutting edge of international RDI." He said there needs to be collaboration between companies, government, industry bodies and academia to build "a clearly recognisable, robust innovation system".

"Other areas for review include further incentivising investment in Ireland through enhancing our R&D tax credit regime," he said.

Ireland ranks about average for R&D indicators such as patents filed. Patent filings at the European Patent Office grew by 3.1pc in 2014, hitting a record high of over 274,000. Ireland was granted about 254 patents last year, about average in the EU. The Government announced the establishment of the so-called Knowledge Development Box in the 2016 Budget, which offers a tax rate of 6.25pc on income generated from Irish R&D and intellectual property.

Irish Independent

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