Saturday 18 November 2017

Innovation grants and funds 'made no difference'

Tens of millions of euro didn't benefit many firms, says report

STATE PLAN: Julie Sinnamon, CEO of Enterprise Ireland
STATE PLAN: Julie Sinnamon, CEO of Enterprise Ireland
Louise McBride

Louise McBride

THE State has paid out tens of millions of euro in innovation grants and funds which have failed to deliver benefits for many firms, according to a new report.

The report, by Forfas, also found that many of the companies who got grants to fund research or innovation work would have gone ahead with their projects had they not received any money from the State.

One scheme – Innovation Vouchers – cost the State about €13.4m between 2007 and 2012.

The aim of the scheme, which is run by Enterprise Ireland, is to encourage small businesses and universities to work together on innovation so that knowledge can be shared between them.

About a third of the companies who got financial support from the scheme said they had received "no tangible benefits" from it, according to the report – which is entitled Evaluation of Enterprise Supports for Research, Development and Innovation.

The report found that universities and other higher education institutes who took part in the Innovation Vouchers scheme received almost €3m from the State to cover their overhead costs – almost a quarter of the total cost of the scheme.

"The overhead costs paid to the higher education institutes appear to be relatively high," said the report.

Another Enterprise Ireland scheme, the Innovation Partnership, cost the State €17.9m between 2004 and 2006. The Innovation Partnership encourages Irish companies to work with universities and research institutes to develop new and improved products, and to gain commercial advantage.

However, only a third of the companies who took part in this scheme between 2004 and 2006 reported or expected an increase in turnover as a result of doing so, the report found.

Less than one in five reported or expected an increase in employment.

Under the Innovation Partnership, Enterprise Ireland provided grants which covered up to 70 per cent of the cost of research projects between 2004 and 2006.

Despite costing the State almost €18m during those years, almost two-thirds of the companies who took part said they would have gone ahead with their research projects even if they had not received the grants.

Less than a third of the companies who took part in the scheme said their projects would not have gone ahead at all without the grants, according to the report.

"There were issues with some companies in terms of their objectives and commitment to participation, as the scheme was not seen by them as being critical to company development in all cases," said Forfas in its report.

A spokesman for Enterprise Ireland said that almost all of those who took part in the Innovation Partnership would recommend the scheme to another business.

"Research and development of all types is an inherently risky activity with high levels of risk and reward," added the spokesman. "There are inevitably high rates of failure involved.

"Nevertheless, innovation allied with research and development are some of the most important economic differentiators available to any company."

Sunday Indo Business

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