Research Prioritisation the Governments priority STI policy goal Introduction and Current Position The decade of investment

t in science, technology and innovation continues to bear fruit which can be seen in the growth of business R&D investment, the dramatic increase in exports of R&D performing firms as well as the level of RDI now attr acted in FDI, the number of scientific posts in industry relevant areas as well as the excellence of our well established research base. The strategy to keep re search centre stage is based in very large part on accelerating economic outcome s from STI investment, further strengthening enterprise engagement with and take -up of public research and driving commercialisation. Prioritisation of our investment in research in priority areas, which will deliv er economic and societal returns, was approved by Government in late February th is year as a whole of Government policy goal and is one of the primary initiativ es to deliver on this strategy. Others include the extension of the SFI mandate to include applied research as well as oriented basic research and the recent pu blication of an Intellectual Property Protocol - an initiative to make it easier for business to access Intellectual Property emerging from State-funded R&D. A range of other initiatives outlined in the Action Plan for Jobs 2012 support thi s overall objective. Progress made in implementing research prioritisation includes: Prioritisation Action Group (PAG) meeting monthly, chaired by Minster Sherlock, with representatives of all relevant Government Departments and research funders ; Research funders working together in a coherent manner to agree actions necessar y to ensure research in the 14 priority areas of opportunity delivers economic r eturns work underway on Action Plans for 10 of the 14 priority areas; Progress made in addressing 6 of the 13 changes recommended to improve the effic iency and effectiveness of the STI system; SFI aligning their research centres call fully with the 14 areas and integrating assessment of impact and relevance where appropriate to the priority areas as w ell as assessing excellence; Intellectual Property (IP) Protocol published to encourage more businesses to co mmercialise IP from state funded research; Irish Research Council plans to roll out an industry based PhD and Masters progr amme to align the supply of trained researchers from academia with the demand fr om enterprise. In line with action 1.6 in the Action Plan for Jobs, the PAG has agreed metrics and targets for enterprise participation and take-up of publicly funded research across enterprise relevant research programmes. The targets are considered ambi tious yet realistic in the context of the diminution of funding and improvement in performance over recent years which will be a challenge to maintain. The targ ets for 2012 and 2013 also reflect the fact that many new initiatives designed t o accelerate the economic impact of public investment in RDI have only recently been launched. However, it is expected that the full impact of these initiatives will be reflected in the targets set out to 2017 as part of the wider Framework for STI Goals, Objectives and Metrics currently been developed by the PAG. Context For competitiveness reasons, Ireland started to invest seriously in building res earch capacity in the late 1990s and for over a decade this investment continued on an upward trajectory. Government Budget Appropriations and Outlays on Resear ch and Development (GBOARD) increased from a low of 504 million in 2002 to a peak of 946million in 2008 before dropping back by 13% to 823 million in 2011. The ear lier decade of investment bore fruit as we saw some 3,200 new scientific posts b eing added to our third-level institutions in strategic areas allied to the need s of enterprise, publication rates doubling and rates of citation of Irish scien ce output rising above the US and EU averages. Business R&D investment increased in parallel and IDA could start targeting RDI investments to qualitatively tran sform and deepen the roots of key multinationals here. In 2004 less than 10% of IDAs investment wins (worth approximately 80million) were in RDI projects and this has risen to over 500 million in 2010 and 700 million in

2011. The national investment is paying off for indigenous firms also as we see exports and employment of R&D performing firms consistently outperform those of firms not engaged in R&D. In terms of balance between private and public invest ment in STI, Ireland has a healthy 2:1 ratio which is better than the EU average where only half of total R&D is funded by the enterprise sector. While the decl ine in Government investment since 2008 is set to continue in 2012 (- 30 million minimum) Irelands Gross Expenditure on R&D intensity ratio has increased from 1.4 3% of GNP in 2006 to 2.21% in 2010 reflecting the nominal decline in GNP over th e 2008-2010 period. Meeting our intensity ratio targets agreed in the context o f EUROPE 2020 (2.5% of GNP equivalent to 2% of GDP) will remain a challenge. The public finances mean that Government investment in STI will remain under pre ssure and yet research needs to stay centre stage in the Governments economic str ategy given the importance accorded by all high performing OECD economies to inv estment in STI as a significant engine of economic growth. This is the driving f orce for a range of Government initiatives to accelerate economic outcomes from our investment, to further strengthen enterprise engagement with, and take-up of , public research and drive commercialisation. These initiatives include the dev elopment and implementation of the Research Prioritisation exercise, the forthco ming extension of the SFI mandate to include applied research as well as oriente d basic research and the recent publication of an IP Protocol - an initiative to make it easier for business to access Intellectual Property emerging from State -funded R&D. A range of other initiatives outlined in the Action Plan for Jobs 2 012 support this overall objective. Background to Research Prioritisation In the context of the broader objective of accelerating economic outcomes from o ur investment in research the research prioritisation report recommended 14 area s of opportunity which should receive the majority of public investment in STI o ver the coming 5 years. The areas were identified on the basis of existing stren gths of research disciples and the enterprise base, opportunities that exist in terms of the global marketplace and those which are most likely to deliver econo mic and societal impact, and jobs. Areas which responded to a national/global ch allenges were also taken into consideration as well as areas where publicly perf ormed R&D is required to exploit an opportunity and complement private sector fu nding. The report recognised that a healthy, balanced, sustainable research system supp orts all aspects of the research continuum and this cannot be achieved by focuss ing investment on only the applied part of the research spectrum. The report also recommended a number of measures which were required to improve the efficiency and effectiveness of the STI system in order to support the imple mentation of prioritisation. The Government agreed to the adoption of the reports recommendations as a whole o f Government policy goal and the future alignment of the majority of public STI investment with these 14 areas of opportunity. This marked a milestone for resea rch and innovation policy in Ireland. The research prioritisation exercise which led to the recommendations was the most ambitious of its kind involving extensi ve research, analysis and stakeholder consultation. Implementation of prioritisa tion will chart the course for future development of policy in this area. Following publication of the report on 1 March 2012, the Prioritisation Action G roup (PAG) was established, under the chairmanship and political leadership of t he Minister for Research and Innovation, to drive implementation of research pri oritisation under the broader authority of the Cabinet Committee on Economic Rec overy and Jobs. The Group has met in plenary on 4 occasions since its establishm ent setting an ambitious pace for implementation and this has been supported by a range of working groups which have been established to progress implementation between plenary sessions. Prioritisation Action Group Meetings and Modus Operandi Membership of the Prioritisation Action Group (PAG) is drawn from Government Dep artments that are represented on the Inter-Departmental Committee for Science, T echnology and Innovation (STI) as well as research funders operating under the a egis of those Departments. The continued support of Forfs is crucial following it

s key role as secretariat to the Research Prioritisation Steering Group. In the first instance, the group agreed Terms of Reference for their work and a modus o perandi for the group. It was agreed that there are two main pillars to implemen tation. The first pillar involves maximising the impact of our spend by focussin g the majority of public STI funding on the 14 priority areas identified in the Report and the second pillar involves implementation of the 13 systemic changes necessary to support prioritisation by improving the efficiency and effectivenes s of our STI system. Through implementation of prioritisation the PAG aims to co nnect, coordinate, validate and where necessary change the behaviour of research funders. Prioritisation Agenda is Already Changing Behaviours Research funders are already starting to change behaviour. This is best illustra ted in the SFI Research Centres call which was launched almost immediately after the Research Prioritisation Report was published and involves an investment of 1 00million over the next six years. Each new SFI research centre must be aligned with one or more of the prioritisation areas. SFI-funded centres will also be re quired to secure and maintain a minimum of 30% in their funding from industry an d this will help to ensure that commercialisation potential is at the core of ea ch new research centre and that the needs of industry are appropriately represen ted and fittingly addressed in the respective research programmes. This alignmen t with the 14 priority areas as well as other changes that SFI have incorporated into their assessment procedures means that SFI have fully adopted the stage ga te approach to assessing applications for funding which was recommended by the P rioritisation Steering Group. 14 Priority Areas In order to provide a mechanism through which research funders could focus their attention and funding on each of the 14 areas of priority, it was agreed that A ction Plans should be developed for each priority area. A draft template for an Action Plan was agreed which included a Vision for the priority area; measurable Objectives necessary to deliver on the vision and associated Actions required t o deliver on the objectives which were to be considered in the context of the re search landscape and innovation eco-system. Each action includes success criteri a / metrics as well as deliverables, responsibilities and timelines. As at the e nd of June 2012, work is underway on developing Action Plans for 10 of the 14 pr iority areas including: medical devices; connected health; diagnostics, therapeu tics, sustainable food production & processing; food for health; smart grids; ma rine renewable energy; manufacturing competitiveness and processing technologies & novel materials. This new approach means priority areas are being tackled in a holistic way by al l Departments and funders working together. Organisations represented on the PAG chair sub-groups and membership of these sub-groups is drawn from research fund ers supporting the specific priority area. The PAG expects to provisionally sign off on a number of these Action Plans at their July and September meetings in a dvance of consultation with stakeholders which will begin from September 2012. I n parallel, the working groups and the PAG will develop and agree metrics and ta rgets for each of the Action Plan Objectives that reflect the national metrics a nd targets developed as part of the framework for monitoring impact of investmen t in STI. The overall aim is to have substantial work completed on the 14 Action Plans by the end of the year. 13 Systemic Actions In addition to focussing the majority of public research spending on the priorit y areas the Research Prioritisation Steering Group also recommended a number of measures to improve the efficiency and effectiveness of the STI system which are required to support implementation of prioritisation. Since the PAG was establi shed it has progressed implementation of 6 of these 13 systemic changes. Priorit y attention was given to (i) the establishment of a framework for monitoring the impact of investment in STI and (ii) the adoption of a stage gate approach to a pplications for funding (meaning that all applications for funding under the pri ority areas should be tested for economic impact as well as scientific excellenc e). The other systemic changes which have been progressed include: publication

of the IP Protocol outlining clear robust and industry friendly policy for comme rcialisation of IP; research centres developing a more industry focussed culture ; and the alignment of supply of trained researchers from academia with demand f rom enterprise sector with the planned roll out of a new employment based post-g raduate programme incorporating PhD and Masters awards. Framework for Monitoring Impact of Investment in Science, Technology and Innovat ion (Systemic Recommendations 1 & 2) The first two systemic recommendations identified by the Research Prioritisation Steering Group related to the development of a framework for monitoring the imp act of investment in STI. The Report recommended that Government should re-state its objectives for STI policy with clear goals and metrics for each element of this policy with a view to accelerating the delivery of economic outcomes from o ur investment in research. The Report also recommended that the policy goals and objectives should be underpinned by a set of national indicators that reflect t he goals and objectives. Work on this framework is well underway and the next ph ase will be to identify metrics and targets for the individual priority areas as part of the Action Plans to measure the impact of STI spend on the priority are as. The intention is to bring this overall framework of STI goals, objectives, m etrics and targets to Government for approval before the end of 2012. Pending the completion of the analytical and strategy work required to set targe ts for the full STI system for the period to 2017, the PAG has agreed research t argets for 2012 and 2013 addressing the five dimensions of enterprise participat ion in publicly funded research specified in Action 1.6 of the Action Plan for J obs 2012. The five dimensions are: 1. Collaborative research with enterprise 2. Industry-based PhD students 3. Employment of trained researchers within industry 4. Licensing and spin-outs associated with HEI research 5. Enterprise participation in the EU Framework Programme (FP7). Stage-gate Process (Systemic Recommendation 5) The Steering Group acknowledged that many research funding programmes and scheme s will need to be adapted to reflect the new priority areas. The Group recommend ed that where competitive calls are linked to the priority areas, applications w ould need to demonstrate both excellence/originality and relevance to the priori ty area. In this regard they pointed to the need for a two stage or stage gate p rocess whereby applications should be screened based on demonstrated relevance t o the priority areas, clarity of deliverables and end user engagement. Only thos e applications that pass the test of relevance should be reviewed against the cr iteria of excellence and originality based on established peer review processes. The PAG required research funders to provide feedback on their project assessmen t systems for review and assessment as to the extent to which a stage gate appro ach already applies and/or is planned in the future. From feedback provided it is clear that there are different approaches to assessing the impact or relevanc e of research proposals. However, models of good practice exist. While the PAG a cknowledges the role of existing sectoral strategies and the need to allow suffi cient flexibility to accommodate the specific outcomes of different programmes, ensuring the alignment of the majority of STI funding around the agreed priority areas will require a more consistent approach by funding organisations. Policies for Commercialisation of IP (Systemic Recommendation 9) The Steering Group recommended that policies and procedures for the commercialis ation of intellectual property arising from publicly funded research should be f ast, predictable and consistent and the group acknowledged the work underway by the IP Policy and Implementation Groups to that end. In response to this recommendation an IP Protocol has been developed which compr ehends new structures which aim to encourage more businesses to commercialise R& D by ensuring that they can access the results of State-funded R&D with greater ease and certainty and include: A new Central Technology Transfer Office, to act as a one-stop shop for business es seeking to use intellectual property deriving from publicly-funded research;

Standardised intellectual property terms, which will facilitate easy-to-set-up a greements between businesses and researchers; Generous commercial terms to encourage businesses to engage with researchers, an d to use the results of research to develop new products and services; and Improved management of Intellectual Property The publication of the IP Protocol on the 8th of June essentially means this rec ommendation is implemented but the PAG will ensure that the various structures i dentified in the Protocol are delivered. Research Centres Developing a More Industry Focused Culture (Recommendation 10) The tenth systemic recommendation in the Steering Groups Report pointed to the ne ed for research centres, with a mandate to engage with industry, to develop a di stinctive industry focussed culture. In making this recommendation the Steering Group acknowledged the study which was underway, by the Advisory Council for Sci ence, Technology and Innovation, dealing with the sustainability of research cen tres. Given the recent publication of this study the PAG invited ACSTI to presen t the report findings to the PAG. While the study made a range of recommendation s around the research centres landscape, the key recommendations pointed to the need for consolidation in terms of the numbers of research centres while at the same time the need for more of a focus on research which is closer to market. DJEI is using Technology Ireland (TI) as a forum for discussion on implementatio n of the recommendations included in the ACSTI study which will support implemen tation of this recommendation. TI is chaired by DJEI and includes representative s of the enterprise agencies under the remit of the Department as well as the Hi gher Education Authority. SFI has already responded at an Agency level to address this recommendation of t he Research Prioritisation Steering Group by issuing an open call for its new Re search Centres Programme 2012 which in the first instance requires an alignment with one of the 14 priority areas. A key component is also to require centres to secure and maintain a minimum of 30% in their funding from industry. Another ke y feature is consolidation of the existing Centres for Science, Engineering & Te chnology and Strategic Research Clusters into a single programme. As stated earl ier, this will help ensure that commercialisation potential is at the core of ea ch new research centre and that the needs of industry are appropriately represen ted and fittingly addressed in the respective research programmes. In devising t he new Centres programme, SFI has placed a greater emphasis on flexibility and r esponsiveness to industry-related opportunities, and researchers will be in a po sition to embrace additional targeted projects and extend their outreach. This recommendation is not limited to SFI centres and the implementation of this recommendation will be kept under review through PAG to ensure implementation a cross all of the centres and funders concerned. Alignment of Supply of Trained Researchers from Academia with Demand from Enterp rise Sector (Systemic Recommendation 13) Recommendation 13 includes 3 elements but the overarching recommendation points to the need to improve the alignment between the supply of trained researchers f rom academia and the demand for such skills from the enterprise sector. The PAG has focussed on two specific elements of this recommendation, namely, the need f or industry driven PhD and Master programme. The newly established Irish Researc h Council (IRC, arising from the merger of IRSET and IRCHSS) presented its plans for a new employment based postgraduate programme which will incorporate a Mast ers Programme of 18/24 months duration as well as a PhD award for a period of 36 months. The purpose of the new programme is to educate researchers at the highes t level and develop their skills in research and innovation activities outside t he higher education domain. All awardees of the programme will be employees of a company with the majority of their time spent in the company. Research undertak en must be of relevance to the company and must contribute to the career develop ment of the awardee as well as having a research value. The IRC is due to roll out the new programme which specifically addresses the two elements of this reco mmendation by issuing a call for participants this summer (2012). Conclusion The research prioritisation exercise has fundamentally shifted the trajectory of

research funding in the years to come to ensure it is aligned with the greatest economic opportunities for Ireland. The PAG will continue to drive the changes necessary to re-orientate research funding to ensure that we deliver on that str ategic direction. Research targets for Enterprise Participation and Take-Up of Publicly Funded Res earch Across Enterprise Relevant Research Programmes agreed by the Prioritisatio n Action Group The 2012 Action Plan for Jobs includes a range of actions around research and in novation. In the Action Plan, the Government re-iterates the importance that it attaches to research and innovation and states that it will continue to place sc ience, technology and innovation at the heart of enterprise and jobs policies so that we are favourably positioned to capitalise on the opportunities that will arise as the global economy recovers. Action 1.6 in the Action Plan specifically states that in the context of the oth er research and innovation actions identified (e.g. research prioritisation, new approaches to funding research centres, applied research mandate for SFI, new E I/IDA technology centres, new IP protocol etc.), the Government, via the Inter-D epartmental Committee on Science, Technology and Innovation, will set new targets for industry participation and take-up of publicly-funded research across all e nterprise-relevant research programmes so that enterprise relevance will play a greater part in research activity including targets for: Target Area 1 - Collaborative research with enterprise Target Area 2 - Industry-based PhD students Target Area 3 - Employment of trained researchers within industry Target Area 4 - Licensing and spin-outs associated with HEI research Target Area 5 - Enterprise participation in the EU Framework Programme (FP7). The commitment in the Action Plan for Jobs was to set these targets by Quarter 2 , 2012. Forfs was tasked in the Action Plan with helping to develop the proposed targets so that a proposal could be brought through the appropriate governance structures for sign-off on a cross-Departmental basis. Forfs has worked through the Governments Prioritisation Action Group to compile th e appropriate metrics and to propose ambitious yet realistic targets based on th e funding that is available in 2012 and likely to be allocated in 2013. For each of the five target areas, two categories of targets are proposed - nati onal targets and agency-specific targets. The intention is that agency-specific targets will contribute collectively to the achievement of the national targets. Scope of Research Prioritisation The proportion of the overall state funding on science and technology funding th at would be subject to prioritisation was the subject of intense debate during t he prioritisation exercise. To put this in context it is worth noting that our o verall science budget for 2011 was 2.4 billion. Of this, total Government investm ent in R&D was 823 million and it is estimated that 441 of this is competitive fun ding that is supporting research in our colleges and public research institution s the aim is to have the majority of this proportion of funding targeted by Rese arch Prioritisation. The majority of this 441 million (and its equivalent in future years) is to go to the 14 priority areas and platform science and technology undertaken in support of the priority areas. The balance is to go to Research for Policy and Research for Knowledge. Some funding will also be required in future years for Integratin g Infrastructure that will support both the priority areas, as well as other area s. * The Science Budget for 2010 of 2.3bn includes all State spending on science and technology. The largest component, over 1bn or 43.3% goes to fund education and tr aining in the areas of science and technology. Research and Development receives the majority of the remaining funding at 37%. The remaining funding was spent on Technology Transfer [3.3%], Technical Services [10%] and on Other S&T activitie s [5%].