MII Innovation Report

A Marketing Institute of I re l a n d C o m m e n t a r y.
October 2010
Irela nd s In n ov a t i o n S t ra t e g y Tim e To M a ke I t H a p p e n !
1.
Table of Contents
1. 2. 3. 4. 5. 6. 7. 8. 9. E xecutive Summary C ommentary Structure and Additional Key Messages I nnovation Ireland, Report of the Innovation T askforce (March 2010) I relands STI Strategy Development and I mplementation (2004 2010) I relands Innovation and Enterprise Performance T he Strategic Role of Marketing O bstacles to STI Success in Ireland G rowth in Ireland to 2020 and Beyond R ecommendations to Support Delivery of Irelands S TI Agenda B ibliography L ist of Appendices Pg. i Pg. iv Pg. 1 Pg. 5 Pg. 13 Pg. 21 Pg. 25 Pg. 31 Pg. 39 Pg. 42 Pg. 44
Executive Summary
In this commentary, the Marketing Institute of Ireland reviews the development and implementation of Irelands Science, Technology and Innovation (STI) strategy. We examine each major STI strategy between 2004 and 2010, starting with Building Irelands Knowledge Economy published in 2004, and finishing with the latest report Innovation Ireland Report of the Innovation Taskforce published in March 2010. We are clear that there is both a golden opportunity and a competitive necessity to achieve much better outcomes, through a new approach that is more transparent, innovative and fast-paced. In publishing this commentary it is our objective to prompt and contribute to constructive debate with STI stakeholders as to how best to make this happen. The need for us to take a more radical and innovative approach is increasingly being driven by the standards set by top STI competitor countries. I relands share of eurozone FDI has halved in six years. According t o the IMF Staff Report for Ireland 2009, Irelands share of Eurozone F DI dropped from 13% in 2001 to 6% in 2007. W e have dropped from 12th to 21st in world competitiveness in 2 y ears. Irelands competitiveness ranking has dropped from 12th in 2 008, to 19th in 2009 and 21st in 2010. O ur EU innovation ranking has not improved between 2004 and 2009. I relands European ranking for 2009 remains at 9th no change from 2 004, and we risk being overtaken by faster growing countries such as E stonia 12th, Cyprus 13th and Slovenia 14th in overall innovation r ankings.
Irelands STI policy development and implementation between 2004 and 2010 has made limited progress. The Marketing Institute of Ireland believes that the current committee-style approach to STI policymaking and implementation has resulted in Ireland continuing to lag our competitors in R&D and innovation performance. For example: B ased on the latest OECD measures (2007 and 2008), Ireland c ontinues to lag key STI competitors (EU 15 plus Norway), being: o 2th out of 16 for number of researchers; 1 o 3th out of 16 for R&D expenditure; 1 I relands broadband infrastructure is a key weakness that means that I reland is not well placed to take advantage of future trends in b roadband.
i
A n analysis of IDA Annual Reports from 1998 to 2009 shows that Foreign Direct Investment (FDI) is no longer a significant source of n et new jobs. T here appear to be serious problems with the way in which second- l evel education impacts on creativity and innovation. Our education s ystem does not produce enough top-performing maths students. I relands productivity rates halved from 2000 to 2007. This reduction i n productivity levels was driven largely by jobs growth (to 2007) i n locally traded services and construction, which exhibit lower rates of p roductivity.
It is our belief that our situation demands that all players in this process, in particular our policymakers, avoid the understandable temptation to defend the status quo, in the face of mounting evidence of the need for Ireland to transform our current approach to STI implementation on which so much of our future depends. The Marketing Institute believes that creativity and innovation, a thriving enterprise culture, a unique competitive advantage, and a world-class education system are the keys to Irelands future success.We propose a vision for Ireland to 2020 that includes the following essential characteristics: a strong international reputation for creativity and innovation. r ecognised as a great place to grow sustainable businesses, with a t hriving enterprise culture. Irish people feeling confidently independent and self-sufficient. n ational policy being truly strategic, long-term, national and all-island. The Marketing Institute of Ireland has identified the following five growth drivers in Ireland to 2020: A unique competitive advantage that clearly defines what Ireland can o ffer the world. A strong and diverse all-island economy that is increasingly diverse, u nderpinned by a vibrant enterprise sector. A world-class education system that drives creativity and innovation, d elivering key skills and fuelling our unique competitive advantage. A confident and creative outlook that both sets Irish people apart, and c onnects us to the rest of the world. A recognition of marketings vital role in driving success in innovation a nd enterprise. The Marketing Institute of Ireland believes that the following recommended actions would constitute a serious step towards bringing about the necessary reforms to our approach to implementing STI policy. E stablish strong leadership by bringing together a small group of p eople with a track record of delivery and assigning them r esponsibility, over the next three years, to implement STI policy at a m uch faster pace.
ii
A dopt a simple, clear and consistent policy framework, where overall S TI strategy objectives are clearly connected and reconciled to the a ctual targets of our enterprise support agencies. S et clear goals and ensure accountability by quickly agreeing what is required in the next three years. We need to find out how much money i s available, set clear milestones, review the work of the i mplementation group every six months, and ensure the stakeholders c ommit to the process and are held accountable for delivery. B enchmark Irelands STI system against the top-performing countries b y establishing an effective governance framework to e nsure implementation and to robustly benchmark Irelands innovation s ystem against the best STI countries in Europe and the rest of the orld. w E xploit the value of all-Island positioning by embracing an innovation s trategy that encompasses the entire island of Ireland with regard to o ur enterprise policy and business innovation.
Strategic marketing plays a crucial role in innovation at both a policymaking level and at enterprise-level. With regard to STI policy development and implementation, marketing can: c reate a unique competitive advantage based on the differences i nherent in Irish culture and on a real capacity to innovate d emonstrated by Irish entrepreneurs. Marketing can make a vital c ontribution to the development of a competitive advantage that i s valued by potential customers, and to the crafting of robust market p ropositions for Ireland in STI niches where we can most effectively c ompete. Ireland must develop a unique basis of advantage, as competition intensifies, that other countries cannot easily copy. From an enterprise-level perspective, marketing is pivotal in the following tasks: M arketing has a crucial role in each phase of the innovation process. Real innovation requires changes in consumer behaviour and t herefore must be both market and consumer led. Marketing helps d rive real innovation. The ultimate effect of innovation is to create v alue that can be translated into additional sales to customers. M arketing provides key skills required by innovative companies - the s kill set required includes many strategic and operational marketing s kills, such as devising business strategies, persuasively communicating b rand values and propositions to consumers, applying technologies t o markets, gaining market understanding and insights, and c ommercialising products and services. In this context we must b uild the necessary marketing competencies for Irish business to s uceed internationally.
iii
Commentary Structure and Additional Key Messages

This commentary of the Marketing Institute of Ireland is structured as follows:
1.

Innovation Ireland - The Report of the Innovation Taskforce (March 2010)

T he Marketing Institute welcomes the overall thrust and many of the g uiding principles of the Report of the Innovation Taskforce. H owever, as a blueprint for action, the Innovation Taskforce Report lacks specifics on costs and deadlines, does not display a proper sense of urgency, does not specifically tackle areas of poor STI performance i n Ireland and does not go far enough in terms of second-level e ducation reform. T his important implementation report, as part of our overall STI p olicy, illustrates the need to directly address the challenges of t he McCarthy Report (in terms of economic impact and value for m oney). In addition, it highlights the necessity to subject our STI a pproach to international evaluation and to place a greater value on the r ole that strategic marketing can play.
2.

Irelands STI Strategy Development and Implementation (2004-2010)

I t is apparent from our review of STI Policy from 2004 to 2010, that I relands approach has comprised of a variety of well-intentioned s trategies that have led to limited progress. It is clear that Irelands STI s trategy is in danger of becoming a grand compromise that u ltimately fails, because major strategic challenges are not being tackled a nd lack of delivery by dominant STI policymakers is accepted and not c hallenged.
3.

Irelands Innovation and Enterprise Performance

I reland must also learn from the best STI countries in the world ( e.g. Finland and Israel). Finland recently submitted its innovation s ystem to rigorous international evaluation. Irelands STI policymakers m ust be prepared to adopt the same openness and mindset in order to b ecome as good as the best. I n addition, some of the factors (with regard to funding, international f ocus and enterprise culture) that have driven success for Israels STI s trategy can also work for Ireland.
iv
4.

The Strategic Role of Marketing

M arketing can play a key role in Irelands future STI success. M arketing provides critical insights into the challenges Ireland f aces. These insights will inform our vision, identify the basis for u nique competitive advantage, pinpoint future market niches, c ontribute to educational reform, promote a vibrant enterprise culture a nd contribute to the development and implementation of a s ubstantive and convincing Brand Ireland.
5.

Obstacles to STI Success in Ireland

There are a number of specific areas, such as broadband, World c ompetitiveness, FDI performance and our education system, which currently represent significant obstacles to Irelands future success. F or example with regard to Broadband performance, as we continue t o lag key competitors, we must ask and urgently address the key q uestion: What sort of Smart Economy can Ireland have in the short t o medium term without a competitive broadband infrastructure?
6.

Growth in Ireland to 2020 and Beyond

T he Services sector has become increasingly important for Ireland. T he sector has grown from 62% of total employment in 1997 to 67% b y 2008. According to Forfs, the services sector is expected to provide t he majority of new jobs in the Irish economy over the next decade. S uch growth in services will be driven by both the increasing s ervicisation of manufacturing, and the increasing electronic delivery o f goods and services. I n this context, a vibrant and progressive Irish education system will be essential. Forfs, in a recent strategy, identified 11 forces of changes i mpacting Ireland to 2025 - this included Education and Skills. Forfs a dvocates the need to undertake further reform and increased flexibility, if education is to continue as a key strength for Ireland. T herefore, recent comments by the Minister for Education opposing any significant Leaving Certificate reform is a worrying development.
7.

Recommendations to Support Delivery of Irelands STI Agenda

T he Marketing Institute of Ireland has made a number of high-level r ecommendations that we believe warrant consideration as a means o f bringing about the necessary reforms to Irelands implementation o f STI policy. I n addition strategic marketing can play a crucial role from both a p olicymaking perspective and at an enterprise-level perspective.
v
Innovation Ireland, Report of the Innovation Taskforce (March 2010):
1.
In this section, we examine the latest report on Science, Technology and Innovation strategy implimentation. The report of the Innovation Taskforce, published 10th March 2010, focuses on the implementation of one of the five key action areas which emerged from Building Irelands Smart Economy (December 2008), that is The Ideas Economy Establishing the Innovation Island. The Marketing Institute of Ireland welcomes this report and acknowledges the focus it brings to the vital area of implementing Irelands Science Innovation and Technology policy. The key recommendations of the Innovation Taskforce Report are set out in Appendix 1, Page 45. The Institute is particularly supportive of the following aspects of the report: - - - - - - W e agree that the entrepreneur and enterprise must be at the centre of o ur efforts to foster innovation. W e acknowledge the need to focus our national research system on a reas of potential strategic and economic advantage for Ireland. W e recognise that our education system must foster independent t hinking, creativity and innovation to achieve our Smart Economy. W e are pleased the taskforce recommends increases in the level of f unding to entrepreneurial businesses. We welcome the recent i ntroduction of a new Innovation Fund and the development of a new S eed Capital Fund. We commend the proposed development of a network of sector-specific Business Angel Funds. W e agree that commercial collaboration between business and our H igher Education Institutions should be improved. W e welcome proposals to develop a national Intellectual Property (IP) p rotocol and to streamline IP licensing to businesses.
We believe that the obvious strengths of the Innovation Taskforce Report can be built upon in order to address the following observations from our review of this Report.
Identifying costs and specific timeframes for implementation:

The recommendations in the Taskforce Report contain neither costings nor specific timeframes for implementation of any of the 24 key recommendations or the 38 supporting recommendations.
Building confidence by demonstrating urgency in implementation, and achieving some early wins:
The Innovation Taskforce Report is to be welcomed for its focus on one of five key action areas of the Smart Economy Strategy which was launched in December 2008, and which was at the time was described by the Taoiseach as an ambitious 5 year plan. If the Smart Economy Strategy is to be realised as envisaged by the Taoiseach within this timeframe, it is essential that a sense of urgency and momentum be brought to bear.
Developing firm measures to tackle areas where Irelands STI performance is lagging key competitors:
The positive disposition evident in the Innovation Taskforce is welcome, but this must not be allowed to in any way encourage complacency around the extent of the challenges ahead and the gaps that are continuing to grow in Irelands R&D and innovation performance as benchmarked against other EU competitor countries. Irelands most recent performance is described later in this commentary.
Benchmarking Irelands STI performance against the best:

It is important that Ireland benchmarks its STI performance against the countries with the best record in innovation and learns from what these countries do well. For example, a recent international evaluation of the Finnish Innovation System is worthy of consideration given that Finland is considered to have one of the best innovation systems in Europe. This evaluation, described later, contains a number of key themes of Finlands approach which could well have resonance for Ireland. If a country like Finland is subjecting its STI system to international evaluation and driving further improvement, then we in Ireland must take note and make substantial changes to our own approach, in order to correctly assess the challenges we face in the future, and to objectively evaluate our performance.
1. Innovation Ireland, Report of the Innovation Taskforce (March 2010):
Further developing the change recommendations for secondlevel education:

The Innovation Taskforce makes a number of recommendations on secondlevel education. The main recommendation (5.3) addresses the issue of higher maths take-up through possible incentives such as CAO bonus points. There are also a number of supporting recommendations with regard to teacher training and mentoring, the roll out of project maths, and the implementation of new syllabi in biology, physics and chemistry. The Taskforce Report recommendations on second level education seem to fall short of what is required, based on the work of the Expert Group on Future Skills Needs. This latter group observed that there are serious problems with the way in which second level education impacts on the creative and innovation capability of Irish students. These problems have a history of being quite intractable because of the influence of public examinations. The National Council for Curriculum and Assessment (NCCA) appears to have grasped the extent of the challenge that this poses, and is moving forward with what appears to be a coherent strategy to tackle it. Halligan (2009) In this context the Innovation Taskforces recommendations would seem to require strengthening, as evidence points to our education system not delivering either the educational outcomes or the technical or creative skills required by a dynamic innovation-led economy.
Implementing rigorous value for money scrutiny of our STI system:

In the absence of a process of international evaluation of our STI system, the McCarthy Report (2009) represents a reasonable starting point against which to critique Irelands approach to STI policy implementation to date, with regard to economic impact and value for money. This is important given that the overall thrust of the Innovation Taskforce Report is to continue to substantially increase STI spend over the medium term. Concerns raised by McCarthy need to be addressed comprehensively if confidence is to be secured in the approach taken to STI policy implementation. These include the view that evidence adduced to date for the impact of state STI investment on actual economic activity has not been compelling, the recommendation that STI funding should be funnelled into a single stream in order to achieve savings through the removal of administrative and research duplication, and issues with regard to output levels and possible duplication in the state agency sector.
1 . Innovation Ireland, Report of the Innovation Taskforce (March 2010):
The concern of the Marketing Institute of Ireland would be that a less than comprehensive set of actions to address the STI issues raised by McCarthy could lead to inefficiencies being preserved within the system, with potentially fatal consequences for the strategy.
Bringing strategic marketing expertise to the implementation of Innovation Ireland, beyond just marketing communications:
The marketing related recommendations contained in the Innovation Taskforce Report are largely limited to marketing communications. For example, the recommendations include: M arketing Ireland as an excellent location for starting innovative e xport orientated companies (9.8) E stablish a national one stop shop website (10.6) D evelop and market Ireland as an international innovation services c entre (12.1) I DA international marketing campaign to attract international e ntrepreneurs (12.3) A single brand identity based on the concept of innovation (12.3) The full listing of the marketing related recommendations of the Innovation Taskforce Report are set out in Appendix 2, Page 46. Whilst such a use of marketing as a tactical communications tool has its place, it is important that the true strategic value of marketing is fully leveraged. The more strategic role which marketing can play in relation to STI implementation in general, and the innovation process in particular, is described later in Section 4 of this commentary.
1. Innovation Ireland, Report of the Innovation Taskforce (March 2010):
Irelands STI Strategy Development and Implementation (2004 - 2010):
2.
In this section, we review Irelands STI strategy development and implementation between 2004 and 2010. It is apparent from our review that the current approach to policy development and execution has been less than effective. Irelands STI strategy would benefit greatly from the implementation of four key elements: (1) having clear leadership, (2) developing a greater sense of urgency, (3) more focused implementation, and (4) greater accountability. We would argue that results to date have been comprised of a variety of well intentioned strategies which have unfortunately led to limited progress and little discernable change. Our review supports a strong perception in the marketing profession that the role of marketing in STI, and its potential to strengthen the process of innovation, is to a large extent misunderstood by STI policymakers. The Ahead of the Curve report in 2004 identified a serious gap in the level of marketing capability in Ireland, but its marketing recommendations remain largely unimplemented. While the approach taken to date has the advantage of achieving consensus, it is apparent from our review of STI strategy to date, that it also has a number of inherent dangers, such as Irelands STI Strategy becoming a grand compromise that ultimately fails, major strategic STI challenges not being tackled, lack of delivery by some dominant STI policymakers and a subsequent lack of accountability, with regard to overall performance.
Knowledge Economy (2004):

In 2004, Forfs published Building Irelands Knowledge Economy setting out its vision for Ireland to 2010 and a clear set of specific recommendations to achieve this vision. Ireland by 2010 will be internationally renowned for the excellence of its research and be at the forefront in generating and using new knowledge for economic and social progress, within an innovation driven culture. (Knowledge Economy, 2004) The 2010 targets for this strategy and progress to date are described in Appendix 3, Page 47. Based on the latest available information (2007 and 2008 estimates) the 2010 targets from this strategy will not be achieved. For example: - B y 2008, gross expenditure on R&D had achieved only 72% of m onetary goal, and 67% of its GNP goal. - B y 2007, only 69% of the number of researchers goal had been a chieved.
5
Strategy for Science, Technology and Innovation - Department of Enterprise, Trade and Employment (2006)
In 2006 the Department of Enterprise, Trade and Employment, in its Strategy for Science, Technology and Innovation (SSTI) 2006 2013, states that Ireland by 2013 will be internationally renowned for the excellence of its research, and will be to the forefront in generating and using new knowledge for economic and social progress, within an innovation driven culture. (SSTI, 2006) In this 2006 strategy, many of the original targets with regard to R&D performance from Building Irelands Knowledge Economy (2004) are simply transferred into SSTI 2006 2013 with the original deadlines in effect being pushed out 3 years from 2010 to 2013. Further details of this strategy are set out in Appendix 4, Page 48. At one level, having the same vision and R&D targets in both the Knowledge Economy strategy (2004) and SSTI (2006) might reflect an admirable focus on worthwhile objectives. On the other hand, the fact that the 2010 R&D targets in the Knowledge Economy Strategy (2004) were transposed en masse to the STI Strategy (2006) as 2013 Targets could also illustrate a lamentable lack of progress in achieving these objectives. In this regard it should be noted that the first key recommendation of the Innovation Taskforce (5.1), is to deliver: on the investment framework set out in the Strategy for Science, Technology and Innovation (SSTI) 2006-2013 and achieve the goal in the renewed Programme for Government of investing 3% of GDP in R&D by committing to investment in an updated SSTI for the 2014-2020 period. (Innovation Taskforce, 2010) This appears to be an admission that the previous STI targets to 2010, and 2013, will not be achieved, and the recommendation of the Taskforce is essentially to extend the time needed (to achieve the Lisbon Agenda 2010 objective to spend 3% of GDP on R&D), by an additional 7 years, from 2013 to 2020.
2. Irelands STI Strategy Development and Implementation (2004 - 2010):
Ahead of the Curve - Enterprise Strategy Group (2004)

In its analysis, the Ahead of the Curve report by the Enterprise Strategy Group (2004) described our sources of competitive advantage as our education and training systems, our stable and advantageous taxation regime and our reputation for effective and agile government, which have been responsive to the needs of enterprise. (Ahead of the Curve, 2004) It also, in the context of falling competitiveness, identified the need for Ireland to regain our leadership position in these areas. Ahead of the Curve identified additional sources of competitive advantage, such as expertise in sales and marketing, and the application of R&D and technology to the creation of new products and services, which would require comprehensive and intensive development and would mark a decisive new orientation of Irish enterprise policy. It also described four essential conditions for success, which in the context of our current economic difficulties have proved to be prophetic - cost competitiveness, infrastructure, innovation and entrepreneurship, and management capability. An extract of the overall recommendations of this strategy are set out in Appendix 5, Page 49. There were two specific recommendations with regard to Marketing as a source of competitive advantage, which do not appear to have been implemented: 1 000 Sales and Marketing Personnel Establish a five-year programme, to place, on a cost-sharing basis, 1,000 graduates and internationally experienced professionals in Irish firms to augment the stock of national sales and marketing talent. This initiative should be complementary to existing programmes. (EI and IDA Ireland). Practical Capabilities in Sales and Marketing Incorporate work placements and modules that focus on the practical capabilities required by firms into marketing and sales curricula. These should also be available to students of technical disciplines. (Higher Education Institutions). In the context of these two recommendations, the recent announcement (30th August 2010) by the Minister for Enterprise Trade and Innovation to place 50 top graduates in export-led firms as part of the new Graduates for International Growth (G4IG), is to be strongly welcomed. This initiative which (will be developed and delivered by Enterprise Ireland in partnership with UCD Michael Smurfit Graduate Business School) will be of 18 months
duration with graduates undertaking an intensive six-month intensive training and skills development in an Enterprise Ireland client firm, followed by a 12month placement in a relevant overseas market. A third recommendation to attract Sales and Marketing projects under the stewardship of IDA Ireland does appear to have achieved some degree of success. T arget Sales and Marketing and European Headquarter Projects IDA Ireland should target sales and marketing and European headquarter projects from both established multinationals and smaller companies at an early stage of internationalisation. (IDA Ireland)
Building Irelands Smart Economy - The Department of the Taoiseach (2008)

In December 2008, Building Irelands Smart Economy was launched which set out a vision for Ireland which states: To drive economic growth through the enhancement of productivity per person by: securing fiscal stability; enhancing R&D intensive foreign direct investment; investing in human capital and research and development; incentivising innovation and commercialisation; investing in critical public infrastructure; and improving public sector performance, within a high-quality physical and social environment. (Smart Economy, 2008) This strategy describes twelve attributes of the Smart Economy. These attributes are listed in Appendix 6, Page 50, with some issues to be considered. Set out below are six of these Smart Economy attributes and some issues which must be addressed for Ireland to gain credibility towards earning the description of smart economy. 1. High-value and rewarding jobs; A thriving entrepreneurial culture; I ssue: We have talked of building an enterprise economy since the C ulliton Report (1992), which advocated fostering a greater c ommitment to developing Irish indigenous enterprise, and we cannot b e said to have delivered it.
2. 3. 4. 5. 6.
A destination of choice for foreign capital and R&D-intensive FDI; Issue: Ireland has lost significantly in eurozone FDI market share. (See T able 2, page 27) 20% of IDA supported companies have significant R&D mandates ( IDA, Annual Report 2009). The IDAs Horizon 2020 Strategy could b e read as signalling a move away from R&D intensive FDI to e mployment intensive FDI. A magnet for top international talent; I ssue: It is not clear that Ireland currently possesses a unique market p roposition. A n attractive incubation environment for European entrepreneurs; I ssue: There is not clarity around the unique market proposition which I reland possesses to attract European entrepreneurs to Ireland. F or example, what is our plan to effectively compete with Finland w hich is executing a similar strategy and has a much more advanced i nnovation system? A pool of highly educated workers; I ssue: In terms of third level education attainment we perform s trongly. However, in terms of our performance in science and m athematics at second level (OECD / PISA, 2009) and the numbers o f students choosing Science, Engineering and Technology (SET) a t third level, we seriously lag our innovation competitors such as D enmark, Finland, Norway, Sweden and the UK. H igh-quality infrastructure with widespread adoption of modern t echnology; I ssue: Ireland is considerably off the pace in broadband. Competitor c ountries are now moving to much faster speeds. Ireland continues to s truggle with coverage and contention issues.
Science Foundation Ireland Strategy 2009-2013 (SFI, 2009):

Some of the strategic objectives and targets to 2013 for Science Foundation Ireland (SFI, 2009) for the Science, Technology and Innovation sector are critiqued against a number of McCarthy Report observations on STI and a number of opinion pieces which appeared in the media during July and August 2009. The overall strategic objectives and some detail of specific SFI targets are described in Appendix 7, Page 51. SFIs Human Capital Target: With regard to SFIs Human Capital Targets, such as the number of PhDs, the McCarthy Report (2009) makes the following observation: In the absence of a clear business need for the doubling of PhDs currently being funded, the group is concerned that graduates will be underemployed or forced to emigrate. Indeed some empirical evidence suggests that 20% of new doctorate holders find employment overseas, and of those who remain in Ireland, most find employment in the public rather than the private sector. (McCarthy Report, 2009) SFIs Quality Outputs Target: In relation to the SFI quality output targets and the use of metrics, such as citations in scientific journals, the Irish Times (August 20, 2009), cites Professor Amar Bhid of Columbia Business School, who asks in his book The Venturesome Economy why the US has maintained, or possibly expanded, its productivity and per capita income lead, while the EU and Japan have increased their share of PhDs, scientific articles, etc. He also says US venture capital-backed businesses use different people and procedures than typical laboratory high-level research - they employ a much smaller proportion of PhDs in their technical staff, and their overall workforces contain a larger proportion of managers and sales and marketing staff - people who are close to users. (Irish Times, August 20, 2009) SFIs Knowledge Transfer: With regard to Knowledge Transfer, the Irish Times (August 20, 2009), cites a previous piece by Dr. Declan Jordan (UCC Economist IT July 6, 2009); A census of post-doctoral researchers that left Science Foundation Ireland funded projects in 2007 found that 9% went to work in science or engineering businesses. A further 10% went to work in industry in other sectors. The most common destination, at 38% for these post-doctoral researchers, was another post doctoral position on a different research project. He expressed a worry that given the significant taxpayer investment, that there is little movement of researchers from funded projects into business. The most effective method of knowledge transfer from universities to business is on two legs he added. (Irish Times, August 20, 2009)
10
According to the SFI Census 2009, 450 team members left SFI funded teams in 2009 (a 10% increase on 2008). 53% of these moved outside Ireland (versus 43% in 2008). In 2009 21% of the leavers went to industry, while 35% moved to other post doctoral research. SFIs Spin-Off Target: Irish Times, (August 20, 2009) There were 8 spin-offs from Science Foundation Ireland (SFI) research between 2002 and 2008 and SFI forecasts 30 in the period 2009-2013. Some of the existing firms are very small and Enterprise Ireland claims a 90% survival rate from its spin-offs but this is totally out-of-line with US experience. Simply put, its data is not credible. .. (Irish Times, August 20, 2009) In its 2009 Census, Science Foundation Ireland (SFI, 2010) states that it has doubled its early stage spin-outs to 6 in 2009 (from 3 in 2008), consistent with its 2009 2013 goals. To a large extent the analysis carried out by Autio (2009) (in support of 2009 Finnish innovation system review) supports the concern with regard to such optimistic forecasts. Autio contends that while high-growth entrepreneurs deliver a disproportionate economic impact relative to their numbers, overall they are rare, not limited to technology sectors (can be prevalent in services), and that achieving high growth can take a long time. This critique demonstrates that we must have a clearer link between the targets set by the enterprise support organisations, such as Science Foundation Ireland, and an overall STI policy framework for Ireland.
11
Horizon 2020 IDA Ireland Foreign Direct Investment Strategy: (IDA, 2010):
IDA Ireland in its latest strategy, Horizon 2020, (IDA, 2010) believes that FDI will increasingly come from early-stage companies that the IDA can help attract to Ireland, in part because so many established leading multinationals are already here. The IDA has identified the following sectors and segments as its future focus to 2020: services innovation (health informatics and financial analytics); clean tech (digital lifestyle management, nanotech and surgical implant); convergence (smart buildings); and cloud computing (IP trading). As part of its Horizon 2020 Strategy, the IDA has set a number of objectives and goals to 2014, in particular a new jobs target of 105,000. This is made up of 62,000 direct jobs and 43,000 indirect jobs (Irish Times, 8 March 2010). Over the last 5 years from 2005 to 2009, IDA supported companies created an annual average of new jobs of 9,714. Therefore a 62,000 5-year target represents a 28% increase over 5 years or an annual new jobs rate of 12,400. It should be noted that IDA supported companies created 4,615 new jobs in 2009. When you examine the likely level of net new jobs created (by subtracting the total jobs lost each year) a very different picture emerges. From 2005 to 2009 IDA supported companies lost jobs at a rate, ranging from a low of 8,239 in 2006 to a high of 18,028 in 2009. This translates into an average annual job loss rate of 10,975 per annum. Therefore if IDA Ireland achieves its goal of 62,000 direct jobs to 2014 (12,400 p.a.) and the current 5 year average job loss rate of 10,975 persists, then the actual number of net new jobs created will be just 7,125 (from the current employment levels of IDA supported companies, 124,800 - 2009) for the five year timeframe from 2010 to 2014. .
12
Irelands Innovation and Enterprise Performance:
3.
OECD - Measures of R&D and Innovation Performance:

The Organisation for Economic Cooperation and Development (OECD, Factbook 2009 and 2010) has identified a number of measures for the development of R&D and innovation within member countries. A critique of Irelands R&D and Innovation performance shows the following:
Table 1: - Key Components of R&D and Innovation Performance Ireland and Ireland Vs EU 15 Plus Norway:
Researchers Expenditure Investment Per 000 on R&D in Employed (% GDP) Knowledge (% GDP) Date Ireland 2007 6.0 per 000 2008 1.43% 2003 + 2.3% Patents Triadic Families ICT Investment % Fixed Capital Formation 2007 5.6%
2007 78
OECD Average:
7.6 per 000 (2006)
2.28% (2007)
4.9% (2003)
Not Available
Ireland 2008 Versus Ranking: EU 15 12th Plus of 16 Norway
2008 Ranking: of 16
2003+ Ranking: of 13
2007 Ranking: of 16
2007 Ranking: of 14
13th
12th
12th
14th
Source: OECD Factbook 2009 and OECD Factbook 2010 - OECD 2010; + 2003 Latest available figures:
13
Irelands performance when compared to other EU 15 countries plus Norway, shows that in relation to:
* N umber of Researchers: Ireland was 12th (6.0) out of 16 in 2008. The t op country being Finland (16.1); * E xpenditure on R & D: Ireland is 13th (1.43%) out of 16 in 2008, the t op country being Sweden (3.75%); * I nvestment in Knowledge: Ireland is 12th (2.3%) out of 13 in 2003, the top country being Sweden (6.3%); * P atents (per million of population): Ireland is 12th (c.15) out of 16 in 2 007, the top being Sweden (c.93). * I CT Investment: Ireland is 14th (5.6%) out of 14 in 2007, the top c ountry being Sweden (25%).
3% GDP Spend on R&D: - Is this a realistic objective for Ireland?

As previously discussed, the Taskforce has recommended that this objective be part of the SSTI 2014 - 2020 Strategy. Forfs 2025 (2009) has suggested that as innovation becomes the driving force in GDP growth, creating new markets and enhancing value-added functions will be key. In order to achieve this Forfs believes that increasing public and private investment in R&D, one of the key targets of the EUs Lisbon Agenda must be addressed. There is now a requirement to decide whether we are willing to implement the R&D expenditure level of 3% GDP. As Craig Barrett, Ex-Chairman and CEO of Intel, put it recently, Ireland has only achieved 1.5% of GDP investment in R&D where under Lisbon objectives it should be now at 3%. Why bail out the banks but not fix innovation? The political will needs to be there. (Barrett, 2010) In addition, while the level of Business Expenditure on R&D (BERD) has doubled within a decade, concerns have been raised that 70 per cent of BERD is through non-indigenous companies, which the IDA has successfully retained. Looking closer again, 70 per cent of that 70 per cent is expended by about 20 companies, an all too narrow a base on which to build a knowledge society. (Irish Times, BERD 28 May 2010)
14
3. Irelands Innovation and Enterprise Performance:
European Innovation Scoreboard (EIS) 2009:

In the latest European Innovation Scoreboard (EIS 2009), Denmark, Finland, Germany, Sweden and the UK are described as Innovation Leaders, with innovation performance well above the EU27 average. According to EIS 2009, Germany and Finland are improving their performance fastest, while Denmark and the UK are stagnating. Innovation Followers within the EU are identified as Austria, Belgium, Cyprus, Estonia, France, Ireland, Luxembourg, the Netherlands and Slovenia with innovation performance below those of the innovation leaders but close to or above the EU27 average. Within this grouping, Cyprus and Estonia are seen as growth leaders, and Slovenia is described as a moderate grower. Ireland is included in the final grouping described as slow growers along with other Innovation Follower countries such as Austria, Belgium, France, Luxembourg and the Netherlands. For 2009, Ireland is ranked 9th overall (no change from its ranking 5 years previously in 2004) in terms of the summary innovation index. The concern is that Ireland is a slow grower in comparison to other Innovation Followers such as Estonia, Cyprus, and Slovenia, currently ranked below it in 12th, 13th, and 14th place. The key challenge for Ireland is unless we increase momentum, these faster growers will overtake us in the overall innovation rankings. Irelands overall performance against the 7 dimensions used to calculate overall innovation performance is compared with the EU 27 States plus Switzerland, in Appendix 8, Page 52.
Irelands Innovation Performance:

The Expert Group on Future Skills Needs characterised Irelands innovation performance as follows: Ireland performs strongly when it comes to the prevalence of innovation, ranked 7th in the EU for the share of companies engaged in innovation (CSO Community Innovation Survey 2004-06). However when it comes to broader measures of Irish innovation capability, the country is actually fairly average. In particular Ireland performs poorly with regard to the low adoption of product innovations invented by others, and low business investment in ICT [Information and Communications Technology]. (Halligan, 2009)
15
Global Entrepreneurship Monitor (GEM) An Ireland and Global Perspective

The Global Entrepreneurship Monitor (GEM) in its 2008 annual report for Ireland suggests there has been no fall-off in Irelands level of those who had most recently set up new businesses at 4.3% (percentage of population who have started a new firm in the last 3.5 years, paying wages). In addition, it states that Ireland continues to be to the fore in Europe in early stage entrepreneurs (7.6%). There continues to be a high number of established owner managers at 9% of the adult population. (GEM Ireland, 2008) There is also some anecdotal evidence that in Ireland the growth in early stage entrepreneurs and established owner managers has been largely in non-STI sectors, such as in Construction and Property in more recent years. Ireland enterprise performance against many of the GEM key measures peaked in 2005 and our current low tech. enterprise profile, is quite similar to Greece, which ranks ahead of Ireland in 4 out of 5 of the GEM measures, based on its global study for 2008. See Appendix 9, Page 53. In addition, this also shows Irelands relative position compared with other Innovation Countries (18 Countries Globally) - Nascent Entrepreneur: Ireland 8th; New Firm Entrepreneur: Ireland 4th; Established Entrepreneur: Ireland 5th; Total Early Stage: Ireland 6th and Exits: Ireland 2nd. GEM Ireland (2008), also points to a significant decline in those actively planning new businesses (nascent entrepreneurs) reducing from 4.2% in 2007 to 3.3% in 2008. There is also a major reduction in the number of people perceiving good opportunities to start a new business down from 46% in 2007 to 27% in 2008 (one of the sharpest declines across participating GEM Countries). A comparison of Irelands entrepreneurship performance compared with key STI competitors such as Finland, Norway and Denmark as well as the level of international orientation for each of these countries, is described in Appendix 10, Page 54.
16
A Review of the Finnish Innovation System:

Ireland needs to benchmark its STI performance against the best. The results of a recent innovation system review, commissioned by the Finnish government, is instructive for Ireland, as Finland is regarded as having one of the most developed and successful innovation systems in Europe and it is not resting on its laurels. Both Finland and Ireland are direct STI competitors in that both countries are looking to the wider European single market to attract international high-growth entrepreneurs and researchers.
There are a number of key themes that emerged from the Finnish Evaluation which have direct relevance to Ireland:
nnovation policy may need to shift from companies to one which I n urtures and attracts creative individuals F inlands innovation policy actors demonstrate uniform thinking and d ont express remotely controversial opinions Innovation policy in turmoil worldwide - structural and financial crisis c reates a sense of urgency - that should not be wasted The evaluation panel welcomes the ambition of the strategy - but finds i t vague T he system lacks explicit cross-ministerial decision making and e xecution W eak co-ordination results in wasteful replication T he true reform of sectoral research (public research organisations, P ROs) remains in gridlock; T he panel supports university reform - but it must go further. (Finnish Innovation System Evaluation, 2009)
If Finland is prepared to subject its own innovation system to international evaluation, Ireland also needs to adopt this mindset in order to become as good as the best.
17
Given Irelands focus on high-growth entrepreneurs, based on the latest Innovation Taskforce Report, it is useful to examine the experience in Finland. As part of the Finnish review, Erikko Autio produced a paper, The Finnish Paradox The Curious Absence of High Growth Entrepreneurship in Finland, which attempts to explain why Finlands weak performance in high-growth entrepreneurship goes hand in hand with it being a world leader in per capita investment in R&D. As part of his analysis, Autio critiqued the literature on high-growth entrepreneurship and identified a number of what he describes as stylised facts: H igh-growth entrepreneurs deliver a disproportionate economic i mpact relative to their numbers. H igh-growth entrepreneurs are rare. H igh-growth entrepreneurship not limited to technology sectors. H igh-growth entrepreneurs tend to be highly innovative. A chieving high growth can take a long time. H igh-growth entrepreneurs differ from ordinary entrepreneurs in t erms of their demographic characteristics. (Autio, 2009)
Autio (2009) reaches three main conclusions with regard to highgrowth entrepreneurship:
1. 2. 3. High-growth entrepreneurship merits specific attention in a national i nnovation strategy because of the direct economic potential associated w ith this phenomenon. H igh-growth entrepreneurship, in spite of its rarity, also appears to be q uite a broad based phenomenon in terms of sector distribution (apart f rom just the technology sector). T he volatility of the high-growth entrepreneurship phenomenon s uggests that supporting high-growth entrepreneurs is not trivial. S ome even argue that public policy interventions have no place in t he context of supporting high-growth entrepreneurship, pointing to t he observation that many highly successful start-ups do not appear to have difficulties in obtaining equity funding. In reality, the question of h igh-growth entrepreneurship policy is complex, and arguments can be m ade both ways. (Autio, 2009)
18
Israels Science Technology and Innovation Success Lessons for Ireland:

Israels success in the development of a world-class innovation system over the last 20 years can provide much learning for Ireland. According to a recent article on Israels innovation policy: Israel has more high-tech start ups per capita and, after the United States more companies listed on NASDAQ than any other country it had 63 in 2009, compared with Irelands 5. Israel attracts five times as much venture capital investment per capita than Ireland and leads the world in civilian R&D expenditure - 4.5 percent of GDP between 2000 and 2005, compared with Irelands 1.2 percent. (Irish Times, Israel, 28 May 2010) Israels Software Industry has seen its software exports grow from $90m in the early 1990s to $2.6Bn in 2000 to over $3.6bn by the end of 2008, according to the Israel Export Institute. (IEI, 2010)
The Export Institute has also identified a number of factors, critical to Israels success to date, including:
A culture of innovation; A culture of serial, nimble entrepreneurship; I nternationally customer focused; A culture of pioneering, early adoption and networking; S olutions covering a broad range of industries; A magnet for multinational research and acquisitions; G overnment encouragement. (IEI, 2010)
Israel has also developed a number of significant initiatives which have helped Israeli technology companies become world-class. One such initiative was the development of the Israel-U.S. Binational Industrial Research and Development Fund (BIRD). BIRD was established in 1977 and acts as a catalyst for joint R&D between US and Israeli companies, focussed on emerging industries and novel technologies with significant commercial potential. Over the last 30 years BIRD has supported over 740 companies with cumulative sales (of products developed through BIRD projects) in excess of $8Bn. In addition, of the 63 Israeli technology companies quoted on NASDAQ, over 75% of these companies have received BIRD funding in the past. (BIRD, 2009)
19
Following the success of BIRD a number of similar funds were also established, for example:
1 994, with Canada, called the Canada-Israel Industry and Research D evelopment Foundation (CIIRDF); 1 996 with Singapore; The Singapore Israel Industrial R&D Fund ( SII RD); 1 999, with the United Kingdom; Britain Israel Industrial R&D Fund ( BRITECH).
20
The Strategic Role of Marketing:
4.
In this section, we highlight the important strategic role that marketing plays, not just in the innovation process, but more generally in the implementation of Science, Technology and Innovation (STI) policy. We look at the pivotal role Marketing plays at each phase of the innovation process from initial research, through to product-mix decisions, to postpurchase customer evaluation. Marketing has other important functions in overall STI implementation. Customer behaviour is a key factor in most instances of innovation. We argue that innovation must be consumer and market led rather than purely technology or product driven. Professional marketers have specific skills that are essential in the implementation of innovation. Innovative companies require people who can set strategic direction. They require people who have strong communications skills, an understanding of how to apply technology, a strong market understanding, the capacity to identify user wants and the ability to commercialise a product or service. These are strategic and operational skills exhibited by a range of professional marketers. Furthermore, Marketing has a key role in ensuring that Ireland builds a real and unique basis of competitive advantage based on a compelling market proposition. This will ensure that the Innovation Ireland brand will be one of substance that delivers on its brand promise.
21
Three out of Four Types of Real Innovation Require Changes in Customer Behaviour:
Halligan makes the point that unless a business changes in ways which makes it more valuable, then no innovation has taken place. The Expert Group on Future Skills goes on to describe four different types of innovation that directly create such value: 1. N ew and improved products, once they are bought by customers; 2. N ew and improved services, once they are bought by customers, either t hemselves or bundled with products; 3. C hanges to the way the company relates to the business system o f which it forms a part that bring greater value to the business from i ts customers; 4. C hanges to internal processes and other characteristics within a b usiness that improve its economic performance, whether through c reating greater value for customers in terms of products, services and b usiness system, or through increasing internal effectiveness and efficiency. (Halligan, 2009) Halligan points out that the first three types of innovation rely on changes in customer behaviour. If customers do not respond positively, no value is created, and no innovation has taken place, no matter how great the internal upheaval within the business. The fourth relies on internal changes within the business, which can also create greater customer value in terms of better products and services. The importance of customer behaviour to these types of innovation clearly emphasises the substantial contribution which marketing can make to the overall process of innovation.
22
4. The Strategic Role of Marketing:
Marketing Plays a Pivotal Role in each Phase of the Innovation Process:

Bettley (2007), states that the integration of marketing with the technology and R&D function is established as a critical success factor in innovation. Bettley clearly sets out the marketing inputs required at each phase of the innovation process and clearly demonstrates that marketing can have a profound impact at each stage, from initial research through to product mix decisions to post purchase customer evaluation. Marketing Inputs into The Innovation Process are described further in Appendix 11, Page 55.
Innovative Companies Need A Broad Range of Strategic and Operational Marketing Skills:
In the Skills in Creativity, Design and Innovation report, Halligan describes the types of people that innovative companies need: Leaders who are good at setting strategic direction, can establish an innovation-friendly culture, and who are good at innovation management; Employees at all levels who have strong generic skills, particularly in communications, teamworking and problem solving; People with a good understanding of how to apply relevant technologies, with skills in application of information technology; People with a good understanding of the market, both in broad aggregate terms and in terms of the specific needs and wants of users of the product or service; and People with a strong grasp of business: how to commercialise a product or service, and how to leverage this to build a strong, profitable and sustainable business. (Halligan, 2009) Many of the skills listed by Halligan are directly relevant to the marketing profession: setting strategic direction, communications, a good understanding of how to apply relevant technologies, an understanding of the market, understanding the wants of users of the product and how to commercialise a product or service. Such skills are clearly in evidence among a range of professional marketers operating in various functions including Strategic Planning, Marketing Communications, Consumer Insight / Market Research, Product Development, Customer Relationship Management (CRM) and Brand Management.
23
Marketings Role in Developing a Real Basis for Competitive Advantage

The Innovation Taskforces ambition in marketing Innovation Ireland, and its resulting recommendations, appears to relegate marketing to a role limited to promotion and marketing communications. In some cases it appears marketing is being used to make a presentational rather than a substantive case for our current STI strategy. Such an approach, coupled with a less than compelling basis of competitive advantage, is not likely to produce success. The reasons are clearly enunciated in Halligan (2009) in describing the competitive threat we face into the future: that not only are countries such as China, India and Brazil aiming to occupy the low and medium value added positions in the world economy that Ireland and other countries are vacating, they are also aiming to develop much the same sort of high added value knowledge economy that we are. (Halligan, 2009) In this context, Halligan makes the point that innovation is critically important in such a competitive world and that Ireland can derive unique advantage from: competing on our differences, whether they are cultural, or result from superior insight into particular markets, or from particular expertise in applying technologies, or from specialist scientific, technological or business expertise. (Halligan, 2009) The clear implication of these observations is that we must develop and deliver a real basis of competitive advantage for Ireland, which is not easily copied by competitor countries. The current proposition, such as an increasingly average education system, speaking English (which continues to highlight the relatively poor language skills of Irish graduates), and an attractive tax regime (which is easy for competitor countries to copy), is no longer fit for purpose, in an intensely competitive global market.
24
Obstacles to STI Success in Ireland:
5.
Broadband:
In January 2010, Forfs published a study benchmarking Irelands latest broadband performance. It has suggested that Ireland has made significant progress over the last two years in improving levels of broadband coverage and take-up (with broadband connections up from 58% to 90%, representing a big transition away from dial-up). However it goes on to describe our key weakness as follows: Irelands key weakness is the lack of deployment of fibre infrastructure closer to the consumer for both wired and wireless networks.
(Forfs, Broadband 2010)
For example in Ireland only 0.6 % of total broadband connections are fibre compared with an OECD 28 country average of 11.3 %. This compares with fibre broadband connection rates in other countries of: 51% in Japan; 46% in South Korea and 21% in Sweden. From a European perspective, fibre connections are also rapidly growing in other countries such as Denmark, Norway, Hungary and the Slovak Republic . It is a matter of concern that the Innovation Taskforce is recommending that serious action on broadband should be a long term objective, as opposed to a short or medium term objective. Given the critical need for advanced broadband services in building a highly innovative enterprise sector, the national roll-out of Next Generation Network (NGN) services, for bandwidth up to and surpassing 1Gbps, should be prioritized. (Innovation Taskforce 2010) In February 2010, Craig Barrett in his RIA presentation on Irelands competitiveness hit out at Irelands current broadband strategy; The Finns have enshrined broadband as a citizens right. The Finns are serious, the Irish need to be serious. (Barrett, 2010) According to Forfs, Ireland is currently not well placed to take advantage of future trends in broadband. ... Irelands relative position has not improved as other countries are moving ahead at an even faster rate (Forfs, 2025, 2009). This raises the key question as to what sort of smart economy can Ireland have in the short to medium term without a competitive broadband infrastructure?
25
Competitiveness
There are significant underlying issues with Irelands level of competitiveness. According to the European Growth and Jobs Monitor 2009 (Lisbon, 2009) when compared against the Lisbon Agenda (R&D) criteria, Ireland has dropped nine places from 4th in 2008 to 13th out of 14 countries in 2009. Lisbon (2009) describes Irelands performance as follows; By contrast, Ireland fell the farthest - and the hardest, to No. 13, just ahead of Italy, the perennial laggard. Irelands reliance on external trade and the importance of its financial services sector in national output made it particularly susceptible to the global economic downswing while the ongoing correction in construction only made matters worse. GDP growth, productivity and public finances all deteriorated precipitously in Ireland. (Lisbon, 2009) In terms of world competitiveness, IMD (2009) shows that between 2008 and 2009 Ireland has dropped from 12th position to 19th in the world rankings of the IMD World Competitiveness Yearbook. In a comparison of Irelands performance with the other EU 15 countries plus Norway (some of our biggest FDI competitors and trading partners), placed Ireland 9th out of the 16 countries. In addition, IMD also carried out a stress test on participating countries based on its 2009 results and rankings (IMD, Stress Test, 2009). The purpose of this analysis was to determine which countries are better equipped to fare through the crisis and improve their competitiveness in the near future. Irelands performance was benchmarked against the other 16 Countries that make up EU 15 plus Norway. It can be seen from that analysis that Ireland (which ranks 25th in World ranking on the Stress Test) ranks 9th out of the 16 other countries previously described. In recent weeks the IMD World Competitiveness rankings have been released for 2010 and this has seen Irelands overall competitiveness ranking drop from 19th in 2009 to 21st in 2010. (IMD, 2010)
26
5. Obstacles to STI Success in Ireland:
FDI: - No longer a significant source of net new jobs for Ireland

Increasingly it appears that Foreign Direct Investment (FDI) will no longer be a significant source of net new jobs for Ireland. According to Craig Barrett, the FDI era is over for Ireland, the real economic investment will be indigenous, and growth will come from that investment. The International Monetary Fund, in its 2009 review, identified that not only had Irelands share of international exports fallen sharply, but also Ireland has had a significant loss of eurozone FDI.
Table 2: - Foreign Direct Investment (% Share of Eurozone FDI) Ireland: 2001 - 2007:
30% 25% 20% 15% 10% 5% 0% Austria Greece Belgium 2007 Finland Italy Spain Portugal Netherlands Ireland 2001 Share
Source: IMF (2009) Adapted from Fig. 3, P.11. IMF 2009, Based on IMF World Economic Outlook and IMF Staff Estimates: Irelands share had declined from 13% in 2001 to 6% in 2007. The market leader, the Netherlands, also followed this trend dropping from 27% to 23% between 2001 and 2007. At the same time a number of other benchmark countries grew their share from 2001 to 2007; Belgium (from 20% to 24%), Finland (from 3% to 3.5%), Italy (from 11% to 12%) and Spain (from 17% to 18%).
27
An analysis of IDA Irelands Annual Reports from 1998 to 2009 shows that: Table 3 : - % Of Net New Jobs Created (1998 - 2009) IDA Supported Companies:
12%
10%
8%
6%
4% 2% 0% -2% -4% -6% -8% -10% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Various IDA annual reports 2000 - 2009 (IDA 2000 - 2010) The number of net new jobs created has reduced significantly from an a verage annual increase (between 1998 and 2000) of 9% to an a verage annual decrease, between 2007 and 2009, of -3.2%. The t otal number of companies supported by the IDA, reached a high of 1 ,262 companies in 1999, reducing to 987 companies by 2009 (a fall of 22%). T he level of direct full-time employment created by these companies p eaked at 142,302 in 2000, dropping to 124,759 by 2009, (a decrease o f 12%). Also it is estimated that an additional 100,000 (IDA, 2010) a re indirectly created, as a result of the presence of FDI companies in I reland.
Between 2006 and 2009 the proportion of IDA supported companies with a significant R&D mandate is relatively slow moving, increasing from 16.5% in 2006 to 20% in 2009. Forfs 2025 (2009) reported that in 2008 greater than 40% of FDI projects won by the IDA were in Research and Development initiatives.
28
Education Attainment and Spending:

The CSO (2009) states that in the period from 2000 to 2008, the total percentage of the population aged between 25 and 34 with a third level education increased from 29% (in 2000) to 42.3% in 2008. Even more significantly during this timeframe the number of females with third level education rose significantly from 30.5% (2000) to 49.9% in 2008. In contrast the increase amongst males, from 29.0% (2000) to 42.3% in 2008, was less pronounced. This widening gap reflects the increasing tendency for females to remain in education for longer than males. Comparing Ireland with the EU 15 plus Norway cohort, Ireland is joint third, with Belgium, behind Cyprus (47.5%) and Norway (43.6%). The bottom three performing countries within this group are Portugal (23.2%), Italy (19.8%) and Austria (19.2%). While Irelands performance with regard to education attainment (third level education described above) is strong, our spend as a percentage of GDP is low in comparison. When Irelands spend in education for 2006 (4.9%) is compared to the EU 15 plus Norway group, Ireland ranks 11th out of these 16 countries. The top three countries being Denmark (8.0%); Sweden (6.9%); and Norway (6.6%). From a review of Irelands performance (OECD/PISA, 2009) in Science, Reading and Mathematics with regard to the proportion of top performers based on 2006 PISA scores it can be seen that: I reland is strongest in Reading (ranked 6th of the top performers), and significantly above the OECD average (ranked 18th); W e are ranked 19th in Science of top performers slightly above the O ECD average (ranked 21st); W ith regard to Irelands performance in Mathematics, we are ranked 3 0th in Top Performers) compared with an OECD average of 19th. Ireland performance in Reading, Mathematics and Science in compared with other key STI competitor countries, such as Denmark, Finland, Norway, Sweden and United Kingdom - See Appendix 12, Page 55. In addition, The Expert Group on Future Skills Needs (Halligan, 2009) makes a number of key points with regard to innovation and the Irish second level education system:
29
There are serious problems with the way in which second level education impacts on the creativity and innovation capability of Irish students. These problems have a history of being quite intractable because of the influence of public examinations. The National Council for Curriculum and Assessment (NCCA) appears to have grasped the extent of the challenge that this poses, and is moving forward with what appears to be a coherent strategy to tackle it. The NCCA deserves support in this, and it is important that the process should not be allowed to be slowed by defence of the status quo, by excessively tight approach to funding or initiatives or by over-reaction to any stumbles that are most likely inevitable in ambitious transformational initiatives such as those that are now underway. (Halligan, 2009)
30
Growth in Ireland to 2020 and Beyond:
6.
11 Key Forces of Change Impacting Ireland to 2025:

Forfs in its strategy Sharing our Future; Ireland 2025, Strategic Policy Requirements for Economic Development identifies 11 Key Forces of Change Impacting Ireland to 2025. These 11 Key Forces of Change are briefly described in Appendix 13, Page 56. Of these 11 Forces of Change, 5 have particular relevance to STI policy development and implementation. These are Technology, Innovation and Entrepreneurship, Education/Skills, Infrastructure, Energy Supply/Security and Climate Change. The strategic policy requirements for these forces of change are described in Appendix 14, Page 57.
The Irish Economy and International Trends:

In 2004, The Enterprise Strategy Group, in Ahead of the Curve (2004) attributed Irelands economic progress in the previous decade as being a result of both good planning and of providence. It identified a number of factors that facilitated the swift pace of economic growth including: membership of the European Union and significant regional aid, longterm social partnership, a well-qualified workforce, Irelands favourable demographic profile and the unprecedented growth of global trade. In the second half of 2007, the pace of Irelands economic development reduced, following a contraction in the housing sector. In the previous decade, house prices in Ireland had risen substantially and investment in housing increased from 6% of GDP (in 1996) to almost 15% in 2006.
31
Productivity:
Irelands average productivity growth rate in the three years from 1998 to 2000 averaged just under 5% per annum. In contrast our average rate for the three years from 2005 to 2007 was just 2.5%.
Table 4: - Labour Productivity Growth (GDP Per Hour Worked) Ireland - 1998 to 2007:
6 5
5.7% 5.3% 4.3% 4.6% 3.9% 3.2% 2.8% 2.4% 2.2% 1.7%
4 3 2 1 1998 1999 2000 2001 2002
2003
2004
2005
2006
2007
Source: OECD Factbook 2009; (Page 57) Economic, Environmental and Social Statistics ISBN 978-92-64-05604-6 OECD 2009: According to Bradley and Kennelly (2008), this can be explained as follows: unlike the boom years where jobs growth was often in high-productivity modern manufacturing, high-technology or export services run by multinational companies, much of the recent jobs growth has been in locally traded services and construction where the rate of productivity is much lower. (Bradley and Kennelly, 2008) The National Competitiveness Council (NCC,2010) in its most recent analysis states that based on the GNP per hour measure, Irelands productivity levels remain below the OECD average, with Ireland ranked 24th in the OECD between 2008 and 2009.
Export Performance:
The National Competitiveness Council (NCC, 2009) states that Irelands growth in exports during 2000-2003 was well above the OECD average, but our relative position worsened in 2003-2006. Irelands share of global trade was 1.2% in 2006, down from 1.4% in 2002, with the share of goods traded dropping from 1.3% to 0.8%. Irelands share of services trade, a smaller but growing component of overall trade, increased from 1.9% to 2.5% over the
32
6. Growth in Ireland to 2020 and Beyond:
same period. In 2007, Irish exports were worth over 154Bn. In 2009, according to NCC(2010), while Irelands total exports fell by 1.8% , this decline was modest compared with the sharp declines experienced in other countries (for example an average of 14.1% in the Eurozone and 13.6% within the OECD). Ahead of the Curve (2004) highlighted the fact that overall indigenous exports had not grown significantly in real terms in the previous decade; Until now, Irelands principal enterprise strengths have been in the operational aspects of manufacturing and services, rather than in markets and product development. This is particularly true of the foreign-owned sector, which accounts for most of our exports and which, for the most part, produces goods that were designed elsewhere, to satisfy market requirements that were specified elsewhere, and sold by other people to customers with whom the Irish operation has little contact and over whom it has little influence. It is also substantially the case in the indigenous sector. Food, which accounts for over 55% of indigenous exports, has been primarily production rather than market led. (Ahead of the Curve, 2004)
Table 5 - Current Account Balance of Payments (As % GDP): Ireland - 1998 to 2008:
1 0 -0.4% +0.8% +0.2% 0.0% -0.6%

Balance as % GDP
-1 -2 -3 -4 -5 -6
-0.7%
-0.9%
-3.5%
-3.5%
-5.3% -5.3% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: OECD Factbook 2010; (Page 77) Globalisation and Trade ISBN 978-92-64-08405-6 OECD 2010.
In excess of 70% of Irish exports continue to derive from IDA supported firms operating in Ireland (IDA, July 2010). The OECD (2010) states that
33
Irelands current account deficit (in balance of international payments) rose from -0.6% of GDP in 2004, to -5.3% in 2008. The National Competitiveness Council (NCC,2010) suggests that while foreign owned companies accounted for almost 90% of total Irish exports in 2008, this overstates their economic impact and suggests that the contribution of indigenous and foreign owned trading sectors to employment and direct spending is similar.
Our Vision for Ireland to 2020 and Five Key Growth Drivers:
Over the next few years, Ireland faces a number of very significant challenges in returning our country to economic prosperity. In seeking to ensure that the marketing profession is properly guided to play its full role in this task, the Marketing Institute of Ireland earlier this year carried out a review of current Irish and international business, economic and social data, and sought out the views of key Irish opinion leaders in the areas of business, entrepreneurship, marketing, the economy, social enterprise and academia. One of the outcomes of this exercise has been the development of a vision for Ireland to 2020, which we have defined as follows: Ireland has developed a strong international reputation for creativity and innovation and is recognised as a great place to grow sustainable businesses, with a thriving enterprise culture. Irish people now feel more independent and self-sufficient and we see ourselves as being clearly rooted and confident in the local, with a superb capacity to reach out globally. Our national policy and its implementation reflect the critical need to be long-term, truly strategic, national and allisland. These strengths, along with our unique culture, our capacity to build rapport with people and to understand them and our reformed and now world-class education system has created a basis for unique competitive advantage. In addition, the Institute has identified five growth drivers which we believe will contribute strongly to the economic and social development of Ireland over the next 10 years to 2020. 1. U nique Competitive Advantage: A clear vision for Ireland, and a substantive basis of competitive advantage that defines what we can offer the world; an Ireland which is strong and confident in the local but connected globally, with a s trong international reputation and a compelling brand.
34
2. 3. 4. 5.
S trong and Diverse All-Island Economy: A strong and increasingly diverse economy, spanning the whole island, w ith a vibrant and celebrated enterprise sector competing to world c lass standards in selected niches in both the smart and green e conomy; which helps us sustain a just society; underpinned by e ffective regulation and governance. W orld-Class Education System: A reformed education system, which drives creativity and innovation, f ocusing on learning rather than teaching, and delivering key skills in l anguages, maths and the sciences; fuelling our unique competitive a dvantage; with an education system that can be marketed to other c ountries. A Confident and Creative People: A deeply-rooted confidence in ourselves as Irish people, with a highly c reative and unique mindset which simultaneously sets us apart and h elps us connect with the rest of the world; a people comfortable with b eing different, and with no need to imitate other larger cultures. M arketing Positioned to Drive Success: M arketing has the potential to provide unique insights into our c hallenges, inform the vision, identify the basis for competitive a dvantage, pinpoint the market niches and opportunities for the s mart and green economy agenda, contribute to educational reform, p romote a vibrant enterprise culture, develop and implement a strong B rand Ireland. To do this we must ensure appropriate levels of m arketing capacity and capability.
In the context of these growth drivers, the Marketing Institute of Ireland believes that Irelands Science, Technology and Innovation (STI) strategy and its effective implementation is a key element in ensuring economic success.
35
Growth in Services Sector:

According to the OECD (2009), the growth in the services sector in Ireland, Iceland, Luxembourg and Turkey has been particularly significant. In Ireland, agriculture continues to fall and the services sector has grown strongly over the last decade. The services sector represents approximately 67% of total employment (2008) in Ireland compared to 62% in 1997.
Table 6: - Evolution of Value Added By Activity (Annual Growth %): Ireland 1998 - 2007
15%
10%
5% 0% -5% -10% -15% 1998 1999 2000 2001 2002 2003 2004 2005 2006 Services 2007
Agriculture, Forestry, Fishing
Industry (incl. Construction
Source: OECD Factbook 2009; (Page 64, 67) Economic, Environmental and Social Statistics - ISBN 978-92-64-05604-6 OECD 2009;
Forfs states that the services sectors are expected to provide the majority of new jobs in the Irish economy over the next decade, with finance and business services growing by almost 200,000 employees, together with an increase of over 100,000 in public administration, health and education. It also suggests that services exports are being driven by both the increasing servicisation of manufacturing, the increasing electronic delivery of goods and services, such as software and digital media. (Forfs 2025, 2009)
36
STI Growth Sectors:

Environmental Goods and Services (EGS) or Green sector worldwide worth $800 billion by 2015: The Smart Economy (2008) estimates that the value of the Environmental Goods and Services (EGS) or Green sector was in excess of $600 billion worldwide in 2005 and is likely to exceed $700 billion by 2010 and $800 billion by 2015. The strategy suggests that Ireland has an opportunity to play a leading role in developing a green economy and thereby benefiting from the associated job and wealth creation opportunities. Forfs describes the role of Information and Communications Technologies as fundamental enablers for the development of the economy as a whole and states that ICTs will be an essential underpinning infrastructure specifically next generation networks in future markets, services, skills, enterprise and economic development. (Forfs 2025, 2009) Key Advantages in Food & Drink; Healthcare; and Life Sciences: Forfs has also identified a number of key advantages for Ireland, specifying the food and drink sector as offering further potential to develop higher value-added products and related services, the healthcare and life sciences sector with its strong existing base, and the energy, environmental and clean technology sector offering potentially significant opportunities, given Irelands resources and location. Chinas Emergence as a Major Economic Power and R&D Investor: According to Forfs 2025, (2009), emerging economies are the main drivers of growth, with China now second only to Germany as the worlds largest exporter (and is expected to surpass Germany in 2010). China is also in the top three in terms of R&D investment. Chinese domestic demand in 2008 was forecast for the first time to become the main driver of world economic growth, and is now a bigger contributor to global growth than US domestic demand.
37
Future Trends in Enterprise Structure:

Forfs 2025 (2009) contends that the enterprise structure will continue to evolve to 2025, with a mix of large and small innovation-intensive companies, indigenous and multinational. Leading services enterprises will operate from Ireland and contribute over 80% of the countrys foreign earnings. With regard to enterprise structure, the following trends will emerge: SMEs and self-employment will flourish: Small businesses and self-employment will flourish to take advantage of local opportunities. Significant levels of entrepreneurship will have emerged and specialist skills and resources will be important in the development of enterprises. Virtual companies and greater entrepreneurship: Virtual companies will flourish, enabling new alliances and more global operations even from a small home market. Companies will be more flexible, able to form, re-form, and create alliances with greater ease. Remote crossborder collaboration, within teams, across companies and between companies will be commonplace. Failure will be recognised as part of success, increasing entrepreneurship levels. New services and technologies will flourish: New services sectors, in particular finance, information and professional services will continue to flourish and developments in nanotechnology, biotechnology and ICT will underpin the emergence of sectors such as health and bio-informatics, high-tech functional foods and clothing. Climate change challenges will provide Ireland with many opportunities in the environmental goods and services sector. There will also be opportunities in high-tech business service areas managing complex systems and providing specialist support to overseas multinationals. ICTs create significant business opportunities: ICTs will also create significant business opportunities within the sector itself, achieving very high levels of investment and effective utilisation. Widespread installation of ICTs, ambient intelligence, location-based services and a convergence of ICTs will proliferate, with advances in life sciences impacting health management, longevity and quality of life. (Forfs 2025, 2009)
38
Recommendations to Support Delivery of Irelands STI Agenda:
7.
Following our review of the Innovation Taskforce Report 2010, and Science Technology and Innovation Strategy between 2004 and 2010, the Marketing Institute of Ireland makes the following recommendations:
Overall STI Policy and Implementation Recommendations:

We believe that the current approach to STI policy making and implementation in Ireland has resulted in Ireland continuing to lag our competitors in terms of R&D and innovation performance. 1. 2. Install leadership and have a clear focus on implementation: B ring together a small group of people with a track record of delivery a nd assign them responsibility to ensure implementation of Irelands S TI policy over the next three years, at a much faster pace, subject t o value for money standards, and with a process of international r eview, evaluation and benchmarking. Implement a clear and consistent policy framework: A dopt a clear and simple STI policy framework, where overall STI s trategy objectives are clearly connected and reconciled to actual t argets of relevant enterprise support agencies.
C urrently overall STI policy objectives and targets do not a ppear to reconcile with actual targets that individual enterprise s upport agencies have committed to. For example, the job creation a spirations of the Taskforce Report versus the IDA 2020 Horizon j ob creation objectives are inconsistent. The goal to produce increasing n umbers of PhDs in STI 2006 to 2013 and Science Foundation I relands wn PhD objectives to 2013 do not reconcile (leaving aside o t he challenges of the McCarthy Report). We need a clear and simple S TI policy framework, where overall STI strategy objectives are c learly connected and reconciled to the actual targets of the relevant e nterprise support agencies. There is also a requirement for full t ransparency in determining why strategic STI objectives are not a chieved, where this occurs.
39
3. 4. 5.
Set clear goals and ensure accountability: Q uickly agree and nail down what is required in the next three years a nd how much money is available; set clear milestones to be achieved; f ormally review the work of the implementation group every six m onths; ensure that all stakeholders commit to the process and are held to account for delivering specific implementation objectives. I n addition, policymakers need to address the McCarthy Report c hallenges of current STI policy (with regard to value for money, o verall economic impact, as well as duplication of effort amongst t he enterprise support agencies) or alternatively accept the need for r adical change to the current approach. E nsure the strategy is implemented and benchmarked against the best: W e must now establish an effective governance framework to ensure i mplementation and also robustly benchmark Irelands innovation s ystem against the best, such as, Finland, Israel, Norway and S weden. e must deliver in practice on the rhetoric of wanting W to be he best, by taking real action to make it happen. The use t of an nternational evaluation panel, similar to the Review of the i F innish Innovation System, can help Ireland to build momentum, and a void the traps of complacency and inertia. Exploit the value of all-island positioning in enterprise policy and business innovation: T he IDA media campaign of 2009 in the US to promote the Innovation Island involved an all-Ireland positioning, and this is to be w elcomed. There is an opportunity now for the innovation strategy to encompass the entire island of Ireland. Whilst the logic and benefits of s uch an approach are clear in terms of international marketing, it s hould not stop there. The more substantial issue of integrated e nterprise policy is one which presents a real opportunity for all s takeholders. Adopting a comprehensive island-wide approach to i nnovation in business would leverage greater resources and engender a s ense of collaboration and interdependence among stakeholders.
40
7. Recommendations to Support Delivery of Irelands STI Agenda:
Marketing Specific Recommendations:

1. 2. 3. C reate real competitive advantage based on difference - Irish culture / a real capacity to innovate: W e must create a real and unique basis of competitive advantage f or Ireland. Marketing can make a strong contribution to developing a real competitive advantage which is valued by potential customers, a nd to crafting robust market propositions for Ireland in STI niches w here we can compete. As a country with aspirations of being a l eading exporter through indigenous companies, with a strong r eputation in innovation, Ireland needs to come up with a credible o ffering. Exploit the potential of marketing to create real value added innovation: T he purpose of real innovation is to create value which can be t raded as sales to customers. This requires a sophisticated use of m arketing throughout the innovation process to ensure that it is market a nd consumer led. Such a role for marketing has clear implications for t he future levels of marketing capability in Ireland. Assess current marketing capability and identify future marketing skills needs; I n developing Ireland as a highly innovative STI economy, we must f ully understand the current level of marketing capability we have and o ur future marketing skills needs. T he marketing skill sets required by innovative businesses include: d evising business strategy, persuasively communicating brand values a nd propositions to consumers, applying technologies to new and e xisting markets, gaining market understanding and insights, and c ommercialising products and services. A key success factor in the development of Irelands STI economy will b e to ensure that we grow current marketing capability and skill sets b ased on likely future needs.
7. Recommendations to Support Delivery of Irelands STI Agenda:
41
Bibliography:
Ahead of The Curve, (2004); Irelands Place in the Global Economy; Enterprise Strategy Group; Autio (2009); The Finnish Paradox: The Curious Absence of High Growth Entrepreneurship in Finland, Helsinki: ETLA Elinkeinoelaman Tutkimuslaitos, The Research Institute of the Finnish Economy, 2009, 30 p. (Keskusteluaiheita, Discussion Papers ISSN 0781-6847; no. 1197); Barrett (2010); Remarks made by Dr. Craig Barrett, Ex. Chairman and CEO of Intel, at Royal Irish Academy speech on Irelands Competitiveness 8th February 2010, as reported on www.digital21.ie; Bettley (2007); Marketing for Innovation: implication of the innovation process model for the marketing curriculum of technology management programmes; Allison Bettley, Technology Management Research Group, Faculty of Technology, The Open University; BIRD (2009); BIRD IsraelU.S. Binational Industrial Research and Development Foundation, Annual Report 2009; Bradley and Kennelly (2008); Capitalising on Culture, Competing on Difference; Innovation, Learning and a Sense of Place in a Globalising Ireland. Bradley, F.; and Kennelly, J.; Blackhall Publishing 2008; ISBN (PB): 978-1-84218-149-2; CSO / Forfs (2009); Statistical Release Business Development Expenditure on Research and Development 2007 /2008; (March 2009); CSO (2009); - Central Statistics Office Ireland; Measuring Irelands Progress (2008); Culliton Report (1992); A Time for Change: Industrial Policy for the 1990s: For the Minster for Industry and Commerce, by the Industrial Policy Review Group, Chaired by Jim Culliton; EIS (2009); European Innovation Scoreboard, 2009; Pro Inno Europe No. 15; (European Commission, Enterprise and Industry March 2010); Energy Policy (2009); Review of Irelands Energy Policy, 2009; The Irish Academy of Engineering (June 2009); Finnish Innovation System Evaluation (2009); Evaluation of the Finnish National Innovation System Policy Report; Reinhilde Veugelers, Chair of the Evaluation Panel (October 2009); Forfs 2025 (2009); Sharing Our Future; Ireland 2025, Strategic Policy Requirements for Economic Development; Forfs (2009); Enterprise Statistics in Ireland 2009 at a glance. Dublin: Forfs; Forfs Broadband (2010); Irelands Broadband Performance and Policy Actions; G EM, Global (2008); A Global Perspective on Entrepreneurship in 2008 (January 2009); G EM, Ireland (2008); Entrepreneurship in Ireland, GEM Ireland 2008; The Annual Report for Ireland (May 2009); Graduates 4 International Growth (G4IG, 2010) Enterprise Ireland Press Release; Minister OKeeffe launches Graduates 4 International Growth (August, 2010); H alligan (2009); Skills in Creativity, Design and Innovation; Una Halligan Chairman Expert Group on Future Skills Needs; I DA (2000 - 2010); (Table 3 is based on an analysis of IDA Annual Reports) Industrial Development Authority Ireland, Annual Reports for each year from 2000 to 2009 (August, 2010); I DA (2010); IDA Ireland Strategy; Horizon 2020 (March 2010); IDA (July, 2010); IDA Ireland; 2010 First Half Results, Press Release (July, 2010);
42
IEI (2010); Based on a recent article from The Israel Export Institute available on their website www. Export. gov.il (May 2010) on the Israeli Software Industry; Irish Times (August 20 2009); Opinion Piece: - Investing 8.2Bn in appliance of science myth Michael Hennigan (Founder and Editor of Finfacts.ie); Irish Times (March 8 2010); Business Opinion: - IDAs plan to create 105,000 jobs could be a hard sell John Collins; Irish Times (March 11 2010); - Spin cannot hide lack of new thinking on jobs Michael Hennigan (Founder and Editor of Finfacts.ie); Irish Times (BERD May 28 2010); - As Good As It Gets? Innovation Business Magazine (May 2010: Dr. David Lloyd A Dean of Research for Trinity College, Dublin); Irish Times (Israel May 28 2010); - Star Potential. Innovation Business Magazine (May 2010: Mark Weiss); IMD (2009); IMD World Competitiveness Yearbook 2009; IMD Stress Test (2009); Stress Test Undertaken; Based on I.M.D. World Competitiveness Yearbook 2009 (August 2009); IMD (2010); IMD World Competitiveness Yearbook 2010; IMF (2009); (Table 2 is based on IMF 2009, Fig. 3 page 11) International Monetary Fund Ireland; Staff Report for 2009 Article IV Consultation; Prepared by Staff Representatives for the 2009 Consultation with Ireland. Approved by Ajai Chopra and Martin Mhleisen (May 2009); Innovation Taskforce (2010); Report of the Innovation Taskforce, Department of the Taoiseach, Government Buildings (March 2010); Knowledge Economy (2004); Building Irelands Knowledge Economy The Irish Action Plan for Increasing Research and Development to 2010. Report to the Inter Departmental Committee on Science, Technology and Innovation (Forfs July 2004); Lisbon (2009); European Growth and Jobs Monitor 2009; Lisbon Council for Economic Competitiveness and Social Renewal and Allianz Economic Research & Development (March 2009); McCarthy Report (2009); Report of the Special Group on Public Service Numbers and Expenditure Programmes (July 2009); NCC (2009); Getting Fit Again, Short-Term Priorities to Restore Competitiveness; The National Competitiveness Council (June 2009); NCC (2010); Benchmarking Irelands Performance 2010; The National Competitiveness Council, (July, 2010); OECD (2009); Organisation for Economic Co-operation and Development Factbook 2009, Economic, Environmental and Social Statistics; OECD (2010); Organisation for Economic Co-operation and Development Factbook 2010, Economic, Environmental and Social Statistics; OECD / PISA (2009); Top of the Class; High Performers in Science in P.I.S.A. 2006; Programme for International Student Assessment (2009); Ornstan (2006); Reorganising Adjustment: Finlands Emergence as a High Tenhnology Leader, West European Politics, Vol 29, No. 4, 784-801 (September 2006); SFI (2009); Powering The Smart Economy, The Science Foundation Ireland Strategy 2009-2013; Science Foundation Ireland (March 2009); SFI (2010); Science Foundation Ireland, Annual Census, 2009 (August, 2010); Smart Economy (2008); Building Irelands Smart Economy, A Framework for Sustainable Economic Renewal; Government of Ireland, Department of the Taoiseach (December, 2008); SSTI (2006); Strategy for Science, Technology and Innovation (2006 2013); Department of Enterprise Trade and Employment (June 2006);
43
List of Appendices:
1. Appendix 1: Summary of Key Recommendations: Innovation Ireland Report of t he Innovation Taskforce (March 2010) 2. ppendix 2: Marketing Related Recommendations: Innovation Ireland Report of A t he Innovation Taskforce (March 2010) 3. ppendix 3: 2010 Targets: Building Irelands Knowledge Economy: The Irish A A ction Plan for Increasing Research Development 2010 (July 2004) Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52
4. ppendix 4: Selected Key Actions and Outcomes - SSTI 2006: Strategy for Science, A T echnology and Innovation 2006 2013 (June 2006) 5. Appendix 5: Extract Recommendations Ahead of the Curve: Irelands Place in the G lobal Economy. Enterprise Strategy Group (July 2004) 6. ppendix 6: Smart Economy Attributes - Building Irelands Smart Economy: A A F ramework for Sustainable Economic Renewal ( ecember 2008) D 7. ppendix 7: SFI Strategic Objectives and 2013 Targets: Powering The Smart A E conomy - The Science Foundation Ireland Strategy 2009 to 20013 (March 2009)
8. ppendix 8: Irelands Innovation Performance 2009 European Innovation Scoreboard A 2 009 (March 2010): 9. ppendix 9: A Snapshot of Entrepreneurship: Global Entrepreneurship Monitor A 2 008: Ireland GEM Rankings Versus Top Five Ranked Countries within The I nnovation-Driven Economies (May 2009) 10. ppendix 10: Ireland Compared with Denmark, Finland and Norway - Global A E ntrepreneurship Monitor 2008 GEM Rankings (GEM, January 2009) 11. ppendix 11: Marketing Inputs into the Innovation Process: Bettley, (2007) A 12. ppendix 12: Irelands Performance in Reading, Science and Mathematics - 2006 A ( OECD / PISA 2009) Compared with Denmark, Finland, Norway, Sweden and UK 13. ppendix 13: 11 Key Forces of Change Impacting on Ireland to 2025: Sharing Our A F uture; Ireland 2025 (July 2009) 14. ppendix 14: Strategic Policy Requirements of Selected Forces of Change: Sharing A O ur Future; Ireland 2025 (July 2009)
Page 53 Page 54
Page 55 Page 55 Page 56 Page 57
44
Appendix 1:
Summary of Key Recommendations: Innovation Ireland Report of the Innovation Taskforce (March 2010)
Key Recommendations: - Immediate and Short Term: 5.2 Reform of Deliver of Research Funding: (Cost Neutral) .....Consolidate funding streams.....identified funding pathway and single lead responsible agency underpinned by commercialisation supports; 5.3 Introduce additional measures to promote the take-up of higher level maths: (Low Cost) I ncluding possible incentives such as the awarding by HEIs of CAO bonus points..... 6.4 evelop and publish a national IP Protocol (Low Cost) D .....Adopt More Meaningful IP Protocol Metrics: Proportion of State HEI Funding Linked to Metrics on Innovation and Commercialisation; 6.7 Convene Expert Group On Commercialisation: (Low Cost) .....the mandate to bundle, market and facilitate speedy commercialisation,.....a single point of access, and a point of contact, for entrepreneur,.full support of the activities of this office by the HEIs /TTOs; 7.1 nnovation Fund Ireland (Attract Top-Tier Venture Partners from Abroad): (High Cost) I . ....implementation as soon as possible of the Innovation Fund; 8.1 Procurement Model To Develop Innovation Solutions With Export Potential (Cost To Be Determined) 8.2 Establish Team For Inter-Firm Colaboration To Take Advantage Of Convergence Opportunities (Cost Neutral) 8.3 mplement a European Accelerator Prog. (From 20 Companies European HQs to 200 in 5 years: (High Cost) I . ....initial goal of attracting 20 companies from within the portfolios of top tier venture capital funds to open their European headquarters in Ireland....to g row this number tenfold.....5 years; 9.1 nterprise Ireland More Focused Agenda on Start-Ups and Early-Stage Activities: (High Cost) E . ....need to prioritise more clearly, and provide leadership in the increasingly important areas of start up and early stage activities; 9.2 ntroduce a New State Seed Capital Scheme: (High Cost) I Would fill the current gap in private seed capital, moratorium for.....for co-investment..... other sources; 9.8 arketing Campaign (Pilot Basis) To Promote Ireland as an Excellent Location for Starting Innovative Export- Orientated Companies: (Low Cost) M D 12.1 evelop and Market Ireland as an International Innovation Services Centre: (Low Cost) l ocation for global IP management, licensing and IP trading services; 12.4 reland as a Centre of Excellence for Innovation - (Positive Message - Programme Visits / Activities): (Low Cost) I c onvey a consistent, positive message of Ireland as centre excellence for Innovation; 14.1 stablish High Level Implementation Committee: (Cost Neutral) E Key Recommendations: - Medium Term: 8.8 More Competitive Tax Offering to Mobile Intellectual Property Rich Businesses: (Cost Neutral) 8.9 R&D Tax Credits (Remove Incremental Spend Requirement): (High Cost) 8.10 Attractive and High Value Mobile Talent Regime: (High Cost) 9.3 Nurture Angel Funding: (High Cost);.....a national portfolio of sector-specific Business Angel funds.....each such Fund should be substantially composed of p reviously successful innovators..... 10.1 Independent Review (Configuration) Enterprise Support Agencies / Programmes: (Low Cost) 10.7 odernise Irelands Bankruptcy Law: (Cost Neutral) M 11.3 stablish one Wet Laboratory Facility (Life Science Start Ups) Laboratory Incubation Space (Microelectronic Start-Ups): (High Cost) E 13.1 ublish Metrics (Report Progress) High Level Implementation Committee: (Low Cost); A transparent and objective process overseen by the High Level P I mplementation Committee..... Key Recommendations: - Long Term: I 5.1 nvesting 3% of GDP in R&D: (High Cost) 11.1 ational Roll-Out Next Generation Broadband Up To 1Gbps: (High Cost) N Source: Extract based on; `Innovation Taskforce (2010); Report of the Innovation Taskforce, Department of the Taoiseach, Government Buildings, Published 11 March 2010.
45
Appendix 2:
Marketing Related Recommendations: Innovation Ireland Report of the Innovation Taskforce (March 2010)
9.8* 10.3+ 10.4+ Marketing Ireland as Excellent Location For Starting Innovative Export Orientated Companies: L aunch a marketing campaign, initially on a pilot basis, to promote Ireland as an excellent location for starting innovative export-orientated companies. ( Low Cost Immediate) ore Broadcast Time (PSB) in Innovation, Entrepreneurship and The Smart Economy: M P ublic service broadcasting should be encouraged to devote broadcast times to topics of national strategic interest in innovation, entrepreneurship and t he smart economy. (Cost Neutral Immediate) ncreased Public Awareness of IP Issues: I I ntroduce a national initiative to increase the public awareness of IP issues (e.g. through the BT Young Scientist exhibition). (Low Cost Short Term)
10.4.1+ romotion and Education Programme From Irish Patent Office: P Introduce a programme from the Irish Patent Office to promote and educate both industry and students about all aspects of IP (similar to that run by the UK IP Office). (Low Cost Medium Term) 10.6+ 12.1* E stablish a National One Stop Shop Website: E stablish a national one stop shop website providing information on all research expertise, innovation and enterprise and other relevant supports a vailable to business: (Low Cost Medium Term) D evelop and Market Ireland as an International Innovation Services Centre: D evelop and market Ireland as an International Innovation Services Centre offering a location for global IP management, licensing and IP trading s ervices. (Low Cost Short Term)
12.2.1+ osition Ireland as Attractive Forum for International IP Disputes Resolution: P S upport initiatives to position Ireland as an attractive forum for the resolution of international IP disputes through mediation and other forms of d ispute resolution. (Low Cost Long Term) 12.3+ DA International Marketing Campaign to Attract International Entrepreneurs: I B uild on the existing IDA International marketing campaign with a view to attracting international entrepreneurs to Ireland, increasing R&D intensive investment by MNCs and raising the level of awareness of the benefits of innovation to the Irish public. (Low Cost Medium Term)
12.3.1+ Single Brand Identity Based on the Concept of Innovation: A A single national brand identity based on the concept of innovation should be consistently used in key international media, trade shows and network e vents by all relevant agencies. (Cost Neutral Medium Term) 12.4* 12.6+ Ireland as a Centre of Excellence for Innovation (Positive Message Events Programme): A n organised programme of visits and other activities should be put in place whereby Ministers, Departments and State Agencies and other relevant s takeholders (for example industry associations) convey a consistent, positive message about Ireland as a centre of excellence for innovation. (Low C ost Immediate) trategy to Support Irelands Ambition to be International Innovation Hub with Diaspora: S The Strategy for engaging with the Diaspora following Global Economic Forum in Farmleigh should include specific objectives to support Irelands a mbition to be an international innovation hub. (Cost Neutral Short Term) * Key Recommendations + Supporting Recommendation
Source: Extract based on; Innovation Taskforce (March, 2010); Report of the Innovation Taskforce, Department of the Taoiseach, Government Buildings, Published 11 March 2010.
46
Appendix 3:
2010 Targets - Building Irelands Knowledge Economy: The Irish Action Plan for Increasing Research Development 2010 (July 2004)
Vision: Ireland by 2010 will be internationally renowned for the excellence of its research and be at the forefront in generating and using new knowledge for economic and social progress, within an innovation driven culture. 2010 Targets Business Expenditure on R&D should increase from 917M in 2001 or 0.9% GNP to 2.5 billion in 2010 or 1.7% of GNP: 2007/ 2008 Progress (To 2010 Objectives) Business Expenditure R&D: 2.5 billion in 2010 (1.7% of GNP): 2008 - BERD: 1,687M* 1.09% * Estimate 2008 - Forfs (2009); Minimum Scale R&D: No. indigenous companies - 1,050 in 2010 and No. foreign affiliates c ompanies 520 companies = 1570 Companies (2010) 2 007 - Indigenous and Foreign Companies: 628 Companies. CSO / Forfs (2009):
T he number of indigenous companies with minimum scale R&D (in excess of 100,000) activity should double, from 525 in 2001 to 1,050 in 2010: The number of foreign affiliates companies with minimum scale R&D activity (in excess of 100,000) activity should double, from 239 in 2001 to 520: The number of indigenous enterprises performing significant R&D (in excess of 2 million) should increase from 26 in 2001 to 100 by 2010: The number of foreign affiliates companies performing significant R&D (in excess of 2 million) should increase from 47 in 2001 to 150 by 2010: R &D performance in higher education and government sectors should increase from 422 million in 2001 or 0.4% GNP to 1.1 billion in 2010 o r 0.8% GNP:
Significant Scale R&D: No. indigenous enterprises - 100 by 2010 and No. foreign affiliates c ompanies - 150 by 2010 250 Companies (2010) = 2 007 - Indigenous and Foreign Companies: 164 Companies. CSO / Forfs (2009): R&D performance (H.E. & Gov.): 1.1 billion in 2010 or 0.8% GNP: 2008 - R&D (H.E. and Gov.) 913M 0.58% GNP (2008) CSO / Forfs (2009): Gross expenditure on R&D: hould increase to 2.5% of GNP by 2010: S 2008 - Gross R&D Expenditure: 2,600M 1.68% GNP (2008) CSO / Forfs (2009): Number of Researchers: umber of researchers (total employment) 9.3 per 1,000 in 2010: N 2 007 - 6.4 Researchers per 1000: Forfs (2009);
Gross expenditure on R&D should increase to 2.5% (3.6 Billion) of GNP by 010: 2010: 2
T he number of researchers should reach 9.3 per 1,000 of total e mployment by 2010, from 5.1 per 1,000 in 2001:
Source: Extract based on; Knowledge Economy (2004) Building Irelands Knowledge Economy The Irish Action Plan for Increasing Research and Development to 2010, Forfs July 2004.
47
Appendix 4:
Selected Key Actions and Outcomes SSTI 2006: Strategy for Science, Technology and Innovation 2006 2013 (June 2006)
Vision: Ireland by 2013 will be internationally renowned for the excellence of its research, and will be to the forefront in generating and using new knowledge for economic and social progress, within an innovation driven culture.
Strategy for STI 2006 2013 Selected Key Actions and Required Outcomes: World Class Research: - Target: umber of new doctorates in Science, Engineering and Technology N e arned annually to nearly double from 543 in 2005 to 997 annually in 2013; N umber of new doctorates in Humanities and Social Sciences to increase f rom 187 in 2005 to 315 annually in 2013; R&D Performance and Targets to 2013: B usiness Investment in R&D (BERD) (Constant Prices) from 1,076M in 2003 to 2.5 billion in 2013: (Split Foreign Owned Companies 1.675 Bn and Indigenous Owned Companies 0.825Bn)
2007/ 2008 Progress (To 2013 Objectives) Progress to Date:
Required annual output of 1,300 PhDs per year, while maintaining quality. 976 in 2006 (from 808 in 2005). First Report on the Strategy for Science, Technology and Innovation (December 2008)
Progress Against 2013 Targets: Business Expenditure R&D: 2.5 billion By 2013: GNP Percentage Target Dropped 2008* BERD: 1,687M* 1.09% * Estimate 2008 - Forfs (2009); Minimum Scale R&D: No. indigenous companies - 1,050 in 2013 and No. foreign affiliates c ompanies - 520 companies = 1570 Companies (2013) 2 007 Indigenous and Foreign Companies: 6 28 Companies. CSO / Forfs (2009):
T he number of indigenous companies with minimum scale R&D (in excess of 100,000) activity should double, from 462 in 2003 to 1,050 in 2013: T he number of foreign affiliates companies with minimum scale R&D activity (in excess of 100,000) activity should double, from 213 in 2003 t o 520 in 2013: T he number of indigenous enterprises performing significant R&D (in excess of 2 million) should increase from 21 in 2003 to 100 by 2013:
Significant Scale R&D: No. indigenous enterprises - 100 by 2013 and No. foreign affiliates c ompanies - 150 by 2013: = 250 Companies (2013) 2 007 Indigenous and Foreign Companies: 1 64 Companies. CSO / Forfs (2009):
he number of foreign affiliates companies performing significant R&D T (in excess of 2 million) should increase from 60 in 2001 to 150 by 2013:
Source: SSTI (2006); Extract based on; Strategy for Science, Technology and Innovation (2006 2013); Department of Enterprise Trade and Employment, June 2006.
48
Appendix 5:
Extract Recommendations - Ahead of the Curve: Irelands Place in the Global Economy Enterprise Strategy Group (July 2004)
1. Expertise in Markets: - Detailed Recommendations: Development of international marketing /sales expertise to bring enterprise in Ireland closer to customer needs. 1,000 Sales and Marketing Personnel: - Establish a five-year programme, to place, on a cost-sharing basis, 1,000 graduates and internationally experienced professionals in Irish firms to augment the stock of national sales and marketing talent. This initiative should be complementary to existing programmes. (EI and IDA Ireland). Target Sales and Marketing and European Headquarters Projects: - IDA Ireland should target sales and marketing and European headquarters projects from both established multinationals and smaller companies at an early stage of internationalisation. (IDA Ireland). Practical Capabilities = Sales and Marketing: - Incorporate work placements and modules that focus on the practical capabilities required by firms into marketing and sales curricula. These should also be available to students of technical disciplines. (Higher Education Institutions). 2. E xpertise in Technology Product and Service Development: - Headline Recommendations: D evelopment of world-class capability in focused areas of technology and in innovation techniques, to drive the development of sophisticated, high-value products and services. n R&D and Innovation Co-ordination Structure: A ncrease Applied R&D Funding: Funding SFI HEA Research Programmes (Ex. NDP): I latform to prioritise State expenditure on Research and Enterprise Development: P ational Research and Innovation Strategy Statement: N 3. Attractive Taxation Regime: - Headline Recommendations: An ongoing commitment to our competitive tax regime, promoting enterprise and driving business growth. ommitment to 12.5% Corporation Tax (On-going): C AT on B2C Based on Customer Location:. V &D Tax Credit: R arbon Tax: C 4. W orld-class Skills, Education and Training: - Headline Recommendations: Building on Irelands historic commitment to education with a renewed focus on excellence and responsiveness to deliver skills appropriate to the needs of enterprise. One Step Up Initiative: uantity and Quality of Graduates and Post-graduates: Q nterprise Sector role with Higher Education Bodies: E unding Framework Competitive Element: F nnovation Fund Higher Education Institutions: I Increase Leaving Certificate completion Rate to 90% kills-Based Immigration Policy (Outside EU): S 5. E ffective, Agile Government: - Headline Recommendations: A single-minded national consensus on the enterprise agenda, driven from the highest level and across all of the Government, together with governance systems which enable swift decision-making and execution. nterprise-led Networks: E here should be an increased focus on FAS on training for those in the labour force: T ector Expertise in Enterprise Agencies: S abinet Enterprise Review Process: C ommon Chairperson of Agency Boards: C Source: Extract based on; Ahead Of The Curve (2004); Ahead of The Curve, Irelands Place in the Global Economy; Enterprise Strategy Group, Eoin ODriscoll (Chairman), July 2004.
49
Appendix 6:
Smart Economy Attributes - Building Irelands Smart Economy: A Framework for Sustainable Economic Renewal (December 2008)
Vision: To build a Smart Economy that exhibits economic security, high quality employment, strong environmental and social performance and secure energy supplies and is in the strongest possible position to benefit from the recovery in the global economy. Smart Economy Attributes: 1 H igh-value and rewarding jobs; A thriving e ntrepreneurial culture; Issues to Be Considered: We have talked of building an enterprise economy since Culleton (1992) and have not delivered it. Ireland has lost significant share of eurozone FDI market share (see Table 2, Page 27). 20% of IDA supported companies have a significant R&D mandate (IDA Annual Report 2009). It is not clear what unique attraction Ireland can provide? Again unclear what the attraction would be to come to Ireland. For example, how do we compete directly with Finland who are executing a similar strategy and have a much more advanced Innovation system. In terms of third level education attainment we perform strongly. In terms of GDP spend on Education / performance in Science and Mathematics at second level and numbers choosing SET at third level we seriously lag competitors. Currently off the pace in Broadband. Competitor countries are now moving to much faster speeds as Ireland continues to struggle. Current public service requires reform and restructure. The trend maybe toward more rules based regulation in Finance, business and technology and away from light touch regulation. Ireland remains relatively high cost. Not clear what our proposition is to create low tech jobs to replace those lost in Construction. Reform of the tax system, widening of the tax base, a move away from transaction taxes and the imposition of carbon taxes. Currently achieving 8% of electricity generation from renewable vs EU target of 20%. Government policy could require a 30bn (Energy Policy, 2009) investment to achieve 40% renewables target by 2020.
2. destination of choice for foreign capital and R&D- A i ntensive FDI; 3. magnet for top international talent: A 4. n attractive incubation environment for European A e ntrepreneurs;
5. pool of highly educated workers; A
6. igh-quality infrastructure with widespread adoption H o f modern technology; 7. modern responsive public service / empowered A citizens; 8. Effective and Efficient / Light and adaptive R egulation;
9. ow costs of doing business and minimal red tape; L
10. favourable tax environment for citizens and A usiness; b 11. An economy based on clean and efficient energy;
12. high quality living environment; widespread adoption of modern technology; A 13 n equitable society; A Consider the experience of Finland, where technology policy meant that employment levels did not return to pre-crisis levels (Ornstan 2006).
Smart Economy Agenda Action Areas: 1. ecuring the Enterprise Economy and Promoting Competitiveness. S 2. uilding The Ideas Economy Establishing the Innovation Island. B 3. nhancing the Environment and Securing Energy Supplies. E 4. nvesting in Critical Public Infrastructure. I 5. Efficient and Effective Public Services and Smart Regulation. Source: Extract based on; Smart Economy (2008), Building Irelands Smart Economy, A Framework for Sustainable Economic Renewal; Government of Ireland, Department of the Taoiseach; December 2008.
50
Appendix 7:

SFI Strategic Objectives and 2013 Targets: Powering The Smart Economy - The Science Foundation Ireland Strategy 2009 to 2013 (March 2009)
SFI Strategic Objectives: 1. Human Capital: T o date approx. 300 SFI teams have been established i n Ireland. A large number of the PIs (Principal I nvestigators) leading these teams have been a ttracted from overseas (103). Challenge for SFI is to retain and to increase their number as defined b y SSTI, in order to achieve the scale required to d eliver value to the Irish Economy SFI Targets to 2013: Human Capital: - Targets to 2013: - 40 World Class PI-led research teams; 4 - ,000 PhD graduates in total, at an on-going average rate of approx. 400 per year; 2 - ,000 post-doctoral research training places; 1 - A core capability that will significantly assist the retention and attraction of big-tech FDI, and a significant increase in indigenous innovations;
2. uality Output: Q E nsure the SFI-funded research teams continue to p roduce the highest quality output, as this is the best external endorsement of the scientific value obtained f rom research investment. 3. lobal Reputation: G I ncrease Irelands global reputation as a location of excellent scientific research and as a source of h uman and knowledge capital, such that businesses c reating next-generation products and services are a ttracted to and retained in Ireland. 4.
Q uality Output: - Targets to 2013: - Contribute significantly to an increase in the number of scientific publications by Irish r esearchers from approximately 800 per million of population to over 1,200; - chieve a Top 10 placement for Ireland in the league of international citation performers and A citation impact in the fields that it funds (from its current overall position of 17th place); G lobal Reputation: - Targets to 2013: - ttract to Ireland a premium cohort of world-class researchers. That have secured, A i nternationally recognised awards; - ecruit 50 new overseas PIs, to supplement the existing 100 overseas PIs recruited up to 2008; R - Assist IDA Ireland. in retaining in and attracting high-tech foreign direct investment; - Conduct five Tier 1 international conferences .in Ireland; - ystematically scan...for developments ... which may require a change of emphasis in SFI...; S Knowledge Transfer: - Targets to 2013: - Approximately 1,000 invention disclosures and 500 patent filings arising from SFI- funded research; - 0 revenue-generating licenses and 30 high-potential start-ups from its research groups; 4 - ncreasing the number of distinct multinational corporations and small to medium - sized I e nterprises engaging in formal collaborations with SFI research groups to over 150;
Knowledge Transfer: P rovide quality inputs to the technology transfer/ t ranslational industries in Ireland, and grow p artnerships that facilitate the expansion of t he national RDI footprint, to ensure that research is optimally exploited for the benefit of Irish society.
Source: Extract based on; SFI (2009); Powering The Smart Economy, The Science Foundation Ireland Strategy 2009-2013; Science Foundation Ireland, March 2009.
51
Appendix 8:
Irelands Innovation Performance 2009: European Innovation Scoreboard 2009 (March 2010):
Indicator: Summary Innovation Performance EU Member States Innovation Performance (Summary Innovation Index) (Includes EU 27 and Switzerland) Innovation Performance (Per Dimension) H 1 uman Resources: M easures the availability of high-skilled and educated people. 2. inance and Support: F Measures the availability of finance for innovation p rojects and the support of government for i nnovation activities. 3. Firm Investments: Covers a range of different investment firms make in o rder to generate innovations. 4. Linkages and Entrepreneurship: C aptures entrepreneurial efforts and collaboration efforts among innovating firms and also with the p ublic sector. 5. hroughputs: T C aptures the Intellectual Property Rights (IPR) g enerated as a throughput in the innovation process and Technology Balance of Payments flows. 6 . nnovators: I Measures the number of firms that have introduced i nnovations onto the market or within their o rganization, covering technological and non- t echnological innovations. 7 . conomic Effects: E C aptures the economic success of innovation in e mployment exports and sales due to innovation ctivities. a 2009 Ranking: - (EU 27 States)
Ireland 9th (EU Average 14th Place) Ireland 10th (Cohort Average 15th Place)
2009 Ranking: (EU 27 States Plus Switzerland) - Above Average Performance: th Place (Cohort Average - 16th Place) 6 - Below Average Performance: 6th Place (Cohort Average - 14th Place) 1
- Below Average Performance: 5th Place (Cohort Average - 12th Place) 2
- Above Average Performance: 3th Place (Cohort Average - 18th Place) 1
- Below Average Performance: 2th Place (Cohort Average - 9th Place) 1
- Above Average Performance: 2th Place (Cohort Average - 17th Place) 1
- Above Average Performance: th Place (Cohort Average - 7th Place) 5
Source: Extract based on; EIS (2009) European Innovation Scoreboard 2009, March 2010.
52
Appendix 9:
A Snapshot of Entrepreneurship: Global Entrepreneurship Monitor 2008:
Ireland GEM Rankings Versus Top Five Ranked Countries within The Innovation-Driven Economies (May 2009)
Measures: Percentage of Population: Ireland 2008 (2007) Ireland 5 Year High Aspiration Start Business in Next 3 Years 10.0% (11.2%) 2005 12.6% Nascent Entrepreneur Actively Planning a New Business 3.3% (4.2%) 2005 5.7% New Firm Entrepreneur Started Firm paying wages last 3.5 Years 4.3% (4.2%) 2005 4.7% Established Entrepreneur Own Manages Business started in 2004 or earlier 9.0% (9.0%) 2008 9.0% Total Early Stage Entrepreneur Total of Nascent and New Firm. 7.6% (8.2%) 2005 9.8% Exits Closed or discontinued a Business in last 12 Months 1.8% (1.9%) 2005 2.3%
Source: GEM, Ireland (2008); Entrepreneurship in Ireland, GEM Ireland 2008; The Annual Report for Ireland, May 2009.
Performance Rankings of the 18 Countries which make up Innovation Driven Group (2008) Based on Prevalence Rates:
Innovation Driven Cohort 2008 Rankings: 1st 2nd 3rd 4th 5th Ireland 2008 Rank Nascent Entrepreneur 1. Iceland 2. United States 3. Greece 4. Norway 5. Slovenia New Firm Entrepreneur 1.Republic of Korea 2. United States 3. Greece Established Entrepreneur 1.Republic of Korea 2. Greece 3. Finland 4. Spain Total Early Stage Entrepreneur 1. United States 2.Republic of Korea 3. Iceland 4. Greece 5. Norway Exits
1. United States
2. Ireland
3. Iceland 3. Norway 5. Israel
4. Ireland
5. Norway
5. Ireland
8. Ireland
6. Ireland
Source: GEM, Global (2008); Global Entrepreneurship Monitor, 2008 Executive Report, January 2009.
53
Appendix 10:
Ireland Compared with Denmark, Finland and Norway Global Entrepreneurship Monitor 2008 - (January 2009):
Measures: Aspiration Nascent Entrepreneur New Firm Entrepreneur Established Entrepreneur Total Early Stage Entrepreneur Exits
Ireland 2008 (2007)
10.0% (11.2%)
3.3% (4.2%)
4.3% (4.2%)
9.0% (9.0%)
7.6% (8.2%)
1.8% (1.9%)
Measures:
Aspiration
Nascent Entrepreneur 2.3%
New Firm Entrepreneur 2.3%
Established Entrepreneur 4.4%
Total Early Stage Entrepreneur 4.4%
Exits
Denmark 2008
7.4%
1.1%
Finland 2008
7.9%
4.1%
3.3%
9.2%
7.3%
1.1%
Norway 2008
10.7%
5.0%
4.0%
7.7%
8.7%
2.7%
International Orientation - Ireland Compared with Denmark, Finland and Norway: Global Entrepreneurship Monitor 2008 - (January 2009).
Country % of Orientation
Ireland 65%
Denmark 33%
Finland 46%
Norway 76%
Source: GEM, Global (2008); Global Entrepreneurship Monitor, 2008 Executive Report; January 2009.
54
Appendix 11:
Marketing Inputs into the Innovation Process: Bettley, (2007):
Phase of Innovation Process: External Inputs: Internal Inputs: i.e.Organisational Characteristics: Creative Design Phase: Implementation Phase: Post Launch: Marketing Input: M arketing Research covering markets, competitors, potential partners, associated macro- e nvironmental factors etc.. M arketing capabilities of the organisation as a critical resource. S tructures, culture and working practices that facilitate intergration of marketing with other f unctions. M arket and competitive strategies e.g. branding, patent protection. M arket orientation of strategies and culture. Knowledge of specific market segments and their needs/wants to form the core of the objectives and constraints of the innovation. Sources include task specific market research a nd ongoing relationships with existing customers. M arketing mix decisions concerning: product specification, including the service component; - ricing strategy; p - romotional mix; p - ow the product will be made available to customers, including service delivery h issues; - the timing of mix changes; P roduct evaluation / test marketing; P roduct launch: promotion campaign design and execution; O ngoing sales activities; E valuation of customer perceptions of product quality (including service);
Source: Adapted from Table 1: Bettley (2007); Marketing for Innovation: implication of the innovation process model for the marketing curriculum of technology management programmes.
Appendix 12:
Irelands Performance in Reading, Science and Mathematics - 2006 (OECD / PISA, 2009):
Compared with Denmark, Finland, Norway, Sweden and UK
Rankings
Top Performers in Science
Top Performers in Reading
Top Performers in Mathematics
Ireland
Denmark Finland Norway Sweden United Kingdom OECD Average
19th
25th 1st 28th 25th 8th Average 21st Ranked
6th
23rd 2nd 20th 9th 16th Average 18th Ranked
30th
17th 4th 28th 21st 24th Average 19th Ranked
Source: (OECD / PISA, 2009); Top of the Class; High Performers in Science in PISA 2006; Programme for International Student Assessment.
55
Appendix 13:
11 Key Forces of Change Impacting on Ireland to 2025: Sharing Our Future; Ireland 2025 (July 2009):
Strategic Question: What decisions should be made to ensure a sustainable, competitive enterprise sector in 2025 and 2040?
11 Key Forces of Change Impacting on Ireland to 2025 1. Demographics; Increasing global population - Population ageing - Irelands age structure higher dependency ratios - Challenges include increased age related e xpenditure, decline in labour force growth, spatial dimensions. 2. Technology, Innovation, Entrepreneurship; Innovation widely defined as a central driver for wealth creation - Pace and scope of technology Change. technology absorption is key - Importance of open collaboration - Pervasive technologies... bio and nanotech, ICTs - Enterprise response. 3. ducation / Skills; E Global pressures on education system... - Education as a key strength for Ireland - Further reform..To promote economic and social progress... Flexibility within the education system 4. ocial Values / Quality of Life; S Q uality of life as a major driver of change - Quality of life in Ireland while high is coming under stress - Healthcare provision as an important aspect of well-being . 5. Globalisation; A n interconnected global economy shaped by structural change - Importance of the developing economies - Rising population and increasing consumption patterns - Long-term outlook for the Irish economy looks positive - Competition for FDI new opportunities in high growth, high productivity areas I reland as a gateway and cultural link. 6. nfrastructure; I World class infrastructure is necessary.....requiring substantial investment - Vision, coordination and planning - Prioritisation of transport, energy, b roadband, waste, water investments. 7. Governance/ Regulation; Increasing role of international organisations - Need for effective governance at global and national levels .. 8. Energy Supply / Security; I ncreasing global energy demand with increased energy prices - Ireland is highly fossil fuel dependent and import dependent - Need to diversify fuel mix a nd sustain cost competitiveness. 9. limate Change; C One of the biggest global challenges .. Demanding targets for Ireland - Significant impacts of climate change include access to water, food security, flooding . Role of technology and innovation. Many business opportunities will also arise. 10. atural Resources; N Prudent use of natural resources Organic farming on the rise . More demanding consumers - The ocean as an untapped resource - Mining for zinc a nd lead will become more costly Increasing public interest in biodiversity and nature. 11. Conflict: Increasing global prosperity with conflict and division - Cultural issues and religious belief will grow in influence - Ireland as a leader for peace and stability. Source: Extract based on; Forfs 2025 (2009); Sharing Our Future; Ireland 2025, Strategic Policy Requirements for Economic Development, July 2009.
56
Appendix 14:
Strategic Policy Requirements of Selected Forces of Change: Sharing Our Future; Ireland 2025 (July 2009):
Technology, Innovation, Entrepreneurship; Innovation widely defined as a central driver for wealth creation - Pace and scope of technology range .technology absorption is key - Importance of open collaboration - Pervasive technologies... bio and nanotech, ICTs Enterprise response. Strategic Policy Requirements - Innovation and Research: efresh the national strategy for building an innovation-driven economy /enterprise base. R ptimise research excellence and associated economic impacts to ensure effective use of investment funds. O evelop the openness of the enterprise sector and the research base to mutual collaboration. D ncorporate food security and the vulnerability of supply in long-term planning. I
Education / Skills; Global pressures on education system... - Education as a key strength for Ireland - Further reform ..To promote economic and social progress... - Flexibility within the education system S trategic Policy Requirements - Education and Skills: evelop an integrated approach to education and training policy and delivery. D aise education outcomes to the top deciles in O.E.C.D. countries. R Encourage the development of the softer skills essential for commerce and innovation, as identified in the National Skills Strategy. evelop strategies that support immigrants education and skill development needs, particularly language skills. D
Infrastructure; World class infrastructure is necessary.....requiring substantial investment - Vision, coordination and planning. - Prioritisation of transport, energy, broadband, waste, water investments. Strategic Policy Requirements - Information and Communications Technologies: nsure universal access to high speed, reliable, seamless, wireless and hardwired communication capacity to foster innovation and productivity. E Identify the most efficient / innovative funding systems to encourage wide-scale access ICTs. rovide clear and effective regulation of electronic communications to drive innovation and competitiveness and deliver on consumer interests. P Ensure the integrity of ICT systems to maximise consumer ICT confidence and use.
Energy Supply / Security; Increasing global energy demand with increased energy prices - Ireland is highly fossil fuel dependent and import dependent - Need to diversify fuel mix and sustain cost competitiveness. S trategic Policy Requirements - Energy Supply and Security; evelop an overarching national strategy to prepare for the challenge of peak oil. D Develop a range of energy options ensure diversity and security of supply and sustain national competitiveness. Develop a flexible, dynamic and efficient supply-distribution grid system. Develop effective measures to achieve energy efficiency /conservation, crucial elements in ensuring a secure energy supply / reduced GHG emissions.
Climate Change; One of the biggest global challenges .. - Demanding targets for Ireland - Significant impacts of climate change include access to water, food security, flooding . - Role of technology and innovation. - Many business opportunities will also arise. S trategic Policy Requirements - Environmental and Climate Change: evelop a long-term vision and action plan to reduce Irelands GHG emissions, to mitigate the effects of climate change and sustain national D c ompetitiveness. limate proof land-use and spatial strategies, as well as infrastructure investment plans and critical infrastructures. C aximise the potential for indigenous and FDI opportunities in environmental and energy goods and services. M
Source: Extract based on; Forfs 2025 (2009); Sharing Our Future; Ireland 2025, Strategic Policy Requirements for Economic Development, July 2009.
57

MII Innovation Report

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

MII Innovation Report

Hochgeladen von

Copyright:

Verfügbare Formate

A Marketing Institute of I re l a n d C o m m e n t a r y.

Commentary Structure and Additional Key Messages

Innovation Ireland - The Report of the Innovation Taskforce (March 2010)

Irelands STI Strategy Development and Implementation (2004-2010)

Irelands Innovation and Enterprise Performance

The Strategic Role of Marketing

Obstacles to STI Success in Ireland

Growth in Ireland to 2020 and Beyond

Recommendations to Support Delivery of Irelands STI Agenda

Innovation Ireland, Report of the Innovation Taskforce (March 2010):

Identifying costs and specific timeframes for implementation:

Benchmarking Irelands STI performance against the best:

1. Innovation Ireland, Report of the Innovation Taskforce (March 2010):

Further developing the change recommendations for secondlevel education:

Implementing rigorous value for money scrutiny of our STI system:

1 . Innovation Ireland, Report of the Innovation Taskforce (March 2010):

1. Innovation Ireland, Report of the Innovation Taskforce (March 2010):

Irelands STI Strategy Development and Implementation (2004 - 2010):

Knowledge Economy (2004):

2. Irelands STI Strategy Development and Implementation (2004 - 2010):

Ahead of the Curve - Enterprise Strategy Group (2004)

2. Irelands STI Strategy Development and Implementation (2004 - 2010):

Building Irelands Smart Economy - The Department of the Taoiseach (2008)

2. Irelands STI Strategy Development and Implementation (2004 - 2010):

2. Irelands STI Strategy Development and Implementation (2004 - 2010):

Science Foundation Ireland Strategy 2009-2013 (SFI, 2009):

2. Irelands STI Strategy Development and Implementation (2004 - 2010):

2. Irelands STI Strategy Development and Implementation (2004 - 2010):

2. Irelands STI Strategy Development and Implementation (2004 - 2010):

Irelands Innovation and Enterprise Performance:

OECD - Measures of R&D and Innovation Performance:

7.6 per 000 (2006)

Ireland 2008 Versus Ranking: EU 15 12th Plus of 16 Norway

3% GDP Spend on R&D: - Is this a realistic objective for Ireland?

3. Irelands Innovation and Enterprise Performance:

European Innovation Scoreboard (EIS) 2009:

Irelands Innovation Performance:

3. Irelands Innovation and Enterprise Performance:

Global Entrepreneurship Monitor (GEM) An Ireland and Global Perspective

3. Irelands Innovation and Enterprise Performance:

A Review of the Finnish Innovation System:

3. Irelands Innovation and Enterprise Performance:

3. Irelands Innovation and Enterprise Performance:

Israels Science Technology and Innovation Success Lessons for Ireland:

3. Irelands Innovation and Enterprise Performance:

3. Irelands Innovation and Enterprise Performance:

The Strategic Role of Marketing:

4. The Strategic Role of Marketing:

Marketing Plays a Pivotal Role in each Phase of the Innovation Process:

4. The Strategic Role of Marketing:

Marketings Role in Developing a Real Basis for Competitive Advantage

4. The Strategic Role of Marketing:

Obstacles to STI Success in Ireland:

5. Obstacles to STI Success in Ireland:

FDI: - No longer a significant source of net new jobs for Ireland

5. Obstacles to STI Success in Ireland:

5. Obstacles to STI Success in Ireland:

Education Attainment and Spending:

5. Obstacles to STI Success in Ireland:

5. Obstacles to STI Success in Ireland:

Growth in Ireland to 2020 and Beyond:

11 Key Forces of Change Impacting Ireland to 2025:

The Irish Economy and International Trends: