GOVERNMENT POLICY:THE INNOVATION Taskforce has urged State agencies and education bodies to jointly market and brand Ireland "as a leading innovation location and destination of choice" for overseas investors.
It has also called for a special 5 per cent rate of tax to apply from profits derived from “innovative activities” carried out in Ireland and other European countries.
It said the current 12.5 per cent tax rate here was not “competitive enough” for intellectual property companies and cited the Netherlands, Belgium, Luxembourg and the UK as countries that have reduced their tax rates in this area.
The taskforce has also called for greater investment and priority to be given to broadband infrastructure and “wet laboratory space” for life sciences.
In addition, the group has recommended that Ireland’s bankruptcy legislation be updated so as to avoid “any sense of stigma” attaching to a failed business that operated appropriately and within the law.
In relation to broadband infrastructure, the draft report shows that the taskforce found that investment by operators in upgrading local access networks was “currently disappointing”.
“To promote greater investment, regulation may need to allow for higher rates of return,” the report states.
“Potential also exists to use regulation to support co-investment where the high cost of civil construction works is shared among a number of operators but each operates its own network and defines its own services and prices.”
The taskforce said the impact on competitors and retail prices would need to be “assessed carefully”.
This finding is likely to be backed by Eircom and its new owners, Singapore-based STT.
Eircom is facing a large bill to upgrade its infrastructure for next-generation technologies and has said that consideration should be given to co-investment by various operators in infrastructure here rather than each company seeking to raise substantial funds to put into separate networks.
The taskforce said the Government should ensure that the provision of broadband infrastructure is “intrinsic” in all State investment plans, including those of local authorities.
Costs should be reduced for providing telecoms and broadband services by reviewing planning rules, and developing “consistent charges and processes across local authorities”.
It said a nationwide rollout of next generation services for bandwidth up to and surpassing 1Gbit/sec should be “prioritised”.
On laboratory facilities, it said there is currently a shortage of key laboratory space here for “spin-out and other companies” to develop and exploit the hundreds of millions being invested by the State every year in research projects.
It has recommended at least one wet laboratory facility “of scale” be made available for post-incubation life-science start ups, and a space be established for microelectronics start-ups.
On bankruptcy, it has recommended that legislation be modernised. While not facilitating “reckless behaviour” or “inappropriate risk-taking”, it should recognise entrepreneurship involves risk and firms can fail. “We need a shift in societal attitudes which acknowledges this reality,” it says.
