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Ireland one of the leading knowledge economies

We have a thriving tech scene, so unsurprising that the information and communication technologies sector is the pace setter

It was still the peak of the Celtic Tiger when the audacious ambition for Ireland to become a “knowledge economy” was first whispered by policymakers. Fast forward almost two decades and Ireland has become one of the leading RDI (research development innovation) locations in the world.

Today’s Government continues to pump large amounts of money into establishing Ireland as a “global innovation leader”. Yet this is a competitive field, and commentators say Ireland cannot rest on its laurels if we are to become an RDI destination of choice. Indeed, Ireland’s desire to be viewed as a global innovation leader must be matched by ongoing investment; funding here has continued to lag behind EU and OECD averages.

Yet R&D has played a major role in the growth of the Irish economy in recent years and the Government has shown continued support for investment in this space, says James McMahon, who leads the tax incentives team at Grant Thornton.

“Most notably, this is evidenced by the R&D expenditure by the Irish Government reaching almost €867 million in 2020 and this is expected to reach €949.1 million,” he says.


Unsurprisingly, a wide range of sectors is capitalising on that investment to push the boundaries of science and technology, as academia and industry work together to provide solutions to society’s pressing problems. Obvious examples are climate action and digital transformation, both of which present key challenges but also opportunities into the future, says Damien Flanagan, partner, R&D incentives practice at KPMG Ireland.

“Innovation within these areas must be incentivised and encouraged,” he adds.

Flanagan says this is evidenced by increased focus on these areas within Horizon Europe and the recently launched Impact 2030 research and innovation strategy.

Ireland has been steadily earning its reputation as a knowledge economy and as a result, it is increasingly a hub for R&D activity by large multinationals, says John Burke, tax partner at Mazars.

“Ireland is home to a thriving tech scene, so it is unsurprising that the information and communication technologies sector is the pacesetter in this regard,” he says. “Breakthroughs are taking place in artificial intelligence, particularly machine learning, and big data, among others.”

Ireland has long had a thriving agri-food and drink sector, adds Burke. “Now technology is increasingly being used to bring about the next era of innovations.”

John Shaw, country head for Legato Health Technologies, says Ireland is “very well positioned” to further enhance its innovation reputation, and he praises the approach that policymakers have taken in their efforts to marry industry and academia.

“We have seen a very good strategy where efforts from the IDA, Enterprise Ireland and SFI [Science Foundation Ireland] have aligned very well with businesses and their innovation strategies,” he says, ‘We have also seen the creation of national research centres such as IMR and CEDAR, two examples that have been particularly effective in bringing different stakeholders together. We have this virtual helix of public, private, and academic involvement so the State is looking at very progressive ideas to encourage innovation.”

But Shaw warns that it isn’t “just about grants and subsidies”, saying culture is critical. “It is often more important to create that community and the forum where collaboration can happen.”

According to Ken Hardy, head of R&D Incentives Practice at KPMG Ireland, companies across the life sciences sector, in both pharma and medical devices, are investing heavily in innovative approaches to sustainability. “We have seen real-world examples where pharma companies are moving to synthesis pathways that produce less waste and assessing alternative suppliers of materials to reduce supply chain carbon outlay,” he says. “There has been a real step change in the life sciences sector recently and we are seeing major shifts in the translation of what would have been niche technologies only a few years ago to mainstream manufacturing. This is most evident in the application of advanced digitisation, automation and AI across the pharma and biopharma sectors.”

Several innovative Irish businesses, such as Inflazome and LetsGetChecked, have attracted international investment over the last few years, while the start-up space and university incubators are constantly evolving and growing, adds Brian Egan, head of Life Sciences at KPMG Ireland.

“From an inward investment perspective, multinationals view Ireland as a compelling venue for several reasons. Many international players have a long-standing presence operating here, and there are numerous examples of further investment being committed to broaden the activities being undertaken here and to move further up the value chain. Medtronic’s recent announcement of 200 new R&D-related roles in Galway is a great example of investment of this nature”.

Ireland’s success to date and our rich potential in RDI is underpinned by our strong workforce, access to key markets and our taxation system. That’s according to Gerry Vahey, tax partner at Mazars. “Access to key markets is the most stable factor, but Ireland’s RDI workforce must be nurtured by providing continued investment in incorporating technology in education, from an early age,” he says, noting that computer science and coding are now secondary school subjects.

Yet there are similar-sized countries out-performing Ireland in terms of domestic innovation, such as Denmark and Sweden. “A cornerstone of policy in both countries is high levels of collaboration within, and between, industry and academia,” Vahey says.

Ireland’s innovation ecosystem is powered by developing robust interdisciplinary research centres that have a critical link between academia and industry, but more can be done in this regard, says KPMG’s Flanagan. “The SFI research centres dotted around the country are a great example. However, to take the next step we may want to focus on creating research centres that target the higher ‘technology readiness level’ scale projects and lean towards the industry end of the spectrum. This creates, retains, and attracts talented scientists and engineers, the most important lever to innovation.”

Ireland’s R&D ranking

Ireland’s rise through the global scientific rankings for the quality of our research has been nothing short of meteoric, from 48th in the world 13 years to a spot in the top 12 now.

Although it might seem dramatic, this achievement has been a slow burn, says Ciarán Seoighe, Science Foundation Ireland’s deputy director general. Keeping Ireland in the top tier will require renewed impetus, he adds.

The Thomson Reuters and Clarivate InCites ranking is based on the quality of research and not the quantity, he explains, factoring in how many times each paper is cited by others over a 10-year period. “It’s not something that you can do this week and see a result next week,” he says.

According to Seoighe, Ireland’s current global standing and reputation as a global innovation leader can be attributed to the ongoing financial investment in this area by successive Governments during that time period. However, he cautions against resting on our laurels.

“If we were to stay still, other countries will pull ahead so it gets harder to keep up with that global standard. The higher up you get, everyone is jostling to make it into the top 10.”

Another factor in our success is Ireland’s strong focus on excellence in research; Seioghe notes that SFI will only fund research projects that are deemed excellent by independent, international peer review experts. “We can see that SFI-funded papers are typically cited much more widely than non-SFI-funded papers,” he says.

The third factor he believes has played a key role is that of collaboration, an advantage small countries can leverage for success by virtue of necessity. “We see researchers collaborating with industry, producing papers with multiple authors, bringing different disciplines together. As a small interconnected country that does give us a bump in terms of our ability to move up those rankings.”

Impact 2030, Ireland’s latest research and innovation strategy, was launched earlier this year and Seioghe says it clearly illustrates the ambition to keep Ireland on the world stage as a “research and innovation powerhouse”.

“We have very productive researchers who are very highly cited and highly regarded which is a great starting point to continue to rise up the rankings but we have to recognise that every other country wants to get up there too.”

Danielle Barron

Danielle Barron is a contributor to The Irish Times