|Marc Mellotte from NUI Galway’s DERI demonstrates what DERI does during former CEO and chairman of Intel Dr Craig Barrett’s visit to NUI Galway for the ‘Education for Innovation’ address while NUI Galway deputy president, Professor Jim Ward and DERI CEO Michael Turley look on, Nov 16, 2010.|
A former Intel CEO said on Tuesday that Ireland's 3% of GDP (gross domestic product) research target
is no longer adequate. Is this wise or crazy advice in an economy where the
indigenous sector only accounts for about 10% of tradeable goods and services
Dr. Craig Barrett called for increased investment from the
Government into research and development projects. Speaking at the ‘Education
for Innovation’ seminar in NUI Galway, he said a sustained plan of funding
needed to be implemented if Ireland wishes to keep up with the world’s larger
and more business savvy nations.
“We cannot jerk around with the R&D policies of our Government and expect to
get good results,” said Dr. Barrett. “It needs to be a sustained
commitment. Why can’t we have a Silicon Valley in our own country? What is it
about society that makes that work? Universities are the key and they are
wonderful spots to create wonderful ideas. Smart people and smart ideas combined
in the right environment can create wealth.
”There has got to be a synergy between the public and private sectors. We have
got to see our private sectors involved with the universities. They have the
great ideas. We need to see them acting as mentors and partners in research. It
is vital,” he said.
The former Intel head is in Ireland this week in his role as chairman of the
Irish Technology Leadership Group, and was keynote speaker at an event at NUI
Galway. His address was followed by a discussion panel with John Ryan,
Macrovision; Professor Patrick Cunningham, Ireland’s Chief Scientific Advisor;
Tom McDermott, Georgia Tech Research Institute; Dr. Martina Newell-McGloughlin,
ITLG and University of California; and Professor Terry Smith, Vice President of
Research at NUI Galway.
Prior to his keynote address, Dr. Barrett met with representatives of NUI
Galway’s leading research institutes The Digital Enterprise Research Institute (DERI)
and the National Centre for Biomedical Engineering Science (NCBES) two major
research groups: REMEDI and MDr.G as well as University of Limerick’s Research
Centres, LERO and the Materials and Surface Science Institute (MSSI) plus
Georgia Tech Ireland.
The Digital Enterprise Research Institute (DERI) is claimed to be the world
leader in Semantic Web (Web 3.0) research. At Tuesday’s event DERI showcased a
portfolio of over 25 of the latest 'cutting edge' technologies emerging from the
institute. REMEDI is a leading biomedical research centre focusing on gene
therapy and stem cell research. REMEDI were joined by industry partner Ovagen
who are working with the institute to develop technologies for the production of
The Molecular Diagnostics Research Group (MDr.G) at NUI Galway has 20
years experience and an international track record of achievement in the
development and application of molecular diagnostics tests for microbial species
identification. The MDr.G were joined by research partners at Beckman Coulter
Ireland with whom they are developing molecular diagnostics for clinically
relevant bacterial and fungal pathogens.
Each year the ITLG leads a delegation of Silicon Valley technologists and
venture capitalists to Ireland to support high potential emerging technology
companies from the island of Ireland. This year’s events are held in partnership
with NUI Galway, University of Limerick and Shannon Development.
As part of his key note address, Dr. Barrett claimed that a 3% target of investment of
Ireland’s GDP into research and developmentis no longer a reasonable target
and that we “have now to compete with the rest of the world to get paid”.
“Look at Microsoft,” he said. “They have a research budget of
approximately $8bn per year. That is huge, and is more than all of Ireland
spends in R&D. Israel now invests 5% of its GDP into research and development.
And Israel has 140 new companies listed on the Nasdaq. Europe only has between
30 and 40. That is the future for Ireland and if we fail to pursue it with vigour, passion and resources, there will be no future for us because our lunch
will be eaten by somebody else. We must outsmart them and outthink them,”
said Dr. Barrett.
Finfacts comment: Dr. Craig Barrett is an accomplished engineer who
headed one of the world's most successful companies but his advice on Ireland
should be ignored.
Last month, Trintech, the last of the high hopes of the 1990s home-grown
Irish high-tech sector, was acquired by an American private equity group; Iona
Technologies was acquired by a US software of more recent vintage in 2008; this
year, 2 of the successful commercial spin-outs from university research were
acquired by US firms.
A company's spending on research is important but as we illustrate in our
related story today, Microsoft and Nokia spend much more than Apple on research
but Steve Job's instinct for consumer tastes has propelled his company to be the
most valuable tech company in the world. The data on corporate spending show
that spending doesn't correlate with success and
there is no statistically significant relationship between financial performance
and the amount spent on innovation.
Global Innovation 2010: Research spending by top 1,000 companies fell in 2009;
Apple gets bigger bang for buck
The Irish economy's tradeable goods and service sectors are overwhelmingly
dominated by foreign firms -- mainly American - - but this fact can
be forgotten by outsiders and conveniently ignored by locals.
Forfás, the State policy advisory agency issued
a report on Tuesday which says that the total research
investment across all sectors of the economy climbed to an estimated €2.6bn in
2008, which is equal to 1.43 % of GDP. In 2008 the share of gross R&D financed by the
public sector increased marginally to 34.5%, while the percentage of gross R&D
financed by industry decreased to 63.2%.
State funding for basic research lies in the range of 37% - 49% and applied
research in the range 51% - 63%. State funding for basic research within the
Higher Education Institutions lies in the range 50% - 68% and for applied
research in the range 32% - 50%.
Corporate spending is dominated by the foreign-dominated chemical and
Sweden and Finland spend about 3.5% on R&D but these countries have big
indigenous sectors with world class companies.
The UK spends less than 2%.
Craig Barrett on Monday said in Dublin that we should focus investment on
indigenous startup firms rather than concentrating in attracting investment from
Barrett said Ireland now faced “incredible competition” to win foreign
direct investment and that advantages such as our corporation tax and a
“decent” education system were being eroded by the efforts of more dynamic
We have limited influence on multinationals regarding location of research
and diverting even greater scarce resources now to research and startups
would be a sure way to waste public money.
have highlighted elsewhere that the high tech sector in Ireland will never
become the main engine of growth.
Silicon Valley cannot be replicated in Ireland -- many of the boosters
for more spending say little about the market for the output of firms. It often
depends on public sector demand.
The number of Israeli companies on the US Nasdaq stock exchange is about 70
not 140 as Craig Barrett cited.
Israel has a high research spending ratio and built its high tech sector from
the experience with its significant defence research operations.
The Yozma (Initiative in Hebrew), public program was a State fund of
funds launched in 1993 to promote venture capital funding with investments from
In the early 1990's, Israel had highly trained graduates in both its defence
forces and the defence industries. At that time, in the aftermath of the
collapse of the Soviet Union, and influx of close to one million people,
Israel's overall population increased by 20%. Nearly 40% of these immigrants
held academic degrees, many of whom were scientists, engineers and specialised
A thriving independent local VC industry, which began as growth of the US
high-tech sector was accelerating, has been established comprising close to 80
VC funds with the total capital under management in excess of $10bn.
Of course an impressive education system like Finland's is an excellent
goal to aim for as is the success of Irish tech firms that are not sold to US
firms before they have potential to provide value-added for the Irish economy.
However, we should not fall for a public welfare system for the select
few with performance and results remaining a fog, while tens of thousands face
bleak years on the dole.
The job potential estimates in the Innovation Taskforce report were a joke;
clued-in political leaders should expect better.
Glen Dimplex chief executive Seán O’Driscoll said last September that
Ireland made the mistake of abandoning hands-on engineering and manufacturing
for financial engineering and a focus on promoting mostly 'smart economy' jobs.
O’Driscoll, who heads a company Irish people can be immensely proud of, said
that the countries leading the way out of the recession, such as China and
Germany, have a strong manufacturing base. Those in the most trouble are
countries such as the United States, Ireland, and the UK, which slashed and
exported much low to high-end manufacturing.
Intel co-founder, Andy Grove, asked in
a recent article:"...what
kind of a society are we going to have if it consists of highly paid people
doing high-value-added work - - and masses of unemployed?"
Grove, a Hungarian
émigré from the 1956 anti-communist uprising, said manufacturing employment in
the US computer industry is about 166,000, lower than it was before the first
PC, the MITS Altair 2800, was assembled in 1975 (figure-B).
Meanwhile, a very effective computer manufacturing industry has emerged in Asia,
employing about 1.5m workers - - factory employees, engineers, and managers. The
largest of these companies is Hon Hai Precision Industry, also known as Foxconn.
Grove said the company has grown at an astounding rate, first in Taiwan and
later in China. Its revenues last year were $62bn, larger than Apple, Microsoft,
Dell, or Intel. Foxconn employs over 800,000 people, more than the combined
worldwide head count of Apple, Dell, Microsoft, Hewlett-Packard, Intel, and Sony