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News : Innovation Last Updated: Sep 28, 2011 - 4:33 AM

Innovation Ireland: Another report on research spending inputs but outputs remain fuzzy
By Michael Hennigan, Finfacts founder and editor
Sep 21, 2011 - 5:29 AM

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Innovation Ireland: A report from management consultants commissioned by the Higher Education Authority and published on Tuesday, with the apparent purpose of bolstering resistance to spending cuts, is another document with data on research spending inputs but credible information on outputs remains fuzzy, at best.

True to form, Seán Sherlock T.D., minister for research and innovation, like his predecessor, is an unabashed cheerleader, possibly because like so many colleagues in the Oireachtas, he is out of his depth.

The question is not whether we should have a public science budget of €2.5bn annually but how much of it is a jobs or welfare programme?

PA Consulting  examined the impacts from Exchequer investment in 45 research centres or initiatives initiated under the Programme for Research in  Third Level Institutions (PRTLI) and found that the impact in terms of direct commercial benefit  alone is of the order of €1.861bn from an Exchequer investment of  €1.182bn.

The study (pdf) examined research investment over the period 2000-2006 and identified 50 companies that have 'validated' a benefit of €753m with an expected potential return in the next five years of a further €1.108bn - - this is the proverbial back-of-the-envelope rather than science!

1,255 jobs were added over the period and there is no data on failed or abandoned projects - - that would have likely muddied the message.

The 50 companies mainly comprise leading multinationals (MNCs) such as General Electric, Pfizer and Siemens.

When spending of billions of euros are added in a sector with a big growth in the number of researchers, it's not surprising that there would be a jump in the number of citations in publications and patent filings and so on -- patents in themselves do not imply commercial success.

Last week, Science Foundation Ireland, the public funding agency, reported a "further impressive 12% rise in international academic partnerships was also achieved to leverage significant additional scientific knowledge from SFI-funded research."

Launching SFI’s Annual Report for 2010, Seán Sherlock said: “Such a massive increase in the total number of collaborations, now standing at 867 and up from 601 in 2009, is certainly to be lauded and is in keeping with the Government’s agenda to facilitate greater commercialisation of research.”

On outputs in 2010, there were 4 early stage spin-out companies and 8 patents awarded to its supported companies.

Collaborations with MNCs can be a low risk option for them.

Apart from the R&D tax credit, the State may separately have provided funding via IDA Ireland that is not accounted for in the PA assessment.

Post hoc estimating the commercial impact of a project is just guesswork - -  even more so if it's a contribution to a bigger project overseas.

The PA Consulting report says: "It was a clear finding of the assessment, borne out by quantitative analysis of impacts and almost universally endorsed by industry and other stakeholders that the development of research capability has, and will continue to have, a significant impact on the attraction and retention of inward investment."

It maybe clear but what isn't clear is how crucial is the research that is being done by US pharmaceutical firms in Ireland, at a time when there is retrenchment in R&D in the sector.

Pfizer last year announced the significant scaling back of its research facility in Sandwich, UK, where it had 2,400 employed for decades.

What is the annual demand for PhDs in the pharmaceutical sector in Ireland?

According to Higher Education Authority (HEA) chief executive, Tom Boland: "While the quality of our lives has been improved as a result of the research programmes, the finding that there has been direct commercial benefit strengthens the case for long term investment in research. PRTLI has led to marketable products and ideas as well as sustaining high end employment and not just on university and institute campuses. It has significantly helped in the development of many companies."

The PA report says: "With a few exceptions, indigenous companies, particularly SMEs, have struggled to realise any significant dividends from working in partnership with centres and initiatives. This is in part a consequence of the focus of the centres and initiatives on basic research in areas of more relevance to the larger multinational corporations (particularly bioscience and biomedical)."

So we rely on the foreign-owned sector where employment in 2010 was back at the 1998 level?

Maybe spin-outs from third level research?

What happens any spin-out with potential? Check here.

Last year Science Foundation Ireland replaced a departing scientist as chief executive, with a civil servant who had retired in 2002.

Wouldn't it be innovative if individuals who have experienced the challenges of developing startups without third-level safety blankets and have sold in difficult markets, had an input to policymaking?

Finally, the MNCs were never likely to release useful data. Nevertheless, the HEA may still be happy with this densely written report. The cost is not going to impact any of their pay or pensions.

In The Financial Times today, Prof. John Kay writes in his weekly column: "Public opinion, well briefed and properly marshalled, is a decisive force in public policy. But since there are many issues in public debate, attention to any one is necessarily transient. The attention of vested interests to their own concerns, however, is permanent."

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