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News : Innovation Last Updated: Oct 25, 2012 - 9:09 AM

Innovation Ireland: Groupthink and vested interests pervade the ecosystem
By Michael Hennigan, Finfacts founder and editor
Oct 25, 2012 - 7:23 AM

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Innovation Ireland: Groupthink has been identified as a factor in the dismal policy failures that culminated in the bursting of Ireland's property boom. In innovation policy making it has continued through the bust but this virus does not prosper alone. As during the years of delusion, the so-called ecosystem comprises: political leaders relying on faith rather than evidence; vested interests in the public and private sectors; an Oireachtas (parliament) incapable of holding to account the beneficiaries of science spending of €23bn (at constant prices) in the past decade and strikingly, a media where most Irish journalists that cover the area, show symptoms of Stockholm Syndrome

Irish political leaders are not alone in being sold on the cool concept of innovation - - even though most innovation does not come from a test tube. However, packing advice panels with insiders ensures that they would always get the answers they want. One member of a taskforce told me that the majority had been primarily concerned with one question 'what does the minister want?'

In 2010, the Innovation Taskforce of 28 mainly insiders, including the head of the universities lobbying group, put forward a bizarre scenario where Ireland could vault over Silicon Valley to become the world's leading high tech location.

This again was more religion than science. The lack of a local market and the reality that any young high tech company would be bought up by a bigger overseas firm, did not matter.

Tonight, the future prospects of success for Irish innovation "will come under the spotlight as 15 expert speakers and innovators (?) knock heads together for ‘The Long Debate,’" in the Guinness Storehouse. Organised by NDRC (National Digital Research Centre) the Long Debate will be moderated by David McWilliams, economist and media commentator, and will see four areas of innovation explored:

  • Science: What is the right balance between basic and applied research for a small island nation?
  • IP: Who should own and manage Ireland’s intellectual property? The Government, Universities, Citizens, or someone else?
  • Education: Should entrepreneurship be a core skill for all?
  • Funding: How should innovation be funded for best results?

The panel comprises: 6 academics; 4 public sector staff; 1 lawyer from a Dublin law firm; 1 venture capitalist; 1 author; the head of the Irish Internet Association and Deputy Eoghan Murphy.

Lopsided with insiders, would be a fair characterisation! It would be interesting if some of the people in Ireland who talk about entrepreneurship, actually tried it.

"Most companies say they're innovative in the hope they can somehow con investors into thinking there is growth when there isn't," Clayton Christensen, a professor at Harvard Business School and the author of the  celebrated 1997 book, 'The Innovator's Dilemma,' told The Wall Street Journal earlier this year.

The Journal says that a search of annual and quarterly reports filed with the Securities and Exchange Commission shows companies mentioned some form of the word 'innovation' 33,528 times last year, which was a 64% increase from five years before that.

More than 400 books with 'innovation' in the title have been published in the last three months, according to a search of Amazon.com

My main argument is on the foolishness of putting university research at the heart of enterprise policy not on what research universities should do.

However, the 2006 strategy is directly linked with the potential for job creation. Apart from what is required for meeting the demand for STEM graduates, while Forfás, the policy advisory agency, publishes some useful data, the policy is mainly faith-based and despite the 14 priorities produced by Jim O'Hara's taskforce, policy makers will eventually be forced to accept the reality that significant job creation will not be spawned in either the FDI or indigenous sectors.

While there has been an increase in science competence, there is no evidence that the FDI sector does significant research in Ireland.

The conventional globalisation model is increasingly redundant as shown by the boom and bust in the solar industry involving US, Chinese and German companies.

1) The OECD says that there is no evidence of significant success of commercialisation of university research;

2) Research from the US and UK shows that high growth firms are not typically in the high tech sector;

3) Innovation in a broad sense is important but it is not necessarily produced in a lab e.g. the development of Ryanair and Starbucks;

4) High tech is not a significant job generator of jobs in any economy. Pioneers seldom thrive and there is no first mover advantage;

5) Employment in the Irish high tech and life sciences in foreign-owned and indigenous firms, has been static in the past decade;

6) Foreign firms in Ireland do not do significant research as evidenced by the low patenting activity;

7) In 2011, patent applications at the Irish Patents Office were at the lowest since 1982;

8) Spinouts produce few jobs and any firm with potential is bought by an overseas firm before the taxpayer gets any return;

9) The 2006 goal of being recognised at as a world-class knowledge economy by 2013, will no be met.

10) Last month, Minister Bruton said Ireland should create its own Google and Microsoft. This is delusional in a country with a small market. The biggest tech company by value in the UK has only 2,000 employees.

SEE: Finfacts presentation and paper on the aspiration tom be a 'world-class knowledge economy'

Check out our subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service.

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