Irish Innovation: Data collected by the Central
Statistics Office (CSO) shows that foreign owned enterprises accounted 71% of
R&D (research and development) business spending in Ireland in 2011. It is
reasonable to assume that not all this claimed spending is strictly R&D.
Finfacts, Aug 2013:
Irish Innovation: Evidence of science policy failure
The CSO said enterprises across all business
sectors in Ireland spent almost €1.9bn on in-house research and development
(R&D) activities in 2011 with 86% of this spent on current expenditure (labour
costs of R&D staff, etc) and 14% on capital expenditure (land and buildings,
etc). The level of spending was unchanged from 2010.
Almost three-quarters of the total expenditure on
in-house R&D was by medium and large enterprises (employing 50+ persons) and in
excess of 61% of total R&D expenditure was generated in the services sector.
Provisional EU data indicates an average EU R&D
spend for 2011 of 1.26% of Gross Domestic Product (GDP). Finland reported the
highest spend at 2.67% of GDP while Ireland spent 1.17% of GDP on R&D.
In 2011, over 19,000 persons (or 14,000 persons
on a full time equivalent (FTE) basis) were engaged in R&D activities of which
two-thirds (66%) were engaged in medium and large enterprises.
Almost 10% of R&D staff (FTE) held a PhD
Over 1,600 enterprises were engaged in R&D
activities of which 58% were in the services sector and 42% in manufacturing. Of
these enterprises, over 72% spent less than €500,000 on R&D activities.
One in ten enterprises spent €2m or more on R&D.
Over a quarter (27%) of foreign owned enterprises spent over €2m and 23% spent
between €500,000 and €2m on R&D. Almost one in four (24%) of medium and large
enterprises invested over €2m in R&D while a further 24% of such enterprises
invested between €500,000 and €2m.
To access Business Expenditure on
Research and Development 2011/2012 data, please use the following link:
Production of Irish goods and
services is dominated by foreign firms and they
do not do research that merits applications for patents at both the Irish
Patents Office and the European Patents Office.
Data shows that business
spending on R&D (research and development) has risen coincident with the
introduction of an R&D spending tax credit of 25%. It's a reasonable assumption
that not all the spending is strictly R&D. Tax strategies for example have a
huge impact on
The R&D tax credit is claimed via self-assessment on corporation tax returns.
Is the Revenue going to query
a claim from a big multinational? Who could it verify these big claims?
The R&D tax credit initial
spend eligible for the credit was raised in the December Budget from €100,000 to
€200,000 without reference to a 2003 base. It's only of relevance to companies
that have been spending on R&D in the past decade.
Logue of New Morning IP, the intellectual capital consultancy,
said last year;
"Our analysis does not
show any link between the introduction of the R&D tax credit and increased
patenting activity by indigenous Irish companies.
In fact in our
experience this tax credit has been used as a way of getting
“free money” without any real
attempt to protect the R&D results through patenting or other IP strategies.
In fact the R&D tax credit scheme is widely promoted by tax advisers and is
primarily seen as part of a tax reduction strategy rather than as a
foundation to build an IP strategy."
Patent applications at the Irish Patents Office from Irish residents (including
foreign companies and also inventions that were not made in Ireland) in 2011
were at the lowest since 1982.
The patent filing record at the European Patent Office indicates that the big
foreign and large indigenous companies operating in Ireland do not do
Their names do not appear among the top filers and that has been consistent in
the pass decade.
Forfás, the Irish government's policy advisory agency, said in a report in 2004
that analysis of the profile of Irish-based companies engaged in patenting
showed that none of the top 50 exporters were among the top ten foreign-owned
patenting companies, and leading computer manufacturers were entirely absent.
Only one of the top 15 pharmaceutical exporters (Abbot) appeared on the list.
Analysis of top indigenous patentees showed that they were mainly SMEs operating
in traditional sectors. "However, the omissions tell us more about the state of
indigenous industry than those that are included. The Irish food sector
contributes two-thirds of all indigenous industry exports but no major food
company or co-operative appears on the list."
The number of patent applications from public (government) research bodies in
Ireland was very small - - as few as 2-3 per year.
Irish Science Policy: 2020 replaces 2013 as target to be 'best country
in...world for scientific research'
Irish Economy: Innovation, a failed enterprise
policy and inconvenient facts for 2013
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