BioWorld International Correspondent

DUBLIN, Ireland - Six members of the government, including the Taoiseach (Prime Minister) Bertie Ahern, lined up at a recent press conference to drive home the message that Ireland would further ramp up its research spending.

Building on a research spending of about €2.5 billion (US$3.14 billion) during the period 2000 to 2006, the government has set out a strategy that will call for a total of €3.8 billion in public research funding from 2006 to 2013. That will entail a net addition of €1.9 billion in new funding over the lifetime of the strategy, according to the government's newly published strategy document on science, technology and innovation. It aims to obtain about €380 million of that from external sources, including the European Union's Framework Programs for Research and from medical and philanthropic foundations.

The government is making available an additional €192 million for 2007 and 2008. Annual research funding, which will amount to €658 million in the current year, will rise to €724 million next year and €784 million the following year. It aims to double the level of business spending on R&D, to about €2.5 billion, in 2013.

By then, the government aims to have total spending on R&D running at 2.5 percent of gross national product. Because of the high concentration of multinational companies operating in the Irish economy, whose transfer pricing practices artificially inflate Ireland's GDP figures, the government prefers to base its R&D spending goals on GNP rather than GDP. The 2.5 percent target would be some way off the European Union's so-called "Lisbon" target, which set a research spending goal for member states of 3 percent of gross domestic product by 2010. Nevertheless, if attained, it would roughly double the level of spending of R&D in the country.

"This is stretching the physical limits of what we can actually do," said Michael Martin, minister for enterprise, trade and employment, who is responsible for the country's main science funding agencies. If the strategy is implemented, he added: "I would be comfortable with our position on any competitive league table."

"I think what the government understands, from a research perspective, and what the particular minister involved understands clearly, is you cannot schedule discovery," Cormac Kilty, chairman of the Irish BioIndustry Association (IBIA). In welcoming the strategy, the IBIA said in a statement it was "eagerly" waiting on further details of better incentives for R&D. Tax credits introduced in 2004 has been of limited appeal, Kilty said.

"They're not working for indigenous companies because indigenous companies have a much smaller spend," he said. The tax credit at present is linked to incremental increases over a company's historical R&D spending, rather than on annual research expenditure. Large multinationals establishing greenfield operations have derived greater benefit from the scheme, he said.

Technology transfer has been an ongoing weakness within the Irish innovation system, but the government this year put in place a €30 million competitive funding program to bolster that function in the country's university system. Lack of availability of seed funding and later-stage funding remain outstanding problems, Kilty said.

"We don't have the funds big enough to participate," he said, while attracting external investors remains difficult. "It's a fact of investment life that venture capitalists tend to restrict themselves to their own national space."

Yet Irish investors are spending upward of €1 billion a year on real estate in overseas territories, Kilty said. As yet, there are no incentives in place to divert some of that cash toward R&D. "The single most important thing the government can do to create an innovation culture is to create very attractive incentives for R&D and investment," Kilty said. "They are going to have to be big."