R&D in Northern Ireland

fibre-optic-credit-david-ritterNorthern Ireland needs to fight for European funding to fast-track its R&D performance and catch up with competing regions. The province cannot afford to lag behind in innovation.

While the Republic has drawn down €290 million from Europe’s key innovation programme, Northern Ireland’s applications total just €30 million. That gap is an urgent wake-up call for the Executive to promote the region’s R&D, especially as the Seventh Framework Programme finishes in 2013.

Statistics for 2010 make clear that business leads the way in local innovation. The private sector spent 22 times more on R&D than government and had a 66 per cent share. Higher education made a substantial contribution (31 per cent) while a mere 3 per cent is done inside government.

That said, government departments have the potential to boost R&D across the board by securing funds from EU R&D programmes.

Most Northern Ireland applications to the framework programme have come from higher education (€21 million), with the remainder from businesses. The programme started in 2007. SMEs are deterred by the cost of participation, inadequate access to finance and problems with finding appropriate partner organisations.

The Irish Government hopes to receive €600 million from the programme over 2007-2013 and many southern researchers were seeking a larger sum. Based on its share of the island’s population, Northern Ireland should therefore be receiving €240 million over the programme’s lifetime. The UK does not have a specific target but has gained £3.27 billion to date.

Business R&D is dominated by externally-owned firms (68 per cent) and large enterprises (61 per cent) i.e. those with more than 250 employees. Small and medium enterprises spent £10.9 million less compared to 2009, an 8 per cent fall, and their share has declined over the recession from 58 per cent in 2008.

Total expenditure in real terms (£521.4 million) was up from £497.1 million in 2009, representing a 5 per cent increase. Using that measure, higher education spending increased by 10 per cent, business spending by 3 per cent and government spending dropped by 6 per cent.

Almost all business R&D spending (94 per cent) is carried out in-house, totalling £324.2 million in 2010. Of this, £234 million was generated in manufacturing. In cash terms, Northern Ireland had the second highest increase within the UK regions (9.1 per cent) in 2009 but that rise is offset by having the second smallest spend; Wales is last with a virtually static £244 million figure.

UK R&D is concentrated in East Anglia and along the M4 corridor, with strong pockets in the East Midlands and North West England.

The province’s R&D investment rate was initially measured as a share of 2009 GVA figures; new statistics are due in December. A 1.1 per cent figure for Northern Ireland makes it sixth out of 12 regions but the regional average is only a modest 1.3 per cent. The UK’s latest overall percentage (R&D of GDP) is 1.87 for 2009, with the Republic just behind on 1.77 per cent.

Business R&D spend in the Republic reached £1.87 billion in 2009 but fell to an estimated £1.6 billion in 2010, with medium and large enterprises cutting their budgets in a turbulent economic climate.

Scandinavian states were Europe’s R&D leaders in 2009: Finland (3.96 per cent of GDP), Sweden (3.62), Iceland (3.1) Denmark (3.02). The most recent US and Japanese figures, for 2009, were 2.77 and 3.44 per cent respectively.

Israel is recognised as the world leader in R&D, particularly in agriculture, defence and engineering. Its rate of GDP will be 4.2 per cent this year, according to the US-based Battelle Memorial Institute.

Battelle’s global R&D forecast, published last December, predicted that worldwide spend would reach $1.19 trillion in 2011. Asia’s share was estimated at 35.3 per cent, having overtaken the USA (34.4 per cent), while Europe’s estimate was 23.2 per cent. China had Asia’s largest R&D budget ($153.7 billion), just ahead of Japan ($144.1 million).

“Leading Asian nations recognize that their economic expansion can be sustained by continued commitment to R&D investment across a wide range of science and technologies,” the study said. In contrast, experienced researchers were becoming harder to find in the US and Europe, and European government support for R&D was being hit by deficit reduction plans.

Speaking to agendaNi last year, European Science Commissioner Máire Geoghegan-Quinn warned that research budgets were seen as an easy target for spending cuts. She recognised that North America and Asia were better at getting research to market and Europe therefore had to catch up. Northern Ireland’s performance therefore needs a radical step change if universities and businesses are to reach their potential in the global knowledge economy.

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