1 Ireland's Smart Specialisation Strategy for Research and Innovation Summary July 2014 DEPARTMENT OF JOBS, ENTERPRISE AND INNOVATION 2 1. Introduction National or Regional Research
They focus policy support and investments on key national/regional priorities, challenges and needs for knowledge-based development.
and aim to stimulate private sector investment. They get stakeholders fully involved and encourage innovation and experimentation.
They are based evidence and include sound monitoring and evaluation systems. The regulations governing the European Structural
aimed at ensuring that appropriate institutional and strategic policy arrangements are in place for effective investment.
In relation to research and innovation investment supported by the ESI Funds, an ex-ante conditionality is the existence of a national or regional smart specialisation strategy in line with the National Reform Programme,
or regional R&i systems. 2. National Context for Smart Specialisation 2. 1 Economic Context Ireland has been left with significant challenges following the economic crisis.
The economy is estimated to have shrunk in GNP terms by almost 18 per cent over the period 2007-2012 with significant adverse impacts on employment and incomes.
Structural reforms and fiscal consolidation have helped to rebalance the economy underpinning a return to the sovereign bond market
Ireland has shown a resilient export performance despite slow demand in partner countries of the euro area.
After five years of contraction business investment is at a very low level. It has started recently growing again,
In its Medium Term Economic Strategy 2014-2020 (MTES), it has set out how it will continue the work of rebuilding The irish economy,
achieving sustainable economic growth, strong public finances, and enduring job creation. After exiting the EU IMF Programme,
adequate and reformed system of social supports and services for those who have completed their working years
and sustain a competitive economy that can pay its own way, serve society, and that can survive
and thrive in a reformed euro zone and an increasingly globalised international economy. The Action Plan for Jobs 2014, published on 27 february,
and the local delivery of assistance to entrepreneurs and smaller firms via the new Local Enterprise Offices.
The Action Plan for Jobs also has a focus on specific sectors in the economy such as agriculture and food, tourism, aviation services, the green economy, retail and construction and property.
A strong commitment to oversight and implementation is key to ensuring the effectiveness of the Plan.
chaired by the Secretaries General of the Departments of the Taoiseach (Prime minister) and of Jobs, Enterprise and Innovation
and published. 3 Medium Term Economic Strategy 4 2. 2 Enterprise Context The overall objective of Enterprise Policy as set out by the Department of Jobs,
Enterprise and Innovation (DJEI) and Forfás over many years4 is to grow incomes and standards of living in Ireland through competitive and sustainable enterprise, innovation, productivity and employment growth.
Ireland's enterprise policy is focused on the core planks of productivity and innovation, delivering on an agenda of enterprise transformation to create a competitive and sustainable platform for growth and job creation.
Ireland's enterprise policy embraces start-ups, Irish owned firms (both nationally and internationally trading) and foreign direct investment, including greenfield and expansions.
There is a strong focus on intensifying promotion of entrepreneurship and the scaling of Irish owned firms
further developing Ireland's proposition for FDI in the face of intensified global competition and facilitating collaborative interactions by firms across the supply chain and throughout the country.
Ireland's enterprise policy continues to focus on an export-led growth strategy as the most sustainable route to deliver jobs
and growth that includes ensuring that policies are in place to support an efficient and cost competitive market for locally trading activities.
Enterprise policy is focusing on realising the economic benefits of its investments to date in R&d infrastructures,
Ireland's enterprise policy aims to derive increased economic benefits by building sector-specific ecosystems,
encouraging an environment for initiative and cooperation between enterprises (particularly SMES) and fostering better exploitation of innovation. 2. 3 Ireland's Enterprise Structure Ireland's enterprise structure is made up primarily of firms that:
Are export oriented (or have the potential to export and internationalise), including: Irish owned firms that are regionally spread
clean 4 Making It Happen Growing Enterprise for Ireland, Forfás/DJEI, 2010 5 technologies, tourism, construction etc.
as has internationalisation by indigenous firms through Outward Direct Investment. are owned foreign, and are generally larger scale entities.
Foreign owned MNCS have been key to delivering on Ireland's enterprise policy since the 60s.
to now encompass a broader range of high value activities through from R&d, to Shared Services, to Customer Technical Contact Centres, to Services sectors and activities as well as manufacturing.
The attraction of FDI plays a key role in pump-priming new sectors and activities in the economy.
Entrepreneurship is associated typically with innovative new firms competing with, and ultimately displacing, obsolete existing firms
and are critical to Ireland's future economic growth. Evidence demonstrates a positive correlation between entrepreneurship and economic performance in terms of growth, firm survival, innovation, employment creation, technological change,
productivity increases and exports. 5 A number of start-ups will internationalise at an early stage including
Firms that continue to trade locally play a major role that can be pivotal in determining the performance of Ireland's entire economy particularly
Locally available, competitive and efficiently produced goods and services can result in increased Direct Economy Expenditure
and contribute to an internationally competitive operating environment for all businesses; There are also a number of foreign owned entities (many larger scale) that have invested here to serve the domestic market including those in the hospitality, retail, communications sectors for example.
They play a key role in stimulating competition leading to increased innovation, enhanced management capabilities and technology adoption;
and Social enterprises also provide employment opportunities and contribute to the social fabric of local communities,
and today many operate in a more commercial sphere. The categorisation of Ireland's enterprise sectors set out in Figure 1 is based on a detailed analysis of sectors in Ireland and future areas of opportunity for Ireland over the period to 2020,
as set out in Making It Happen, which was informed through consultation with key stakeholders and companies (nationally and internationally based).
The categorisation 5 Action Plan The European Agenda for Entrepreneurship, European commission, COM (2004) 6 acknowledges the importance of both services and manufacturing activities to Ireland's future economic growth,
and the fact that the former distinction between these activities has become increasingly blurred. Convergence and the concept of adjacent possibilities transcend the current definition of sectors,
and new opportunities will arise at the blurring of the edges of existing sectors. The sectoral cohorts are set out as follows:
Emerging opportunities and untapped potential; C a renewed focus on mature sectors; D: Locally Traded Services Figure 1:
Sectoral Categories in Ireland Source: Forfás 2. 4 Business Expenditure on R&d (BERD) Business Expenditure on R&d (BERD) has increased from €1. 2 billion in 2003 to over €1. 96 billion in 2012,
this speaks to the success in embedding the practice of R&d investment in companies in Ireland.
CSO databank, Forfás BERD surveys Indicators also show that Enterprise R&d intensity continued to increase.
The BERD Survey of 1, 600 enterprises engaged in R&d in 2011 showed that 27 per cent had spending of €500,
The imperative to maximise Ireland's return on investment in research is emphasised explicitly in the Higher education System Performance Framework 2014-16 under System Level Objective 4:
and the achievement of other societal objectives and to maximise research collaborations and knowledge exchange between and among public and private sector research actors. 3. STI Context The importance of investment in science,
and future economic and social development is reflected in the appreciable allocations for investment in science, technology and innovation by Government in the current and previous National Development Plans,
and a reputation for research excellence and has an increasing base of enterprises engaging in RD&I activity with RD&I active enterprises demonstrating better resilience in the current difficult economic climate.
Prior to a Government policy decision to make a significant investment in science, technology and innovation, research funding in Ireland was at very low levels.
and direct support to the enterprise sector to help individual companies to build their capacity for research and development.
This approach to the investment followed the recommendations of the Technology Foresight exercise7 conducted by The irish Council for Science, Technology and Innovation (ICSTI) in 1998.
and 6 http://www. djei. ie/publications/science/2006/sciencestrategy. pdf 7 http://www. forfas. ie/media/icsti990430 technology foresight overview. pdf 9 To enhance the environment for the creation of new
These investments have been made to strengthen national research capabilities via investment in human and physical infrastructure.
Cycle 4 in 2012 and the Cycle 5 investment was initiated in December 2010. The aim of the programme is position Ireland as an internationally recognised location with the infrastructure
The Strategy for Science Technology and Innovation 2006-2013 (SSTI) set in train a strong positive trajectory for the STI investment and associated policy.
and increase innovation in the enterprise sector to accelerate Ireland's economic path of sustainable growth.
through substantial public investment, in the SSTI with the result that we have made significant steps in establishing a strong research environment, based on building scientific excellence in a number of key strategic areas.
In the last decade we have trebled the level of investment in research and development, providing enterprise support for R&d, investing in human capital, physical infrastructure and the commercialisation of research.
This investment has contributed significantly to an increase in Foreign Direct Investment (FDI), the competitiveness of indigenous enterprise and to the creation and application of new knowledge and technologies.
In summary the achievements secured from the investment since 2000 place Ireland in a strong position to realise the vision associated with the SSTI of a country renowned for the excellence of its science
and enterprise partners in locations in more than one region for example INSIGHT and AMBER9. Ireland also seeks to leverage the national investment to catalyse all island
and international cooperation in priority areas and maximise draw down of non-exchequer funding. 8 http://www. hea
certain priority areas are more important to the economy in certain regions than in others, e g.
However, the enterprise base in a priority area typically spans more than one region and research and development needs in companies are multi-disciplinary requiring collaborations across a number of research areas drawing on research strengths nationally.
(either hosted or have major partners) in regions where the impact of investment will be most relevant
and with greatest opportunity for skill supply and uptake and spill overs etc. 4. 2 Developments in Regional Research
and societal needs and optimise efficiency to achieve maximum return on investment. With increasing pressures on exchequer resources, a country of Ireland's size is not in a position to develop critical mass in each and every field of science
which future public investment in STI should be focussed over the period to 2017. The group carried out the bulk of its work in 2011.
1. In response to market and societal demand trends, develop a national consensus on a number of priority areas or approaches to challenges/opportunities
which need to be underpinned by future investment in publicly-funded STI; 2. Identify and articulate, as far as possible,
The focus of these criteria was to ensure alignment with the overall national policy focus on the transformation of the economy to a more sustainable basis for economic growth for the future,
and capacity and particularly areas that have the greatest potential to deliver economic return through enterprise development, employment growth and job retention in Ireland;
and to ensure that new opportunities are identified. 6. Process and Methodology 6. 1 Governance-Ensuring Participation
and Ownership The high level Government appointed Research Prioritisation Steering Group comprised a range of entrepreneurial actors including representatives from academia, enterprise, finance, public sector organisations and advisory bodies and the Chief
I. 6. 2 Analysis of context and potential for innovation 6. 2. 1 National Research and Enterprise Strengths and National and Global Opportunities A significant input to the work of the Steering
Global Market Opportunities, Growth Markets and the Positioning of The irish Enterprise Base10; Drivers, Trends and Societal Issues from a National Perspective in a Global Context11;
the enterprise dimension, the societal dimension, and Ireland's existing research base, provided context and a basis for assessing the potential for innovation 6. 2. 2 International Review The group also examined consultative prioritisation exercises in other countries (UK, Sweden, Denmark, The netherlands, and Japan).
and Israel were facilitated also by Steering Group members during the process. 10 Review of global market trends, growth markets and the positioning of The irish enterprise base, 2011.
The rest of the membership comprised representatives from each of the relevant funding organisations active in the thematic area and representatives from the university sector, the institutes of technology sector and the enterprise sector.
Natural resources and Sustainable Environment Agriculture, fisheries and food, marine research, energy, climate change, environment, including built environment, smart living spaces, smart cities, transport and related
Creative and Cultural Enterprise ICT including next generation internet and computing, information security, software, gaming, social networking, digital media, digital content, e-learning;
Creative and cultural enterprise. Innovative Processes for Enterprise (Advanced Manufacturing and Business Services) Advanced manufacturing (including applications in ICT, pharmaceuticals, biopharmaceuticals, bio processing, medical technologies, food and drink etc.;
Business and services innovation (e g. financial services, educational services, etc. Potential priority areas were established based on a top down process drawing on priorities identified at EU level
and internationally including horizon scanning exercises, and on a bottom up basis from national funding agencies and other stakeholders.
An indicative‘long list'of potential priority areas based on a wide ranging exercise conducted by Forfás,
duplication and the opportunity to group and consolidate them and agreed an initial list of areas for which detailed assessments would be undertaken.
which Irish-based enterprises already compete or can realistically compete What are the potential applications or products and
and do we have the environment to support commercialisation?(People, finance, regulatory considerations, companies, partnering capacity,
Are there other areas where public investment can be leveraged? Infrastructure, human capital 3. Ireland has built
or is building (objectively measured) strengths in research disciplines relevant to the priority area What is the profile of research throughout the commercialisation spectrum from fundamental to commercially relevant
and how does it the area benchmark internationally? Do we have critical mass in this area
E g. does this challenge present a market opportunity? If this research is relevant to a global challenge,
and based on deliberations agreed a document to be used as the basis for targeted consultation with stakeholders.
Stakeholder engagement events were organised by each of the TWGS at which the TWG perspectives were shared with stakeholders
in order to elicit feedback. In parallel, the Steering Group invited the main enterprise and higher education representative bodies to provide formal written inputs to the stakeholder engagement documents compiled by each TWG.
TWGS having considered the stakeholder feedback, made prioritisation and elimination decisions in working group meetings using a scoring methodology based on the criteria.
Based on this assessment the groups made their recommendations to the Steering Group on proposed priorities.
Discussions with stakeholders were ongoing throughout the process through formal briefings and bilateral meetings with stakeholder groups. 6. 3. 2 Final Deliberations A further large-scale stakeholder engagement event was organised in early September 2011 to gather feedback from stakeholders on emerging priorities.
Based on these inputs and further deliberations the Steering Group agreed the priority areas to be recommended to Government.
There were a number of areas that received significant exchequer funding prior the NRPE that were identified not as priority areas.
and securing a return on the State's investment. Significant examples of such areas included bioenergy and the discovery and development of therapeutics.
and recommended to Government as areas that would become the focus of future research 17 investment that is oriented towards The irish enterprise base (see Table 3). Detailed descriptions of the priority areas
and opportunities identified are provided in the Steering Group's Report. Table 3: Priority Areas for Publicly-performed Research 2013-17 A Future Networks & Communications H Food for Health B Data Analytics, Management, Security & Privacy I Sustainable Food Production
& Processing C Digital Platforms, Content & Applications J Marine Renewable Energy D Connected Health & Independent Living K Smart Grids & Smart Cities
(i e. total Government investment in research less the research component of the block grant to HEIS and the funding administered by the enterprise development agencies for in-company performed R&d).
An integrated national system of clinical and translational research capacity that can help Ireland capture the local and global benefits of investment in health related research;
and Ongoing investment in the ICT/e-infrastructure that underpins all research endeavours in the country.
a share of future investment will remain untargeted in order to support excellent basic research in new and unanticipated research areas.
and effectiveness of the national STI system. 6. 4entrepreneurial Discovery The NRPE was undertaken to select areas to focus RD&I investment where Ireland had a realistic chance to excel
and therefore maximise impact of RD&I investment on the economy. It was based on a strong evidence base and rigorous analysis combined with stakeholder (broad based) judgement.
Extensive stakeholder involvement was achieved throughout the process from consideration of the need for a prioritisation exercise
through the background analysis and planning phases, designing the methodology, the prioritisation process itself and deliberations therein and its ongoing implementation.
This involved a number of mechanisms including the Steering Group (broad membership and strong industry chairmanship), more specialised thematic working groups, expert consultancy, broader stakeholder engagement through round table workshops,
and throughout the process bilateral engagements with key stakeholders. A wide range of actors were involved including representatives from academia, industry, entrepreneurs, venture capital, industry representative bodies, public sector bodies
advisory bodies, representatives of civil society and research users and beneficiaries, regulators, etc. 19 7. Implementation of Research Prioritisation 7. 1 Vision for National STI Policy
of specific economic outcomes from investment in research. In the context of the Government Decision in February 2012 to implement the recommendations contained in the Report of the Research Prioritisation Steering Group,
implementation of research prioritisation is de facto a manifestation of the overarching goal of accelerating the economic and societal return on our STI investment.
There will be an opportunity to consolidate that overarching goal further in the context of a new Strategy for Science,
agencies and stakeholders to ensure a coordinated approach to developing the action plans and drive greater coherence across the system at the level of priority areas.
Alignment and coordination of funding programmes and calls across enterprise agencies. A requirement for all funding agencies to adopt a stage-gate approach based on excellence
Greater emphasis on fostering interdisciplinary research, both within the natural sciences and also with social sciences and business disciplines in the context of innovation In services. 20 Deeper engagement between enterprise agencies
and the national health system to maximise synergies between the biomedical enterprise base and research in the public health sector.
Active communication and cooperation between the enterprise development agencies and clinicians and medical regulatory bodies to ensure mutual understanding of regulatory challenges facing next generation medical products.
and agencies to ensure the potential opportunity in each priority area is realised. Each Action Plan includes a vision,
Each action plan seeks to ensure an alignment between publicly funded research within the priority areas and the research needs of enterprise.
The PAG carried out a series of 6 thematic workshops aligned with the Priority Areas to facilitate the sharing of information between research funding agencies and departments on enterprise research needs within specific sectors.
The objective was to synthesise this knowledge into a comprehensive national picture across all sectors of internationally trading enterprise.
The collective understanding that emerged from these workshops has been opened up for scrutiny and validation via subsequent direct engagement with enterprise.
and the development of ecosystems within the public sector for the trial and application of emerging technologies, The need to develop a more progressive, supportive and responsive domestic regulatory environment,
Science Foundation Ireland Science Foundation Ireland programmes play a pivotal role in enhancing Ireland's human capital in strategic areas
relevant to the competitiveness of Irish based enterprise. SFI programmes support academic researchers and research teams;
excellence and importance to enterprise recruitment initiatives to attract iconic research leaders to Ireland, including support for the development
and fellowships with industry support for commercially relevant applied research and the development of commercial expertise in the HEI sector investment in research infrastructure focused international collaboration. 22 PRTLI (5th
engineering and maths (STEM) to ensure that there is a pipeline of young people who are prepared to pursue third
and fourth level qualifications in STEM disciplines for the purpose of securing employment in the knowledge economy.
Enterprise Ireland Provides direct supports for R&d activity within Irish firms, and supports for companies to build R&d capability and acquire new technology through licensing.
This is a joint initiative between Enterprise Ireland and IDA Ireland allowing Irish companies and multinationals to work together in these centres.
Technology Centres are structured to lie at the boundary between the academic environment and industry and are driven by the companies that are involved, rather than from the academic perspective.
IDA Ireland IDA Ireland programmes provide the basis for winning new FDI investment projects. The IDA's Research, Development & Innovation (RD&I) Support programme is designed to support companies at all stages of RD&I
Key Enabling Technologies, Manufacturing and Services Manufacturing is a crucial sector for Ireland. This sector has substantial capacity for jobs growth,
and that is why the enterprise agencies decided to examine new ways of targeting support at manufacturing.
The employment outlook for the sector depends critically on addressing domestic competitiveness factors and a favourable international trading environment.
and meets the needs of customers; and Ability to adopt and utilise key enabling technologies.
'and‘Innovation In services and Business Processes'underpin both the manufacturing and services sectors. Key manufacturing sectors include ICT, Life sciences, Food and Drink, Engineering, and Electronics.
and securing this industry against scarcity of energy and other resources. Success will be defined by increasing the competitiveness of manufacturing as a sector in Ireland,
and also by securing Ireland as a location for next generation manufacturing. 24 Ireland has made a significant investment in the KETS in the last decade
and the Enterprise Ireland/IDA programmes will support their adoption and utilisation. 8. Monitoring and Evaluation Through the Prioritisation Action Group,
a framework for monitoring the impact of public investment in Science, Technology and Innovation (STI) has been developed,
and that new opportunities are identified and the PAG is considering a mechanism to achieve this.
1. To stretch the public enterprise support system in order to maximise the impact of public investment in R&d under Research Prioritisation. 2. To assess the success over time of the implementation of Research Prioritisation.
The framework also captures many key outputs associated with the other objectives of national STI policy,
the human capital and education objectives associated with national R&d investment and the internationalisation of Irish research.
the outputs and outcomes associated with total Government investment in research and development (GBAORD13). The adoption of National Targets also reflects the fact that investment in research contributes directly to performance at the aggregate national level.
The National Targets serve as the basis for establishing some of the targets for the departments and agencies.
The PAG compiled a list of 78 metrics for the enterprise support environment at varying levels of granularity categorised into inputs
and to ensure that the enterprise development system is aligned accordingly, a set of targets were developed for the agencies
or Outlays on R&d. 26 Priority Area Targets The Priority area targets are intended to assess the effectiveness of the Action Plan in exploiting the opportunity that was identified in each Priority Area (PA) as part of the NRPE.
This will allow for assessment of how well these sectors are performing relative to the overall economy,
A full list of these indicators is available in‘Research Prioritisation, A framework for Monitoring Public Investment in STI'.
funding for business sector R&d, administered via State agencies including IDA Ireland, Enterprise Ireland and others;
State Investment in R&d 2011-2012 Forfás, August 2013 As can be seen from Figure 4,
In relation to the Europe 2020 Strategy Headline Target for Research and development, Ireland has adopted a target of raising combined public and private investment to 2. 5%of GNP (approximately equivalent to 2. 0%of GDP
there will be tight control over investment in the period to 2015. Post 2015, in the context of a return to sustainable growth domestically and a recovered global economy, we anticipate a renewal of the pattern of annually increasing public investment in R&d coupled with a quickening of the average rate of growth of private R&d
investment from the relatively modest rate of 3%forecast to 2014. This growth will be driven through a continuation of a supportive fiscal environment for R&d investment as well as supports for higher education R&d industry linkages with higher education researchers, commercialisation of research results, in-company R&d and start-up companies.
Accordingly, the circumstances expected post 2015 will enable a resumption of progress towards the Europe 2020 R&d target of 2. 5%GNP by 2020 to take place. 528 635 739 784 915 948 909
838 802 796 0 100 200 300 400 500 600 700 800 900 1000 2003 2004 2005 2006 2007 2008
June 2013) Adoption of a Framework of Metrics and Targets to monitor the impact of Science, Technology and Innovation (STI) investment in broad terms and in relation to implementation of research prioritisation;(
June 2013) Assessment of enterprise research needs to build a comprehensive national understanding of research needs across all sectors of internationally-trading enterprise completed has been carried out;
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