Irish Innovation Policy: An agenda for discussion (December 2019)

1.      Introduction

This paper provides a brief overview of the history and current position of innovation policy in Ireland.  A strong and relevant innovation policy framework has always been seen as fundamental to the creation and maintenance of a successful and sustainable social and economic system for the country.
As we move towards the year 2020 and beyond such a framework has acquired even more importance.  It is beginning to be noticed that there is an intellectual and comprehension gap between reality and aspiration in the planning of our future.  On the one hand, ritual acknowledgement is made to the scientific consensus that rising levels of greenhouse gases combined with massive degradation of the environment (particularly soil and wildlife habitats) is threatening another major extinction event at worst or radical life-style changes at best.  On the other hand, planning for the future of agriculture, food, transport, health and many other areas is proceeding on the basis of business as usual.
In this context it is imperative and urgent to examine our innovation policy framework and to assess its fitness for purpose for the future.

2.      Innovation and the Innovation System

‘Innovation’ is the introduction and diffusion of new solutions in response to problems, challenges or opportunities that arise in the social and/or economic environment. Resulting from ‘new combinations’ (Schumpeter 1934) of knowledge, capabilities and resources, innovation is regarded as a major source of change in all social and economic activities, in poor as well as rich countries.
‘Innovations’ are novel creations in the form of new or improved products or processes of economic or societal importance, usually developed by firms. New products (product innovations) may be material goods or intangible services; it is a question of what is produced. New processes (process innovations), on the other hand, may be technological or organizational; here, it is a question of how the products are produced.
Innovation primarily takes place in firms (usually in the private sector) but is also significant in the public sector (Mazzucato 2011). An innovation system is one that includes not just the innovations/innovators themselves but also “all important economic, social, political, organisational, institutional and other factors (activities) that influence the development, diffusion and use of innovations” (Edquist 2018).  As Fernando Flores (2013) puts it, Innovation Science + Technology + Creativity, but must always be contextualised in situated practices and in particular times and places, where culture and social mood play important roles.
In formulating this document, we have had discussions with Ken Guy, former Head of the Science and Technology Policy Division at OECD.  Ken was a member of the panel that reviewed the Research Prioritisation exercise in 2015. He has also provided a useful frame for thinking about innovation system.

3.      Innovation Policy for the 21st Century

The different perspectives on innovation are also reflected in policy. A narrow policy perspective considers invention only, while a broader, more holistic perspective, emphasises the entire innovation cycle from creating novel ideas to their implementation and diffusion. Many of those who have looked at innovation and its role in the regional, national and global economies believe that innovation policy practice is seriously lagging behind innovation research when it comes to being systemic, broad-based, demand-oriented or holistic (Breznitz et al, 2018). This means that, in many cases, innovation policies tend to be partial rather than holistic, and that most of these partial policies were of a linear kind.
Innovation policy can be seen as involving a division of labour between private and public organisations. Within such an approach, two conditions must be fulfilled for there to be reasons for public innovation policy intervention in a market economy:
  1. Private organisations must prove to be unwilling or unsuccessful in achieving the objectives formulated; i.e. a policy problem must exist.
  2. The state (national, regional, local) and its public organisations must also have the ability to solve or mitigate the policy problem.
These two conditions show the central importance of the issue of additionality in solving policy problems. Innovation policy pursued by public organisations is sometimes needed. However, policy actors must try to ensure that they do not replace, duplicate or crowd out what private actors (can) accomplish.

4.      Irish Innovation Policy Heretofore

Over the past decade there have been a number of papers and articles discussing both the history of innovation policy in Ireland and its recent development (Fitzgibbon 2011; O’Doherty and Fitzgibbon 2014; O’Doherty 2017; Noonan, Kelly & Vidolov 2015; Bradley & Kennelly 2008; Dept of Jobs, Enterprise and Innovation 2015; Cogan et al. 2015; Kavanagh 2018; Kitchin 2018). The following points summarise the contents of these papers:
       Since the 1970s, while the focus of industrial policy has been to promote both indigenous industry and foreign direct investment (FDI), in practice the main focus of industrial policy has been on the attraction of foreign direct investment (FDI).  The agency responsible for the development and implementation of this policy – the IDA – was extremely successful and attracted almost unanimous support for its policy and strategy.  The impact on industrial development and employment in Ireland since that time has been enormous and well recognised.
       Up until the late 1990s, public support for research was at a very low level, as the main drivers of economic growth were the foreign-owned manufacturing plants which utilised the benefits of research performed in their home countries and had little need of research in Ireland.  Increasing globalisation in the 1990s saw the foreign firms in Ireland move up-market and away from basic manufacturing towards higher-skilled activities.  This necessitated the introduction of a very significant increase in research funding and infrastructure, around the year 2000, through the mechanism of Science Foundation Ireland and other programmes.
       At the same time, new policy structures were in place.  Forfás incorporated some of the innovation activities of the National Board for Science and Technology (est. 1978).  Within the public administration system there was a new Cabinet Committee and Interdepartmental Committee for Science, Technology and Innovation.  The Irish Council for Science, Technology and Innovation was established to provide independent external advice to these committees and to Forfás.  The office of Chief Science Advisor to the Government was established in 2004.
       The approach to public research and technology organisations (RTOs) is one place where Ireland differed significantly from other European countries, large and small.  The Agricultural Institute was established in the 1950s with help from Marshall Aid and has existed continuously since then (today as Teagasc).  For industry, Sean Lemass established the IIRS in 1946 and it continued in existence until 1993.  It was, however, seen as of minor importance to the inward investment policy and never adequately funded.  Its industry support functions, including applied research, were transferred to the newly-established Enterprise Ireland in 1994 but were discontinued shortly thereafter by the new organisation.
       In recent years the various research and innovation functions have gradually been transferred to the Department of Business, Enterprise and Innovation.  Forfás and the Advisory Council were abolished in 2015.  SFI continues, but with a revised remit to support more applied research.  The function of Chief Science Advisor to the Government was transferred to the Head of SFI.
       In the past, national policy for research and innovation benefited substantially from external advice and input.  The review of Irish science policy undertaken by OECD in the 1960s provided a foundation and stimulus for the developments over the following decades.  The report of the Science, Technology and Innovation Advisory Council in 1995 led to Technology Foresight, the establishment of the Irish Council for Science, Technology and Innovation, of Science Foundation Ireland and of Research Councils for Science and Engineering and for the Social Sciences, the setting up of the Interdepartmental Committee on Science, Technology and Innovation, and other structural changes.
One issue is that innovation agencies can approach innovation in very different ways, and this diversity can be lost in any broad-brush approach to innovation policy.  Here, Breznitz et al (2018) provide a useful typology for classifying innovation agencies based on, on one dimension, whether the focus is on radical or incremental innovation, and on a second dimension, whether innovation agency is concerned with a narrow set of ambitious objectives or whether it is more decentralised in character, delegating R&D and objective setting to private sector actors.  These two dimensions generate four different types of innovation agency

Breznitz et al (2018) locate various agencies in different countries in their taxonomy and, in Figure 3, we have done the same with a selection of existing and defunct Irish innovation agencies. A significant conclusion arising from the wide-ranging work of Breznitz and his colleagues over a number of recent years (2015-2018) is that it is generally, but not exclusively, new and relatively smaller ‘peripheral’ agencies (in terms of budget, personnel and even remit) that have the greatest impact on innovation ‘practice’..[1]
Some agencies, such as Science Foundation Ireland and the ESRI, do not fit into the classification scheme, while previous organisations, such as the National Board for Science and Technology (NBST), Eolas and Forfás existed at a ‘meta’ level, above the ‘Breznitz’ classification scheme.  Significantly, such a ‘meta-agency’ is also missing from the current Irish innovation system.

5.      Innovation Policy Gaps

Centring innovation policy around attracting foreign direct investment has been a success, but it has also led to a number of gaps and deficiencies. 
First, the strategy has meant that innovation policy has largely overlooked the needs of many indigenous businesses, in particular in terms of the role of innovation policy in raising their overall level of productivity. The importance of the indigenous sector is recognised in the Government’s Future Jobs Strategy which has “improving SME productivity” as one of its five pillars.  However, there’s a lack of knowledge about the broad area.  So, for instance, there’s not much research on how indigenous businesses scale up, nor on the nature of innovation in indigenous firms, nor on the differences between sectors. There is a general consensus, but relatively little concrete thinking, on how to promote and enhance technological and supply chain relationships between Irish SMEs and multinational companies - even those in the same sector. 
Second, Ireland’s ranking on international innovation indices – where it is typically mid-table – is skewed by the peculiarities of the Irish economy, with its high levels of services exports, intellectual property payments and outward investment, all of which are related to tax avoidance.  While patent data has to be treated with caution, Ireland’s, per capita applications to the EU patent office in 2018 was less than half the number applied for by Switzerland, Luxembourg, the Netherlands, Sweden, Denmark and Germany. Moreover, two companies – Aptiv Technologies and Accenture – accounted for 38% of the Irish applications and almost certainly these applications are based on research done outside Ireland. A critical discussion of the state of patent applications and entrepreneurship in Ireland can be found in Finfacts (June 2019)   https://www.finfacts-blog.com/2019/06/the-poor-state-of-entrepreneurship-in ireland.html
Third, innovation requires individual commitment, high levels of trust, rootedness and a sense of belonging to a distinct community (Bradley & Kennelly 2008). By way of illustration, Ireland was perhaps at its most innovative (across many domains) between 1880 and 1920, and this innovation was founded on a deep sense of place and a strong cultural identification. More recently, Ireland has punched well above its weight in cultural innovation (whether in film, theatre, music, etc.).  The lesson is that to stimulate local innovation, people must know and appreciate who they are, where they are from, and where they are trying to go. Indigenous innovative capabilities therefore depend on a strong cultural and social base, capitalising upon tacit resources embodied in self-knowledge and tradition. In the emerging sustainable age, this deep sense of place, fostered by a forward-looking public policy, should be an important driver of innovation in Ireland’s indigenous enterprises. This approach to innovation is very different to the FDI/SFI understanding, which is essentially aspatial, acontextual, ahistorical, and acultural.
Fourth, the strategy has emphasised funding basic scientific research, even though it has long been recognised that basic research doesn’t necessarily lead to commercial innovation.  In the Irish context, this is being partly addressed by trying to deepen industry involvement in the sixteen SFI-funded Research Centres as well as developing fourteen new Technology Centres.  However, this shift – from science to engineering – has typically underappreciated the fundamentally social nature of technology-in-use.
Fifth, the emphasis on STEM research has resulted in very little investment in research in Arts, Humanities and Social Sciences.  Most recently, all of the Research Priority Areas announced in early 2018 are in STEM. As Prof Robert Kitchin has said, “the prioritisation areas ignore issues such as housing, education, economics, public administration and the wider public good.  Government seems to believe that creating jobs will fix everything, yet having full employment did not prevent the last crash and Ireland continues to be riddled with a diverse set of crisis issues”.  That crash cost the Irish state €60bn, but the cause of the crash was more to do with topics routinely covered in social science – e.g. corporate governance, banking regulation, property bubbles, neo-liberalism, etc. – rather than STEM research.  The issue was also recognised by the International Panel which reviewed the implementation of the Research Prioritisation Exercise in 2015. In their report, they stated that “research prioritisation should be positioned in a broader, strategic research framework which recognises the need to fund excellent research in other areas, in order to underpin the wider skills agenda, to meet broader societal goals and to enhance further Ireland’s reputation for outstanding science”.  The logic here is not to reduce spending on STEM research, but to invest more heavily in developing our collective knowledge and understanding of other important domains.
Beyond this, there’s little discussion around the different ways of thinking about innovation and innovation policy, and the consequential different models and nature of the actors that might, or might not, have a role in innovation policy development and/or implementation. For instance, innovation policy is currently premised on the notion that the state should buy rather than make knowledge (Teagasc is an exception) and that the state’s role should be to create and manage markets for knowledge production and consumption. There is little if any debate about the merit of this approach or investigation of its downsides (the policy arguably fosters short-term thinking, opportunistic tendering, and militates against institution-building for the longer term).  Likewise, there’s little discussion on what ‘centralisation’ might mean in the context of innovation, or on the role of local actors – e.g. county councils – in innovation policy. This lack of debate can be partly attributed to the disappearance of the innovation policy structures that were in place 10-15 years ago.
The economist Colm McCarthy (2019) has identified another example of the lack of coordination in inward investment policy.  A big effort has been made to attract data centres to Ireland and this has been very successful.  Data centres, however, are enormous users of electricity with consequent implications for energy supply and security, climate change policy and other areas.  Little attention has been paid to this conflict of objectives.

6.      Identifying the Problem

While a lot has been written in the last decade or so about research, innovation and economic development – with a tendency to paint a positive picture of progress – it is difficult to substantiate these arguments with hard evidence.  This reflects a reduction in innovation performance information, particularly in relation to business performance, over the past ten or twelve years.
Prior to that period, Forfás undertook two types of activities which helped to provide the basis for innovation targets in the various innovation policy plans since 2000 and for fine-tuning policy instruments in the light of actual performance.  The first activity was the undertaking every two years of a survey of R&D in the business sector, with a very detailed published report identifying, among other things, the difference in performance between foreign-owned and indigenous enterprises, as well as a number of more specific innovation indicators.  The second activity was the undertaking of independent, external evaluations of the various innovation programmes operated by the agencies.  The evaluations were conducted in line with best international practice in the field.  It is usually the case that those evaluated in this way do not particularly appreciate such scrutiny but there is little doubt that it can help identify problems and opportunities and improve performance overall.
The CSO continues to prepare what used to be known as the Community Innovation Survey for Ireland under the heading of Innovation in Irish Enterprises, the latest issue of which relates to the period 2014-2016.  The CIS is an EU-wide initiative and was originally carried out jointly in Ireland by the CSO and Forfás.  The current version (April 2018) is a 12 page PDF on the CSO’s website while the CIS 2008-2010 (April 2012) was an 80+ page publication.  This went into much greater detail on the differences in firm performance of R&D but in particular into the non-research and non-technological aspects of innovation such as the diffusion of knowledge and technology into firms, organisation and marketing activities and the barriers being faced by SMEs.
The absence of these data and analysis makes it very difficult to identify precisely what is happening and to get a handle on what needs to change.  This is a major criticism of current practice.

7.      Innovation Policy Overseas

Virtually all developed countries, including OECD members (and most developing ones), have some kind of national representative body/council that deals with policy advice and formulation on some (and increasingly wider) aspects of their ‘national innovation systems’, including funding and governance issues.
The OECD has produced a series of Reviews of Innovation Policy which provide a   a comprehensive assessment of the innovation system of individual OECD member, focusing on the role of government. Thus far, the OECD has reviewed 22 countries: Portugal (in 2019), Austria (in 2018), Kazakhstan, Norway, Finland, Costa Rica (in 2017), Malaysia, Lithuania, Luxembourg, Sweden (in 2016), Croatia, France, Korea, Viet Nam (in 2014), Mexico (in 2013), Slovenia (in 2012), Russia (2011), China, Hungary, Norway (in 2008), Chile (in 2007), Switzerland (in 2006). The OECD  provide concrete recommendations on how to improve policies which impact on innovation performance, including R&D policies. Each review also identifies good practices from which other countries can learn.  It would be timely for Ireland to consider commissioning the OECD to carry out such a review.
Beyond the OECD studies, the Swedish Agency for Innovation Systems, VINNOVA, carried out a survey/analysis in 2015 of the characteristics and the challenges facing ‘National Research and Innovation Councils as an Instrument of Innovation Governance’ (Serger et al. 2015).  The authors of this study note that ‘the interest in innovation councils responds to a growing need for strengthening the coordination, inclusiveness and, ultimately, the effectiveness of innovation policy governance’. The questions asked were ‘What is the function, composition and role of councils in different national innovation systems – and how do they reflect the evolving demands on innovation governance? What are some of the challenges that may be experienced, and what are alternative approaches to addressing these challenges?’
This study, which built on previous international comparisons of national innovation councils conducted by the OECD, provides a comparative analysis of national Innovation Councils in Austria, Denmark, Finland, Germany, Netherlands, Switzerland, UK, Canada, US, China, Japan and Korea. The report found that while numerous countries have established innovation councils, their structural characteristics differ significantly between countries. The most notable differences were around mandate (strong or weak), focus (narrow or broad), anchoring (primary reporting relationships), resources (large or small), outputs (analyses or decisions).
The study also highlighted some new trends that demonstrate innovation councils’ reaction to the evolving demands of innovation governance. These include a strengthened focus on forward-looking activities (e.g. foresight processes in Germany and multi-annual plans for research and innovation in Japan and South Korea), a greater tendency to involve foreign expertise (in the case of Austria, Germany, the UK, the Netherlands, Switzerland and Singapore), and more attention to stakeholder inclusion and communication (in the case of Denmark, Canada, and USA).

8.      Case Studies

Case: Swedish National Innovation Council

Arising from the results of the VINNOVA report and other analytical and political developments, the Swedish Government decided in February 2015 to establish the National Innovation Council (NIC).
The NIC consists of ten external advisers from industry, unions and academia, including three university professors (from environmental studies and innovation studies, and one university vice-chancellor), one union representative, as well as CEOs of large firms (Volvo Group, Stora-Enso) and small firms (including innovative entrepreneurs and one business angel). The NIC members are appointed in their personal capacity and do not represent the organisations from which they come, or any political party.
Five representatives from the government participate in the NIC meetings. In addition to the Prime Minister, the Minister of Finance, the Minister of Enterprise/Innovation, the Minister of Research and the Minister of International Development Cooperation and Climate (also Deputy Prime Minister) participate in the meetings. The small secretariat of the NIC is placed under the auspices of the Office of the Prime Minister, i.e. superior to all ministries, which is important.
The existence and operation of the NIC is based on the premise that research is not the same as innovation nor always a basis for innovations, and that much research funding is intended for basic research and research in areas with little relation to innovation.
Since research and innovation are different actions, there is a need to distinguish between innovation systems and research systems. Research policy and innovation policy are also seen to be different phenomena, with different objectives and using different policy instruments, in a transformation of innovation policy from linear to holistic – with the aim of leading to a better research policy and a better innovation policy.
The NIC is thus not a science/research and technology/innovation policy council. Instead, it is dedicated to dealing with innovation policy in a much broader sense than most of the science, technology and innovation policy councils in other countries. The Swedish NIC also partly deals with research policy issues, but in the broader context of innovation. This approach is similar to how the Swedish Research Policy Council (which continues to exist) is dealing with innovation policy. This means that the areas of responsibility of these two councils overlap and must be coordinated.
They also intrude into the territories of many additional policy areas, such as labour market, public procurement, energy, transport, health care, environmental and regional policies. This makes it clear to everyone that policy areas do overlap to various degrees. In the Swedish approach, innovation policy and research policy should be separate from each other in the design phase – but it must be ensured that they support each other when implemented.

Case: Finland’s Research and Innovation Council

Nieminen et al (2016) identify these key milestones of the Finnish science, technology and innovation system since 1990.
1990 – National innovation system is introduced as a central policy concept.
1995 – Finland joins the EU.
1996 – Government’s decision of additional research funding programme for 1997-1999.
1999 – R&D funding exceeds 3 per cent of GDP.
2004 – Structural evaluation of the research system.
2005 – Council of the state decision in principle on the structural development of the STI system.
2006 – Structural renewal of universities and research institutes begins.
2007-2009 – Establishment of six strategic centres of STI, SHOKs.
2008 – National innovation strategy by the Government.
2010 – R&D funding 3.9 per cent of GDP.
2013 – Decision of the government to reorganize public sector research organizations.
2012-2015 – Decisions to cut public R&D and education expenditures.
Finland’s Research and Innovation Council is an advisory body chaired by the Prime Minister. The Council discusses key issues relating to the development of research and innovation policy that supports wellbeing, growth and competitiveness.  It was set up in 2008 to, among other things: (a) follow national and international developments in research, technology and innovation; (b) evaluate developments within the sphere of its authority; (c) address major matters relating to the development of science, technology and innovation policy and prepare proposals and plans.
In September 2013, the Finnish government adopted a Resolution on Comprehensive Reform of State Research Institutes and Research Funding aimed at building up multidisciplinary, high-level research of significant societal relevance and research in support of government decision making. The resolution covers the reorganisation of public research institutes, reallocation of some public research funding to competitive research funding, and the creation of a new, strategic research funding instrument (the Strategic Research Council) within the Academy of Finland to support long-term research on challenges facing Finnish society (see chapter 6 of the OECD Review of Innovation Policy: Finland, 2017).  The members of the Strategic Research Council currently comprise two persons working in the senior management of government research institutes, four university professors, two senior executives of a private company and one retired senior civil servant.

9.      Potential Recommendations

Recommendation 1: Review existing supports for ‘domestic’ innovation

The objective here is to get a clearer sense of the various incentives and  support mechanisms available to businesses engaged in innovation. This review should identify, analyse and critique the agencies providing the support, the conditions surrounding the support, levels and types of support given, overall and specific budgets, domestic/FDI focus, etc.  The aim of the review would be to identify strengths and weaknesses in Ireland’s approach to industrial innovation, which should help shape future approaches.  Such a review should also help ensure that the Irish innovation support system relates to actual practice and would be most appropriately led by DEBI.

Recommendation 2: Utilise the expertise & experience of the OECD in reviewing overall Irish productivity & innovation policy

In the area of innovation policy in particular, the Irish Government, along with the wider civil and public service, has built up a long-term relationship with the OECD and its Secretariat in Paris. This goes back to 1966, with the publication of ‘Science & Irish Economic Development’, which was a sister report to the highly influential ‘Investment in Education’ and led to the establishment of the first National Science Council in Ireland. The Centre for Entrepreneurship, SMES, Regions & Cities (CFE) at the OECD is currently finalising a ‘Review of SME and Entrepreneurship policies and programmes in Ireland’ on behalf of the Minister and Department of Business, Enterprise & Innovation (DBEI). This has identified an overall productivity problem among established SMEs (in particular in the medium-sized category where both manufacturing and services sectors have experienced a recent decline in productivity) and highlighted the role of innovation in increasing and maintaining productivity.
In the context of the upcoming review of ‘Innovation 2020’ of It would seem to make much sense for the Irish government to use our relationship with the OECD to conduct a wider review of Irish productivity and innovation policy, along the lines of previous studies, both in Ireland and other member states. The review of specific supports for innovation envisaged in Recommendation 1 would be an important input to this wider OECD-related exercise.

Recommendation 3: Establish an Irish Innovation Council

Any OECD-related review of Irish innovation policy will take some time.  In the context of such factors as:
  1. the upcoming restatement of overall innovation policy (revision of Innovation 2020)
  2. the 20-year anniversary of the major Technology Foresight exercise published at the turn of the millennium and
  3. the ongoing Science Foundation Ireland strategy review
  4. the ongoing but increasingly urgent issue of how Irish indigenous industry can become competitive in a rapidly evolving global environment and the significant role of innovation in that transformation
all taking place within wider national and international economic and social developments, such as Brexit and climate change, it is now timely to consider establishing an Irish Innovation Council. Given how the role of innovation and innovation policy is currently being rethought, as outlined above, such a Council could learn from the Swedish NIC, with its focus on the total innovation process.
A Council drawn from a range of interests similar to those represented in the Swedish case – i.e. industry, academia and government/public service – would also be in keeping with the approach adopted in the almost 50-year history of Irish policy advisory and implementation bodies. As is the case in Sweden, an issue that might arise is whether a separate ‘research’ council/forum dealing with basic research and other non or part-innovation issues might or might not be required or how existing structures might be adapted for that role.
The setting-up of an Innovation Council does not necessarily imply establishing a new statutory organisation/agency. In a similar way to the Climate Change Advisory Council or the Irish Fiscal Advisory Council,  it could operate out of an existing government department. The Council might be most appropriately located within the Department of Business, Enterprise and Innovation (though Sweden’s NIC is under the auspices of the Office of the Prime Minister).  Regardless of its location, an Innovation Council would need a level of autonomy and independence as well as adequate financial and professional resources (e.g. ‘dedicated’ policy analysts). There is much experience in establishing such structures within the Irish civil/public service. 

Recommendation 4: Initiate a new Foresight Exercise

In the context of climate change and the ecological crisis, it is important that we have formal ways of planning for the longer-term.  Traditionally, Ireland has benefited from Technology Foresight and economic planning exercises – the Technology Foresight exercise carried out in the late 1990s and published almost 20 years ago was pivotal in creating Science Foundation Ireland – and it is now appropriate to conduct a similar forward-looking exercise, but with a broader remit.  As well as addressing climate change and the ecological crisis, creating an equitable and sustainable digital society should also be part of the remit.
Such an exercise might be conducted under the auspices of the proposed Irish Innovation Council, but it would probably be more appropriate, given time constraints and the need for a broader remit, to initiate the exercise promptly in partnership with the Department of An Taoiseach. The exercise should be part of an ongoing, continuous process of policy formulation.

References

Bradley, Finbarr and James J. Kennelly. (2008) Capitalising on culture, competing on difference: innovation, learning and sense of place in a globalising Ireland. Blackhall Pub. Blackrock, Ireland.
Breznitz, Dan, Darius Ornston, and Steven Samford. (2018) “Mission critical: the ends, means, and design of innovation agencies.” Industrial and Corporate Change 27 (5)  883-896.
Breznitz, D. and D. Ornston (2018), The politics of partial success: fostering innovation in innovation policy in an era of heightened public scrutiny,” Socio-Economic Review, 16(4).

Breznitz, D. and D. Ornston (2013),The revolutionary power of peripheral agencies: explaining radical policy innovation in Finland and Israel, Comparative Political Studies, 46(10), 1219–1245.

Cogan, Joe, Downey, Liam, Fitzgibbon, Michael and O’Doherty, Dermot (2015) Submission to the Interdepartmental Committee on Science, Technology and Innovation. Unpublished Work.
Dept of Business, Enterprise and Innovation (2019) Future Jobs Ireland 2019: Preparing now for tomorrow’s economy. Dublin: Government of Ireland.
Dept. of Jobs, Enterprise and Innovation (2015) Report of Independent Panel on progress in implementing research priorities. Dublin: Government of Ireland.
Finfacts (June 2019) “The Poor State of Entrepreneurship in Ireland
Fitzgibbon, Michael (2011) 'Fifty Years of Irish Industrial and Science Policies, 1960-2010: A Critical Analysis', Administration, 59: 101-141.
Flores, Fernando (2013) Strategic orientations for innovation -  Chile on the 2025 horizon. National Council on Innovation for Competitiveness.
Kavanagh, Donncha (2018) The €60 bn. Question: Where’s our intellectual deficit? Presentation to Waterford Institute of Technology.
Kitchin, Rob (2018) 'Research Priority Areas', The Irish Times, 19 March.
Mazzucato, Mariana (2011) The entrepreneurial state. London: Demos.
McCarthy, Colm (2019) ‘Varadkar bans drilling for oil never found in Ireland's waters’,  Irish Independent, 22 October.
Noonan, Camilla, Kelly, Séamas and Vidolov, Simeon (2015) Science, Technology and Innovation Policy in Ireland – a Historical Sketch. Dublin: University College Dublin.
O’Doherty, Dermot. (2017) 'The Appliance of Science:  STI (science, technology & innovation) and economic development', History Ireland, 25(1): 14-15.
O'Doherty, Dermot and Fitzgibbon, Michael (2014) 'Seán Lemass and Laurence Kettle: Agents for technical change and industrial research', History Ireland, 22(1): 40-43.
OECD (2012) 'STI policy profiles: Innovation policy governance', in OECD Science, Technology and Industry Outlook 2012. OECD Publishing.  Available at: http://dx.doi.org/10.1787/sti_outlook-2012-en
OECD (2019) Draft Report on SMEs & Entrepreneurship in Ireland
Serger, Sylvia Schwaag, Wise, Emily and Arnold, Erik (2015) National Research and Innovation Councils as an Instrument of Innovation Governance VINNOVA - Swedish Governmental Agency for Innovation Systems.


TITLE: Science, Technology & Innovation (STI) Policy (1966-2016) – Commemorating a New Beginning?
In this busy year of anniversaries and commemorations there has been one significant area of Irish economic and social life to which little or no attention has been paid. In the hope-filled days of the mid-60s, the Irish Government – in cooperation with the OECD (a key partner in many seminal policy reports and implementation exercises at that time and since) – published ‘Science and Irish Economic Development’ (SIED) in 1966[1]. Reporting to the then Minister for Industry and Commerce, Jack Lynch and the National Advisory Committee he established, the Project Team, led by UCD Economist Paddy Lynch (no relation), based its report on a detailed survey of the state’s scientific and technological resources and capabilities across the spectrum of the public, private and university sectors.

It is worth noting that Paddy Lynch was concurrently responsible for producing another significant report in conjunction with the OECD, entitled ‘Investment in Education’. Far from ending up sitting on the proverbial shelf, both of these reports were to lead to rapid and significant political and administrative action – in the case of SIED to the setting up of the representative and advisory National Science Council (by Charles Haughey) in 1967. The responses to the Investment in Education report included early and major second level changes (e.g. ‘free education’ - 1966) as well as  third level initiatives (e.g. Regional Technical Colleges in 1969). Both reports stressed the importance of applied research and technical skills, alongside longer-term research needs.

One of the reasons why such rapid action followed from these reports was that, under the relatively radical and reform-minded Lemass Government, a group of people with both good analytical skills and strong political and public administration links was brought together and adequately funded and resourced to ‘do the job’ properly. In the case of SIED, this involved recruiting a full-time staff drawn from Bord na Mona – Horace ‘Dusty’ Miller, (a mechanical engineer) as Deputy-Director - and from the then An Foras Taluntais/Agricultural Institute - Diarmuid Murphy, (a researcher and statistician, later Secretary of the National Science Council) - along with part-timers including the Professor of Electrical Engineering at UCC ,Charlie Dillon (later, Chairman of the ESB), TCD economist, Martin O’Donoghue, (later Minister for Economic Planning & Development), an international public servant from the UN Economic Commission for Europe, Bill Hyland, (later to return to the Department of Education) and finally, as Secretary, from the civil service, Cathal Mac Gabhann, (later to be Chief Executive of Gaeltarra Eireann and Udarás na Gaeltachta). They spent a full three years preparing  a comprehensive report  on Irish science and technology, which would not be matched until what is known as the Tierney Report from the Science, Technology & Innovation Advisory Council (STIAC) and the subsequent White Paper in the mid-1990s, which  led to a major increase in state funding for research.

The 1963-1966 Research and Technology Survey was one of five established in the early to mid-60s in OECD member states to see how R&D and other science and technology-related activities were linked to and could be more oriented towards economic and social needs. The other four pilot countries were Italy, Spain, Greece and Turkey. The Research and Technology Survey and the subsequent SIED Report not only set out ‘to supply information on the present state of research and technological development in the Irish economy’ but also ‘to forecast the likely growth of these activities over the next 15 years.’ Here again it anticipated developments in the late 1990s when a major Foresight exercise was organised to follow up the analytical and advisory work of STIAC.

Charles Cooper, a South African-born economist who had vowed not to return to his homeland until the end of apartheid, was the OECD staff member overseeing the five surveys. He was to leave the OECD in 1969 and join the staff of the Science Policy Research Unit (SPRU) at the University of Sussex. This was founded in 1966 and was directed for many years by Professor Chris Freeman, who is widely recognised as the primary innovation theorist of the 20th century. Cooper was to play a further important role in the development of thinking on the potential economic and social impact of science and technology in Ireland in a seminal report to the National Science Council on Science, Technology and Industry in Ireland (known as the Cooper-Whelan Report)[2] published in 1973.

This was co-authored by Cooper (advised by Freeman and others at SPRU) and Dr. Noel Whelan, who worked closely with Paddy Lynch in the setting up of the  first master’s degree in the Economics of Science and Technology and the establishment of a Sussex-type Science Policy Research Centre (SPRC) at UCD, both now no longer in existence. He was subsequently to become Secretary of the Department of the Taoiseach. The Cooper-Whelan report extended the discussion on the role of science and technology in Irish-based industry, both indigenous and foreign, particularly in the form of innovation or, more particularly, new product and process development. The report traced clearly for the first time the nature and impact of the two-tier nature of industry in Ireland – on the one hand a small group of new, foreign-owned firms in high technology sectors attracted here by a tax-free exports regime and grants, and on the other hand an indigenous and largely traditional sector of subsidised, non-exporting small firms for which technology and research were irrelevant’.[3] This inspired much discussion on the role and focus of R&D and innovation in Irish industrial and related policies over the 1970s and early 1980s, particularly in the context of the lively and detailed debate stimulated by the Telesis Report.[4]

The major institutional change arising from the Cooper-Whelan report was the establishment in 1978 of a National Board for Science and Technology, a statutory body to provide science and technology policy advice.  It replaced the National Science Council established in 1967.

The Cooper-Whelan and Telesis reports broke new ground - particularly in stating strongly the need for an approach to research and innovation that took into account longer-term needs in relation to more fundamental research in an academic setting, playing a role in international science etc., but also a clear focus on the need to address the more immediate product and process development needs of both indigenous and foreign industry.

Such ‘local’ development needs (and opportunities) had previously been addressed in various reports and analyses going back to the mid-19th century at least with the work of Sir Robert Kane[5] and the publication of The Industrial Resources of Ireland’ in 1844.[6]Both this and a subsequent review by the Young Irelander, Thomas Davis,[7]stressed the importance of ‘knowledge,’ as well as natural resources, as the basis for industrial and economic development – thus anticipating the modern concept of ‘the knowledge economy’ by over a century. What both missed is the importance of markets and marketing as essential elements in innovation and the development of new products (goods & services).
                                                  
Another Irish pioneer in the application of science to economic and social development was John Desmond (JD) Bernal, born in Nenagh in 1901, who was both a pioneering researcher in the study of x-ray crystallography and the author of ‘the Social Function of Science’[8], which was published just before the outbreak of the 2nd World War in which he played a high level policy advisory role. Bernal was known as ‘Sage’ and according to his biographer, Andrew Brown[9], 'The Social Function of Science . . . was Bernal's attempt to ensure that science would no longer be just a protected area of intellectual inquiry, but would have as an inherent function the improvement of life for mankind everywhere. It was a ground-breaking treatise both in exploring the scope of science and technology in fashioning public policy, with Bernal arguing that science is the chief agent of change in society, and in devising policies that would optimise the way science was organised. The sense of impending war clearly emerges. Bernal deplored the application of scientific discoveries in making war ever more destructive, while acknowledging that the majority of scientific and technical breakthroughs have their origins in military exigencies, both because of the willingness to spend money and the premium placed on novelty during wartime.'

Until recently Bernal had gone largely unrecognised in his own country. This can at least partly be explained by the fact that he spent most of his career at the University of Cambridge and Birkbeck College, London. But the recent establishment of the €52 million Bernal Project at the University of Limerick (UL), close to his native Tipperary, has gone some way to correcting this. The investment will expand research capacity in the industrially-oriented Applied Sciences & Engineering faculty.
UL has also pioneered the concept of ‘Translational Research’ where a conscious effort is made to build in industrial applications from the start of the research project and the difficulties of technology transfer are minimised.

So a serious long-term approach to policy-making and advice in STI was established 50 years ago (and more). Irish scientists, technologists and economists, supported by a far-seeing Government and public service, were to the fore in developing and embracing new ideas and structures for the application of science and technology in what was a challenging area of thinking and governance. The principle of having a representative and expert advisory body in a field recognised at the OECD and elsewhere as being increasingly significant for industrial and economic development was laid down.

However, it was not until financial resources became available to Ireland from the European Regional Development Fund in the late 1980s that real progress was made on implementing a research and innovation policy.  A Minister of State for Science & Technology (along with an Office within the responsible Department), and, latterly, one for Research, became a normal part of Government. Ireland’s only industrial research and technology organisation (RTO) – the Institute for Industrial Research and Standards, which was merged with the NBST in 1988 to form Eolas –was given more resources to expand its capabilities.  But following a review of industrial policy in 1991 (Culliton Report) Eolas was abolished and replaced by an agency responsible for developing indigenous industry (Enterprise Ireland).  A new policy advisory body was established in 1993, Forfás, to provide policy advice and co-ordination for industrial and science and innovation policies.  In 1995 the Government established a major consultative exercise on the future of science and innovation policy, called STIAC (the Science, Technology and Innovation Advisory Council) and its output, the Tierney Report, led to major changes.  A Foresight study was undertaken, resulting in an enormous increase in the level of public funding for basic research and the setting-up of Science Foundation Ireland.  A permanent advisory council was established to provide expert advice on science, technology and innovation (ICSTI).  Research Councils for Science & Engineering and the Social Sciences were established (later to be amalgamated into the Irish Research Council) to channel the new funds into research in third level institutions.  An office of Chief Scientific Adviser to Government was also established.

These developments in the 1990s can be seen in general terms as a logical follow-on to the early commitment in the 1960s to the formulation and implementation of a coherent approach to developing a national system of innovation in line with best practice in other small, developed countries, although they were marked by a lack of attention to the need and opportunity for the kind of applied research and technical development that would have favoured indigenous industry. This and other in-built flaws, combined with the well-known problem in Irish public policy of ignoring weaknesses and emphasising only the supposed positives, has led to a situation where the 2016 picture is very different. There is currently no dedicated Minister for Science & Technology or Research, although a senior Government Minister, as well as a Junior Minister with other primary responsibilities, retains ‘Innovation’ in their ministerial titles. Even more starkly, there is no independent advisory council or related professional secretariat. Nor is research or science mentioned in the current Programme for Government. In addition, the posts of Director General of Science Foundation Ireland and the state’s Chief Scientific Adviser are carried out by the same person, calling into question the independence and objectivity of the latter, irrespective of the merits of the individual involved.

In the context of Brexit, the Apple tax controversy and other short-term challenges, these may seem to be somewhat ‘academic’ issues but the latest OECD Economic Survey of Ireland[10] stresses the need to encourage industrial R&D in particular and innovation in general as a major policy priority. A recent background paper[11] prepared by the OECD Secretariat states that ‘while Ireland has made good progress towards building up its scientific capabilities, innovation capacity remains weaker than in other small advanced OECD countries, such as Austria, Denmark, Sweden and Switzerland.’ It goes on to say that ‘attracting high-tech multinationals should remain central, (but) there is potential to better develop spillovers between these firms and domestic SMEs, notably by establishing applied research centres.’

A similar concern has been echoed by some Irish economists, including John Fitzgerald. In his regular Irish Times column[12] Fitzgerald last year commented that ‘for half a century the attraction of foreign investment to Ireland has been a key feature of the Irish development strategy’ and ‘it has proved successful, with a large number of foreign multinationals coming to Ireland and prospering here.’ He then went on to state that ‘In the longer term, Ireland needs to evolve its industrial strategy to reduce its dependence on low tax rates as the crucial arm of competitiveness. Greater reliance on innovation by domestic business and on developing skills and expertise will provide a more secure long-term strategy.’

These views underline the point that Ireland needs adequate and appropriate policy-making and advisory structures to address specific research and wider innovation issues. Over the years, lip service has been paid to establishing an Irish version of the OECD concept of a ‘national system of innovation’, in which all the elements of the innovation process and a wide range of actors involved are included. In 2016, such an approach increasingly appears to be a receding memory. This is illustrated in the fact that the welcome Year of Design 2015 was clearly reflected in Enterprise 2025[13] but only received a small mention in Innovation 2020[14].

There is an immediate need to restore the mechanisms that are necessary to make this happen. Perhaps in addition to a representative council like we have had since the mid-1960s, we might also see the resurrection of the 2010 Task Force on Innovation, the last major consultative exercise in this area, whose report faded away after the change of Government in 2011. In both cases, we might well pay heed to Chris Freeman’s advice that
‘Innovation is far too important to be left to scientists and technologists. It is also far too important to be left to economists or social scientists’ (Freeman, 1974: 309)[15].
October 2016


[1] Stationery Office, Sept/Oct 1966 (Volumes 1 & 2)
[2] Stationery Office, January 1973
[3] Fitzgibbon, M. (2011) ‘Fifty Years of Irish Industrial and Science Policies, 1960-2010: A Critical Analysis’, Administration, 59, 101–141.
[4] A Review of Industrial Policy NESC Report No.66 1982
[5] Secretary, RIA; and Professor of Natural Philosophy, RDS and of Chemistry, Apothecaries Hall of Ireland
[6] Hodges & Smith, Dublin June 1844
[7] Prose Writings, Davis, Walter Scott, London 1889 (which appeared in the Nation in 1844)
[8] Faber 1939
[9] J.D. Bernal: the Sage of Science – Andrew Brown OUP 2005
[10] OECD Economic Surveys – Ireland September 2015
[11] From bricks to brains: increasing the contribution of knowledge-based capital to growth in Ireland – David Haugh, OECD Economics Dept Working Papers No 1094
[12]Home-grown business is driving the recovery more strongly than multinationals  - foreign direct investment is vital to jobs but the real source of growth is indigenous -  Irish Times Tue, Feb 3, 2015  
[13] Department of Jobs, Enterprise and Innovation, Enterprise 2025 Ireland’s National Enterprise Policy 2015-2025 Background Report 2015
[14] Department of Jobs, Enterprise and Innovation, Innovation 2020: Progress Report July 2016
[15] Freeman, C. (1974), The Economics of Industrial Innovation, Harmondsworth: Penguin
Books.