Innovation Europe > News > Innovation EU Vol1-1 > Ireland

Following average GDP growth of 6% (1995-2007), economic activity dropped sharply in 2008 (-2.3% of GDP) and Ireland entered into a recession exacerbated by the world financial crisis and subsequent collapse of the Irish property and construction markets. GDP in 2009 is likely to fall by more than 9.2% and wages and salaries have already declined in the private sector by 10-20% in many cases.

The recent supplementary budget has focused mainly on severe tax increases and some spending cuts. The response of the government to calls for more stimulation has been to maintain high capital expenditure (€7.3bn to support construction jobs), set up a special fund for new start-up investment of €500m, maintain current innovation investment, and introduce tax relief for the purchase of intellectual property. This change in current economic conditions has not, as yet, resulted in any significant change in the National Development Plan (NDP) 2007 – 2013.

According to the 2007 European Innovation Scoreboard (EIS), Ireland’s innovation performance (relative to the EU average), places it among the innovation followers, with Austria, Belgium, Canada, France, Iceland, Luxembourg and the Netherlands. All these countries have average Summary Innovation Index (SII) scores below those of the innovation leaders but above that of the EU-25 and the other countries.

Main innovation challenges

• To ensure the performance of the HE sector achieves its targets.
• To maintain the level of innovation in the private sector.
• To build the internal company capacity to innovate.

Action

The key change since last year has been the recognition of the importance of the service sector in future economic growth and a growing debate on how to assist the HE sector to commercialise its research.

The co-ordination of STI across all disciplines and government departments has improved, although this has been more successful in the industry sector, where user friendliness (ease of use) of supports is the current issue being tackled. Better co-ordination and user friendliness are key approaches to achieving 2.5% GERD by 2013 (the Irish equivalent of the Lisbon 3%).

The following future policies are suggested:

• Use of specific cluster development to increase the level of innovation;
• To give control of more of the innovation budget for SMEs to the Regional Assemblies;
• To develop new measures to inspire more HE innovation activities;
• The development of innovation supports for the service sector.