It is not surprising that there are demands made, almost on a daily basis, by lobby and special interest groups for the State to increase funding. After all, Ireland has one of the healthiest fiscal surpluses among OECD member states. It is also one of the fastest growing economies, which is putting significant pressure on existing capacity.
There is no doubt that almost every call made on the government to increase spending has some justification. But decisions must be made on the basis of what is best for the country in the long term rather than political expediency.
The State must, as one key priority, focus on investment that lifts the long-term potential of the economy. In this context, the Government should consider Ibec’s calls to increase public investment in research and innovation to 1 per cent of Gross National Income (GNI) by 2035.
Donald Trump’s second term as US president has underlined the growing vulnerability of Ireland’s foreign direct investment model. These include moves to try to force pharma companies and other multinationals to relocate capacity to the US. There is also the growing risk of a global trade war, which will accelerate de-globalisation.
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Against this backdrop, every effort must be made to build up the domestic economy. Producing a world class research and innovation infrastructure is an effective way of doing this. Moreover, Trump’s attacks on universities are poised to grow, which will lead to a steady brain drain from the US. Increased investment in research and innovation would put Ireland in a much better position to attract some of this talent.
Right now, poor funding of the sector here means the goal of attracting key researchers from the US is a nice headline, but one with little substance. Ireland also has work to do to underpin the funding of the third level sector, for both undergraduate and graduate students, which has a key role in underpinning innovation. Education has been vital to the longer-term success of the economy, but there is a sense of complacency about our position which needs to be tackled
