Spending on research and development by the private sector has slowed markedly and continues to lag behind the EU average, according to a study by Forfás, the national policy and advisory board for enterprise and technology.
While companies invested €917 million in R&D in 2001 from €784 million in 1999, the rate of increase in spend declined to 4 per cent, compared with 11.8 per cent in 1999 to 2001.
With R&D expenditure languishing at less than 1 per cent of gross national product - compared to an EU average of 1.2 per cent - the economy is in danger of falling behind Europe and the rest of the developed world, warned Mr Martin Cronin, Forfás chief executive.
If the Republic is to reach an R&D spend of 3 per cent of GNP by 2010, the target set by the EU heads of government, indigenous industry must strive harder to innovate, he said. While multinationals were meeting EU R&D targets, domestic companies remained off the pace, he explained. Mr Cronin said: "Business is increasing its investment in R&D, but not at a rate which will improve our position relative to other countries."
He added: "In the light of...the goal that Ireland has set itself of being a competitive and knowledge-based economy, we must ensure that Ireland is a location which is attractive for R&D both in our universities and in industry."
The Government must nurture increased R&D outlay by indigenous industry, said Mr Cronin. Helping companies forge closer links with third level was a vital first step, he said.
"The capacity of firms to absorb new technologies is of particular importance and their connection to the higher education system, which is the major source of new technology for commercialisation, must be facilitated."
