The Innovation Task Force was appointed to advise the government on how to turn Ireland into an international innovation hub and to support the development of a smart economy. It’s easy to be cynical but better to be constructive. The ITF has issued a call for submissions on its terms of references:
- to examine options to increase levels of innovation and the rates of commercialisation of research and development on a national basis with a view to accelerating the growth and scale-up of indigenous enterprise and to attract new knowledge-intensive direct investment;
- to bring forward proposals for enhancing the linkages between institutions, agencies and organisations in the public and private sectors to ensure a cohesive innovation and commercialisation ecosystem;
- to identify any specific policy measures which might be necessary to support the concept of Ireland as an International Innovation Development Hub including in the areas of legislation, educational policy, intellectual property arrangements, venture capital and immigration policy.
Here is my draft submission. All comments welcome. I’ll acknowledge your input by something like “A draft of this submission was posted at www.irisheconomy.ie and substantially improved as a result of the discussion there. Comments by Malle Appie were particularly helpful.”
High wages require high labour productivity. High productivity requires excellent skills and creativity. Ireland can only maintain its position at the forefront of economic development if it fosters innovation and commercialization. Innovation is a creative process, however, and therefore cannot be mandated by government policy. The government can only create the conditions under which innovation and commercialization are likely.
Excellent education is at the heart of any innovation policy. Only a small fraction of workers will ever be involved in actual innovation. The majority of workers take advantage of the innovations of others, but excellent skills are needed to take full advantage.
Higher education is the focus of innovation, but higher education thrives only when it builds on excellent primary and secondary education.
Excellent education requires excellent teachers. While teaching introductory courses requires didactic skills, teaching at the advanced bachelor’s, master’s and PhD level requires a true understanding of the subject matter. Only researchers who have moved the knowledge frontier can teach at the frontier of knowledge; and only professors like that can give students the skills, self-confidence and inspiration to innovate. Top people are rare and in high demand. Universities abroad offer senior positions with few management and teaching obligations. Ireland can only attract and keep top researchers if it offers similar conditions. This automatically creates a body of curiosity-driven (or fundamental) research.
There are pockets of research and teaching excellence in Irish universities, but the overall level can be improved. Funds are allocated on the basis of student numbers. This should be adjusted for the quality of the graduates, for instance as measured by their incomes twelve months after graduation. Research funds should be allocated on the basis of the number of publications and the number of citations. Faculty pay is currently based on seniority. University pay scales should be reformed to reflect excellence in teaching and research.
Science Foundation Ireland should be expanded to finance all fundamental research. At present, SFI funds research in selected topics only. These topics were selected by politicians, who have no particular expertise in this area. Fundamental research is a global public good. Ireland should contribute its share. Ireland would contribute more if available funding is given to the best proposals, rather than to the best proposals in politically-favoured areas.
Problem-driven (or applied) research draws on fundamental research from around the world. The particular area of fundamental research in Ireland is therefore less important than its quality. Furthermore, it is very hard to predict future growth industries, or what research is needed to foster such growth. The government should therefore create the conditions for applied research, rather than define its area. This is all the more important as policy makers tend to focus on the “new” economy. By definition, the “old” economy is much larger. Although innovation tends to be slower in the old economy, it is much more effective in creating economic growth and new jobs.
Commercialization should be left to businesses. The role of government is to protect patents, trademarks and business secrets, the main instruments to reward commercial research. Tax breaks for R&D mean that more R&D activity is located in Ireland, but there is no reason to believe that profits or jobs that are spun out would be located in Ireland too. It should be noted that R&D per se employs only a limited amount of people, and wages are not exceptionally high.
Government has a larger role to play in pre-commercial applied research. As with fundamental research, excellence is key. Mediocre research serves no purpose. Rewards, however, should not be solely based on academic criteria such as publications and citations. This type of research is best co-funded by a coalition of organizations who potentially have a commercial stake in the result.
Universities could play a larger role in applied research than they do at present. In comparison to other countries, Irish universities are largely closed. It is exceptional for people to move from academia to policy and back. If this were as common in Ireland as it is in the USA, policy making would gain in quality and university teaching would gain in relevance. Joint appointments are rare. In other countries, Germany for example, it is common for senior staff at research institutes (of the government) and research departments (of companies) to share an appointment with a university. Such “personal unions” generate a steady stream of ideas, funds, and people in both directions.
Universities should also have a stake in successful commercialization. In Ireland, an academic-turned-entrepreneur is a loss to the university. In other countries, university staff who have an idea for a start-up company are allowed to work part-time, with a guarantee for a full-time job in case the company fails. This takes away part of the downside risk for the entrepreneur, thus increasing the number of start-ups. These start-up companies rent office space and other university facilities, paying in shares. The university would thus operate as a venture capitalist, and would actively support commercialization.
Given the level of public investment in research and higher education and its alleged importance for future economic growth and employment, it is imperative that a framework be developed to evaluate specific investments. Too much of the debate on research investment is clouded in vague generalities. The research to develop such a framework would take only a small fraction of total research funding. The framework should be tested with an ex-post evaluation of past research spending.
Past and current research funding has been concentrated in the natural sciences and, by implication, product innovation. The research recommended above should also evaluate whether this focus is appropriate. The service sector has made a significant contribution to economic growth and is likely to continue to do so. The service sector disproportionally employs people with an education in the social sciences; and technological progress is primarily driven by process innovation. Research support in these fields may be warranted.
Innovation is a creative process. Some observers claim that creativity is “our” main competitive advantage over the large numbers of highly skilled engineers and scientists in Asia. Ireland has a considerable international reputation in the creative arts. This certainly makes Ireland a more attractive location for foreign investment. However, emulating recent developments at Princeton University, it should also be investigated whether and how the apparent creativity of the arts can be mobilized to promote creativity in the sciences.
In sum, Ireland’s policy on public support for research should
- create an environment that enables and rewards innovation and commercialization
- focus on objectively measured excellence
- be inclusive of all forms of research and all types of innovation