213. Deputy Billy Kelleher asked the Minister for Business, Enterprise and Innovation if there is still a commitment to attain the Innovation 2020 research and development intensity target of 2.5% of GNP in view of recently published reports (details supplied); and if she will make a statement on the matter. (Question 19631/18 asked on 08 May 2018)

Minister of State at the Department of Business, Enterprise and Innovation (Deputy John Halligan): I propose to take Questions Nos. 208 and 213 together.

As part of a coordinated European response to the challenges for growth and jobs, Ireland, along with our EU colleagues, signed up to the Europe 2020 Strategy in 2011. Under Europe 2020, Ireland committed to raise gross (public and private) investment in Research and Development (R&D) to 2.5% of GNP by 2020. We reiterated this commitment in Innovation 2020, Ireland’s strategy for research and development, science and technology.

The overarching vision in Innovation 2020 is for Ireland to become a Global Innovation Leader driving a strong sustainable economy and a better society – within this the focus is on excellence, talent and impact. Innovation 2020 commits all research funding government departments to ensure that R&D expenditure is afforded a sufficiently high priority.

As part of the whole of Government approach to Innovation 2020, an Implementation Group chaired by my Department and comprising representatives from key Government Departments, research funding agencies and the Chief Scientific Adviser to the Government has been established and is tasked with driving delivery of the actions in Innovation 2020.

As committed to in Innovation 2020, the Implementation Group is to report annually to the Cabinet Committee on progress in achieving high-level targets and delivering on actions. Two progress reports have been published and are available on my Department’s website, www.dbei.ie. Innovation 2020 comprises 139 actions (which includes headline actions and their sub-actions). The Second Progress report, reporting on actions taken in the period up to July 2017, was published in December 2017. It stated that 42 actions had been initiated, 67 actions were ongoing and 8 actions were complete. The third progress report is due to be brought to Cabinet in July 2018.

As three quarters of Ireland’s gross expenditure on R&D is funded by enterprise, a very significant part of our policy has been to align public effort in a manner that leverages R&D activity in the enterprise sectors. While private spending on R&D slowed during the financial crisis, it has been increasing steadily since 2011. Direct public expenditure on R&D climbed from €719m in 2016 to an estimated €768m for 2017.

Notwithstanding that we have increased both public and private R&D spending in recent years, Ireland’s R&D intensity rate (R&D budget as a percentage of GNP) was estimated at 1.52% of GNP for 2015 and 1.43% of GNP in 2016. The recent fall has been due, in part, to the increase in GNP, which was particularly strong in 2015 for one-off reasons. While Ireland has not yet reached its 2020 target, it is worth noting only 2 of the EU27 countries have reached their targets as per latest figures.

The CSO introduced a new indicator in July 2017 (modified GNI or GNI*) designed to exclude globalisation effects that disproportionately impact the measurement of the size of the Irish economy. When using GNI* as a complementary indicator, the R&D intensity rate is estimated at 1.72% for 2016.

A mid-term evaluation of Innovation 2020 will be undertaken this year. This will give us the opportunity to review progress on the targets, goals and actions in Innovation 2020 so that we can identify any relevant adjustments in a timely manner to ensure successful delivery on the vision and objectives.

It is recognised that we will need to continue our drive to increase public and private investment in R&D if we are to realise our vision in Innovation 2020. I have emphasised that across Government there is a need to ensure that in discussions regarding financial allocations for future years, the importance of funding for R&D is kept to the fore.