Ireland’s science budget - like the rest of the country’s finances - is taking a severe battering during the current economic crisis, with a 4.5 per cent cut this year to €570 million, down from € 597 million in 2010.
“While this represents a small reduction on the allocation for 2010, it substantially protects the overall investment and prioritises spending with greatest impact on enterprise and job creation,” according to the Department of Enterprise, Trade and Innovation, which is responsible for managing the budget.
The Department is disbursing €377 million of the total to Science Foundation Ireland (SFI) and to the Programme for Research in Third Level Institutions, both of which fund university research, and to Enterprise Ireland and IDA Ireland, the economic development bodies whose role is to build out the country’s so-called ‘smart economy’ strategy in the commercial sphere, by boosting private sector R&D and promoting the adoption of low carbon technologies.
Science cuts are not “unreasonable”
The overall national budget for 2011 was narrowly passed by the Dáil (the Irish parliament) at the beginning of December, after a €67.5 billion bailout package was agreed between the government, the International Monetary Fund and the European Central Bank.
Given this unfortunate backdrop, the reaction to the cut in the science budget is more one of resigned acceptance rather than any real sense of disappointment. “I don’t think it’s unreasonable that the [science] budget should take a cut. It’s encouraging that it has held up as well as it has,” says Brian Caulfield, a serial software entrepreneur-turned-venture capital investor.
Despite the pervading gloom, Caulfield says he is “way, way more optimistic” about Ireland’s future than the general media perspective would suggest he has a right to be. Funding companies is easier in a downturn than in a boom. “The cost of innovation, the cost of entrepreneurship is drastically reduced,” he says. “Pretty much everything is cheaper in terms of building a company – that’s a positive.”
Although the total science budget has been cut, SFI’s budget has been increased, following a fall in 2010 that left it unable to fund any new initiatives. “The cuts in the budget last year had a major effect in that we weren’t bringing anybody in,” says SFI spokeswoman Alva O'Cleirigh. Established in 2003, and modelled on the US National Science Foundation, SFI has become the core engine of Ireland’s recent efforts to boost its research base. Meanwhile, the Programme for Research in Third Level Institutions, which provides infrastructure and current funding, is in the midst of a programme of investment involving €359 million spread over several years.
Embracing Austerity
In trying to plot a course out of its current economic impasse, Ireland has, in the main, embraced austerity, rather than the stimulus measures adopted by many other countries, including the US, Japan, Germany and France. The current level of spending is well below targets the government set in June 2006, when it launched an ambitious science strategy that envisaged an additional €1.5 billion in public research funding between 2007 and 2013. That would have taken the country’s total R&D spend to 2.5 per cent of gross national product. (The government uses this measure rather than the more commonly used gross domestic product, as Ireland’s GDP is artificially inflated by the accounting practices of its large base of multinational manufacturers.)
However, that strategy has rapidly unravelled. After peaking at €751 million in 2008, Ireland’s spending on R&D started to go backwards. Nevertheless, the country has established a number of eye-catching initiatives, foremost among them being an attempt to lure top-tier international venture capital funds to Dublin with €250 million of public money as bait.
Participants are required to put in at least as much again, with the funds to be invested in innovative companies in Ireland and elsewhere. “It’s a normal process of the internationalisation of venture capital,” says Garrett Murray, senior investment adviser at Enterprise Ireland the country’s inward investment body, which is managing the Innovation Fund Ireland initiative in collaboration with Ireland’s National Pensions Reserve Fund.
International VCs lured to invest
Innovation Fund Ireland is funded from outside the government’s science, technology and innovation budget, and it is moving quickly. A first call for expressions of interest, which closed in late November, elicited 32 responses. The timing of the initiative seems to be working in its favour. “The fundraising environment for venture capital funds right now is so very difficult that it is possible to attract the attention of major international firms with relatively modest amounts of capital,” Caulfield says.
London-based DFJ Esprit and its Californian associate DFJ, were disclosed as the first participants in the scheme. The two DFJ funds received €30 million in total, with DFJ Esprit opening a Dublin office, which Caulfield is heading.
Polaris Ventures has received €50 million through the initiative, which will fund a Dogpatch Labs facility in Dublin, its first outside of the US. Originally named after the area of San Francisco in which the first such centre opened, Dogpatch Labs offer early-stage entrepreneurs desk space, wireless communications and a supportive environment for nurturing new business ideas. The facility will complement other investment initiatives, including a new pre-seed scheme for companies developing internet applications and games.
Irish science still en route for its finest hour
Dublin also remains on track to fulfill its duties as host to the 2012 European Open Science Forum (ESOF) event, the biennial showcase of all the research funded by the European Commission. The government, which is committing half of the event’s €6 million budget, duly allocated its required contribution of €830,000 for 2011. “We see that as significant commitment to the project, and we’re very pleased,” says David Fahy, recently-appointed director of the programme.
The event was to be have been Irish science’s finest hour - a celebration of Ireland’s recent embrace of research and innovation and a showcase of its achievements. While that basic vision remains intact - just about - the fanfares are likely to be more muted than originally planned.
Fahy, says the government deserves some credit for its commitment. “Under enormous pressure they have largely held and maintained science funding.”
Total Public funding of Science, Technology and Innovation
2007 - €649 million
2008 - €751 million
2009 - €643 million
2010 - €597 million
2011 - €570 million
Science Foundation Ireland R&D Budget
2003 - €47 million2004 - €109 million
2005 - €122 million
2006 - €140 million
2007 - €156 million
2008 - €160 million
2009 - €171 million
2010 - €150 million
2011 - €161 million
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