A main challenge facing Ireland as it seeks to remain competitive in a global economy is its ability to be more than a tax haven or place for low-cost manufacturing and call centers—especially when other nations are offering stiffer competition at this low end of the innovation spectrum.
One critical way to do this is by strengthening the country’s homegrown science and technology base—offering multinationals new reasons to do business in Ireland when costs alone become less attractive. In fact, just after my mid-October visit, the country announced the creation of five new national research centers—bringing the total to 12, all created since 2013.
Jon O’Halloran is general manager of the Synthesis and Solid State Pharmaceutical Centre (SSPC), which is based at the University of Limerick. As he puts it: “What we’re trying to do is shift the paradigm.” In the past, a multinational’s Irish operations might run into problems that had to be solved elsewhere. The goal with the centers, he says, is that “instead of being an exporter of problems to corporate, we’re an importer of problems—and an exporter of solutions.”
I have spent much of my career looking at research and development issues in industry, academe, and government, writing four books about this important subject. In Dublin, I sat down with Mark Ferguson, director general of Science Foundation Ireland, which oversees the national research centers, to learn more. I later took a trip to Cork and Limerick, visiting one national institute and two national research centers focusing on three different fields: biotech and pharmacological research, information and communications hardware, and software. What follows are some notes and impressions of what I found.
The Backdrop and Model
First, a disclosure: Science Foundation Ireland and SSPC are sponsors of Xconomy’s Innovation in Ireland report. So is University College Cork, which is also mentioned below. Xconomy’s ethics guidelines preclude sponsors from having any special say in our editorial content. I decided to write about the research center program because I find it extremely relevant to Ireland’s future in the global economy. This notebook covers not just what I think is good about the effort, but where I have questions.
The aim of the centers is to build world-class expertise in core fields where Ireland can compete globally—from software to hardware, computing to pharmaceuticals, energy to marine research. You can find a list here, although the five new centers are not on it as of this writing. Rather than fund them entirely from national coffers, the government requires industry participation to help ensure the work is both scientifically important and relevant to business. The five new centers each got 155 million euros from SFI and 90 million euros in cash and in-kind contributions from industry (funding for the first seven was a bit higher: 200 million euros from government, 100 million euros from industry—bringing the total Irish government commitment for the centers to nearly 2.2 billion euros). Basically, two-thirds is covered by government, one-third by industry, with plans to win additional funding from the European Union’s Horizon 2020 program (this is a nearly 80 billion euro program from 2014-2020 to fund research initiatives designed to keep Europe competitive: a few center projects have already been funded).
There are too many layers to Ireland’s program to detail here. One key point is that the centers are not housed at any one institution. Rather, a lead institution functions as headquarters, with researchers spanning multiple institutions. Ireland is just too small in most cases to house a true, world-class operation at any one place—so these are virtual operations. Other key details:
—Centers operate on a hub and spoke model. The hub is the core research area and all industry partners get access to that work. Spokes are additional projects funded on top of the core, either by individual companies or consortia, allowing the centers to expand into new areas.
—Government funding isn’t permanent. Centers are funded for six years, with a review in Year 5 to determine if funding will continue past the sixth year. This review is based on output such as papers, patents, and spinout companies, as well as impact: were patents exploited, did spinout companies get funding, etc.
—Projects must get past two review committees to be funded. First, they are peer reviewed for scientific worth. Then, if they pass muster, a separate panel reviews them for real world impact. The first group of reviewers are scientists, the second group R&D directors, venture capitalists, etc.
—No one from Ireland, including the government, is allowed on either panel.
The point of the above, sums up SFI director Mark Ferguson: “We only fund research that is scientifically excellent and we only fund research that is impactful.”
My first visit, on a rainy afternoon, was to Tyndall National Institute on the grounds of University College Cork. Tyndall is the largest scientific institute of its kind in Ireland, with some 460 scientists, researchers, students, and support staff. The core focus is information and communications tech, with deep expertise in microelectronics and photonics (it is also headquarters of the Irish Photonic Integration Centre, one of the national centers). It’s a hardware place—sensors and other enabling technologies for smart grids and cities, connected health devices, and so on. Carlo Webster, who led the tour, says Tyndall has more than 200 active industry partnerships, including many with American companies such as Boston Scientific and Qualcomm.
Some things that stood out:
—One big area of growth is life sciences and medical devices. That’s because medtech is incorporating more and more electronics. “This is a huge opportunity for an institute like Tyndall to add value,” says Webster.
—Tyndall and UCC, which itself is home to at least three other national research centers, share a technology licensing office that is upping the ante on technology transfer and spinout companies (as is everyone, everywhere). Both have a long way to go by U.S. standards. Tyndall has spun out roughly one company a year for the past 10 years, according to Webster. UCC has been averaging 2-3 per year and is pushing to get that to 4-5 annually. “We need to be a lot more efficient and effective in getting our spinouts up and ready,” says Tim Roche, UCC’s director of technology transfer.
—One company, Grasp Wearable Technologies, spun out of Tyndall the very week I visited. It offers a platform for precision motion tracking, with the first applications for athletes.
The next morning, I visited the University of Limerick. The place brought back memories. (In 1989, I had played basketball there in the finale of a seven-game series against Irish all-stars. I was a bench player, and had scored just 19 points in the first six contests combined. At Limerick, I exploded for 25…but I digress.)
My first visit was to SSPC, which was funded as a national research center last year, marking its move from what was called a research cluster into a much bigger entity that now counts 35 principal investigators, 60 PhD students, and 34 post docs.
Its focus is the pharmaceutical industry. It has deep expertise in crystallization and addresses a wide range of pharmaceutical challenges, from drug formulation to improving the solubility of active ingredients, and more. For instance, changing a compound’s formulation could improve solubility so that it works better—enabling a drug that might never have seen the light of day to come to market, general manager O’Halloran says. “From our perspective the impact is jobs,” he says. “Jobs in the pharmaceutical sector.”
Also headquartered at the university is Lero, the Irish Software Research Centre. Lero was founded in 2005, but this October it joined the newest batch of national research centers, greatly increasing its funding and scope. It is part of Ireland’s attempt to build expertise in critical software arenas like cloud computing, analytics, big data, privacy and security, autonomous systems, and smart infrastructure. Lero currently has 40-plus academics, 38 researchers, and 70 PhD students, according to general manager Brendan O’Malley. It also has six spinouts and 26 patents to date, with another 20 patents pending, he says.
As with Tyndall, Lero sees the medical arena as a big growth opportunity. That’s because software can sometimes be a classified as a medical device in its own right, if it is used by physicians to make decisions about patients, says O’Malley. Lero works on frameworks to make such software compliant with medical regulations, for example.
Focusing on core areas and not trying to do everything is essential for a small country (or organization) competing globally. Creating virtual research centers that bring more expertise to bear on these areas also makes great sense, as does the strategy of requiring corporate funding to ensure work is relevant to the business world. The selection committee structure, and the exclusion of anyone Irish from the selection panels, are extremely interesting to me, and make a lot of sense if they really are independent of political and other pressures. Ferguson told me he borrowed many aspects of the research center concept from around the world, but “the impact review panel is unique to us—that isn’t borrowed from anybody.”
One thing that jumped out at me, though, was the level of industry participation. In-kind donations usually involve equipment that companies don’t want anymore, and don’t signal real commitment. Ferguson was well aware of this. He said the current rule is that industry must contribute at least 30 percent of the center’s funding, with at least 10 percent in cash (in-kind contributions can be equipment, services, or people). His goal is to get industry’s cash contribution to 30 percent of the total. They aren’t there yet. So one key question will be whether industry really ponies up as time goes on: that could make a big difference in keeping these labs vital and growing.
Another question mark surrounds the strength of the government’s commitment. Time and time again, programs start off with a bang and fall out of favor due to changing times, changing leadership, or a new bright object to chase. Ireland has been unrelenting in maintaining its low corporate tax rate and other business incentives. Will the Irish government make the same unwavering commitment to efforts like research centers, whose payoffs can be harder to see and unfold over years, if not decades?