While it can be hard to hear them over the voices of the negativity merchants like Morgan Kelly, there are still many positive people out there offering constructive and novel ideas as to how we speed up our progress back to growth.
One such person is Raymond Hegarty, chief executive of the Intellectual Property Foundation in Luxembourg. The positive idea I am advocating today is based heavily on proposals he has been championing.
The idea centres how we convert the good proposals and plans in both the government’s Smart Economy document and the Innovation Task Force report into real and sustainable jobs within the next 2 – 3 years.
Both documents focus on the importance of Research and Development (R&D) and its capacity to deliver good quality jobs. The history of globalisation shows that multinational’s tend to concentrate profits back into the places where the research and development is conducted.
By its very nature R&D has two inherent problems. First, is the time span from initial idea to final marketable product. In many cases it can be anything up to 15 or even 20 years before profits start to accrue. Second, as it is research – the outcomes can not be known at the start. The attrition rate is therefore high and a lot of R&D investment in does not pay off.
It is like Henry Ford’s observation that half of every dollar he spent on advertising was wasted. He just didn’t know which half. So it is with R&D – except the percentage is often a lot higher than 50%.
Raymond Hegarty identifies the path to economic success from R&D as: research – invention – intellectual property (IP) – commercial success.
What he proposes is that Ireland use the Smart Economy policy to become a world leader in the this latter half of the path: specifically in the process of commercialising intellectual property and make Ireland a centre of excellence in turning intellectual property into profits.
It is important to note that he argues that we should do this in addition to the investment in the R&D approach. What he calls for is a twin track approach, with the R&D offering us the longer term job creation and the intellectual property commercialisation offering us the potential of sustainable ob creation in 2 – 3 years
We have the structures, the reputation, the expertise and the people here to take intellectual property that has been already developed and turn it into a real income stream.
We have done it already in the IT and financial services sectors. In both cases we specialised in converting intangible assets into real profits and real jobs here at home.
We have already taken the important first step by introducing tax allowances for the acquisition of intellectual property. Now we need to go the next few steps and make ourselves the world leader again in this field.
It is a field that is growing strongly and steadily. In the last thirty years the total proportion of the assets of the larger global companies which are intellectual property has increased almost five fold.
The benefits in terms of employment, tax take and exports could be as great as those of the IT boom of the 90s.
On a personal note, I would like to pay tribute to Senator Kieran Phelan who died suddenly and tragically recently. I had the great pleasure of working closely with him in recent years in his role as Fianna Fail’s spokesperson in the Seanad. He was a decent man and a hard-working colleague.
Kieran’s warmth and humour showed that he did not see politics in a combative way, but rather as the means by which we all contribute to improving our country. Ar dheis Dé go raibh a h-anam dilis.