There were two stories which appeared in the Irish Times yesterday that cast doubts on one of the key pillars of Irish economic development – the cooperation between academia and industry.
The first piece by Dick Ahlstrom outlines how Irish academics are ranked lowest out of 30 nations in attracting investment from industry to carry out research.
Ahlstrom wrote that research by the UK-based Times Higher Education magazine showed that South Korean academics attracted around €77,000 each to carry out research, compared with just €6,000 or so here. Other nation’s rankings included the US at 14, Japan at 16, Germany at 21, Switzerland at 22 and the UK at 26.
Now, Ahlstrom says that the methodology was crude and does not break things down by category, such as ICT, pharmaceuticals, etc, and so the conclusions may not be as damning as they at first appear.
But the picture is further clouded with the next story. Carl O’Brien reports that Revenue has reviewed the R&D tax credit scheme and found that many such credits were being incorrectly claimed.
O’Brien reports that 26 out of 32 claims were incorrect and consequently €6 million returned to exchequer.
The R&D tax credit scheme, according to the story, has seen massively increased uptake, going from €80 million in tax relief in 2004 to about €225 million in 2010.
Now the story reports that the Revenue said that the majority of such cases were due to “accounting errors” as opposed to skulduggery, with only one case involving “complete denial of a claim for tax credits”.
These developments paint a very disturbing picture for the Irish economy. First of all, in the realms of ICT there has been great work done in getting academia and industry to work closer together. One need only look at the work done in the NCI and its cloud computing competency centre, the DCU annual showcase for computer science students, which attracts top companies to see the talent, and the first ever cloud computing degree from CIT to see that there has always been close ties between academia and industry here -at least in the world of ICT. But, if the yield for research is so potentially low, might that become a bar to such close cooperation in the future?
Well it would appear not, as most of the programmes that have been successful seem to be based around preparing students properly for the reality of what will be required of them in the industry of today and tomorrow. But still, it appears as if Irish academia still has a job to do to convince industry to spend money with them to do specific research, especially the type of research to which academia is best suited.
Unfortunately, a contributory factor in this may be the fact that attitudes toward research might be a little cavalier.
O’Brien’s piece indicates that much of the problems with the R&D tax credits scheme seem to be more focused on the tax relief side than the R&D side, which gives one the impression, along with the massive increase in usage of the scheme, that some companies are not necessarily engaging in the true spirit of the thing.
The statement that “The Revenue has assigned scientific and technical experts to examine the activities of firms to determine if they are involved in genuine research and development, according to confidential records obtained by The Irish Times,” would seem to indicate that even where there were not “accounting errors”, there may be grounds for review of the actual technicalities of the research and development being undertaken.
This is a very important issue not only for the ICT sector here, but for the country as a whole. If we are seen to be a soft touch for tax credits for R&D, attracting investment from abroad may get a lot harder as a perception might grow that all R&D carried out here is merely to reduce tax burdens, as opposed to anything else such as the quality of academics and students to aid and assist in such work carried out, both internally and in academia. If such a notion was to take hold, we may well find ourselves in a very unenviable position where that 30th place in the rankings for investment from industry in academia becomes a permanent one.
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