Building the Knowledge Economy Patrick Cunningham Chief Scientific Adviser to the Government Engineers Ireland Cork, Nov 8, 2010 1
Lisbon Agenda (2000) to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion. 3% of GDP on R&D 1/3 public; 2/3 business 2
SSTI vision (2006) Ireland by 2013 will be internationally renowned for the excellence of its research, and will be to the forefront in generating and using new knowledge for economic and social progress, within an innovation driven culture. 3
2006 2007 1776 4 4
The Wealth of Nations: Rich: $439k capital per person Poor: $7k 5 Source: Where is the Wealth of Nations? World Bank, 2006.
Ireland s Wealth Source: Where is the Wealth of Nations? World Bank, 2006. 6
% of 25-34 Age Group with Tertiary Education 45 40 35 Ireland % 30 25 20 OECD 15 10 5 0 1976 1986 1996 2006 55-64 45-54 35-44 25-34 Age Group Source: Education at a Glance, OECD, 2008. 7
The Tiger Years 60Bn Modern Manufacturing Roots: Sales 40Bn 20Bn Internationally-traded Services Traditional Manufacturing EU / Euro Tax Education 1990 1995 2000 2007 8 Source: Forfás, 2008
Depth of Global Recession 2% 0% Decline in GDP(GNP) for 2009-2% -4% -6% Global Economy US EU Ireland -8% -10% -12% Sources: International Monetary Fund; Central Bank of Ireland 9
Business Public People Money Ideas People Money Ideas Research & Development Collaboration Research People Money Publications, Citations Patents Patents Capital Investment, Start-ups New/Improved Processes, New/Improved Processes, Products, Services. Products, Services. 10 Benefits to Society: Employment, Health, Quality of Life
GDP per capita Source: International Monetary Fund, 2009
GDP per capita and Human Development Index Correlation = 0.90 Sources: International Monetary Fund, 2009, Human Development Report, UN Development Programme
GDP per capita and Satisfaction with Life Index Correlation = 0.85 Sources: International Monetary Fund, 2009; White, A. (2007). A Global Projection of Subjective Well-being: A Challenge To Positive Psychology? Psychtalk 56, 17-20
GDP per capita and Happy Planet Index Correlation = 0.35 Sources: International Monetary Fund, 2009, Happy Planet Index 2.0 from the New Economic Foundation (nef)
GDP per capita and GINI Coefficient Correlation = 0.22 Sources: International Monetary Fund, 2009, Human Development Report, UN Development Programme
3,000 Investment in R&D (GERD) 1.66% GNP 2,500 current m 2,000 Private 1,500 1.41% GNP 1,000 500 Public 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: derived from Forfás data 16
Public Investment in R&D* 1,400 1,200 m constant prices (2007) 1,000-15%**? 800-4%** 600 400 200 NDP 2000-2006 Total = 4B NDP 2007-2013 Total = 8.2B 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 * GBAORD - Government budget appropriations or outlays on R&D. ** Indicative only: SSTI relative to 2008, 2009 (nominal), respectively. Source: Forfás, DETE, 2009 17
Exchequer Expenditure 2009 (~ 60 bn) Enterprise Agriculture 2% 2% Justice 4% Other 9% Capital 12% Education 13% Investment for the future Seedcorn Health 24% SSTI 1% Spending for today Social Welfare 33% 18 Sources: Revised Estimates for Public Services, DF, April 2009; SSTI Finances, DETE, May 2009
Gross Domestic Expenditure on R&D as % GDP Ireland ranks 18 th out of OECD 28 19 Source: Annual Competitiveness Report Vol. 1, NCC, August 2009
European Innovation Scoreboard - Inputs Human Resources S&E, SSH Primary Graduates S&E, SSH PhD Graduates Pop. with Tertiary Education Life-long Learning Youth Education Attainment Finance & Support Public R&D Expenditure Venture Capital Private Credit Firms with Broadband Firm Investments Business R&D Expenditure IT Expenditure Non-R&D Innovation Expenditure Linkages & Entrepreneurship SMEs Innovating In-house Innovative SMEs Collaborating Firm Renewal Public-Private Co-publications Throughputs EPO Patents Community Trademarks Community Designs Technology Balance of Payments 20
European Innovation Scoreboard - Outputs Innovators SME Product / Process Innovation SME Marketing / Organ. Innovation Resource Efficiency Innovators Economic Effects High-tech Manuf. Employment Knowledge-Intensive Serv. Employment High-tech Manuf. Exports Knowledge-Intensive Serv. Exports New-to-market Sales New-to-firm Sales 21
Summary Innovation Index 2008 (29 Indicators) EU-15 Followers Leaders Source: European Innovation Scoreboard 2008, UNU-MERIT, Maastricht, Jan 2009 22
EIS ( 2008 methodology ) Time Series 0.7 Switzerland 0.65 Sweden 0.6 0.55 0.5 Denmark Finland Ireland 0.45 0.4 EU-27 2004 2005 2006 2007 2008 Source: European Innovation Scoreboard 2008, UNU-MERIT, Maastricht, Jan 2009 23
Summary Metrics now show Ireland close to EU-15 average i.e. among the followers. Target peer group includes FI, SE, DK, CH & AT. 24
Challenges Monitoring Delivery against Correct Indicators Effective Linkages to Dual Business Sectors Close attention to needs of foreign-owned firms Special efforts to lift indigenous firms Keeping on Track to Target To match leading countries Achievable in ~10 years 25
Dublin: European City of Science 2012