Our country’s future: the fate of PRTLI

The publication of the report last week by ‘An Bord Snip Nua’ – the Report of Special Group on Public Service Numbers and Expenditure Programmes – has raised many issues and questions about the future of public expenditure in Ireland. Broadly speaking the report’s recommendations can be sub-divided into those that address bad value for money, or waste; those that identify expenditure that simply cannot be afforded in present circumstances; and those that claim to identify expenditure under policy principles that may simply be wrong, or at least no longer appropriate.

It appears that expenditure on research was seen by the Group as, at least in part, falling under the latter heading. A key claim in the report is that, as far as the Group is concerned, they could not find enough evidence that expenditure on science, technology and innovation had yielded sufficient economic activity (volume 1, p. 14). On that basis, the Group proposed savings of €27 million per annum on research programmes funded under the Department of Education and Science, and the termination of the Programme for Research in Third Level Institutions (PRTLI). Ironically perhaps, the latter recommendation was published on the exact day that higher education institutions had been asked to submit their detailed proposals under Cycle 5 of PRTLI, and shortly after the tenth anniversary of the initiation of the programme.

In fact, it would be difficult to over-state the historical and current significance of PRTLI. The whole programme would not have got under way at all in the late 1990s but for the financial support and the energetic prompting of Chuck Feeney and Atlantic Philanthropies. Before the first cycle of the programme, Irish universities were largely teaching-only institutions, without either the capacity or the expertise to provide backing for the development of R&D in Ireland. With the first cycle, a small but important number of key research groups were given the means to become internationally competitive and attract world class scientists and researchers. The impact of this was huge, as it allowed Ireland to be presented as a place where some cutting edge research was being undertaken, and this led directly to a new wave of inward investment. Many of the blue chip companies that subsequently invested in Irish R&D did so because of the changed circumstances of Irish research institutions. Furthermore, this R&D investment in many cases helped to secure the retention in Ireland of more general operations by those companies, with thousands of workers benefiting. This has continued right through the present decade. Even high value manufacturing jobs in the pharma sector have often owed their arrival to the backing made available through university research teams.

When the government announced in 2002 that it was suspending PRTLI due to temporary budget problems, the effect was immediate. I was at a gathering in the United States during that period at which American companies were being courted to locate knowledge-intensive operations in various countries. A spokesman for an Asian country suggested publicly at that event that US companies should now focus on Asia, and that Ireland in particular had now been shown not to be serious about R&D. The effect of this statement (and others like it elsewhere) prompted the government to re-start PRTLI, thankfully before the damage had become irrecoverable.

Right now we are looking down into the same abyss, and again we may be doing so because of our own actions. No matter what some may argue, a key element in future economic growth will be knowledge-intensive investment, whether by multinational companies or through indigenous firms. At this point countries in other parts of the world, including big ones like China and India, and smaller ones like Singapore, are competing aggressively for such investment. To shut ourselves out of this would be madness.

It may well be that we need to look closely at how research investment is determined and how well the money is spent. But to argue that such investment does not produce economic benefits is staggeringly ignorant. Not only must this particular recommendation be repudiated, it must be done so quickly and audibly. Our future is at stake.

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14 Comments on “Our country’s future: the fate of PRTLI”

  1. Vincent Says:

    100m to the boarding schools. Now there is a target if ever there was one. But by lobbing stuff like that in the report they have given it a certain plausibility.
    However, as with the Lisbon treaties the overall concept which at first seems as plain as a pike-staff becomes very opaque when you pull each individual part for examination. And you end up wondering when holding something which in economic orthodoxy is as near fact as you can get being starved to the point where it would be pointless.
    R&D in the Universities is but one of these. The most blatant are the cuts to the dole for those under 25. What exactly is with that. Surely there are about twenty places where this is unlawful if not downright illegal. But given that this money is the only cash the Gov’ has any real control over it is even more difficult to fathom where exactly they are going with this.
    But then one remembers that the State has a history, a rap-sheet, where it starved areas to force emigration.
    And much like NAMA is little more than a twist on the Land annuities. It seems that Finance and their Academic buddies have dusted off the 1930 song-sheets. And like in the 30’s when policy was counter to all economic sanity, this idiotic report is little more that an abdication of responsibility between 2000 and 2030.
    Next time you are handing out parchment, you may as well add something for the taxes and charges. For this report taken as a whole is a none too subtle invitation to leave.

    • Thanks, Vincent. Right now I am trying to get my head around what political/ideological/principled frame of reference is being recommended in this report. I do think we all need to accept that the country is in trouble and needs to save money. I also accept that we cannot, in our sector, be excluded from that. But if I look at the recommendations as a whole, my fear is that this doesn’t actually contain any coherent world view of where Ireland needs to go in order to thrive again.

      Maybe that’s not what they were asked to do. But it’s what the government now needs to do in order to ensure that we do something more and something better than just sitting there in despair. They need to communicate a vision.

      • Phil Says:

        That makes sense given that McCarthy never wanted to produce a final report, but rather issue on a rolling basis recommendations to government as they came up (unfortunately cannot find link). Government instead wanted a final report produced, such that it could be pointed to as the basis of decisions.

        Based upon what you’re saying and those previous statements by McCarthy these rolling observations have amounted to a ‘brain dump’ concatenated into a report lacking any vision, where each recommendation would appear to exist independently. This fits with McCarthy’s comments to the effect that the report is a ‘smorges board’ where government can choose which to take.

        The obvious danger as you point out is that there is no coherency with these recommendations, treating each as independent is ludicrous, nevertheless this is also the major downfall of many economic models which have turned out spectacularly well in recent times…

        We are however also talking about an economist here who saw no value in the DART (as mentioned in recent profile published in the phoenix – it’s a pity their stuff isn’t online). Fintan O’Toole’s article today is similarly insightful http://www.irishtimes.com/newspaper/opinion/2009/0721/1224250994691.html

      • Vincent Says:

        Yes, accepted. And have done so for a number of years at this stage. But the problem at the moment is that no one has attempted to establish a floor. You can push, pull, tweak and deep-fry the numbers, but until someone says this is the floor, the forces will build and shove the thing lower and lower. Then you will find the crap really hitting the fans. At the moment, most of the reactive matter is confined within property assets and tragic as this is, it is nothing to the leveraged position of most of the firms trading in the state. This is what all the different countries are worried about at the moment. Remember it was 1987 when Wall Street* with Gordon Gekko explained to the world that to halt the raider you needed to have the debts of the company so high that it was uneconomic to buy the thing. But also remember that the Irish firms have been swallowing debt with international mergers like basking sharks. Now these debts are safe enough at the minute, but if this craziness of feeding the banks at all costs continues then the liquidity of the economy will be sucked out. And where it is so important when and where the state removes cash from the system. AND the place you do not remove it from is the bottom or any place near it.

        Further, it is no real help that Economics is touted as some sort of Science, when it is of the same family as the Turf Accountant.

  2. Iain Says:

    Indeed, that particular section of the report reads like a national economic suicide note. It is astonishing that the group seriously believes that such investment has yielded no economic benefit and shows the weakness of the approach of looking only at direct and immediate returns rather than broader shifts in perception and international standing. We who were in Scotland at the time PRTLI started were certainly aware of it in terms of potential economic competition between the two countries and Ireland’s investment in research was one of the issues in the debate around devolution/independence that fuelled demands for greater economic and education powers for the Scottish Parliament. There was constant rivalry between Scottish Enterprise and its Irish counterparts to secure investment from multinationals in the technology sector and although Ireland’s very low tax regime was attractive often the discussion also flagged up the apparent serious commitment to research investment.

    • Thanks, Iain. Actually, there is even evidence of ‘direct and immediate’ returns. This section reads as if they were not interested in finding any such evidence, as their minds were already made up. That takes us back to the need for evidence-based policy-making.

      • otto Says:

        I might add that the report’s suggestion that we should not fund PhD students because they emigrate is astonishing. Of course, given the right skills, PhD graduates will take advantage of the worldwide market for researchers. But I’m sure that many or most PhDs from Stanford and Cambridge emigrate too, without that implying that there are no economic benefits to California or East Anglia from having those research universities. Maybe if Irish universities aim to train PhDs so that they can only get jobs in Ireland…

  3. Jilly Says:

    Re Otto’s point: I was also astonished by this line of reasoning about PhDs tending to emigrate. The authors of the report don’t seem to have grasped that those with PhDs (in just about any discipline) tend by their nature to enter extremely mobile and global job markets. So yes, some Irish-trained PhDs will leave Ireland, but as Otto says, some overseas-trained PhDs then come here (we in the university sector have many of them as our colleagues, just for one example).

    This was a line of reasoning I wouldn’t hope to find on the Joe Duffy Show…

    • There is an additional point: if fear of graduates emigrating is an argument against taking on PhD students, then it is an equally good argument against offering any kind of degree courses (including undergraduate ones) to anyone at all. It’s just silly.

  4. Katherine Says:

    Hi there – and thanks for the blog, always interesting and thought provoking.
    The topic of R&D in Universities raises that dreaded capitalist notion of commercialisation. Of course I understand that commercialisation takes many forms, but I also think its easy to see how we have arrived at an economic assessment that Irish R&D expenditure has under-delivered.
    A stronger basis for commercialisation and linkage with business is necessary if state investment in R&D is to be protected. …and yes, I agree that shutting down R&D is a totally fatal step, but it would be unrealistic to say that the current system is perfect and doesn’t need to be overhauled.

  5. Perry Share Says:

    Is someone keeping stats on the number of Irish PhD graduates who have emigrated? How long is the time series – does it start with the beginning of PRTLI? Has anyone asked the emigre doctors if they are intending to come back, after perhaps gaining some post-doc experience.

    I wonder where McCarthy got this mad idea from. The background documents seem to suggest that the emigration rate for PhDs is 20% – is this a high or low figure? In any case, the whole concept of this being an issue is insane.

  6. otto Says:

    Shouldn’t you be trying to get a piece into e.g. the Irish Times publicly defending PRTLI and research investment in general?

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