Posted tagged ‘Lisbon Strategy’

Guest blog: The other Lisbon agenda and investment in higher education

January 22, 2010

By Professor Frank Gannon
Director-General of Science Foundation Ireland

In the recent past, the whole country became very familiar with – even transfixed by – the Lisbon Treaty, with most of us adopting a Yes, No or Maybe position. Less familiar for many, however, was a parallel yet entirely unrelated ‘Lisbon’ Strategy, also known as the ‘Lisbon Agenda’ or ‘Lisbon Process’, issued in March 2000. This Lisbon Agenda involved the Heads of the EU countries declaring a decade ago that the EU would become the world’s leading knowledge-based economy by 2010. That was followed up at a meeting of the Heads of State in Barcelona that stated that every EU country would, by 2010, invest 3 per cent of GDP in R&D (GERD), with two-thirds of this coming from the private sector and the remainder from the public/government funds. Ireland was a signatory to these agreements.

The fact is that, in 2000, Ireland was a long way off spending that amount on R&D. Realism was shown when the Strategy for Science Technology and Innovation (SSTI) plotted expenditure such that 2.4 per cent of Gross National Product (more appropriate for Ireland than Gross Domestic Product) would be invested by Ireland by 2013. The record shows that, since then, Ireland was one of the few countries that consistently increased its investment in R&D in the years up to 2009.

But the 3 per cent target always had two implicit ‘get-out’ clauses. The first came from the fact that Government policy can do very little to ensure that the private sector (and in Ireland this means, predominantly, the multi-national companies) would increase their engagement in R&D such that the 2 per cent (a two-thirds portion of the 3 per cent) attributed to them would be delivered. The second variable is the denominator of GNP. As it diminished in the last year, the recorded GERD for Ireland will increase in 2009 when the statistics are calculated. Perversely, all of the EU data will show an increase because of that macro change. It is more realistic to compare the real money invested. The last such comparison that I saw showed that the EU was spending the same amount of money as the USA had 20 years ago. And it is money – not ratios – that counts!

Now a new EU report, The Role of Community Research Policy in the Knowledge-Based Economy, by Soete presents a different 3 per cent target to be reached by 2020. In this, the focus is on 1 per cent expenditure on R&D by every EU Member State (i.e. omitting the contribution from enterprise and charities) and 2 per cent on higher education. The first part of this new proposal is one that I wrote about in 2003 (Government rhetoric and their R&D expenditure EMBO reports 4, 2, 117–120 (2003) and is within the grasp of Ireland. We are in the top-10 EU countries for this statistic and I hope that consistency of policy (reiterated in the latest Revised Programme for Government) will ensure that we achieve it well before 2020.

The new focus on investment in higher education helps to stress the connection that most commentators make between the higher education institutes (HEIs) and the ‘smart economy’ of the future. It would seem that the road to achieving this 2 per cent will be more difficult for Ireland and most other countries. The EU average is 1.3 per cent spent on higher education, and that compares poorly with 3 per cent in the USA (with private institutions having a major impact). Currently, we appear to be spending approximately 1 per cent of GDP on HEIs.

Doubling that spend on higher education will be a difficult challenge, but one that deserves attention. For both goals, the biggest hurdle is to get ‘buy-in’ that is reflected in the announcements made at budget time. If the roles of R&D and of the HEIs are not understood or appreciated, then death by a million cuts will follow. The question then will be: what is the new non-smart strategy for Ireland’s future economy? I presume it is not that we return to the economy of the 1980s when we were a low-cost location for manufacturing.

Being in Europe allows us to develop policies that have the benefit of analyses of similar countries. I presume that is why we accept policies such as the Barcelona/ Lisbon agendas. Let’s hope that we behave as Europeans in 2010 just as we have voted for Europe in 2009.