Innovation Task Force on The Framework for Sustainable Economic ...

AMERICAN CHAMBER OF COMMERCE
American Chamber of Commerce Ireland
Submission to the
<strong>Innovation</strong> <strong>Task</strong> <strong>Force</strong>
on
The Framework for Sustainable Economic
Renewal
(SMART Economy)
SEPTEMBER 2009

Submission to the <strong>Innovation</strong> <strong>Task</strong> <strong>Force</strong>
AMERICAN CHAMBER OF COMMERCE
0BACKGROUND
With over 580 US companies employing over 100,000 people directly, it is estimated
that a further 225,000 jobs are directly supported by US companies based in
Ireland. The contribution these companies make to the Revenues of the State in
terms of corporation tax, PAYE, VAT and other taxes is considerable.
US foreign direct investment has been a driver of innovation and research in the
private sector. It contributes and supports Ireland’s dynamic enterprise
infrastructure through the transfer of technology & commercial know-how, skills
development, and the injection of an ethos of change, innovation, continuous
learning and a global perspective into working life.
Total US investment in Ireland is US$146 1 billionF F. Continued investment is crucial to
Ireland’s current and future success, both as an investor and a significant trading
partner. Ireland continues to face increasing competition from other economies
for this investment.
The American Chamber of Commerce continues to work with its members to
identify how, in the light of our rising cost base and knowledge-based competition,
Ireland can implement innovative policies and initiatives which will help us to
remain an attractive location for foreign direct investment.
2BAmerican Chamber of Commerce Ireland
6 Wilton Place
3BDublin 2
Telephone: +353 1 661 6201
Contact : Brian Cotter, Government Affairs Manager, Hb.cotter@amcham.ieH
Hwww.amcham.ieH
1 Bureau of Economic Analysis (2008) at the US Department of Commerce.

AMERICAN CHAMBER OF COMMERCE
1BSUBMISSION
Taking Decisions to Position Ireland Positively for the Next Global Economic Upturn
In the context of the Government’s Framework for Sustainable Economic Renewal,
Building Ireland’s Smart Economy and the Strategy for Science, Technology and
<strong>Innovation</strong>, and drawing on lessons from successful international and national
models, the American Chamber of Commerce Ireland is pleased to make its
submission to the <strong>Innovation</strong> <strong>Task</strong> <strong>Force</strong>.
While Ireland continues to face increasing competition from lower cost economies
for foreign direct investment, its Strategy for Science, Technology and <strong>Innovation</strong>
has successfully transformed our economic aspiration to develop a credible base,
in a global context, of research and innovation. We share its underlying and
critical objective that this investment in our future must create economic success.
The American Chamber of Commerce is strongly of the opinion that a competitive
cost base is a necessary starting condition for industry to retain and grow
employment in Ireland. We believe that there is considerable potential for the
cost-base to be re-engineered to maintain high standards of living with greater
employment levels. Industry has considerable experience of this in its own
environment and is willing to share this practice if the public system is flexible and
motivated enough to commit itself to reform.
Given a competitive cost base, the American Chamber believes that there is
significant opportunity for an innovation-led industrial strategy focused on creating
enterprise and jobs in high-value, export-led sectors making use of research,
science and technology with a significant tax and incentive bias. Importantly, it
believes that the Foreign Direct Investment (FDI) base can provide an important
conduit to expedite the creation of a new indigenous base of enterprise that is
significant (employment) in scale and globally focused.

VERIFICATION
AMERICAN CHAMBER OF COMMERCE
COMPETITIVENESS
Reflecting on the mandate of the <strong>Innovation</strong> <strong>Task</strong> <strong>Force</strong>, the American Chamber
of Commerce Ireland request the verification and testing of all recommendations
with a representative panel of multinational and indigenous export-focused
industry. This will increase the likelihood that policy or resource allocation decisions
taken on foot of its deliberations quickly have the desired positive impact. It is
important that the core value propositions within Ireland’s innovation strategy
have international business credibility in terms of cost-base, excellence and
uniqueness.
COST-BASE
Cost competitiveness is a key test for Ireland’s offering and is a minimum basic
condition for any investment. Assumptions being made on Ireland’s
competitiveness, credibility and uniqueness must be systematically benchmarked
and validated with the multinational companies that make up the international
business community in Ireland. Any incentives being proposed to stimulate
investment in target areas must demonstrate a truly compelling business
proposition, i.e. the incentive must strengthen the return on investment (ROI) of the
investment and not used to mitigate an unsustainable cost base.
EXCELLENCE
Ireland’s capability to differentiate itself will be founded upon areas of scientific,
operational and business excellence that are genuinely recognised internationally.
The Strategy for Science, Technology and <strong>Innovation</strong> (2007) has successfully
transformed our economic aspiration to develop a credible base, in a global
context, of research and innovation. To complete this transformation it is a

easonable expectation that we should now begin to articulate the gain we
expect from the investment in terms of how it will transform the industrial base. That
base must be increasingly acknowledged as innovative, as well as being
knowledge/skills intensive to gain worldwide attention for the;
• Unique global competence that Ireland is building,
• Expected effect of the new human capital in attracting new investment,
• Number of new start-up companies in new areas of competence,
• Increasing investment of multinationals in sustainable research,
• Number of venture or spin-out/in activity associated with the research.
UNIQUENESS
The uniqueness of Ireland’s offering will depend on the international appreciation
that Ireland has available and/or underutilised resources that present the
opportunity to sustain its SMART economy ambitions. These include the availability
of skills, infrastructure, natural resources, the commitment of the State and
established industrial, scientific and business networks to support the scale of that
ambition.
AMERICAN CHAMBER OF COMMERCE

AMERICAN CHAMBER OF COMMERCE
INDUSTRY STRATEGY
The American Chamber believes strongly that the creation of new enterprise
focused on Market and Technology Convergence is a significant opportunity for
the established industrial base in Ireland. Furthermore, to rapidly create new
exporters of scale in terms of employment, it is necessary to engage multinationals
to generate new companies that can focus on convergent solutions for existing
and new markets.
These New Companies would be of Global Scale, Ireland Based, and leverage the
IP/Technologies, resources and collective assets of the State and its institutions, the
indigenous entrepreneurial base and the pool of multinational companies in
established industrial clusters.
The successful introduction of collaborative research programs under the SFI CSET
program serves as a good foundation new enterprise creation. It is now
recognised that the path to Commercialisation for those Research Programs
requires new applied research infrastructure and significant resources. There are a
significant number of ways that the multinationals can support this
commercialisation infrastructure.
This FDI base has access to a global perspective on technology evolution, supply
chain innovations and purchasing behaviour. We believe that the collaborative
research practice established under the SFI program can be further extended to
enable different multinationals to work together with State companies and SMEs to
create new applied technologies. The effective development of this practice will
have significant upside for both the companies and the State.

Collaborating with multinational companies will provide a significant steer to this
new applied research activity and ensure that the activity is market-led, has
access to customers and resources, and can avail of international management
capability. Encouraging this practice through incentives greatly increases the
opportunity for new ventures to achieve scale quickly.
AMERICAN CHAMBER OF COMMERCE
Key Contributions from the Multinational Base
• Collaboration - The application of the principal of collaboration,
sharing of assets and the mitigation of costs can broaden the
commercialisation capability without adding significantly to the
investment and cost base. Those principles need to be defined and
promoted, to ensure the fast and effective development of the
commercialisation infrastructure and eco-system.
• Market Access - It is sensible and appropriate for the most new
companies to use the established channels to market. The foreign direct
investment (FDI) base can address this most significant challenge facing
start ups and growth companies. Creating a practice and incentive
policy to allow this to occur would increase the new ventures’
opportunity to succeed significantly.
• Market Intelligence - Equally there is a significant challenge for new
ventures to acquire the right market intelligence to allow for the
development of a successful market strategy. Access to the resources
and collective intelligence of the FDI base will greatly advance the new
venture and improve its ability to target the global market and establish
its brand.

AMERICAN CHAMBER OF COMMERCE
INCENTIVES
To support the creation of new enterprises in the SMART economy it will be
necessary to rethink the instruments of support for the creation, development and
growth of the new ventures. Some of the existing support agencies and structures
will need to be restructured and refocused to support this initiative, specifically
ensuring that their competence and mandate is relevant to the challenge.
While research activities and programs in Ireland will generate intellectual property
(IP) in various forms it will be insufficient to fuel and expedite the level of enterprise
creation required to address the economy’s employment ambitions without the
engagement of the FDI base. It will be necessary to avail of a much wider Pool of
relevant IP to support the development of new and/or “convergence”
technologies. This pool can include the existing store of IP and Technology that is
resident within multinationals, the indigenous base and in some cases the State
(Universities, Research Institutes).
The development of new ventures based on those new technologies, leveraging
the investment and assets of both the State and private sector, will emerge in
different forms but will require a new model (interim vehicle) to encourage
investment. This new model should protect stakeholder interest during the
technology development stage and maximise the international valuation of the
entity when it begins to trade. Therefore the essence of any incentive based
measure must be to provide relief on the basis of investment in technology
development and increase the future ROI based on a successful launch of a new
trading and sustainable enterprise.
The emerging new enterprise will establish itself in three forms and will require a
package of incentives and reliefs that are specific to attracting investment,
leveraging technology or market linkage to multinational companies, as well as
strengthening their own balance sheet in their formative years.

The emerging new enterprise should be clustered on certain likely technology “hot
spots” that can leverage the IP and technology of the stakeholders, can emerge
as international players, and can create significant and broad employment
opportunity. The likely categories include;
a) Indigenous Based Spin-Out Companies from multinationals – products,
technologies and teams managing a viable enterprise that not are core to
the corporate interest;
b) Restructured or New Indigenous small and medium enterprises (SME’s) –
reinvent an existing enterprise through the acquisition of new technology
and/or the provision of existing or modified technology to new markets;
c) New joint ventures, including multinational companies – emerging
convergent technology opportunities that are cross sector and require a
combination of existing and new IP/Technology to develop and test a new
market solution.
Each new enterprise/venture may be described as above or a hybrid of the
above and must be capable of addressing global market opportunities. In this
context those new companies must have the opportunity to use the island as a
test market to validate the potential of their products and services.
Encouraging multinationals to create and locate IP within Ireland is currently an
important challenge. The enhanced incentive package in the 2009 Finance Act to
locate IP in Ireland is a significant first step. Additional relief (such as an increase in
R&D tax credits) should be specifically devised to encourage the creation of new
foreground IP that addresses a key market need and can be licensed to the
constituents listed above. This will provide a key incentive to stimulate and
differentiate those new ventures.
Recognising that this contribution can be the most important factor in the creation
of the new venture, we need to find other innovative ways to link the tax relief to
AMERICAN CHAMBER OF COMMERCE

commercial success. The multinational investor must be encouraged to release
useful IP (by market definition) and have it licensed to the new venture. Creating a
safe environment for developing and licensing IP, including effective disclosure
and management, is a basic requirement of the commercialisation infrastructure
and eco-system. This will require the development of Ireland’s legal and
commercial court infrastructure to support collaborative arrangements in a SMART
economy.
An agreed coherent and informed strategy for research to commercialisation that
provides all stakeholders (private and public) with the opportunity to align their
investments and resources is the single and most basic requirement for
investor/stakeholder participation. Providing an effective bridge to market for the
research will require the participation of multinationals but this must be based on a
solid return on their investment. Equally the State must achieve its return on
investment in the form of significant job creation, exchequer revenue, and
sustainable economic export growth.
AMERICAN CHAMBER OF COMMERCE

Members of the American Chamber of Commerce Ireland
3M Ireland Limited DeCare International Merit Medical Ireland Ltd
Abbott Ireland (Ballytivnan-
Sligo)
Abbott Ireland (Vascular
Division Clonmel)
AMERICAN CHAMBER OF COMMERCE
DeCare Systems Ireland Ltd Merrill Brink International
Dell Ireland
Merrill Lynch International
Bank Ltd
Abbott Ireland Diabetes Care Dell Products Europe BV Microsemi Ireland
Abbott Ireland Diagnostics Delta Air Lines Inc Microsoft Ireland
Abbott Laboratories Ireland
Ltd (Citywest-Dublin)
DePuy Ireland (A Johnson & Johnson
Company)
Accellent DeRoyal Europe Ltd
Accenture Digital River Ireland
Adhesives Research Ireland
Ltd
Millipore
ModusLink Ireland
Operations
Monster Cable International
Ltd
Drury Communications Moog Ltd
Adobe System Software Ltd DTS Licensing Ltd. NCR Global Solutions Ltd
AIG Ireland Ltd eBay International AG Nortel Networks (Ireland) Ltd
AIG Life Ireland Ltd Elavon Financial Services Northern Trust (Ireland) Ltd
Alcon Laboratories Ireland Ltd Electronic Concepts Europe Ltd Novell Ireland Software Ltd
Allergan Pharmaceuticals
Ireland
Eli Lilly and Company (Ireland) Ltd. Oracle
Alltech (Ireland) Ltd Eli Lilly SA - Irish Branch Palm Global Operations Ltd
Altera European Trading Co
Ltd
Amazon Data Services Ireland
Ltd.
American Power Conversion
(Galway)
American Power Conversion
(Mayo)
EMC Ireland Patterson Pumps Ireland Ltd
Emulex Ireland PayPal
Enterasys Networks (Distribution) Ltd PepsiCo Ireland
Enterprise Rent A Car
Analog Devices BV Equifax Commercial Services Ltd
Analytic Partners Federal Express Europe Inc
Pfizer Healthcare Ireland
(Citywest)
Pfizer Ireland
Pharmaceuticals (Cork)
Pfizer Ireland
Pharmaceuticals (Dlghre)

AOL Global Operations Ltd Fidelity Investments Pitney Bowes (Ireland) Ltd
Aon Group Fidelity Investments (Galway)
Apple Operations Europe Fluor Ireland Ltd
AMERICAN CHAMBER OF COMMERCE
PNC Global Investment
Servicing (Wexford)
PNC Global Invstment
Servicing (Europe) Ltd.
Aramark Ireland FMC International Pramerica Systems Ireland
Arpin International Group Forest Laboratories Ireland Premiere Global Services
Assurant Solutions Fort Dodge Laboratories Ireland Procter & Gamble
AT&T Four Seasons Hotel Dublin Prometric Ireland Ltd
Attachmate Geneva Ireland Financial Trading Ltd QLogic
Attachmate Incorporated Genworth Financial
Quest Diagnostics Ireland
Ltd.
Avaya Genzyme Ireland Ltd Quintiles Ireland Ltd
Avocent International Ltd Georgia Tech Research Institute Red Hat Ltd
Ballina Beverages Gilead Sciences Ltd
Resources Global
Professionals
Bank of America Google Ireland Ltd Right Management
Bausch & Lomb GTECH Ireland Operations Ltd Robert Half International
Baxter Healthcare - Ireland
Manufacturing
Harris Wireless Ireland Ltd.
Baxter Healthcare Ltd Hartford Life Ltd
RR Donnelley Global Turnkey
Solutions
RR Donnelly Global Turnkey
(Cork)
Baxter Healthcare S.A. Hasbro Ireland Ltd Salesforce.com
BD Medical Diabetes Care Henry Ford & Son Ltd Sanmina-SCI Fermoy
Beacon Hospital Hertz Europe Service Centre Ltd SBLM Architects Ireland Ltd
Beckman Coulter Ireland Inc Hewitt Associates Ltd
Schering - Plough
(Avondale)
Benchmark Electronics Hewlett Packard Ireland Schering Plough (Brinny)
Best Doctors
Hewlett Packard Manufactoring
Ireland Ltd.
Bioniche Pharma Group Hewlett-Packard Galway Ltd
Schering- Plough Swords
Sciele Pharma Ireland
Limited
Bose GP Hibernia Atlantic Shannon LNG

Boston Scientific (Clonmel)
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Honeywell International Technologies
Ltd
SIG (Susquehanna
International Group Ltd)
Boston Scientific (Letterkenny) Honeywell Process Control Solis Lough Eske Castle
Boston Scientific Cork Ltd Horner Ireland Ltd SPX Dollinger
Boston Scientific Ireland
(Galway)
Bristol-Myers Squibb Innocoll Technologies Ltd
IBM Ireland Starwood Hotels & Resorts
State Street International
(Ireland) Ltd
Cadence Design Systems Intel Ireland Ltd StructureTone
Catalent Pharma Solutions Inc Intel Shannon Ltd Sun Life Financial Ireland
CEI Collins Engineers Ltd
Centocor Biologics (Ireland)
Ltd
International Fund Services (Ireland)
Ltd
Iron Mountain Records Management
Symantec Ltd.
Synopsys International
Limited
CH2M HILL ITW Mima Teleflex Medical
Chase Paymentech Janssen Pharmaceutical Ltd The Westin Hotel Dublin
Chubb Insurance Company
of Europe SE
JPMorgan Bank (Ireland) Plc Thermo King Ireland Ltd
Cigna HealthCare Ireland Ltd Kellogg Europe Trading Ltd Titan Aviation Leasing Ltd.
Cisco Internetworking
(Ireland) Ltd (Galway)
Kelly Services Transitions Optical Ltd
CIT Group Kingston Technology International Ltd TransPerfect Translations Ltd
Citi Lake Region Medical Ltd UnitedHealth Group
Citi Hedge Fund Services
(Ireland) Limited
Citrix Systems
Lionbridge Technologies
Lionbridge Technologies, Global
Sourcing and Search (Mayo)
UPMC University of Pittsburg
Medical Centre
Valois Ireland Ltd
Cognex Ltd Logitech Ireland Services Ltd Verizon Ireland Ltd
Colgate Palmolive Support
Services
CommScope EMEA Ltd
(Systimax Solutions)
Magnet Networks Waters Technologies
Manpower Ireland Group Watson Wyatt (Ireland) Ltd
ConocoPhillips Ireland MBNA Ireland Wells Fargo International
Conrad Dublin McAfee Ireland Ltd
Willis Risk Services (Ireland)
Ltd

Continental Airlines McDonald's Restaurants of Ireland Ltd Wyeth Biotech
Cook Medical McKesson Ireland Ltd Wyeth Medica Ireland
Cordis Cashel Medtronic CardioVascular Galway Wyeth Nutritionals Ireland
Covidien (Tyco Healthcare
Ireland Ltd)
AMERICAN CHAMBER OF COMMERCE
Mentor Graphics Xerox (Europe) Ltd
Covidien Heathcare (Athlone) Mercer Xilinx Ireland
Critical Path
Merck Sharp & Dohme Ireland (Human
Health) Ltd
Crown Relocations Merck Sharp & Dohme Ireland Ltd
Zeus Industrial Products
(Ireland) Ltd
Zimmer Orthopedics
Manufacturing Limited