45126-Invest. Qual-No111

Investment in Qualitydevelopment and developing organisation and managementcapabilities.10.4.2 Science, Technology and InnovationIn a world without market failure the production of knowledgethrough R&D would be left to the market. However, information,whether it be on new product development or process improvement,has the characteristic of being a public good and can therefore beeasily acquired by potential imitators if not protected. Left to themarket innovative activity would therefore be under provided. It isfor this reason that countries both guarantee individual intellectualproperty rights through copyrights and patents and provide variouskinds of public support for R&D.The strategic importance of research and innovation to Ireland’sfuture development is now recognised by Government. This isreflected in the increase in public sector funding for research andinnovation, rising from €196m in 1998 to €342m in 2001. TheNational Development Plan (NDP) allocated almost €2.5 billion forresearch, technological development & innovation (RTDI) in recognitionof “the evolution of the knowledge based economy whereintellect and innovation will determine competitive advantage.” Theimportance of business investment in R&D has also been recognisedby the Council, and is included as an indicator in its recentreport on National Progress Indicators. The Council recognised thatin a global economy increasingly driven by technology and technologicalchanges, simply following the lead set by other countrieswill ultimately limit productivity (NESC, 2002a).The Government’s RTDI strategy, as outlined in the NDP, includesstrengthening research capability in third level institutions,increasing linkages between institutions and companies, providingpublic investment in niche technologies and embedding the cultureof R&D in small and medium enterprises (SMEs). The trends inexpenditure in R&D are outlined below.550