Innovation Inputs, How does the Republic of Ireland Compare?

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The Republic of Ireland’s industrial and enterprise strategies will have to evolve in the future to adjust to changing political, economic and technological realities.

One constructive step that the Irish government can take to future proof its economy is to renew its focus on innovation policy with a view to building a world class innovation system. Technological change and innovation have long been of fundamental interest to economists because of the belief that sustainable long-run economic growth depends on the ability of the economy to produce and diffuse new innovations.

It is unwise to conflate innovation with R&D or to treat innovation as a linear process. Yet it is notable that the Republic invests significantly less in innovation inputs than do other similar small open economies. While the Republic is making progress in building up its innovative capacity, its capacity remains weaker than in other small advanced economies.

National Innovative Capacity depends on much more than the volume of innovation inputs. Knowledge flows and linkages, as well as compatible institutions and the quality of capital markets are also important. Even so, the volume of inputs is important for innovative competence and ultimately for productivity led growth. In this context, the Republic’s systemic underinvestment is a concern.

For a brief discussion of this issue and the implications for long-run economic growth see the latest NERI inBrief here.

For a much wider discussion see the latest NERI Working Paper here.

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Dr Tom McDonnell


Tom McDonnell is co-director of the Nevin Economic Research Institute and is based in the Dublin office. In addition to managing staff in the Dublin office he has co-responsibility for the NERI's research programme and for its strategic direction.  

He is also responsible for, among other things, the NERI's analysis of the Republic of Ireland economy including risks, trends and forecasts. He specialises in economic growth, economics of innovation, Irish and European economies, and fiscal policy. 

He previously worked as an economist at TASC and before that was a lecturer in economics at NUI Galway and at DCU. He has also taught at Maynooth University (MU) and is currently an occasional staff member at MU. 

Tom obtained his PhD in economics from NUI Galway. He is a native of Limerick city and lives in Maynooth.

Contact: [email protected] or 00353 1 889 77 42.