Outside, it looked like any other February day you might experience in Ireland: cold, windy, low-slung clouds nipping at the top of high-rise commercial towers. There was even some Irish inside the uptown Phoenix restaurant, as Ireland’s minister for Health and Children ate lunch with Gov. Janet Napolitano.
The Irish official, Mary Harney, was in Arizona to view firsthand the state’s health care practitioners and educators, taking in tours of Mayo Clinic and A.T. Still University, and speaking with leaders in the industry as part of a fact-finding mission in advance of revamping Ireland’s health care system.
Prior to her current assignment, Harney served as her country’s minister for Enterprise, Trade and Employment, and during that time she became the architect of a program credited with creating an economic revolution in Ireland. Also a member of Dáil Éireann, or Ireland’s House of Representatives, she drafted and gathered support for legislation that ultimately created Science Foundation Ireland and invested about $750 million in research and development, specifically in the areas of bioscience and technology.
Although she was in Phoenix to investigate health care programs, she also spent some time with business leaders and legislators discussing her experiences with Science Foundation Ireland and what policy-makers here can expect with Science Foundation Arizona, which is modeled after the program she created.
After dining with the governor, Harney ambled to the restaurant’s bar, her stormy blue eyes a perfect match for the weather just outside the window that was creating puddles on the tables and chairs on the patio. She spoke with Arizona Capitol Times about the importance of creating a new, vibrant economy, the role government should play in that and what Arizona politicians need to keep in mind about Science Foundation Arizona as they work to balance the state’s budget.
I think most Arizonans have only heard of Science Foundation Ireland anecdotally, through stories in the newspapers correlating Arizona’s effort to what your country has done. Can you explain what the purpose is and the concept of the program≠
Ireland was traditionally an agricultural country. We basically exported agricultural products, mainly to the U.K., and imported manufactured products. That was the story of Ireland up to the ’50s and ’60s. In the ’70s, we began to create incentives to encourage manufacturing, and some of the world’s biggest companies have major manufacturing facilities in Ireland.
However, we realized that as we became more prosperous and more developed, there were places in the world where goods and services could be produced much cheaper. Labor was no longer a big advantage in Ireland because we were, obviously, a more developed country and a more prosperous country. We recognized that if we want to compete, we had to get into the knowledge base. We had to, in particular, embrace innovation and research and investment in people and new ideas, and instead of just being a country where other people’s ideas were manufactured, we wanted to become the innovators.
So, in the early ’90s, the government established a Technology Foresight exercise, and the people that were involved in that were a combination of people from the education system, people from inside and outside the country, people from the policy-making and government level and people from industry. They recommended to the government that, if we wanted to continue to succeed beyond where we were in the ’90s and into 2020, we needed to invest in basic research. We needed to create a critical mass of serious researchers.
We started Science Foundation Ireland and we gave it an allocation of 500 million pounds, which is $750 million. Their job was to attract to Ireland, and support in Ireland, the best research in ICT (information and communications technologies) and biotechnology. The agreement was not just to give the money to Irish researchers, but to compete internationally. So, when the Science Foundation Ireland was established, many of the board members were from all over the world, including many from the United States.
We set out to put in place a foundation that would attract the best in the world and give among the biggest grants that were given anywhere in the world for basic research. The key thing we had to do was find a dynamic chief executive officer who hadn’t been working in Ireland. We thought it would be easier for someone to come from outside and tell us what needed to be done. That’s where Dr. William Harris came into the equation.
Today, the foundation has committed over 1 billion pounds in research grants and we’ve attracted some of the world’s largest research institutes. It’s been highly successful, but it’s in its early days. In terms of research, we’re at a five- or seven-year horizon, but we’re looking at a 20-year horizon.
In addition to the money the government has made available, a lot of companies now are putting research functions into Ireland and are working with Science Foundation Ireland in a collaborative way.
(Editor’s note: Dr. William Harris currently serves as president and CEO of Science Foundation Arizona. He was hired in 2006.)
What’s been the net effect on Ireland’s economy because of Science Foundation Ireland≠
As I said, in addition to the investment the government’s making through the foundation, because of the commitment that is being shown in the early years, it’s encouraging a lot of industry to put research functions into Ireland. It’s pulling Ireland very much into the knowledge base. It’s helping to develop the skill base of the population and attract very serious research and academics. In the medical field, for example, many have come back to work as researchers because of the funding and the commitment to the funding.
I think it’s put us right up there at the top, in a situation where Ireland, because of all the priorities, never had any money to invest in the future. It was very much a day-to-day endeavor. I think this has put us — for a small country of only 4.3 million people — it has made us serious players in the innovation space.
We want to continue in that. That’s the only place we have a future. We have no future simply doing what we did in the past, with China and India and development in other parts of the world. Small countries, small states like Arizona, can only succeed if we are constantly focused on competitiveness. Today’s competitiveness is about people and converting ideas into new products and services rapidly.
What was your role in the development of Science Foundation Ireland≠
I was the minister that introduced it and sponsored it and convinced the government to do it and brought in the legislation to give it legal backing. I was involved internationally in helping to attract some key people to the board of Science Foundation Ireland, particularly attracting Dr. Harris to become CEO, which was really successful. Any new idea that doesn’t get off to a good start has a disappointing future. It flounders. The start is very important and we got off to a very good start.
What was the biggest challenge you faced in trying to get support for the program≠
Well, basically, when you’re asking the government to assign 500 million pounds to som
ething into the future, when you have so many day-to-day needs in health and education and public infrastructure, it wasn’t easy. But I remember bringing one of the industry representatives from Foresight to the Cabinet meeting. He said, well, my company invests this amount every year. He was able to put it in context.
It took some time to persuade (the government) because there was a huge competition for resources, as there always is in government. Resources are not infinite, and everybody feels their area deserves more investment. But this was about convincing the government that our economic success, our wealth-generation capacity, was very much tied into moving into the innovation space.
While you’ve been in Arizona, you’ve spoken with elected officials about Science Foundation Arizona, which is modeled after the Irish program. What has been the crux of your message to them≠
On (Feb. 2), I had an opportunity to meet some business representatives. My message is the world is changing very rapidly. Success in the past is no guarantee of success in the future. We need flexibility and agility. We need to invest in people, to invest now for countries like the United States or Ireland. There are always places where things can be made much cheaper than they can ever be made here, so our advantage has to be in terms of ideas.
I think the politicians have to be able to see beyond the immediate needs, as difficult as that is. There’s generally no votes in research and the voters at the doors aren’t interested in research. But there are votes in economic sustainability and economic growth and employment. I think the challenge for politicians is to convince the public that economic growth and employment is very much linked in to supporting innovation.
Last year, state leaders agreed to $100 million in funding for Science Foundation Arizona over four years, contingent on matching private funds being raised. But the downturn in the economy has hit Arizona particularly hard this year, and the state is facing a deficit that may reach $1 billion — about 10 percent of last year’s budget. There are fiscal conservatives that did not like the decision to commit the money in the first place, and now that funding may be targeted to fix the deficit.
I can understand that attitude, but at a time when there’s a downturn, it’s even more important to support innovation, because it’s through innovation and economic revolution that you have the capacity to generate economic growth. I think it’s the last thing that needs to be cut — you can’t start-stop research.
People are going to choose to come and make their career in your country in the research space. They want to know that there’s medium- to long-term support for that, otherwise you won’t get the best people to come in if they feel that it may stop and start. The best people are going to be influenced by the commitment, and you need the best people.
Your party, the Progressive Democrats, is widely regarded for its pushes for privatization and free-market economic policies. Here, fiscal conservatives look at a program like Science Foundation Arizona as being contrary to those ideals. Is there an inherent contradiction between those philosophies and the Science Foundation model≠
Our party, we like to think that we’re innovative. We believe in supporting enterprise and entrepreneurship and low taxation, a minimum role of the state. But, equally, we believe the state has an obligation to support innovation and develop the potential of its people. Competitiveness and economic growth and success are very much dependent for developed countries like ours to support innovation.
While most innovation in the world is supported by the private sector, unless government kick starts it in small countries, it’s not going to happen.
What about the concern of local fiscal conservatives here, namely that spending tax dollars on such a project is not the proper role of government and is a waste of money≠
I don’t accept that. At a time when there’s so many other places in the world where things can be produced much more cost-effectively than in the U.S., you’ve got to support innovation.
It would be great if government didn’t have to do it, but government does have to do it. Particularly in newly developing countries or states — such as Ireland or Arizona — it’s not going to happen organically by the companies. I think support by government for innovation and research is the magnet to attract company investment. I actually think it pays huge dividends.
Ireland has become attractive for direct investment. Among the things that have made us attractive are the investments in education, the availability of highly educated people. We have the highest level of education for people under 35 with third-level (university) education anywhere in the world. The commitment to flexibility and innovation and supporting all of that and cutting down red tape and access to the local and federal governments — which is easier in a country that’s as small as ours — these are the kinds of tools that business appreciates. As well as, of course, low taxation and a regulatory environment that supports and gives legal backing to what companies are doing.
What role do tax rates — especially those on businesses — play in attracting the bioscience and other high-tech firms to locate in a particular country or state≠
I think they play a role, but you only pay taxes when you start making profits. I think they’re a factor, certainly, but I think the availability of people and an environment — a business ecosystem — that’s conducive to entrepreneurship and innovation and doesn’t get in the way and make things more difficult, that appreciates entrepreneurs — that’s very important.
We have spent a long time in Ireland, now, trying to bring industry and the education system closer together. In the past, it was sort of taboo. The academic world was very separate from the business world and wasn’t quite seen as the place for the universities to be.
Now, it’s very different and the universities have lots of support for campus companies and they’re doing a lot of programs in conjunction with industry. They’re trying to create flexible learning and environments that support the needs of industry, both working together to each other’s advantage. That, too, is very important. Education and industry, for our countries, are very much linked together.
Thank you for your time, Minister Harney.
Thank you very much.