Disruptive Technologies Innovation Fund

Research and development (R&D) grants have a profound impact on society by driving innovation, economic growth, and addressing critical challenges. The evolution of R&D funding underscores its importance in shaping the modern world.

As we continue to face new challenges, Bryan Clarke and Dr Clare Guy of our R&D Tax Incentives Practice looks at the role of R&D grants in supporting scientific research and technological development remains as vital as ever.

The concept of R&D funding can be traced back to the early 20^th century. One of the earliest examples is the establishment of the National Research Council (NRC) in the United States in 1916.

Landscape of R&D funding

Post-World War II, the landscape of R&D funding changed dramatically. The report “Science, The Endless Frontier” was commissioned by President Franklin D. Roosevelt in November 1944 and was delivered to President Harry S. Truman in July 1945.

It was instrumental in shaping modern R&D policy. The author of the report, Vannevar Bush, was a brilliant engineer, inventor and science administrator who during World War II headed the U.S. Office of Scientific Research and Development (OSRD).

Bush’s report emphasised the need for government support in scientific research, arguing that such investment was essential for national security, public health, and economic prosperity.

He proposed the establishment of a centralised agency to fund and coordinate scientific research, which eventually led to the creation of the National Science Foundation (NSF) in 1950.

The impact of Bush’s report extended far beyond the United States, influencing science policy in many other countries.

United Kingdom: Inspired by the report, the UK established the Research Councils to coordinate and fund scientific research including the Science Research Council (SRC) in 1965 (which became the Science and Engineering Research Council in 1981), which played pivotal roles in advancing British science and technology.

Canada: Canada followed a similar path by strengthening its National Research Council (NRC). The NRC expanded its focus to include a broader range of scientific disciplines and increased funding for basic research, mirroring the recommendations of Bush’s report.

Western Europe: Many Western European countries, recovering from the devastation of World War II, saw the report as a blueprint for rebuilding their scientific infrastructure. Countries like France and Germany increased government funding for scientific research and established national agencies to oversee these efforts.

Japan: Post-war Japan also took cues from the report, investing heavily in science and technology to rebuild its economy. The establishment of institutions like the Japan Science and Technology Agency (JST) was influenced by the principles outlined in Bush’s report.

Supporting R&D in Ireland

Ireland has a rich history of supporting R&D, which has been instrumental in driving innovation and economic growth.

Bryan Clarke

Director

KPMG in Ireland

In 1949, the establishment of the Industrial Development Authority (IDA) marked a significant step in Ireland’s R&D landscape. The IDA was created to attract foreign direct investment (FDI) and has been pivotal in promoting R&D activities in Ireland.

During the 1980s and 1990s, Ireland began to significantly increase its investment in R&D. The government recognised the importance of innovation for economic development and started providing more substantial support to both domestic and international companies. In 1993, the Industrial Development Act divided the IDA into three agencies: IDA Ireland for FDI promotion, Enterprise Ireland to support local enterprise, and Forfás for policy advice (which dissolved in 2014). Despite initial concerns about overreliance on FDI, Ireland saw significant FDI inflows during the high-tech boom of the 1990s, acting as a bridge between Silicon Valley and Europe. This made Ireland the largest net FDI recipient in the OECD from 1993 to 2003. Most transnational corporations (TNCs) investing in Ireland were in export-oriented high-tech sectors like electronics, pharmaceuticals, software, and international services, leading to rapid economic growth driven by exports.

The creation of Science Foundation Ireland (SFI) in 2000 was a major milestone and was a direct result of policies formulated in the 1990s. SFI was established to fund excellent scientific research that would enhance Ireland’s reputation as a global leader in innovation. The Irish Research Council was established in 2012. It was formed to support and enhance research across all disciplines in Ireland. The activities and functions of SFI and the IRC were amalgamated into Research Ireland, the new national competitive research and innovation funding agency.

Introducing R&D tax credits

The introduction of the R&D Tax Credits in 2004 provided significant incentives for companies to invest in R&D.

Dr. Clare Guy

Senior Consultant

KPMG in Ireland

These measures have made Ireland an attractive destination for high-tech industries resulting in significantly increased the R&D expenditure in Ireland as shown in Table 1 published by Irish Revenue in July 2024.

Total Value of Expenditure		Of which:
Year	€m	Small/medium enterprises	Large enterprises
2012	1,384	643	741
2013	2,340	663	1,677
2014	2,757	690	2,067
2015	2,430	607	1,823
2016	1,798	614	1,184
2017	1,696	689	1,006
2018	1,171	522	649
2019	2,602	801	1,801
2020	3,105	786	2,319
2021	3,471	798	2,673
2022	4,688	888	3,800

In 2018, the Irish Government allocated €500 million over ten years to R&D through the Disruptive Technologies Innovation Fund (DTIF), reflecting its ongoing commitment to fostering innovation. The DTIF focuses on several key research areas that align with Ireland’s national priorities. These areas include:

Information and Communications Technology: Projects in this area involve advancements in digital technologies, cybersecurity, and telecommunications.
Health and Wellbeing: This includes medical devices, biotechnology, and innovations aimed at improving healthcare delivery and patient outcomes.
Food: Research in this area focuses on food production, safety, and sustainability.
Energy, Climate Action, and Sustainability: Projects aim to develop renewable energy sources, improve energy efficiency, and address environmental challenges.
Manufacturing and Materials: This involves the development of advanced manufacturing processes and new materials with enhanced properties.
Services and Business Processes: Innovations in this area aim to improve business operations, logistics, and service delivery.

Success stories

A standout success story in the pharma sector funded by the Disruptive Technologies Innovation Fund (DTIF) is the OsStic® technology project.

This initiative, led by PBC Biomed in collaboration with Biodesign Europe, SFI Research Centre for Advanced Manufacturing (I-Form) at Dublin City University, and Dolmen Design & Innovation, focuses on developing a groundbreaking bio-adhesive bone void filler.

Other notable success stories from the DTIF are:

A-techsyn whose drone technology can survey large areas of coastline, improve maritime surveillance and support Ireland’s ability to combat drug smuggling.
Deciphex use AI to target accurate screening which will contribute to improved outcomes for cancer patients
The Subsea Micropiles project is developing solutions for seabed drilling systems for installing marine anchors, a technology that has huge potential to support the growth of offshore wind applications.
Lumavison’s high-resolution imagery of the beating heart will provide cardiologists with accurate information to guide patient therapy
Neurent Medical’s technology will improve the quality of life for millions of patients suffering from chronic rhinitis

Application process

The current application process for the DTIF involves several key steps:

Eligibility Check: Ensure that your project meets the eligibility criteria. The DTIF is open to collaborations between SMEs, multinational corporations (MNCs), and research-performing organisations (RPOs) engaged in industrial research or experimental development.
Preparation: Familiarise yourself with the terms and conditions of the call. It is advisable to use the indicative application form to prepare your submission. This helps in avoiding incomplete or ineligible applications.
Submission: Applications can be submitted online via the Enterprise Ireland website.
Evaluation: Submitted applications are assessed by panels of independent international experts. The evaluation criteria include the quality of the disruptive technology, the excellence of the overall approach, economic impact and sustainability, and the strength of the collaboration.
Interview: Shortlisted applicants may be invited for an interview with the evaluation panel to discuss their project in more detail.
Announcement: Successful projects are typically announced in the first quarter following the application deadline.

While the there is an overhead in applying for a grant under the DTIF, the benefits are significant. Small and Medium-sized Enterprises can claim up to 50% of their eligible costs while Large Companies can claim up to 40% of their eligible costs. In addition, it may be possible to claim a portion of the remaining costs under the R&D tax credits regime, leading to further cost savings.

The current call (Call 7) is open for submissions until April 30, 2025.

How KPMG can help

We are Ireland’s largest, longest-established, most experienced R&D Incentives practice operating. We operate on an all-Ireland basis. Our team consists of 40 multidisciplinary professionals in a range of areas, such as tax, finance, science and engineering.

We have prepared RD&I Grant applications for leading multinational companies on the island of Ireland, including some of the largest grant awards by the IDA and requiring Irish Cabinet approval.

Our team of engineering and scientific experts assist with drafting the technical aspects of the grant application and drawdown documents, ensuring they deliver a high degree of flexibility to accommodate potential changes in research priories.

Our holistic approach to R&D Tax Credits and RD&I Grant drawdowns streamlines the process for clients who are availing of both incentives by capturing the required data once.

Our RD&I Grant experts sit within the same team as our R&D Tax Credit specialists, ensuring a streamlined dual process for clients who are availing of both incentives.

Our grant application and drawdown processes will maximise your grant while minimising the time inputs from both your engineering and finance teams.

We can help, and we’d like to meet with you to discuss your options.