Irish businesses invested just over €1 billion in research and development (R&D) in 2003, up from €900m in 2001, according to industrial development body Forfas.
Its report showed that business spending on R&D rose at an annual rate of 9.2% between 2001 and 2003, though the rate was 5.2% when adjusted for inflation.
Chief executive Martin Cronin described the performance as 'solid', given the global economic slowdown and particularly the technology slump in the period.
The ratio of R&D spending to national output rose only slightly to 0.97%, well below the 1.7% target set out by the Government. The OECD average is 1.45%, while the EU figure is 1.13%.
A breakdown showed that R&D spending rose sharply in the pharmaceutical and instruments sectors, but fell in the food and drink industries. Foreign-owned companies accounted for an increased 72% share of such spending.
