The Government plans to invest up to €500m to create a fund to be known as Innovation Fund Ireland. This would support companies in the early stages of research and development.
The proposal is part of the Government's framework plan for economic renewal, launched this afternoon.
Taoiseach Brian Cowen also said the Government would be 'engaging intensively' with the social partners in the coming weeks. The talks will focus on 'how we can devise a credible time frame in which to close the gap in the public finances'. Mr Cowen said this process would be influenced by the end of year Exchequer figures.
He said it was time that Ireland captured ideas and commercialised the ideas in this country. Health Minister Mary Harney said the plan required a national effort like that in the mid-1980s.
The €500m innovation fund will be divided into five funds of up to €150m, and these will be operated in coordination with existing supports from Enterprise Ireland.
The renewal programme also includes a plan to help entrepreneurship and new businesses by introducing what the Government calls 'highly favourable taxation measures', including a three-year exemption from Corporation Tax for business start-ups.
The Government also said that 'greening' the economy would help turn the economy around and that putting energy efficiency at the heart of the strategy would protect us from future rises in energy costs.
But the Opposition has dismissed the plan as a public relations exercise. Fine Gael's Finance Spokesman Richard Bruton said the Government did not appear to have a clear strategy. Labour's spokesperson on Finance, Joan Burton, has criticised the Government plan, saying it had failed to provide new money for most of the proposed measures.
Employers' group IBEC 'broadly welcomed' the programme, but warned that there were other issues to be urgently addressed - in particular the currency crisis.
Small business group ISME described the programme as 'vague' and 'bereft of ideas', adding that it failed to address the key issues facing the small business sector. But the Small Firms Association welcomed the move and said it looked forward to engaging with the Government on developing the specifics of measures in the programme.
Speaking at the plan's launch, the Taoiseach said it was not an 'instant solution' to the country's problems, adding that many of the factors that will determine the timing and pace of the recovery, such as exchange and interest rates, are beyond our control.
Mr Cowen also said that the successful implementation of the programme could not just be delivered by the Government.
