Physics business brings in €7bn to Irish economy

29 November 2012

A new report from the Institute of Physics (IOP) shows that physics-based businesses contribute more than €7bn annually to the Irish economy and directly employ over 86,000.

report cover
Minister for Research and Innovation, Seán Sherlock, at the launch

Such companies would not exist without the physics base, or without employees who have an advanced understanding of physics.

Across Ireland, physics, and physics-trained people, underpin a wide range of, businesses from medical technologies to ICT, space industry, web services and even some areas of high-finance. The analysis, by Deloitte, in the report describes the impact of these sectors, which are critically-dependent on the supply of new physics research and physics-trained people.

Direct employment in physics-based business is comparable to that of all the finance, banking and insurance sectors combined. Including induced and indirect sectors employment rises to 119 000 and the Gross Value Added (GVA) contribution to €12bn.

The Minister for Research and Innovation, Sean Sherlock said; “I welcome the report's analysis on the importance of Physics to the Irish Economy.  It reinforces the rationale behind the emphasis being placed on ensuring the flow of science, including physics, graduates from our third level institutions.

Indigenous industry and the Irish economy need a skilled workforce, and a key element in ensuring the workforce has the skills required is by increasing the number and quality of science, technology, engineering and mathematics, or STEM, graduates. This is a key objective of this Government, which recognises that investment in research and innovation will underpin our economic recovery.”

Jobs in the physics-based sector are significantly more productive than the national average and, at €86 000 per worker, twice as productive as jobs in the construction sector.  While these sectors have been effected by the economic downtown, they are showing resilience. While employment in this area dropped between 2008 and 2010, it was proportionally less than in the Irish economy as a whole. In addition, physics based businesses export more than €23 billion of goods and services per year and consistently these businesses export more than the national average: 45% over 2005-2008 compared with 41%.

Pádraig Ó Murchú, Intel’s Education and Research Manager for Ireland in welcoming the report noted that “physicists and physics trained people are critically important to Intel to enable us design, innovate and manufacture computing devices that will connect and enhance the lives of every person on earth.”

As Kevin McGuigan, Chair of the Institute of Physics in Ireland commented:, “clearly physics has a major role to play in building the new Irish economy.” He continued, “for these physics-based sectors to achieve their potential, and for Ireland to build a sustainable economy of the future, built on high-technology, knowledge-intensive industries, there must be more focused support. The source of the strength of physics-based industries is the products of physics research. To be able to develop this research, and create wealth, there must be a ready supply of physics-trained workers..” In this context, he noted that “it was worrying that 23% of post-primary schools did not offer physics at Leaving Certificate Level."

What is a ‘physics-based’ business?
A challenge in the production of the report was identifying which business sectors can be classified as ‘physics-based’; technologies arising from  physics underpin a wide range of businesses – from Dunne’s checkouts to Powercity’s flat screen televisions, lasers and LEDs wouldn’t exist without physics.

Dunne’s and Powercity, however, would not have been included in the analysis as IOP and Deloitte agreed that ‘physics-based’ businesses would only refer to those businesses that would be unable to exist without ability to respond and adapt to latest advances in research.

For further detail about the classification method and more detailed findings, please see the full report: The Importance of Physics to Irish Economy (PDF, 5 MB).