Creating an all-island open innovation ecosystem
INNOVATION PROFILE: InterTradeIrelandInterTradeIreland knows how valuable innovation can be for firms – it just needs to get the word out
Firms that engage in innovation are three times as successful as those that do not, according to a new report from InterTradeIreland. It also found that firms are seeking to create competitive advantage by finding ways to increase the efficiency and effectiveness of their innovation processes. “We need to get more businesses innovating,” says Aidan Gough, strategy and policy director with InterTradeIreland.
“What we have found is that not enough businesses are involved in innovative activity and we are seeking to address this.”
Part of the solution to this issue lies in open innovation, he says. “Open innovation means expanding the pool of participants in the innovation process to all types of outsiders and tapping into the resources they can provide. This approach takes in organisations outside the firm that can act as catalysts, contributors or collaborators for innovation. These organisations form a wider community – an innovation ecosystem – that firms can leverage.”
The cross-border study, Leveraging the Innovation Ecosystem for Business Advantage, covers the experiences of over 1,100 firms on the island of Ireland on their engagement with the innovation ecosystem and on their capabilities, in order to understand how these factors shape the behaviour of firms. The study found that a high proportion of firms (62 per cent) have engaged in innovation activity in the past three years and confirms the strong link between innovation and growth.
The findings also debunk the myths that innovation is applicable only to large high-tech industries, and is all about doing RD and inventing new products.
“Sometimes innovation can be mixed up with research and development,” Gough says. “We take a very broad view of innovation, and product or service RD is only one part of it. The majority of businesses do not engage in RD but can still be very innovative in other areas . . . Also, the research shows that most innovative firms are micro-enterprises with less than 10 employees and that they come from all sectors of the economy.”
The report also found evidence that firms that export display a higher level of innovation activity than those that do not.
In the context of open innovation, the study found that almost half of firms that innovated in the past leverage external resources and supports and that they do so within the broad phases of the innovation process: idea generation; development; and launch/commercialisation.
Larger firms (55 per cent) are more likely to be outward looking than smaller firms (36 per cent) while the same holds for exporters (58 per cent) and cross-border traders (53 per cent) compared to domestic firms (31 per cent).
Despite the incentives for firms to take an open approach to innovation and the availability of supports, just over half of firms innovate without formally leveraging external resources. “Our study has found that only one in three firms engaged in any formal innovation processes. However, we have all of the components of a full functioning innovation ecosystem in place here on the island of Ireland and we are looking at improving the management of the relationships within it at present.”