Irish innovation: No room for complacency as performance declines

Slips in relation to the EU average must be reversed and obstacles to progress removed

According to the Global Innovation Index (GII), which ranks world economies according to their innovation capabilities, Ireland ranks 19th of the 132 economies featured.

The Index is published by the World Intellectual Property Organisation (WIPO), a specialised agency of the United Nations. It ranks world economies according to their innovation capabilities, using a framework of roughly 80 indicators.

That puts Ireland near the top of the class, which is good. But in 2020, Ireland was ranked 15th and the previous year, 12th, so the trend is going on the wrong direction, which is bad.

In all, the index suggests that Ireland is performing below expectations for its level of development.

A similar picture emerges from the European Innovation Scoreboard (EIS), a comprehensive assessment of the research and innovation performance of EU member states and selected third countries.

It classifies Belgium, Denmark, Finland and Sweden as "innovation leaders", whose innovation performance is well above the EU average. Ireland sits in the next batch, called "strong innovators", alongside Austria, Estonia, France, Germany, Luxembourg and the Netherlands, whose performance above the EU average.

But EIS 2021 found performance had declined for seven member states: Ireland, France, Latvia, Luxembourg, Netherlands, Portugal and Slovakia

And while Ireland is a “strong innovator”, over time its performance relative to the EU has “decreased strongly”, the report shows, particularly in the last three years.

It attributes the decline in innovation performance over the past two years to “reduced performance on government support for business R&D, business R&D expenditures, employment in innovative enterprises, sales of innovative products and environment related technologies”.

State supports

There are, however, a number of State backed supports to help develop and fund business innovation. These range from Local Enterprise Office Innovation Vouchers worth €5,000 to Enterprise Ireland’s Agile Innovation Fund, which supports projects that cost up to €300,000.

One of the most recent government-backed supports for innovation comes from Skillnet Ireland, the business support agency whose mandate is to advance the competitiveness, productivity and innovation of Irish businesses through enterprise-led workforce development.

It is investing more than €5 million in a new initiative, the Innovation Exchange, which is designed to connect fast-paced Irish SMEs who have innovative solutions to offer, to the often slower moving large multinational corporations that need them.

Large corporations such as IBM and Glanbia have already signed up to be part of the programme which will ultimately support 1,000 Irish SMEs around the country.

Skillnet Ireland has developed the programme, in partnership with Dublin Business Innovation Centre (BIC), in the understanding that in this age of digital transformation, innovation is the catalyst that propels businesses forward, boosting productivity and profitability.

The initiative focuses on identifying challenges within the area of digital transformation and developing solutions using emerging technologies such as artificial intelligence, internet of things and robotics across key sectors including energy, food, travel, health, education, human resources, logistics and compliance.

Digital challenges

The problem Skillnet Ireland and Dublin BIC identified was that, although established businesses in Ireland, including Ireland’s large cohort of foreign direct investment, have an appetite to work with innovative SMEs to solve digital challenges, they find it time-consuming and complex to navigate their way to the right providers and the right solutions.

Part of the problem is that innovation still means so many different things to so many different companies. "For some its internal, looking at their processes and trying to automate them. For others it's about innovating their products and services," says Liz Thomas, head of strategic projects at Skillnet Ireland.

“With SMEs and FDI, Ireland has a perfect marriage waiting to happen, we just can’t get to the altar.”

Among the barriers to innovation for large, slow-moving corporates are their own internal bureaucracy, their existing processes, and their need to get approval from their – often – US-based headquarters.

For SMEs, which “are often super agile, creative and innovative, they can’t get into large corporates”, says Thomas. The barriers they face include the long sales cycles that come with FDI, which small businesses typically can’t afford to wait for. Picking their way through to the actual decision makers is a challenge too.

As a time-saving, curated approach, the Innovation Exchange should help punch innovation through to places it previously had difficulty reaching.

In some respects, ensuring Ireland moves back up through the global innovation rankings matters now more than ever. “For Ireland the tax breaks argument has gone away. It’s about talent and it’s about innovation,” she says.