Irish businesses on top in survey of innovations

Irish businesses lead Europe in manufacturing and services innovation, a survey of nearly 34,000 businesses by Eurostat has shown.

Nearly three-quarters (73 per cent) of Irish manufacturing firms correspond to the report's definition of "innovative", having "either introduced new or improved products on the market, or introduced new processes on the market during the last three years". In the services sector, the Irish figure is also top, at 58 per cent.

The survey of 12 European Economic Area countries finds an average rate of innovation in manufacturing of 53 per cent, with Austria (67 per cent) and Denmark (69 per cent) coming closest to Ireland, while the worst performers were Belgium (27 per cent) and Spain (29 per cent). In services, the average was 41 per cent, with Belgium coming bottom on an abysmal 13 per cent, a statistic that will scarcely surprise those who live here.

Large companies (more than 250 employees) perform better, with the range in Irish manufacturing running from 85 per cent in the larger companies to 78 per cent in medium-sized firms, and 68 per cent in small firms. In Germany and Ireland, the innovation gaps between large and small companies are narrower than elsewhere. And while the majority of countries cite as their the main reason for innovation the desire to improve products or service quality, new markets and market share were the key motivators in Belgium, France, Ireland, and Luxembourg. Irish manufacturing innovation expenditure, at 3.3 per cent of turnover, is, however, significantly less than average (3.8 per cent) and less than half that in Sweden (7 per cent). In services, the figure is lower, at 2.1 per cent (average 2.7 per cent).

The survey also shows that turnover in the new and improved products represents a third of Irish manufacturing firms' total turnover, close to the average 31 per cent, but some way behind Germany's 43 per cent. In large Irish companies, however, the share of total turnover is also 43 per cent, while in small firms it is half that (21 per cent).

In the sectors of industry producing machinery and electrical and optical equipment, the share of total turnover represented by innovative products is 69 per cent in Ireland, a full 15 percentage points above its closest rival, Germany. In food, beverages, textiles and leather, the equivalent Irish figure is only 12 per cent. The report is the second Community Innovation Survey, and the figures for most countries, including Ireland, are from 1996.