Type of Innovation expenditure by enterprises1 2010, 2012 and 2014 | ||||||
2010 | 2012 | 2014 | 2010 - 2014 | 2012 - 2014 | ||
€m | €m | €m | Percentage change (%) | |||
In-house Research and Development | 1,252.9 | 1,861.4 | 1,881.9 | 50.2 | 1.1 | |
Purchase of external Research and Development | 481.7 | 525.3 | 373.3 | -22.5 | -28.9 | |
Acquisition of machinery, equipment and software | 603.9 | 921.7 | 1,239.2 | 105.2 | 34.4 | |
Acquisition of other external knowledge | 206.6 | 236.8 | 229.3 | 11.0 | -3.2 | |
All other innovation activities | n/a | 109.1 | 69.3 | n/a | -36.4 | |
Total innovation expenditure | 2,545.1 | 3,654.2 | 3,793.0 | 49.0 | 3.8 | |
1 Enterprises with 10 or more employed in Industry and Selected Services sectors. | ||||||
Results from the 2012–2014 Community Innovation Survey (published as Innovation in Irish Enterprises) show that total spending on innovation activities in Industry and Selected Services sectors was almost €3.8bn in 2014, a 4% increase on the 2012 spend of €3.65bn. The main driver for this increase was a 34% rise in expenditure on acquisition of machinery, equipment and software, from €0.92bn in 2012 to €1.24bn in 2014.
The value of In-house Research & Development (R&D) in 2014 was €1.88bn, which was the highest share of spend and accounted for 50% of all expenditure.
The acquisition of external R&D at €373m represented 10% of total spend. This involves enterprises contracting-out R&D to public or private research organisations or to other enterprises.
Acquisition of external knowledge cost €229m or 6% of the total, with the value of all other innovation activities at €69m accounting for 2% of expenditure.
Please note, care should be taken in interpreting the results from the Community Innovation Survey. Of those enterprises who confirmed they had innovative activity, the level of spend represented 1.4% of their turnover and this low expenditure level can lead to volatility in the results over time. See Figure 1 and Headline table.
Services enterprises spend on in-house R&D accounted for a third of total innovation expenditure
Of the total spend of €3.8bn by enterprises on innovation activities, Selected Services accounted for €2.1bn compared to €1.7bn for the Industrial sector.
Selected Services sector enterprises spent €1,234m on in-house R&D amounting to almost a third (32.5%) of total innovation expenditure, €530m on machinery, equipment and software, €204m on acquisition of external knowledge, €117m on external R&D, and €42m on all other innovation activities.
Industrial enterprises spent €709m on machinery, equipment and software, €647m on in-house R&D, €257m on external R&D, €25m on acquisition of external knowledge, and €27m on all other innovation activities. See Table 1.
Foreign enterprises accounted for 61% of total innovation expenditure
Even though foreign owned enterprises accounted for only 18% of all relevant enterprises, they accounted for €2.3bn or 61% of all innovation-related expenditure, including €1.3bn on in-house R&D.
Irish owned enterprises, which account for 82% of all relevant enterprises, spent €1.5bn on innovation related activities in 2014 or 39% of the total, of which €563m was spent on in-house R&D. See Figure 2 and Table 1.
For long labels below use to display on multiple lines | % |
---|---|
Irish owned enterprises | 39.2838979732966 |
Foreign owned enterprises | 60.7161020267034 |
Over 69% of large enterprises had innovation expenditure in 2012-2014 compared with 41% of SMEs
Nearly 42% of all enterprises had innovation expenditure in 2014. By size class, 38% of all small enterprises, 53% of medium enterprises (41% of SMEs combined), and 69% of large enterprises had such expenditure.
The largest 50 enterprises with innovation expenditure, representing 1% of all relevant enterprises, accounted for 65% of total innovation expenditure.
Almost 53% of Industrial enterprises had innovation expenditure compared with 37% of enterprises in the Selected Services sector. While 41% of enterprises in the Industry sector purchased machinery, equipment or software relating to innovation activities, the corresponding figure for Selected Services was 26%. See Figure 3 and Table 2.
Industry | Selected Services | |
In-house R&D | 42.5942962281509 | 23.0600613765892 |
Acquisition of machinery, equipment and software | 40.4783808647654 | 26.1946514686541 |
Acquisition of external knowledge | 21.113155473781 | 14.094695309075 |
External R&D | 18.1232750689972 | 11.3546690048224 |
All other innovation activities | 17.9852805887764 | 10.2586584831214 |
Almost half of foreign owned enterprises had innovation expenditure
Almost 41% of Irish owned enterprises had innovation related expenditure in the reference period compared to 47% of foreign owned enterprises. Nearly 29% of Irish owned enterprises performed in-house R&D relating to innovation activities compared to 33% of foreign owned enterprises. See Figure 4 and Table 2.
Irish owned | Foreign owned | |
In-house R&D | 28.5222121486854 | 33.1695331695332 |
Acquisition of machinery, equipment and software | 30.4079782411605 | 32.5962325962326 |
Acquisition of external knowledge | 16.1922030825023 | 17.1171171171171 |
External R&D | 12.4932003626473 | 18.2637182637183 |
All other innovation activities | 11.894832275612 | 16.6257166257166 |
61% of all enterprises were innovation active during 2012-2014
Of the enterprises surveyed in the Industry and Selected Services sectors, 61% were innovation active in the period 2012-2014. These enterprises generated 85% of total turnover and employed more than three quarters of total persons engaged in these two sectors.
Enterprises classed as innovation active are those enterprises that have carried out a product, process, organisational or marketing innovation between 2012-2014. They may also exercise an intellectual property right or license. See Figure 5 and Table 3.
Total Industry | Total Selected Services | All innovative enterprises | |
Total enterprises with innovation activities | 66.3753449862006 | 58.4173608066637 | 60.9857482185273 |
Total turnover that is generated by enterprises with innovation activities | 88.9719652368852 | 82.5355065826471 | 84.4928719800881 |
Total persons engaged who work in enterprises with innovation activities | 82.1529945232907 | 72.1042605759982 | 76.0279594863364 |
Almost 49% of all enterprises had technological innovation during 2012-2014
Enterprises that are classed as technological innovation active are those enterprises that had carried out a product or process innovation.
Overall, it was found that 49% of all enterprises with ten or more persons engaged in the Industrial and Selected Services sectors were technologically innovative in the reference period. These enterprises generated 76% of all turnover and employed 66% of persons engaged in the Industry and Selected Services sectors. See Figure 6.
Activity rates | |
% of total enterprises with technological innovation activities | 48.8420427553444 |
% of total turnover generated by enterprises with technological innovation activities | 76.2136765120771 |
% of total persons engaged who work in enterprises with technological innovation activities | 65.9057516986078 |
European Innovation Rankings
The Community Innovation Survey is carried out in all EU member states. The most recent data available from Eurostat is taken from the 2010-2012 survey and allows comparisons across the entire community. When analysing the 2010-2012 results, Ireland shows the 3rd highest innovation rates of all countries for whom data has been published at 59%.
While the innovation activity rate for enterprises in Industry and Selected Services sectors increased to 61% in Ireland in the period 2012-2014, comparable innovation activity rates will not be available for the other EU member states until Q4 2016. See Figure 7.
Percentage | |
Ireland (2014) | 61 |
EU-28 (2012) | 48.9 |
Germany | 66.9 |
Luxembourg | 66.1 |
Ireland (2012) | 58.7 |
Italy | 56.1 |
Sweden | 55.9 |
Belgium | 55.6 |
Portugal | 54.6 |
Austria | 54.4 |
France | 53.4 |
Finland | 52.6 |
Greece | 52.3 |
Netherlands | 51.4 |
Denmark | 51.1 |
Malta | 51.1 |
United Kingdom | 50.3 |
Turkey | 48.5 |
Estonia | 47.6 |
Serbia | 47.5 |
Slovenia | 46.5 |
Norway | 44.7 |
Czech Republic | 43.9 |
Cyprus | 42.1 |
Croatia | 37.9 |
Slovakia | 34 |
Spain | 33.6 |
Lithuania | 32.9 |
Hungary | 32.5 |
Latvia | 30.4 |
Bulgaria | 27.4 |
Poland | 23 |
Romania | 20.7 |
A marketing innovation is the implementation of a new marketing concept or strategy that differs significantly from an enterprise’s existing marketing methods and which has not been used before. It requires significant changes in product design or packaging, product placement, product promotion or pricing.
Ireland had the 2nd highest rate of marketing innovative enterprises at 35.7% in the period 2010–2012, with Greece having the highest rate at 36.8%.
Figures for 2012–2014 show marketing innovation had risen in Ireland to 39.6%. However, comparable innovation activity rates will not be available for the other EU member states until Q4 2016. See Figure 8.
Percentage | |
Ireland (2014) | 39.6 |
EU-28 (2012) | 24.3 |
Greece | 36.8 |
Ireland (2012) | 35.7 |
Turkey | 34.7 |
Germany | 34.4 |
Portugal | 32.8 |
Malta | 32.6 |
Luxembourg | 32.4 |
Serbia | 32.2 |
Italy | 31 |
Sweden | 30.4 |
Denmark | 29.5 |
Cyprus | 29.5 |
Austria | 29.5 |
Slovenia | 28.5 |
Finland | 26.5 |
France | 25.4 |
Croatia | 23.5 |
Netherlands | 23.2 |
Norway | 23.2 |
Czech Republic | 22.4 |
Belgium | 21.9 |
Estonia | 21.9 |
Hungary | 19.7 |
Lithuania | 19.3 |
Slovakia | 19.3 |
United Kingdom | 16.8 |
Latvia | 16.5 |
Bulgaria | 14.2 |
Romania | 13.8 |
Spain | 13.2 |
Poland | 10.6 |
Nearly 38% of enterprises were engaged in process innovations, with 36% engaged in product innovations
Nearly 38% of enterprises in the Industry and Selected Services sectors had process innovations in the period 2012-2014, while 36% were engaged in product innovations. Over one in four, 27%, of those enterprises were engaged in both process and product innovations.
Almost 45% of Industry enterprises were engaged in process innovation compared to 34% of enterprises in Selected Services. Foreign owned enterprises were more likely to engage in product innovations, process innovations or both compared to Irish owned enterprises. See Figure 9.
Product innovation | Process innovation | Product and process innovation | |
Industry | 44.1122355105796 | 44.8942042318307 | 33.8546458141674 |
Selected Services | 31.6527838667251 | 34.4366505918457 | 22.9285401139851 |
Irish owned | 33.599274705349 | 36.6273798730734 | 25.1495920217588 |
Foreign owned | 45.045045045045 | 43.1613431613432 | 32.3505323505324 |
All enterprises | 35.6739904988124 | 37.811757719715 | 26.4548693586698 |
New to firm or new to market innovations generated 18% of turnover in 2014
Over 18% of turnover for enterprises in 2014 was reported to be the result of new to firm or new to market innovations. This can be broken down into 15% from new to market and 3% from new to firm innovations.
Almost 23% of the turnover of foreign owned enterprises was generated as a result of new to the market and new to firm product innovations compared to 11% of the turnover of Irish owned enterprises. See Figure 10.
Turnover: New to firm | Turnover: New to market | |
Industry | 4.81640221959654 | 12.1317622289938 |
Selected Services | 2.55472045878052 | 16.004401884974 |
Irish owned | 5.20977857804686 | 5.78707905121857 |
Foreign owned | 1.95771049052549 | 20.7303956387144 |
All enterprises | 3.24251165560199 | 14.8267091090899 |
Two thirds of large enterprises introduced an organisational innovation
Enterprises were asked details of organisational innovations that they introduced in the period 2012-2014. An organisational innovation is a new organisational method in the enterprise’s business practices, workplace organisation or external relations that had not been previously used by enterprises.
Over 44% of all enterprises carried out an organisational innovation in 2012-2014. New methods of organising work responsibilities and decision-making (39%) and the introduction of new business practices (38%) were the most cited forms of organisational innovation. An organisational innovation was introduced by 68% of large enterprises over the reference period. This compares with 41% of small enterprises and 54% of medium sized enterprises. See Figure 11.
Small (10-49) | Medium (50-249) | Large (250+) | All enterprises | |
New business practices | 34.3732274532048 | 46.8941382327209 | 61.1842105263158 | 37.7226840855107 |
New methods of organising work responsibilities and decision-making | 36.2072225373417 | 48.7314085739283 | 60.5263157894737 | 39.4299287410926 |
New methods of organising external relations | 16.5626772546795 | 21.3473315835521 | 37.171052631579 | 18.3046318289786 |
Any organisational innovation | 40.9718283229344 | 53.8932633420822 | 68.4210526315789 | 44.4032066508314 |
Primary marketing innovation was the introduction of new media or techniques for product promotion
Two in five of all enterprises carried out a marketing innovation in 2012-2014. The most common form of marketing innovation was the introduction of new media or techniques for product promotion and 28% of all enterprises indicated that they engaged in this activity. Significant changes to the aesthetic design or packaging of a good or service were implemented by 21% of all enterprises. A marketing innovation was introduced by 52% of large sized enterprises and 44% of medium enterprises between 2012 and 2014, while 38% of small enterprises introduced a marketing innovation. See Figure 12.
Overall, 40% of Industrial enterprises had a marketing innovation, with the same percentage reported by enterprises in Selected Services. Foreign owned enterprises introduced a marketing innovation in 39% of cases compared to 40% of Irish owned enterprises. Foreign owned enterprises introduced new media or techniques for product promotion compared in 26% of cases compared to 28% of Irish owned enterprises. Over a fifth (22%) of foreign owned enterprises introduced new methods of pricing goods or services compared to 18% of Irish enterprises.
Small (10-49) | Medium (50-249) | Large (250+) | All enterprises | |
Significant changes to the aesthetic design or packaging of a good or service | 18.812629986765 | 26.5966754155731 | 31.25 | 20.6799287410926 |
New media techniques for product promotion | 26.1297031574967 | 30.7961504811898 | 38.8157894736842 | 27.4940617577197 |
New methods for product placement or sales channels | 18.9638873132917 | 23.7970253718285 | 31.5789473684211 | 20.353325415677 |
New methods of pricing goods or services | 17.602571374551 | 20.7349081364829 | 27.6315789473684 | 18.5718527315914 |
Any marketing innovation | 37.8332387975043 | 44.4444444444444 | 51.9736842105263 | 39.5932304038005 |
Technological innovation co-operation with enterprises unchanged since 2010-2012
When developing new to market or new to firm product and process innovations, firms can develop these within their own firm or within their enterprise group. Alternatively, firms may engage in co-operation with other sources to help develop these technological innovations.
Of all technologically innovative enterprises, 31% indicated that they engaged in some co-operative activity when developing their innovations. The same percentage was observed in the 2010-2012 survey. Enterprises reported in 23% of cases that they were engaged in technological innovation co-operation with partners located in Ireland, compared with 16% of enterprises engaged with partners in Other Europe. See Figure 13.
Over one in four Industrial enterprises and one in five Selected Services enterprises engaged in technological innovation co-operation with partners located in Ireland. One fifth of Industrial enterprises were engaged in technological innovation co-operation with partners in Other Europe compared to 14% of Selected Services enterprises.
Around one in five Irish owned enterprises were engaged in technological innovation co-operation with enterprises located in Ireland while 12% had co-operation partners located in Other Europe.
Almost 40% of large enterprises engaged in technological innovation co-operation with partners located in Ireland while 9% of large enterprises co-operated with partners located in China/India.
Location | |
Ireland | 22.7051671732523 |
Northern Ireland | 5.13677811550152 |
Other Europe | 16.048632218845 |
United States | 8.17629179331307 |
China/India | 3.19148936170213 |
All other countries | 4.13373860182371 |
An intellectual innovation was reported by 11% of enterprises in 2012-2014
Intellectual Property Rights can involve applying for a patent or European utility model, or registering a trademark or industrial design right. A firm may also decide to license in or out these rights.
In 2012-2014, 11% of enterprises had an Intellectual innovation, with 8% registering a trademark and 6% applying for a patent. See Figure 14.
During the reference period, 7% of foreign owned firms licensed in from another enterprise, university or research institute compared to 2% of Irish firms.
Irish owned | Foreign owned | All enterprises | |
Enterprises with intellectual innovation | 10.3354487760653 | 12.3669123669124 | 10.7036817102138 |
Enterprises registering a trademark | 7.68812330009066 | 6.47010647010647 | 7.46733966745843 |
Enterprises applying for a patent | 4.89573889392566 | 9.00900900900901 | 5.64133016627078 |
Enterprises registering an industrial design right | 0.70716228467815 | 1.96560196560197 | 0.935273159144893 |
Enterprises applying for a European utility model | 0.29011786038078 | 1.22850122850123 | 0.46021377672209 |
Almost two in five enterprises had an environmental innovation in 2012-2014
Environmental innovation requires introducing a product, process, organisational or marketing innovation with environmental benefits, with 38% reporting such activity during the reference period.
Just over 20% of enterprises achieved this through reduced energy use or CO2 production, 19% through recycled waste, water or materials, and 18% through facilitating end user recycling. See Figure 15.
Overall, 35% of firms stated they have procedures in place to identify and reduce environmental impacts, ranging from 75% of large enterprises to 49% of medium sized firms to 30% of small firms.
Percentage of enterprises | |
Any Environmental innovation | 38.3610451306413 |
Reduced energy use or CO2 production | 20.1306413301663 |
Recycled waste, water or materials | 19.2102137767221 |
Facilitated end user recycling | 17.770190023753 |
Reduced end user energy use | 15.8105700712589 |
Reduced material or water use | 15.1425178147268 |
Reduced air, water, noise or soil pollution | 12.8859857482185 |
Extended product life for end user | 11.312351543943 |
Reduced end user pollution | 10.1395486935867 |
Replaced materials with less hazardous substitutes | 9.67933491686461 |
Replaced fossil energy with renewables | 5.40380047505938 |
Table 1: Innovation expenditure by nationality of ownership, sector and size class, 2014 | ||||||||||||
€m | ||||||||||||
Nationality of ownership | Sector of activity | Size class | ||||||||||
Irish | Foreign | Industry | Services | Small | Medium | Large | All enterprises | |||||
(10-49) | (50-249) | (250+) | ||||||||||
In-house R&D | 563.3 | 1,318.6 | 647.5 | 1,234.4 | 254.9 | 699.4 | 927.7 | 1,881.9 | ||||
Purchase of External R&D | 177.5 | 195.7 | 256.6 | 116.6 | 27.2 | 166.2 | 180.0 | 373.3 | ||||
Acquisition of machinery, equipment and software | 704.5 | 534.7 | 709.2 | 530.0 | 179.1 | 406.2 | 653.9 | 1,239.2 | ||||
Acquisition of other external knowledge | 30.1 | 199.2 | 25.0 | 204.3 | 29.8 | 182.3 | 17.1 | 229.3 | ||||
Other expenditure | 14.6 | 54.7 | 27.3 | 42.1 | 15.8 | 8.2 | 45.4 | 69.3 | ||||
Total innovation expenditure | 1,490.0 | 2,303.0 | 1,665.6 | 2,127.4 | 506.7 | 1,462.2 | 1,824.0 | 3,793.0 | ||||
Table 2: Percentage of enterprises engaged in technological innovation expenditure by nationality of ownership, sector and size class, 2014 | |||||||||||
% | |||||||||||
Nationality of ownership | Sector of activity | Size class | |||||||||
Irish | Foreign | Industry | Services | Small | Medium | Large | All enterprises | ||||
(10-49) | (50-249) | (250+) | |||||||||
In-house R&D | 28.5 | 33.2 | 42.6 | 23.1 | 25.2 | 40.5 | 59.5 | 29.3 | |||
Purchase of external R&D | 12.5 | 18.3 | 18.1 | 11.4 | 10.9 | 19.8 | 35.2 | 13.5 | |||
Acquisition of machinery, equipment & software | 30.4 | 32.6 | 40.5 | 26.2 | 27.5 | 40.7 | 52.3 | 30.8 | |||
Acquisition of other external knowledge | 16.2 | 17.1 | 21.1 | 14.1 | 14.4 | 22.5 | 28.0 | 16.4 | |||
Active - all other expenditure | 11.9 | 16.6 | 18.0 | 10.3 | 10.8 | 16.5 | 32.2 | 12.8 | |||
Total | 40.7 | 46.5 | 52.8 | 36.5 | 37.8 | 53.3 | 69.1 | 41.8 | |||
Table 3: Technological and non-technological innovation activity rates by sector and size class, 2012 - 2014 | ||||||||||||
% | ||||||||||||
Sector of activity | Size class | |||||||||||
Industry | Services | Small | Medium | Large | All enterprises | |||||||
(10-49) | (50-249) | (250+) | ||||||||||
% of total enterprises with innovation activities | 66.4 | 58.4 | 57.3 | 71.7 | 85.5 | 61.0 | ||||||
% of total turnover that is generated by enterprises with innovation activities | 89.0 | 82.5 | 67.1 | 81.4 | 92.8 | 84.5 | ||||||
% of total persons engaged who work in enterprises with innovation activities | 82.2 | 72.1 | 59.9 | 73.8 | 85.2 | 76.0 | ||||||
Introduction
The Community Innovation Survey (CIS) 2014, also known as Innovation in Irish Enterprises (IIE) is a survey of innovation activities of enterprises in Ireland and other EU Member States. The CIS is carried out under the STATISTICS (COMMUNITY INNOVATION SURVEY) ORDER 2015 (S.I. No 165 of 2015) made under the Statistics Act, 1993. The survey collects information about product and process innovation, as well as organisational and marketing innovations and other key variables during the three year period 2012 to 2014 inclusive. Most questions cover new or significantly improved goods or services or the implementation of new or significantly improved processes, logistics or distribution methods.
The CIS (IIE) was previously conducted by Forfas but is now solely conducted by the CSO to increase efficiency in the collection of statistical data and to reduce the burden on the participating enterprises. Data were collected in accordance with Section 33 of the Statistics Act, 1993 and with EU law and the survey was carried out under the agreed set of international rules as laid out in the OECD Oslo Manual. Data are strictly confidential and will be used only for statistical purposes.
Survey
The CIS (IIE) survey sampled enterprises with ten or more persons engaged in the selected NACE categories as included in the table below. The CSO conducted a postal survey in 2015. A total of 4,645 survey forms were issued to the sampled enterprises from the CSO’s Business Register. The response rate was 69.2%, or 3,216 forms.
NACE Rev. 2 |
|
Sections and Divisions |
Description |
Industry |
|
B (05-09) |
Mining and quarrying |
C (10-33) |
Manufacturing |
D (35) |
Electricity, gas, steam and air conditioning supply |
E (36-39) |
Water supply; sewerage, waste management and remediation activities |
Selected Services |
|
G (46) |
Wholesale trade, except of motor vehicles and motorcycles |
H (49-53) |
Transportation and Storage |
J (58-63) |
Information and communication |
K (64-66) |
Financial and insurance activities |
M (71-73) |
Architectural and engineering activities; technical testing and analysis; scientific research and development; advertising and market research |
The CIS questionnaire is available from the CSO website.
Other Europe
Other Europe includes the following European Union (EU) countries, EFTA or EU candidate countries: Albania, Austria, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Italy, Kosovo, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, and Turkey.
The market introduction of a new or a significantly improved good or service with respect to its capabilities, user friendliness, components or sub-systems. The product innovation could either be new to the market or new to the firm.
The implementation of a new or significantly improved production process, distribution method, or support activity for goods and services. The process innovation could either be new to the market or new to the firm.
An innovation activity, which saw the introduction of a new or significantly improved good or service by the firm onto its operating market before other competitors.
An innovation activity which saw the introduction of a new or significantly improved good or service to the firm, and which was already available from competitors in the operating sector.
Spending on activities to support and implement production or process innovations.
The implementation of new or significant changes in firm structure or management methods that are intended to improve your firm’s use of knowledge, the quality of your goods and services or the efficiency of work flows.
The implementation of a new marketing concept or strategy that differs significantly from your enterprise’s existing marketing methods and which has not been used before. It requires significant changes in product design or packaging, product placement, product promotion or pricing.
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