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Services enterprises spend on in-house R&D accounted for over 30% of total expenditure

The total spend of €3.6bn by enterprises on innovation activities was split evenly between the industrial and selected services sectors, at €1.8bn each.  Industrial enterprises spent  €742m on in-house R&D, €545m on machinery, equipment and software, €367m on external R&D and €141m on acquisition of external knowledge, while €48m was spent on all other innovation activities. The selected services sector enterprises spent €1.1bn on in-house R&D, €376m on machinery and equipment, €158m on external R&D, €96m on acquisition of external knowledge and €61m spent on all other innovation activities. See Table 1.

 

 

Foreign enterprises account for almost 63% of total innovation expenditure

Irish owned enterprises, which account for 79% of all relevant enterprises, spent €1.36bn on innovation related activities in 2012, of which €592m was spent on in-house R&D.  Even though foreign owned enterprises only accounted for 21% of  all enterprises, they spent €2.3bn, or 63% of all innovation-related expenditure including €1.3 bn on in-house R&D. See Figure 2 and Table 1.

68% of large enterprises had innovation expenditure in 2012 compared with 35% of SMEs

Over one in three , or 36% of, enterprises had innovation expenditure in 2012.  More than 31% of all small enterprises, 52% of medium sized enterprises and 68% of large enterprises had such expenditure in the period. The largest 50 enterprises with innovation expenditure, who represent less than 1% of all relevant enterprises, accounted for 60% of total innovation expenditure.  See Table 2.

48% of industrial enterprises had innovation expenditure compared with 30% of enterprises in selected services sectors.  While 34% of enterprises in the industrial sector purchased machinery, equipment or software related to innovation activities the corresponding figure selected services sector enterprises was 19%.  See Figure 3 and Table 2.

 

Almost 34% of Irish owned enterprises had innovation related expenditure in the reference period compared to 46% of foreign owned enterprises.  Almost 26% of Irish owned enterprises purchased in-house R&D related to innovation activities compared to 33% of foreign owned enterprises.  See Figure 4 and Table 2.

Almost 59% of all enterprises were innovation active during 2010-2012

Almost 59% of enterprises with 10 or more persons engaged in the industrial and selected services sectors were innovation active over the period 2010-2012.  These enterprises generated 84% of total turnover in these sectors.  Over three-quarters of total persons engaged in these sectors worked in such enterprises. 

Enterprises that are classed as innovation active are those enterprises that have carried out a product innovation or a process innovation or an organisational or a marketing innovation between 2010 and 2012. See Table 3 and Figure 5.

Over 42% of all enterprises were technological innovation active during 2010-2012

Enterprises that are classed as technological innovation active are those enterprises that had carried out a product innovation or a process innovation in the survey period.

Overall, it was found that 42% of all enterprises with ten or more persons engaged in the industrial and selected services sectors were technologically innovation active in the reference period.  These enterprises generated 70% of all turnover and employed 64% of persons engaged in the industrial and selected services sector.  See Figure 6.

International innovation activity rate rankings

The Community Innovation Survey is carried out in all EU member states.  The most recent data available from Eurostat is taken from the 2008-2010 survey, and allows comparisons across the entire community. When analysing results, Ireland shows the 6^th highest innovation rates of all countries for whom data has been published.

While the innovation activity rate for enterprises in industry and selected services sectors with at least ten persons engaged was 42% in Ireland in the period 2010-2012, comparable innovation activity rates will not be available for the other EU member states until Q4 2014. See Figure 7.

Ireland had the 7th highest innovation spend per enterprise on in-house R&D at €851,000 for the period 2008 - 2010 with Denmark having the highest spend per enterprises at €2.65m. Comparable figures for 2010-2012 show the spend per enterprise in Ireland has risen to over €1m per enterprise.  See Figure 8.

Almost 28% of enterprises were engaged in product innovations with 26% engaged in process innovations

Over one in four enterprises in the industrial and selected services sectors had product innovations while almost 26% were engaged in process innovations.  Just over one in six ,17%, of those enterprises were engaged in both process and product innovations.  Almost 33% of industrial enterprises were engaged in process innovation compared to nearly 23% of enterprises in selected services sectors. Foreign owned enterprises were more likely to engage in product innovations, process innovations or both product and process innovations compared to Irish owned enterprises.  See Figure 9.

Over 23% of turnover  in 2012 resulted from new to firm or new to market product innovations

Of the 23% of turnover reported in 2012, almost 16% of turnover for enterprises in 2012 was reported to be the result of new to the market product innovations in the reference year, while 8% of turnover was as a result of new to the firm product innovations in the same period. 

Over 27% 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 nearly 17% of the turnover of Irish owned enterprises.  See Figure 10.

73% of large enterprises introduced an organisational innovation

Enterprises were asked details of organisational innovations that they introduced in the period 2010-2012. 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 42% of all enterprises carried out an organisational innovation between 2010 and 2012. The introduction of new business practices ,33%, and new methods of organising work responsibilities and decision-making ,36%, were the most cited forms of organisational innovation. An organisational innovation was introduced by nearly three in four large enterprises over the survey period. This compares with 38% of small enterprises and 55% of medium sized enterprises.  See Figure 11.

Enterprises indicate that their primary marketing innovation was the introduction of new media or techniques for product promotion

Over one in three of all enterprises ,35%, carried out a marketing innovation between 2010 and 2012. The most common form of marketing innovation was the introduction of new media or techniques for product promotion and one-quarter of all enterprises indicated that they engaged in this activity. 18% of all enterprises introduced significant changes to the aesthetic design or packaging of a good or service. A marketing innovation was introduced by 42% of medium sized enterprises and 51% of large enterprises between 2010 and 2012 while 33% of small enterprises introduced a marketing innovation.  See Figure 12.

38% of industrial enterprises had a marketing innovation which compared to 35% of enterprises in the selected services sector. 40% of foreign owned enterprises introduced a marketing innovation in the period 2010-2012 compared to over one in three ,35%, Irish owned enterprises. 26% of foreign owned enterprises introduced new media or techniques for product promotion compared to 24% of Irish owned enterprises. Almost a quarter ,23%, of foreign owned enterprises introduced significant changes to the aesthetic design or packaging of a good or service compared to 16% of Irish enterprises.  

Innovation co-operation with enterprises in the United States sees a large increase

In 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 innovation co-operation with other sources to help develop these innovations.

31% of all innovation active enterprises indicated that they engaged in some co-operative activity when developing their innovations. 23% of all enterprises were engaged in innovation co-operation with partners that were located in Ireland, compared with 20% of enterprises that were engaged with partners in the Rest of Europe. Compared with the 2008-2010 survey, innovation co-operation with enterprises located in the United States increased from 7% of all enterprises  to 11% of all enterprises. See Figure 13.

 Over one in four industrial enterprises and one in five selected services sector enterprises engaged in innovation co-operation with innovation partners that were located in Ireland. In excess of 21% of industrial enterprises were engaged in innovation co-operation with partners in the Rest of Europe compared to over 17% of selected services sector enterprises.

Around one in five Irish owned enterprises were engaged in innovation co-operation with enterprises located in Ireland while over 13% had innovation co-operation with partners located in the Rest of Europe. 35% of all foreign owned enterprises were engaged in innovation co-operation with enterprises located in the Rest of Europe while almost 27% co-operated with partners in Ireland.

Almost half ,49%,  of large enterprises engaged in innovation co-operation with innovation partners located in Ireland while close to 9% of large enterprises co-operated with innovation partners located in China/India.