Over 43% of foreign owned enterprises had innovation expenditure

When looking at innovation expenditure by nationality of ownership 35.7% of Irish owned enterprises had innovation expenditure compared to 43.3% of foreign owned enterprises. 23.0% of Irish owned enterprises performed in-house R&D relating to innovation activities compared to 34.7% of foreign owned enterprises. See Figure 4 and Table 2. 

45.5% of all enterprises were innovation active during 2016-2018

Of the enterprises surveyed in the Industry and Selected Services sectors, 45.5% were innovation active in the period 2016-2018. These enterprises generated 61.5% of total turnover and employed over half of total persons engaged in these two sectors.

Enterprises classed as innovation active are those enterprises that have carried out a product or business process innovation between 2016-2018. They may also exercise an intellectual property right. See Figure 5 and Table 3. 

Eastern and Midland region accounted for 70.3% of all innovation

Regional data is available for the first time for the Community Innovation Survey and has been produced in accordance with the latest NUTS classifications. An Information Note can be found here.

Total innovation spending in the Eastern and Midland (EM) region was in excess of €3.8bn in 2016-2018 which accounted for 70.3% of all expenditure. The remaining 29.7%, which accounted for €1.6bn of the total spend, was spent in the Southern region (€1.1bn or 19.4%) and in the Northern and Western (NW) region (€560m or 10.3%) respectively. 59.0% of all innovation spending in the EM region can be attributed to in-house R&D, while the corresponding figure for the Southern region was 44.5%. See Figure 6 and Table 4.

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 2014-2016 survey and allows comparisons across the entire community. Ireland ranked 11^th with an innovation rate of 57.3%, of all countries for which data was published. This was higher than the average EU-28 innovation rate of 50.6%.

Comparable innovation activity rates for the period 2016-2018 will not be available for the other EU member states until Q4 2020. See Figure 8.

Over one third of large enterprises introduced an organisational innovation

Enterprises were asked details of organisational innovations that they introduced in the period 2016-2018. An organisational innovation is a new organisational method in the enterprise’s business practices, external relations or decision making that had not been previously used by enterprises.

Almost 28% of all enterprises carried out an organisational innovation in 2016-2018. New methods of organising work responsibilities, decision-making or human resource management at 20.9% was the most cited form of organisational innovation, closely followed by new business practices for organising procedures at 20.7%. An organisational innovation was introduced by 35.5% of large enterprises over the reference period. This compares with 27.5% of small enterprises and 26.3% of medium sized enterprises. See Figure 9 and Table 6.

Marketing Innovation

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 promotion, packaging, pricing, product placement or after sales services.

16.8% of enterprises reported a marketing innovation in 2018. By size class, 17.5% of small, 15.5% of medium and 17.2% of large firms used marketing innovations. See Figure 10 and Table 6. 

34.0% of enterprises were engaged in process innovations, with 28.6% engaged in product innovations

34.0% of enterprises in the Industry and Selected Services sectors had process innovations in the period 2016-2018, while 28.6% were engaged in product innovations. Over one in five, 20.9%, of those enterprises were engaged in both process and product innovations.

Almost 40% of Industry enterprises were engaged in process innovation compared to 30.8% 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 11 and Table 7.

New to firm or new to market innovations generated over 10% of turnover in 2018

10.5% of turnover for enterprises in 2018 was reported to be the result of new to firm or new to market innovations. This can be broken down into 6.9% from new to market and 3.6% from new to firm innovations.

14.0% of the turnover of foreign owned enterprises was generated as a result of new to market and new to firm product innovations, compared to 7.5% of the turnover of Irish owned enterprises. See Figure 12 and Table 8.

Half of enterprises engaged in co-operation in 2016-2018

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, 50.8% indicated that they engaged in some co-operative activity when developing their innovations. Enterprises reported in 45.5% of cases that they were engaged in technological innovation co-operation with partners located in Ireland, compared with 33.7% of enterprises engaged with partners in other Europe.

49.2% of Industrial enterprises and 42.8% of Selected Services enterprises engaged in technological innovation co-operation with partners located in Ireland. 40.3% of Industrial enterprises were engaged in technological innovation co-operation with partners in other Europe, compared to 28.8% of Selected Services enterprises.

Over 44% of Irish owned enterprises were engaged in technological innovation co-operation with enterprises located in Ireland, while 29.7% had co-operation partners located in other Europe.

57.0% of large enterprises engaged in technological innovation co-operation with partners located in Ireland, while 40.3% of large enterprises co-operated with partners located in other Europe. See Figure 13 and Table 9.

Different priorities cited as the main factor in hampering innovation activities at 17.0%

Firms were asked which factors had a high degree of importance in hampering their innovation. The main factor cited, for both the Industrial (18.0%) and Selected Services sectors (16.4%), was different priorities within the enterprise. This was followed closely by lack of internal finance. See Figure 14 and Table 10. 

An Intellectual innovation was reported by 15.3% of enterprises in 2016-2018

Intellectual Property Rights can involve applying for a patent, registering a trademark or industrial design right, use of trade secrets or claiming copyright.

In 2016-2018, 15.3% of enterprises had an Intellectual innovation, with 8.5% registering a trademark and 7.1% applying for a patent. In general, large enterprises engaged more in intellectual innovation than SMEs. See Figure 15 and Table 11.

"No need due to market conditions" cited as main reason for non-innovation

Enterprises with no innovation activity during 2016-2018 were asked to indicate why it had not been necessary or possible to innovate.

19.9% of these enterprises stated there was no need due to market conditions, with 18.3% citing there was no need due to previous innovations. See Figure 16 and Table 12.