47% of Irish firms using innovation

Just under half of Irish-based companies employing more than ten people were “active innovators” between 2004 and 2006, according to a report released today.

The Community Innovation Survey (2004 - 2006) complied by Forfas and the Central Statistics Office found that 47 per cent of firms were engaged in innovation.

Almost 13 per cent of turnover in the industrial and services sectors in 2006 was estimated to be based on innovations in the preceding two years, the report said.

In the context of the survey innovation is defined as the introduction of new products, processes or services over the period.

Large firms had the highest innovation rates, with 75 per cent of those employing 250 or more people saying they were innovative. Firms of this size attributed 16 per cent of turnover in 2006 to product innovations.

Medium sized firms, employing less than 250 people, had an innovation rate of 62.5 per cent while small companies with no more than 50 employees were the least innovative with a score of 42.7 per cent.

The industrial sector is seen as more innovative (57 per cent) than the service sector (41 per cent).

According to the survey a third of companies introduced new products over the period while 30 per cent changed their processes.

In 2006 the total spend on innovation activities was almost €4.6 billion. Cost was identified as the main barrier to innovation. In 2004 the euro zone average for active innovation was 42 per cent. The complete data for 2006 is not yet available.

The survey was based on questionnaires sent to 4,150 companies with a 52 per cent response rate. The results were extrapolated out to produce national results.