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For more information on this release:
E-mail: sbs_rap@cso.ie Barry Kelleher +353 21 453 5208 Mary Duggan +353 21 453 5584
For general information on CSO statistics:
information@cso.ie (+353) 21 453 5000 Visit StatCentral.ie, the portal to Ireland's official statistics On-line ISSN 2009-8413
CSO statistical release, 29 July 2016, 11am

Innovation in Irish Enterprises

2012-2014

Type of Innovation expenditure by enterprises1 2010, 2012 and 2014
 2010201220142010 - 20142012 - 2014
 €m€m€mPercentage change (%)
In-house Research and Development1,252.91,861.41,881.950.21.1 
Purchase of external Research and Development481.7525.3373.3-22.5-28.9 
Acquisition of machinery, equipment and software603.9921.71,239.2105.234.4 
Acquisition of other external knowledge206.6236.8229.311.0-3.2 
All other innovation activitiesn/a109.169.3n/a-36.4 
Total innovation expenditure2,545.13,654.23,793.049.03.8 
1 Enterprises with 10 or more employed in Industry and Selected Services sectors.
      

Total spending on innovation activities in Ireland during 2014 increased by almost 4% to €3.8 billion

Figure 1: Percentage share of innovation expenditure by type, 2012 and 2014
go to full release

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.

IndustrySelected Services
In-house R&D42.594296228150923.0600613765892
Acquisition of machinery,
equipment and software
40.478380864765426.1946514686541
Acquisition of external
knowledge
21.11315547378114.094695309075
External R&D18.123275068997211.3546690048224
All other innovation
activities
17.985280588776410.2586584831214

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 ownedForeign owned
In-house R&D28.522212148685433.1695331695332
Acquisition of machinery,
equipment and software
30.407978241160532.5962325962326
Acquisition of external
knowledge
16.192203082502317.1171171171171
External R&D12.493200362647318.2637182637183
All other innovation
activities
11.89483227561216.6257166257166

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 IndustryTotal Selected ServicesAll innovative enterprises
Total enterprises with
innovation activities
66.375344986200658.417360806663760.9857482185273
Total turnover that is generated by
enterprises with innovation activities
88.971965236885282.535506582647184.4928719800881
Total persons engaged who work in
enterprises with innovation activities
82.152994523290772.104260575998276.0279594863364

 

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
Germany66.9
Luxembourg66.1
Ireland (2012)58.7
Italy56.1
Sweden55.9
Belgium55.6
Portugal54.6
Austria54.4
France53.4
Finland52.6
Greece52.3
Netherlands51.4
Denmark51.1
Malta51.1
United Kingdom50.3
Turkey48.5
Estonia47.6
Serbia47.5
Slovenia46.5
Norway44.7
Czech Republic43.9
Cyprus42.1
Croatia37.9
Slovakia34
Spain33.6
Lithuania32.9
Hungary32.5
Latvia30.4
Bulgaria27.4
Poland23
Romania20.7

 

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
Greece36.8
Ireland (2012)35.7
Turkey34.7
Germany 34.4
Portugal32.8
Malta32.6
Luxembourg32.4
Serbia32.2
Italy31
Sweden30.4
Denmark29.5
Cyprus29.5
Austria29.5
Slovenia28.5
Finland26.5
France25.4
Croatia23.5
Netherlands23.2
Norway23.2
Czech Republic22.4
Belgium21.9
Estonia21.9
Hungary19.7
Lithuania19.3
Slovakia19.3
United Kingdom16.8
Latvia16.5
Bulgaria14.2
Romania13.8
Spain13.2
Poland10.6

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 innovationProcess innovationProduct and process innovation
Industry 44.112235510579644.894204231830733.8546458141674
Selected Services 31.652783866725134.436650591845722.9285401139851
Irish owned 33.59927470534936.627379873073425.1495920217588
Foreign owned 45.04504504504543.161343161343232.3505323505324
All enterprises 35.673990498812437.81175771971526.4548693586698

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 firmTurnover: New to market
Industry4.8164022195965412.1317622289938
Selected Services 2.5547204587805216.004401884974
Irish owned5.209778578046865.78707905121857
Foreign owned1.9577104905254920.7303956387144
All enterprises3.2425116556019914.8267091090899

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
34.373227453204846.894138232720961.184210526315837.7226840855107
New methods of organising
work responsibilities and
decision-making
36.207222537341748.731408573928360.526315789473739.4299287410926
New methods of organising
external relations
16.562677254679521.347331583552137.17105263157918.3046318289786
Any organisational
innovation
40.971828322934453.893263342082268.421052631578944.4032066508314

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
18.81262998676526.596675415573131.2520.6799287410926
New media
techniques for
product promotion
26.129703157496730.796150481189838.815789473684227.4940617577197
New methods for
product placement
or sales channels
18.963887313291723.797025371828531.578947368421120.353325415677
New methods of
pricing goods or
services
17.60257137455120.734908136482927.631578947368418.5718527315914
Any marketing
innovation
37.833238797504344.444444444444451.973684210526339.5932304038005

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
Ireland22.7051671732523
Northern Ireland5.13677811550152
Other Europe16.048632218845
United States8.17629179331307
China/India3.19148936170213
All other countries4.13373860182371

 

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 ownedForeign ownedAll enterprises
Enterprises with intellectual innovation10.335448776065312.366912366912410.7036817102138
Enterprises registering a trademark7.688123300090666.470106470106477.46733966745843
Enterprises applying for a patent4.895738893925669.009009009009015.64133016627078
Enterprises registering an industrial design right0.707162284678151.965601965601970.935273159144893
Enterprises applying for a European utility model0.290117860380781.228501228501230.46021377672209

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 innovation38.3610451306413
Reduced energy use or CO2 production20.1306413301663
Recycled waste, water or materials19.2102137767221
Facilitated end user recycling17.770190023753
Reduced end user energy use15.8105700712589
Reduced material or water use15.1425178147268
Reduced air, water, noise or soil pollution12.8859857482185
Extended product life for end user11.312351543943
Reduced end user pollution10.1395486935867
Replaced materials with less hazardous substitutes9.67933491686461
Replaced fossil energy with renewables5.40380047505938
Table 1: Innovation expenditure by nationality of ownership, sector and size class, 2014 
           €m 
    Nationality of ownershipSector of activitySize class 
    IrishForeignIndustryServicesSmall Medium Large All enterprises 
        (10-49)(50-249)(250+) 
In-house R&D563.31,318.6647.51,234.4254.9699.4927.71,881.9 
Purchase of External R&D177.5195.7256.6116.627.2166.2180.0373.3 
Acquisition of machinery, equipment and software704.5534.7709.2530.0179.1406.2653.91,239.2 
Acquisition of other external knowledge30.1199.225.0204.329.8182.317.1229.3 
Other expenditure14.654.727.342.115.88.245.469.3 
Total innovation expenditure1,490.02,303.01,665.62,127.4506.71,462.21,824.03,793.0 
            
Table 2: Percentage of enterprises engaged in technological innovation expenditure by nationality of ownership, sector and size class, 2014   
        %   
 Nationality of ownershipSector of activitySize class   
 IrishForeignIndustryServicesSmall MediumLargeAll enterprises   
     (10-49)(50-249)(250+)    
In-house R&D28.533.242.623.125.240.559.529.3   
Purchase of external R&D12.518.318.111.410.919.835.213.5   
Acquisition of machinery, equipment & software30.432.640.526.227.540.752.330.8   
Acquisition of other external knowledge16.217.121.114.114.422.528.016.4   
Active - all other expenditure11.916.618.010.310.816.532.212.8   
Total40.746.552.836.537.853.369.141.8   
         
 
Table 3: Technological and non-technological innovation activity rates by sector and size class, 2012 - 2014 
           % 
      Sector of activitySize class 
      IndustryServicesSmall Medium Large All enterprises 
        (10-49)(50-249)(250+) 
% of total enterprises with innovation activities66.458.457.371.785.561.0 
% of total turnover that is generated by enterprises with innovation activities89.082.567.181.492.884.5 
% of total persons engaged who work in enterprises with innovation activities82.272.159.973.885.276.0 
           
           
           

Background Notes

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

 

Questionnaire

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.

 

Definitions:

PRODUCT INNOVATION:

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.

PROCESS INNOVATION:

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.

NEW TO MARKET INNOVATION:

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.

NEW TO FIRM INNOVATION:

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.

INNOVATION EXPENDITURE:

Spending on activities to support and implement production or process innovations.

ORGANISATIONAL INNOVATION:

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.

MARKETING INNOVATION:

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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