Total innovation expenditure by enterprises was €7.4 billion in 2020 compared with €5.5 billion in 2018.
Enterprises involved in innovation employed more than 372,000 people in Ireland in 2020.
Irish-owned enterprises accounted for 27% of innovation expenditure in Ireland, while foreign-owned enterprises accounted for 73%.
More than 22% of enterprises introduced an innovation in response to the COVID-19 pandemic, while nearly 14% abandoned or suspended an innovation due to the pandemic.
The total spend on innovation in Ireland was €7.4bn in 2020, an increase of 36.3% on the 2018 figure of €5.5bn. The main driver for this increase was a 100.6% rise in expenditure for in-house R&D from €3bn in 2018 to €6.1bn in 2020. In-house R&D accounted for 81.8% of all innovative expenditure. Care should be taken in interpreting the results from the Innovation in Irish Enterprises. Innovation expenditure represents 2.9% of the total turnover of the innovative enterprises in this survey and it can vary greatly from year to year. See Headline Table.
In addition to the increase in in-house R&D spending mentioned above, the total expenditure on external R&D decreased 5% from €853m in 2018 to €811m in 2020, while the expenditure on all other innovation areas decreased 65% from 1.6b to 542m. See Figure 1 and Table 1.
| Type of Innovation expenditure by enterprises, 2018 and 2020 | |||
| 2018 | 2020 | 2018-2020 | |
| €m | €m | Percentage change | |
| In-house Research and Development | 3,031.1 | 6,081.0 | 100.6% |
| Purchase of external Research and Development | 853.3 | 810.9 | -5.0% |
| Acquisition of machinery, equipment and software | 1,126.5 | 336.4 | -70.1% |
| Acquisition of other external knowledge | 185.0 | 31.6 | -82.9% |
| All other innovation activities | 258.9 | 174.3 | -32.7% |
| Total innovation expenditure1 | 5,454.8 | 7,434.3 | 36.3% |
| 1 Expenditure for enterprises with 10 or more employed in Industry and Selected Services sectors. | |||
| For long labels below use to display on multiple lines | 2018 | 2020 |
|---|---|---|
| In-house R&D | 55.6 | 81.8 |
| External R&D | 15.6 | 10.9 |
| Machinery, equipment, software | 20.7 | 4.5 |
| Other external knowledge | 3.4 | 0.4 |
| All other innovation | 4.7 | 2.3 |
Irish-owned enterprises accounted for 27% of innovation expenditure while foreign-owned enterprises accounted for 73%. See Figure 2 and Table 1.
| For long labels below use to display on multiple lines | % |
|---|---|
| Irish owned enterprises | 27 |
| Foreign owned enterprises | 73 |
More than 39% of enterprises in the Industry sector engaged in in-house R&D compared with almost 26% of enterprises in Selected Services. See Figure 3 and Table 2.
The percentage of Irish enterprises active in innovation was 57.7% in 2020 compared to the EU-27 average from 2018 of 50.3%. EU-wide data for 2020 is not yet available. See Figure 5.
| Percentage | |
| Ireland (2020) | 57.7 |
| EU-27 (2018) | 50.3 |
| Estonia | 73.1 |
| Cyprus | 68.2 |
| Belgium | 67.8 |
| Germany | 67.8 |
| Italy | 63.2 |
| Sweden | 63.1 |
| Austria | 62.6 |
| Finland | 61.9 |
| Greece | 60.3 |
| Denmark | 57.1 |
| Croatia | 52.5 |
| France | 51.5 |
| Luxembourg | 50.6 |
| Lithuania | 50.5 |
| Netherlands | 49.7 |
| Slovenia | 48.6 |
| Czechia | 46.8 |
| Malta | 46.5 |
| Ireland (2018) | 45.5 |
| Portugal | 37.8 |
| Latvia | 32.9 |
| Spain | 31.1 |
| Slovakia | 30.5 |
| Bulgaria | 30.1 |
| Hungary | 28.7 |
| Poland | 23.7 |
| Romania | 14.6 |
This figure depicts the rates of types of organisational innovation by enterprise size. See Figure 6 and Table 5.
| Small (10-49 persons engaged) | Medium (50-249 persons engaged) | Large (250+ persons engaged) | All enterprises | |
| Business practices for organising procedures | 17.1 | 19.2 | 35.3 | 19.5 |
| Methods of organising external relations with other firms or public institutions | 4.2 | 4.4 | 8.4 | 4.6 |
| Methods of organising work responsibility, decision making or human resource management | 13.8 | 17.4 | 26.4 | 16.2 |
| Any organisational innovation | 24.6 | 28.7 | 51.1 | 28.4 |
The rates of product and process innovation by sector and nationality of ownership are presented in the below figure. See Figure 7 and Table 6.
| Product innovation | Process innovation | Product and process innovation | |
| Industry | 34.4 | 48.9 | 26.9 |
| Selected Services | 30.4 | 43.8 | 24.5 |
| Irish owned | 27.7 | 42.3 | 21.8 |
| Foreign owned | 47.3 | 58 | 38.5 |
| All enterprises | 31.9 | 45.7 | 25.4 |
Large enterprises had higher rates of engagement in intellectual property rights compared to small or medium enterprises. See Figure 8 and Table 9.
The most common factor hampering innovation for both the Industry sector and the Selected Services sector was having different priorities within the enterprise, followed by the lack of skilled employees, the lack of internal finance, and high costs. See Figure 9 and Table 10.
The most commonly reported reason for non-innovation was having no need due to market conditions (15.7%). See Figure 10 and Table 11.
Small enterprises were more likely to report a high impact from each of the four factors compared to medium and large enterprises. See Figure 11 and Table 12.
| Government policies | Customer demand for related products | Increasing costs | Extreme weather | |
| Small (10-49 persons engaged) | 46.2313759859772 | 53.0674846625767 | 41.0604732690622 | 50.1314636283961 |
| Medium (50-249 persons engaged) | 39.0197326543603 | 43.3481858688733 | 33.991088478676 | 41.502227880331 |
| Large (250+ persons engaged) | 41.0604732690622 | 33.991088478676 | 22.7027027027027 | 36.8221643381482 |
Large enterprises reported the highest rate of innovation due to the COVID-19 pandemic (36.8%), while enterprises of all sizes reported similar rates of abandoned innovation due to the pandemic. See Figure 12 and Table 13.
| Innovation in response to COVID-19 | Abandoned innovation due to COVID-19 | |
| Small (10-49 persons engaged) | 19.7195442594216 | 12.4452234881683 |
| Medium (50-249 persons engaged) | 22.7243793761935 | 15.5951623169955 |
| Large (250+ persons engaged) | 36.7567567567568 | 14.0540540540541 |
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Statistician's Comment
Commenting on the release, Devin Zibulsky, Statistician in the Business Statistics Division, said: “Innovation in Irish Enterprises is based on a survey of the innovation and research and development (R&D) activities of enterprises employing 10 or more people from 2018 to 2020. The Oslo Manual (OECD/Eurostat, 2018) defines innovation as a new or improved product, process, or combination of both that differs from previous products or processes and that has been made available to users or brought into use.
Enterprises reported higher rates of innovation and innovation spending in 2020 compared with 2018, which may partially reflect the impact of the COVID-19 pandemic. Most innovation expenditure (82%) was for in-house (R&D), while large enterprises (employing more than 250 people) accounted for 73% of the total expenditure. In response to the COVID-19 pandemic, 22% of Irish-owned companies and 26% of foreign-owned companies introduced new innovations"