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Innovation in Irish Enterprises 2020

Almost 60% of enterprises in Ireland engaged in innovation activities between 2018 and 2020

Online ISSN: 2009-8413
CSO statistical publication, , 11am

Key Findings

  • 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.

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"

Graphs and Tables

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
 201820202018-2020
 €m€mPercentage change
In-house Research and Development3,031.16,081.0100.6%
Purchase of external Research and Development853.3810.9-5.0%
Acquisition of machinery, equipment and software1,126.5336.4-70.1%
Acquisition of other external knowledge185.031.6-82.9%
All other innovation activities258.9174.3-32.7%
Total innovation expenditure15,454.87,434.336.3%
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
20182020
In-house R&D55.681.8
External R&D15.610.9
Machinery, equipment, software20.74.5
Other external knowledge3.40.4
All other innovation4.72.3

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.

Figure 3: Type of innovation expenditure by sector, 2018-2020
Figure 4: Type of innovation expenditure by nationality of ownership, 2018-2020

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
Estonia73.1
Cyprus68.2
Belgium67.8
Germany67.8
Italy63.2
Sweden63.1
Austria62.6
Finland61.9
Greece60.3
Denmark57.1
Croatia52.5
France51.5
Luxembourg50.6
Lithuania50.5
Netherlands49.7
Slovenia48.6
Czechia46.8
Malta46.5
Ireland (2018)45.5
Portugal37.8
Latvia32.9
Spain31.1
Slovakia30.5
Bulgaria30.1
Hungary28.7
Poland23.7
Romania14.6

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
17.119.235.319.5
Methods of organising external
relations with other firms or
public institutions
4.24.48.44.6
Methods of organising work
responsibility, decision making
or human resource
management
13.817.426.416.2
Any organisational
innovation
24.628.751.128.4

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 innovationProcess innovationProduct and process innovation
Industry 34.448.926.9
Selected Services 30.443.824.5
Irish owned 27.742.321.8
Foreign owned 47.35838.5
All enterprises31.945.725.4

Large enterprises had higher rates of engagement in intellectual property rights compared to small or medium enterprises. See Figure 8 and Table 9.

Figure 8: Intellectual property rights by size class, 2018-2020

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.

Figure 9: Factors hampering innovation activities by sector, 2018-2020

The most commonly reported reason for non-innovation was having no need due to market conditions (15.7%). See Figure 10 and Table 11.

Figure 10: Enterprise reasons for non-innovation, 2018-2020

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 policiesCustomer demand for related productsIncreasing costsExtreme weather
Small (10-49 persons engaged)46.231375985977253.067484662576741.060473269062250.1314636283961
Medium (50-249 persons engaged)39.019732654360343.348185868873333.99108847867641.502227880331
Large (250+ persons engaged)41.060473269062233.99108847867622.702702702702736.8221643381482

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-19Abandoned innovation due to COVID-19
Small (10-49 persons engaged)19.719544259421612.4452234881683
Medium (50-249 persons engaged)22.724379376193515.5951623169955
Large (250+ persons engaged)36.756756756756814.0540540540541
Table 1 Innovation expenditure by nationality of ownership, sector and size class, 2020

Table 2 Percentage of enterprises engaged in innovation expenditure by nationality of ownership, sector and size class, 2018-2020

Table 3 Technological and non-technological innovation activity rates by nationality of ownership, sector and size class, 2018-2020

Table 4 Technological innovation activity rates by size class, 2018-2020

Table 5 Business process innovation activity rates by nationality of ownership, sector and size class, 2018-2020

Table 6 Business product and process innovation activity rates by nationality of ownership, sector and size class, 2018-2020

Table 7 Percentage of total turnover attributed to product innovation activities by nationality of ownership, sector and size class, 2018-2020

Table 8 Location of co-operation partner for technologically innovative enterprises by nationality of ownership, sector and size class, 2018-2020

Table 9 Intellectual property rights activity rates by nationality of ownership, sector and size class, 2018-2020

Table 10 Factors hampering innovation activities by sector, 2018-2020

Table 11 Non-innovation activity rates by nationality of ownership, sector and size class, 2018-2020

Table 12 Percentage of impacts of climate change rated high, by sector and size class, 2018-2020

Table 13 Impacts of COVID-19 by nationality of ownership, sector and size class, 2018-2020