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Article discusses the innovativeness of enterprises in the European Union(EU). It provides information on the state of innovation and focuses on some features and key aspects of the development of innovations implemented by enterprises. Innovation forms part of the Europe 2020 strategy for its role in creating job opportunities, making enterprises more competitive in the global market, improving the quality of life and in contributing to a more sustainable growth. Encouraging and stimulating innovation is one of the main objectives of European policies. The Community Innovation Survey (CIS) provides statistics analysed by types of innovators, economic activities and size classes. The survey is currently carried out every two years across the EU, some EFTA.
The Innovation and Investment Division works to promote a competitive, productive enterprise environment which attracts foreign investment, supports indigenous enterprise and encourages export-led growth. The Division also promotes, on an agreed North/South basis, the development of an environment that optimises the benefits of the all-island economy for enterprises through North/South collaboration particularly in the areas of trade and business development.
The Division is responsible for the development, promotion and co-ordination of Ireland's science, technology and innovation policy and Ireland's policy in international research activities. It also has responsibility for the formulation of Ireland's policy on intellectual property (IP) issues and ensures that Ireland has a modern suite of IP legislation that reflects developments in intellectual property practice and obligations arising from international agreements. In implementing this policy agenda, the Division works with and funds, in whole or in part, a number of agencies and programmes, namely IDA Ireland, Enterprise Ireland, Science Foundation Ireland, Shannon Development, InterTrade Ireland and the Higher Education Authority (who administer the Programme for Research in Third Level Institutions).
Extent of innovation
Almost half of all enterprises in the EU-28 reported innovation activity (48.9 %) during the period 2010-12. Compared with the period 2008-10, the share of innovative enterprises decreased by 3.9 percentage points. Among the EU Member States, the highest shares of innovative enterprises during the period 2010–12 were observed in Germany (66.9 % of all enterprises), Luxembourg (66.1 %), Ireland (58.7 %) and Italy (56.1 %) — see Figure 1. The lowest shares were recorded in Bulgaria (27.4 %), Poland (23.0 %) and Romania (20.7 %).
Table 1 provides an analysis of the types of innovation implemented between 2010 and 2012, namely product, process, organisation and marketing innovation. For the EU-28 as a whole, more than one quarter (27.5 %) of enterprises reported organisational innovation. Marketing innovation ranked second, being implemented in 24.3 % of all enterprises. Product innovation(innovation that encompasses new or significantly improved goods or services) was introduced in 23.7 % of enterprises. Relatively few enterprises (21.4 %) implemented process innovations. It is important to note that individual enterprises may have introduced more than one type of innovation.
In general, Member States with high overall shares of innovative enterprises reported higher shares for most types of innovation. In particular, Member States with a high share of product innovative enterprises also reported a high share of with process innovative enterprises, with the notable exception of the United Kingdom. Regarding the specific types of innovation, Germany, the Netherlands, Belgium, Sweden, Finland and Luxembourg presented the highest shares of product innovative enterprises, all over 30.0 % of all enterprises. A greater share of enterprises implemented process innovation in Portugal, Luxembourg, Belgium and Italy, again all in excess of 30.0 %. As regards the introduction of new organisational methods — introducing new practices or methods for organising procedures, external relations or for organising work responsibilities and decision making — the highest shares were reported for enterprises in Luxembourg, Austria, Malta, the United Kingdom and France, all over 34.0 %; the share in Luxembourg was 46.8 %, considerably higher than in any other EU Member State. As concerns marketing innovations, the highest shares of enterprises with such innovations were observed in Greece, Ireland and Germany, all in excess of 34.0 %.
Process innovations were introduced in slightly more than one in five enterprises (21.4 %) across the EU-28 during the period 2010–12. Based on the available data (see Table 2), the most common novelty or improvement among process innovators was related to the methods to manufacture or produce goods and services. Among the EU Member States, Germany, France, Latvia and Lithuania were the leaders in this specific type of process innovation: more than 7 in 10 process innovative enterprises in these Member States reported innovations related to the methods to manufacture or produce goods and services.
New or significantly improved supporting activities for processes, such as maintenance systems or operations for purchasing, accounting, or computing were implemented in nearly three fifths (58.9 %) of the process innovative enterprises across the EU. Less common implementation in the process innovation context was process innovations related to new or significantly improved logistics, delivery or distribution methods for inputs, goods or services, as this was undertaken by just over one third (34.9 %) of the process innovative enterprises in the EU.
Sources of information
Enterprises could be encouraged by their operational environment to innovate, for example in order to meet the needs or requirements of their customers or suppliers. However, enterprises may also decide to undertake innovation activities on their own initiative, as part of development strategies. In this case, information coming from other stakeholders may also arouse interest. Moreover, a concept widely found in discussions on innovation is 'open innovation': open innovation is 'the use of internal and other enterprises' ideas to develop businesses opportunities'. It is considered to be an important component of the foreseen European Innovation System.
Methods for maintaining or increasing the competitiveness for product and process innovations
Data on methods for maintaining or increasing competitiveness have been provided by 21 EU Member States in the 2012 data collection exercise. Based on the data shown in Figure 4, more than 6 in 10 (61.9 %) product and / or process innovative enterprises in the EU used lead time advantage over competitors (in other words, reducing the time lag between the initiation and the implementation of their innovations) to improve their competiveness between 2010 and 2012. Slightly more than one quarter (28.5 %) of these enterprises considered this method as highly important. A similar proportion (60.6 %) of product and / or process innovative enterprises used the complexity of goods or services to maintain or increase their competitiveness. Less than half of these considered this method highly important. These two leading methods (among those surveyed) were closely followed by the use of secrecy, which was used by just over half (51.2 %) of product and / or process innovative enterprises in the EU. Trademarks, patents, copyrights and design registration seemed to be less used by the product and / or process innovative enterprises to maintain or increase competitiveness and a relatively small considered these methods as highly important. However, it should be noticed that the use of these methods is more common for enterprises in certain activities and the extent of their use is also related to enterprise size: for example, larger enterprises make more intensive use of patents.
An increase in turnover was considered a highly important goal by 60.0 % of innovative enterprises between 2010 and 2012, followed by a decrease in costs (55.4 %) and an increase in profit margins (50.8 %). An increase in the market share was reported as a highly important goal by 41.0 % of innovative enterprises. For non-innovative enterprises, the ranking was quite similar to that for innovative enterprises, with one notable difference: the share of non-innovative enterprises reporting an increase in the turnover as a highly important goal was slightly less than the share reporting a decrease in costs.
Surveyed enterprises were also asked to report strategies according to a certain level of importance. The results shown in Figure 6 cover the 19 EU Member States that provided data for this subject. The intensification or improvement of marketing of goods and services was the strategy most frequently regarded as being highly important between 2010 and 2012, both for innovative and non-innovative enterprises. The next two most common strategies reported as being highly important concerned the development of new markets, either within or outside Europe, both of which were considered highly important by just over one quarter of innovative and non-innovative enterprises in the EU. The strategy of building alliances with other enterprises and institutions was the strategy least often reported as being highly important (among the strategies surveyed), by innovative and non-innovative enterprises.
Data sources and availability
The community innovation survey collects information about product and process innovation, as well as organisational and marketing innovation. The legal basis for collecting these statistics is Regulation 995/2012 implementing Decision 1608/2003/EC concerning the production and development of Community statistics on innovation. Innovations are based on the implementation of a new or significantly improved product (good or service) or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations.
Such innovations may be developed by the innovating enterprise itself, together with other enterprises, by another enterprise or by adapting or modifying processes originally developed by other enterprises or institutions. The simple resale of new goods and services purchased from other enterprises is not considered innovation. Innovations should also at least be new to the enterprise concerned. In some cases, innovative enterprises may cooperate with other parties and the cooperation partners may be located in other countries or on other continents. Information collected within the community innovation survey allows for an analysis of cooperation with national partners, partners from elsewhere in Europe, partners from the United States, China or India, with partners from other countries.
In the 2012 data collection exercise, a particular module focused on the goals of the enterprises and on the strategies they used and the obstacles they faced to reach these goals. The results highlight the differences between innovative and non-innovative enterprises. The available indicators show the number of enterprises reporting, for instance, strong price competition, high costs of access to new markets, or a lack of adequate finance as highly important or not relevant obstacles.
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