Over One Quarter Of NI Businesses Are Innovating Results Reveal

The Northern Ireland Statistics and Research Agency has today released results from the Northern Ireland element of the UK Innovation Survey 2011.

The UK Innovation Survey 2011 is part of a wider Community Innovation Survey (CIS) covering a range of European countries. This is the seventh iteration of the survey covering the period 2008-10, providing information on the extent of business innovation, factors perceived to be limiting innovation, and the impact of innovation on businesses. The 2011 survey sampled enterprises with 10 or more employees across a range of sectors including production and construction, and distribution and services.

Key Points:

•Twenty-seven per cent of enterprises in NI were innovation active in the three-year period 2008-10 (31% in 2006-08). This is slightly lower than the equivalent UK figure of 31 per cent (38 per cent in 2006-08).

•Northern Ireland had the equal second lowest (along with London) business innovation activity rate of the UK regions and countries. The region with the lowest rate was North West England.

•The difference between the proportions of enterprises that were product innovators in NI (14%) and the UK (19%) and process innovators (NI: 7%; UK: 10%) during 2008-10, remained similar when compared to 2006-08.

•As is the case in the UK, there is considerable variation in innovation activity across detailed NI industry sectors. However, at the broad industry group level, twenty-seven per cent of enterprises in the Production and Construction grouping were innovation active compared to 26% in Distribution and Services. The equivalent figures for the UK as a whole were 34% and 30%, respectively. The transport equipment sector was the most innovative sector in Northern Ireland (59% of all such businesses were innovation active).

•Cost factors continue to be the most frequently cited significant barrier to innovation among NI and UK enterprises. Seventeen per cent of respondents in NI and 14% in the UK as a whole reported that both the cost of finance and the availability of finance were significant barriers to innovation.

•Direct costs of innovation (15%) and excessive perceived economic risks (15%) were the next most commonly reported significant barriers to innovation. UK businesses were slightly less likely to cite these factors as barriers.

•Comparisons between the 2011 and earlier innovation surveys are partially limited by differences in methodology. However, comparing the 2007, 2009 and 2011 surveys showed that the proportions of firms in NI engaged in innovation activity have decreased from 37% in 2004-06 and 31% in 2006-08 to 27% in 2008-10.

•It is worth noting that UK GDP growth began to turn negative in the 2nd quarter of 2008, so economic conditions were fluid and probably unfavourable throughout the reference period 2008-2010. This is likely to have had an impact on the number of businesses starting innovation activities in 2008 thereby affecting the overall number of innovation active firms.

(CD)