The Role of Interaction and Proximity for Innovation by Irish High-Technology Businesses: Policy Implications

July 01, 2005

News

01/07/2005

 

The Role of Interaction and Proximity for Innovation by Irish High-Technology Businesses: Policy Implications

Declan Jordan and Eoin O’Leary (Department of Economics, UCC)

Embargo: Friday July 1st 2005 at 00.01a.m.



Article appearing in the forthcoming Quarterly Economic Commentary, Summer 2005

 

 

  • This article is critical of government R&D and industrial/regional development policies aimed at improving innovation in Irish high-technology businesses.
  • A survey of 184 high-technology businesses in Ireland shows that 68% rarely or never interact with Third Level Colleges and Support Agencies (eg IDA Ireland, Enterprise Ireland) for the purpose of promoting innovation.
  • This suggests that the return to the Irish economy from the substantial state funding (€599 million in 2003) on R&D activities, through initiatives such as Science Foundation Ireland, may be disappointing.
  • Interaction with group companies, suppliers and customers is strong, with on average 81% indicating regular, frequent or continuous interaction, but this occurs over long distances and not locally/regionally within Ireland.
  • This raises a question about the particular type, if any, of local/regional clusters and networks (frequently promoted in policy documents such as the Enterprise Strategy Group Report, 2004 and the National Spatial Strategy, 2002), which might reasonably be expected to promote innovation in Irish high-technology businesses.
  • The survey suggests that Ireland has undeveloped regional innovation systems, which currently seem to have little to offer high-technology businesses (both foreign-owned and indigenous) in pursuit of enhanced innovation performance. This warrants urgent attention by local, regional and national policymakers.