Irish SMEs ‘must strive to become innovation leaders’

Ireland received a clear warning that it must spend more on research and its SMEs must be much more progressive if it is to create the kind of jobs and growth needed to emerge from the crisis.

The country kept its place as having the tenth most innovative environment for business in the EU according to the score card released by Commissioner Máire Geoghegan-Quinn.

But its performance in the different areas were erratic. It was in the top three in human resources and employment in knowledge-intensive activities, but floundered in the bottom third for public sector spending on research and development, access to venture capital and having progressive SMEs.

The country ranks high for its scientific publications, but when it comes to turning the knowledge into patents, trademarks and designs, it slips down the list. The result is that the country is ranked as an “innovation follower”, rather than a leader.

Mr Geoghegan-Quinn noted that countries that scored highest in the innovation elements were the ones that are surviving the economic turmoil, with the exception of Ireland. “Those who have suffered most were the least innovative,” she said.

The overall report for Ireland noted relative strengths in human resources, and one of the highest percentages of the labour force working in knowledge intensive activities.

But the picture changes when it comes to SMEs, with fewer than 20% producing new products or services, coming 24th in the EU overall. This has fallen by almost 15% in the year — the biggest in the EU.