Other differences between local operating conditions may be shaping plants’ other
innovation priorities. For example, high labour costs in Germany mean that reducing
production costs is seen as a priority by around 60 per cent of plants in Bavaria but
only 40-49 per cent of plants in Northern Ireland and the Republic of Ireland.
Conversely, matching competitors, which was seen as a priority by 55-62 per cent of
businesses in Northern Ireland and Republic of Ireland, was emphasised by only 23-
26 per cent of plants in Bavaria (Table 2). This latter point reflects the incremental
nature of innovative activity undertaken by many German plants in contrast to the
more radical and market responsive approach adopted by UK and Irish plants (e.g.
Culpepper, 1999, p.47; Roper, 1997).
In terms of the changes in plants’ innovation objectives over the 1991 to 1999 period
(Figure 2):
• In Northern Ireland, increasing priority has been given to product replacement and
extending plants’ product range, with a reduced emphasis on improving product
quality, cost reduction and the introduction of environmentally friendly products.
• In the Republic of Ireland, as in Northern Ireland, extending the product range
increased in importance while quality improvement, cost reduction and increasing
market share decreased in importance.
• In Bavaria, increasing priority was given to replacing and extending plants’
product ranges, cost reduction and entering new markets. Matching competitors
and developing environmentally friendly products again declined in importance.
Two pieces of evidence here suggest shorting product lifetimes and the increasing
importance of radical rather than incremental innovation. First, plants gave increasing
priority to product replacement, and secondly the decline in the importance of quality
improvement suggests that plants are placing more emphasis on developing new
products rather than improving their existing product ranges. This move towards more
radical innovation may pose particular problems for German firms which have
historically maintained their competitive position through incremental innovation or
customisation rather than more radical innovation (see, for example, the references in
Culpepper, 1999, p. 44). Some differences in innovation priorities were evident,
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