Benchmarking Regional Innovation: A Comparison of Bavaria, Northern Ireland and the Republic of Ireland

however, between plants in Northern Ireland and Republic of Ireland and those in
Bavaria. In particular, reducing cost pressures was increasingly important in Bavaria
but seen as of declining importance in Northern Ireland and Republic of Ireland.

Constraints on plants’ innovation activity may be important in limiting plants’ ability
to achieve these changing objectives. Benchmarks for the constraints on innovation
activity were derived as the proportion of plants indicating that each factor was either
‘important’ or ‘very important’. Figure 3 gives the percentage of all manufacturing
plants in each study region highlighting each innovation constraint in 1999. As
expected, and like previous studies (e.g. Roper et al., 1996), low expected rates of
return, the riskiness of undertaking innovation and lack of finance predominate, along
with a perception that market opportunities were limited (Figure 3). Other factors (i.e.
legislative requirements, attitudinal barriers, and lack of information) were seen as
less important barriers to innovation in each study region.

Some differences in the barriers to innovation did exist, however, between the study
regions. First, while a lack of expertise for innovation was not evident in Northern
Ireland it was highlighted by a significantly larger proportion of manufacturing
businesses in Republic of Ireland (Figure 3). One possibility is that this may reflect
the influence on innovation of ‘Celtic Tiger’ growth rates that have led to tight labour
markets in the Republic of Ireland. Secondly, 32 per cent of plants in Bavaria
highlighted the riskiness of innovation compared to 22 per cent in Northern Ireland
and Republic of Ireland, and thirdly a lack of opportunities for innovation was
highlighted by 41 per cent of plants in Bavaria but only 25-28 per cent in Northern
Ireland and Republic of Ireland. Combined with the fact that German plants also
indicated that a low rate of return was an important barrier to innovation, this suggests
that market conditions in Germany at the time of the 1999 survey may have been
more difficult than that in the other study regions¹¹.

¹¹ OECD (1999), for example, indicates that GDP and investment growth in Germany in 1999 were
expected to be well below trend and that business confidence and industrial orders fell sharply in 1999.

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