relatively low level of R&D spending by businesses (e.g. Industrial Research and
Technology Unit, 1992; STIAC, 1995). And, given the declines in the proportion of
plants undertaking R&D in Bavaria, some regional convergence has occurred. In part
at least this convergence may reflect similar factors to those influencing the
constraints on innovation activity discussed earlier. Steps have been taken in both
Northern Ireland and the Republic of Ireland to boost the level of business R&D
spending while economic conditions in Germany at the time of the 1999 survey were
probably discouraging R&D investments (OECD, 1999).
Another factor which has in the past been shown to be strongly linked to plants’
innovation potential, and is, perhaps, less likely to be sensitive to the business cycle
than R&D investments, is the level of graduate employment (Figure 6). Overall, the
lowest level of graduate employment in the study regions is now found in Northern
Ireland (7.1 per cent) compared to 7.7 per cent in Bavaria and 8.9 per cent in both the
Republic of Ireland (Table 1). This, however, is a marked contrast to the situation in
1993 when levels of graduate employment in Northern Ireland (6.7 per cent) and the
Republic of Ireland (8.8 per cent) were actually above that in Bavaria (4.7 per cent).
In other words, from 1993-99, Bavaria had overtaken Northern Ireland in terms of the
level of graduate employment (Figure 6). In part this may reflect global trends
towards a more highly skilled manufacturing workforce but may also reflect pressures
within Germany as further and higher education become more attractive compared to
traditional apprenticeship training (Culpepper, 1999, p. 49).
Clearly, however, undertaking R&D and having a high level of graduate employment
are not sufficient to generate innovation. Also necessary is efficient co-ordination and
information sharing within the firm, one reflection of which is the extent of multi-
functional working. Although not covered by the 1996 and 1999 surveys, information
on the extent of multi-functional involvement in the innovation process is available
from the 1993 survey (see also Roper, 1997; Love, 2000). Figure 7 summarises the
percentage of all manufacturing involving more than one functional group in seven
elements of the product innovation process in 1993. Multi-functional involvement in
the innovation process was most common in each region in product testing and least
common in the marketing phases of the product development process (Figure 7). As
expected from previous studies using PDS data, multi-functional working was more
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