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

1999. In general terms the benchmarks therefore suggest a stronger innovation profile
in the Republic of Ireland than in Northern Ireland but innovative activity continues to
lag well behind that in the German study regions. The need - recognised in recent
policy statements and expenditure announcements - is to significantly increase the
level of R&D spending and to continue the process of institutional capabilities to
support firms’ innovative activity.

Of the three study regions, however, Bavaria is alone in achieving increases in the
extent and success of product innovation for each plant sizeband over the 1993-99
period. While this may reflect the development of more high-tech industry in the
region, it is a development which has been accompanied by significant government
spending and institutional developments. For example, from 1992-97 there was a
sharp increase in the basic support by Lander and Federal government in Germany for
science in Bavaria, with spending increasing 25 per cent in nominal terms compared
to a 12.7 per cent increase in the old Lander and a 12.2 per cent rise in Baden-
Württemberg. Similarly, institutional developments in Bavaria were made to support
high-tech industry and innovation including the establishment of the Bavarian
Research Foundation in 1991 to foster collaborative research in new technologies,
Bayern Innovativ (1995) set up to stimulate technology transfer to SMEs and parallel
developments in provision of venture capital (e.g. Bayern Kapital Landshut). Despite
these developments links between firms and institutional innovation partners in
Bavaria remain relatively underdeveloped as does the extent of multi-functional
working.

In more general terms, the benchmark comparisons suggest little evidence of
convergence between innovative activity in the study regions. In terms of the extent of
innovation, Northern Ireland and the Republic of Ireland continue to lag increasingly
behind plants in Bavaria. In terms of the success of innovation the situation is even
more stark with Northern Ireland and the Republic of Ireland losing ground relative to
Bavaria. Accounting for these performance differences in terms of the efficiency with
which plants in each area innovate is difficult given the overall similarity (or
advantage of Northern Ireland and the Republic of Ireland) in terms of intra-firm co-
ordination and inter-firm linkages. More convincing are arguments related simply to
the extent of the regions’ commitment and investments in R&D and innovation. To

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