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In the second phase an examination of the barriers to innovation took place separately in each
of the two industrial sectors. In addition, differences in each sector between the metropolitan
area and the peripheral region were also examined. Table 2 presents the results in the hi-tech
sector and Table 3 in the traditional sector.
Perhaps the most interesting and unacceptable outcome resultant from the order of importance
ascribed to the list of barriers is the high correlation between the two extremely different
industrial sectors. Both the hi-tech sector and the traditional industry ranked the same five
economic barriers as the most effective factors on innovation, albeit with a slight changes in
the inside order of these factors. The same was found with the next four supportive factors
included in the medium level of significant group.
Such results pointed to the necessity to address more general policy in order to reduce the
principal limitations, instead of adapting specific policy to each of the industrial sectors.
Accordingly, such policy must emphasize mainly on the five economic factors that basically
decrease the willingness and ability of the firms to engage in innovation.
A consistent higher mean score was found as ascribed by the hi-tech firms to the more
important barriers (factors 1-9 in the list) than by the traditional sector. The explanation to this
relies on twofold. First, the great experience that the hi-tech firms grant from their vast
engagement in innovation, in comparison to that of the traditional industry. Such experience
creates much more knowledge on the real effect of these barriers. This can be illustrated by
the percent of firms (in the sample) that engaged in product innovation that comes to 72% in
the hi-tech sector, and only 41% among firms belong to the traditional industry. Secondly, the
development of new product in the hi-tech sector involved, in general, more complicated
inputs in contrast with those that needed in the traditional industry. Thus increasing the effect
of the risk