Barriers and Limitations in the Development of Industrial Innovation in the Region

22

In the traditional industries there were much more locational statistical significant differences
in this perspectives. These differences obtained specifically from the unique structure of this
industrial sector located in the northern periphery of Israel, where great part of the firms
owned by the Kibbutzim. This ownership pattern creates relative advantage to these industries
by given them preference in the investment in R&D and the capability and willingness to take
risk in comparison to their competitors in the more central regions. The main difference that
found to be statistical significant connected to the lack of highly skilled labor, as a limitation
to the development of innovation, stressed more by firms located in the peripheral region.
This is due to their great engagement in innovation in comparison to the firms located in the
metropolitan area. Another significant statistical difference was found between the firms in
accordance to location regard to the lack of market consumption to new products and
processes. This limitation mainly stressed by the traditional firms in the metropolitan area.

The conclusions from this study in regards to public policy are also connected to the
insignificant barriers in the development of innovation identified in the analysis. The
possibility to receive R&D services everywhere emerges by the small importance ascribed to
this factor as a barrier by the firms in the sample, regardless to their branch affiliation or
location. This finding evidence to the great success of Israel in becoming an R&D laboratory
on a worldwide scale, thus bring to removal this barrier. Another conclusion obtained from
the findings is the irrelevant of traditional barriers to the development of innovation that in the
past had great influence on locational choice of the industrial firms. In this context it is worth
to remind the difficulties in the availability of external technical services, lack of
opportunities for co-operation with other firms and technological institution and lack of
technological opportunities. All of which in the globalization era and due to the high
telecommunication progress lost their importance.

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