labor in the region that could effect negatively the ability to innovate, since it is difficult to
commute skilled labor to large distance.
3.2 The Data
The empirical study based on the analysis of database collected in a field survey that was
carried out in the Northern region of Israel. The sample of industrial plants was randomly
selected from three Fast Growing Industries (FGI) with high capacities for innovation. The
sample comprised 211 randomly selected industrial firms represents about 72% of the total
industrial plants in the FGI category mentioned above, located in the Northern region of
Israel. A carefully designed instrument was used in a personal interview administered to
senior managers from each of the firms in the sample. (for more details on the sample selected
see also: Shefer, et al., 2001).
The selected industrial branches were divided into two categories: the first category,
representing the hi-tech industries, includes electronics, electro-optics, optics, and precision
instruments. The second category represents the more traditional industries and includes the
plastics and metal products. The justification for this grouping came from the numerous
variations that were found in the innovative properties characterizing these two industrial
groups (for more details see Frenkel et al. 2001).
3.3 The Region
The northern part of Israel were chosen for the study as it represents a classic pattern of an
area encompassing the different types of sub-regions identified for the investigation. In 1998
some 1.5M people consisting about 26% of the population of Israel resided in this region. For
the purposes of the study the northern region divided into two sub-regions: 1) The Haifa
metropolitan area the main urban core in the North. This sub-region includes the core zone
and its outskirts - the central Galilee located on the fringe of the core zone, and are within an
acceptable commuting distance. 2) The peripheral areas, comprising the less developed areas
of the Northern region. These areas are removed from the metropolitan influence, and are not
within an acceptable commuting distance (see Map 1).
3.4 The Research Method
During the field survey firm directors were requested to state the importance they would
allocate to various factors which constitute barriers to innovative success, by ether slowing
down or altogether stopping an innovative project. Those interviewed were presented with a
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