(Table 1). The recent economic history of the region is one of declining traditional
industries in the manufacturing sector (particularly textiles and heavy engineering)
and a growing dependence on public and private service sector activity. Unlike the
Republic of Ireland, inward investment to Northern Ireland has been relatively limited
in recent years and has been dominated by software, networked services and back
office activity. As a result, the region’s manufacturing sector is dominated by smaller
firms and weakly embedded externally-owned plants (Crone and Roper, 2000).
The main institutional and policy frameworks operating in Northern Ireland reflect
relatively closely those of other UK regions despite substantial regional autonomy in
some areas of public spending, notably economic development. The result is that the
Northern Ireland innovation system shares many of the weaknesses of that of the UK
as a whole highlighted, for example, by Walker (1993). Knowledge generation and
sourcing in Northern Ireland is undertaken primarily by larger private sector
manufacturing companies and by the region’s two universities, although R&D
spending by higher education in Northern Ireland is below that in each of the other
study regions (Table 2).
Republic of Ireland - Largely as a result of the expansion of the externally-owned,
high-tech sector, the Republic of Ireland has achieved spectacular national growth
rates throughout the 1990s, earning the country its ‘Celtic Tiger’ nickname (Roper
and Frenkel, 2000). The foundation for recent rapid growth was, however, laid in
earlier decades as Ireland attracted substantial inward investment particularly from the
US. By 1998, the cumulative effects of FDI into Ireland meant that inward investment
accounted for 44.1 per cent of manufacturing employment, 68.4 per cent of net output
(i.e. value added) and 87.7 per cent of exports (Ruane and Gorg, 1997). The same
cumulative effect is also evident in the fact that the top 20 companies in the Irish
electronics sector includes only two Irish firms (Roper and Frenkel, 2000).
Since the mid-1990s substantial efforts have been made to develop research
capabilities and infrastructure within the Republic of Ireland and to set national
priorities for development. EU Structural Funds were used, for example, to support
collaborative programmes of research (the Programmes in Advanced Technologies or
PATs) which established research institutes and centres of excellence in
biotechnology, advanced manufacturing, opto-electronics, materials technology,
software, telecommunications, and power electronics (NIEC, 1999, p. 71). More
recently (March 2000) a £560m Technology Foresight Fund was launched.
Bavaria - Although the largest of the study regions in terms of total population,
overall population density in Bavaria is well below that in Baden-Württemberg
reflecting the rural nature of much of Bavaria (Table 1). Like Baden-Württemberg,
however, Bavaria has maintained income levels well above the EU average
throughout the 1990s, benefiting from the opening up of Eastern Europe (Jones and
Wild, 1994). Unlike Baden-Württemberg, however, Bavaria has a mixed industrial
structure with significant mechanical engineering, aerospace, automotive and
electronic engineering sectors. Another feature of Bavarian industry is the prevalence
of widely dispersed small- to medium-sized manufacturing plants. The average size of
establishment in 1990 was 70.2 workers compared to a West German average of
153.7 (Jones and Wild, 1994).