Innovation - the key to unlocking Northern Ireland’s economic growth

Innovation - the key to unlocking Northern Ireland's economic growth

"Many firms are so busy dealing with the issues of today that they don't allocate the time and resources to develop the businesses of tomorrow."

With employment at a record high, more people than ever engaging in training and employers reporting fewer skills shortages, Northern Ireland's economy is on the up.

But impressive headlines mask underlying problems. A fundamental change in mindset is imperative if Northern Ireland is to prosper on the global stage, argues Invest Northern Ireland.

Invest NI - the organisation committed to growing the economy by helping new and existing businesses to compete internationally and securing inward investment - is convinced that innovation is the key to unlocking future economic growth.

"People tell us that they don't 'do' innovation, as though it's a game only large companies can play. But innovation is not a bolt-on. It should not be restricted to a research and development lab. It has to be integral to everything a company does," says Invest NI Managing Director of Innovation and Capability Development Tracy Meharg.

The unique challenges

Perhaps because of their location, separated from the mainland, many Northern Irish businesses have grown accustomed to concentrating efforts close to home.

Many family-owned businesses have a history of serving local customers, and doing that well.

But that means they lack some of the skills and attitudes necessary to compete in today's international market - most notably, the readiness to look forward and innovate.

Invest NI is adamant that the days of Northern Irish businesses competing on plentiful resources and cost have long gone.

It maintains that to compete successfully, companies need to be more sophisticated in meeting the needs of today's ever more demanding customer.

"Too many companies focus only on quality, cost and delivery. Today, that just buys you an entry ticket," adds Ms Meharg. "To truly compete, companies need to understand exactly what their customers want - in terms of functionality, performance and customer relationships, for example."

Barriers to innovation

A study by Invest NI into the barriers deterring businesses from innovating revealed that they didn't know where to innovate or how to convince shareholders and customers that there was a need to innovate. And in any case, they felt they lacked the expertise internally to carry it through.

Creating the desire to capitalise

One of the challenges facing Invest NI is to motivate businesses to take risk and have the ambition to grow.

Efforts to convince the business community include tours to innovative countries like Finland.

Ms Meharg adds: "There is a gradual cultural change but still too many companies think about innovation only when they need to halt a decline. They need to realize that innovation is an ongoing process across all parts of a business. They must keep looking ahead and asking 'what next?'"

Transferring knowledge

In a culture where profit lines and cost reduction are all, many businesses are failing to open their eyes to opportunities such as collaborations with others.

Traditionally, the attitude has been to 'hide your answers' for fear that a competitor might discover what you're up to. Companies need to be open - open to ideas and to collaboration," explains Ms Meharg.

Invest NI is not only working to stimulate networking between businesses but also to promote collaboration between industry and science, to ensure the transfer of technology and knowledge.

Equipping a new generation

But if Northern Ireland is to meet the needs of a global marketplace, it needs to ensure there is a next generation of skilled employees waiting to take up the innovation challenge.

While fewer employers now report skills gaps in their workforce, where shortages do occur, they continue to present a serious concern. One solution is to encourage more pupils to choose science, technology and engineering subjects.

Invest NI wants businesses to work in partnership with education to enthuse young people about the potential of these subjects to deliver an exciting, worthwhile career.

"If Northern Ireland is to make the transition to a knowledge-based economy, then we must encourage a change in attitude to the area of science, technology, R&D and innovation," Ms Meharg.

Events such as Innovation Week are part of the effort to raise awareness of what's possible and of what has been achieved by those who dared to innovate.

NESTA Chief Executive Jonathan Kestenbaum was among the keynote speakers at the Skills for Innovation Conference, organised as part of Innovation Week 2007 by Invest NI, part of the Department of Enterprise, Trade and Investment.

Did you know?

• Around 10 companies account for half of all Northern Irish exports.
• Almost 90 per cent of local firms employ fewer than 10 people.
• The public sector employs one in three of all workers in Northern Ireland.
• While manufacturing exports rose by 45 per cent in real terms in the five years from 1996/97, more recently, exports have levelled off.
• Invest NI has so far leveraged £23 million of private sector investment in R&D as well as establishing 17 Centres of Research Excellence.
• It has seen the number of foreign-owned companies operating in Northern Ireland increased by over 60% between 1996 and 2002, from 304 to 637.