Media Release

Innovation = Jobs + Growth

Enterprise Ireland’s Innovation Forum and Showcase held on 6-7 September posed the question: what is innovation and why is it important. This article by Limerick Institute of Technology’s Enterprise Acceleration Centre Manager, Donncha Hughes addresses this question taking on board the many issues raised by the speakers at the recent conference held in Dublin Castle.

Innovation is the making of ‘new combinations’ – combining existing ideas, skills and resources in a novel way. Innovation is more than invention. Expressed as an equation innovation is:

Innovation = Creativity + Successful commercialisation

Innovations range from incremental to disruptive. Incremental innovations stem from continuous efforts to improve products and services and can include reformulation of product for example flavours, packaging and sizes, novel marketing approaches, changes to delivery processes and/or associated services and warranties. Disruptive innovation involves substantial innovative change which can create a new market, or fundamentally changes an industry structure with examples being the PC and the mobile phone.

Innovation is a hot topic for the Irish economy because business in Ireland is facing greater challenges:

• eroding competitiveness
• greater global competition from low-cost economies
• competition from knowledge economies who have excellent supply chain and logistical systems
• more sophisticated and demanding business and consumer markets
• increasingly complex and merging technologies

In this new global reality, innovation is the key to gaining competitive advantage for individual companies but also for national and regional economies. Innovation is a central component in the new competitiveness equation.

Competitiveness = Innovative capacity + Productivity + Value Chain Leverage

where

Innovative capacity = potential to create a continuous stream of commercially relevant innovations.

Productivity = output value per unit of input.

Value chain leverage = incremental value derived via collaboration in a value chain

Taking another perspective, Innovation is one of the three tenets of ‘the Knowledge Triangle’ which is at the core of the Lisbon Agenda, the strategy which aims to make "the EU the world's most dynamic and competitive economy" by 2010.

‘Europe must become better at producing knowledge through research, at diffusing it through education and at applying it through innovation, alongside creating jobs and making Europe a more attractive place to invest and work’.

Janez Potočnik, EU Science and Research Commissioner

Having defined innovation and underlined its importance the follow-on question is how has and will Ireland respond to the innovation challenge.

For companies there are innovation tools and techniques which offer practical guidance and assistance while the Innovation Forum and Showcase highlighted several case study examples of innovation in practice in Irish companies. A key theme emerging from the Forum was the requirement for senior management to take the lead to create a culture of innovation; with 3 key actions strongly recommended:

1. Make connections and be open to external knowledge
2. Involve and empower staff to express and execute new ideas
3. Excite your customers by providing creative solutions to their needs. Building a strong customer interface is particularly important for new product and service development.

The Innovation Forum and Showcase highlighted that innovation across all possible dimensions will deliver bottom line results for your company. 

Limerick Institute of Technology combines all the components of the triangle of knowledge within a regional context. The Enterprise Acceleration Centre located on campus at Limerick Institute of Technology is a practical approach to delivering the aims of the Lisbon Strategy providing tailored supports to start-up companies. The Enterprise Acceleration Centre aims to be a ‘hotspot’ of innovation and creativity. The major benefit cited by clients of incubator facilities around the world is the connections formed with other entrepreneurs with businesses in diverse sectors and in various stages of development. LIT’s Centre will focus on networking, management development, technology transfer, collaborative R&D and commercialisation of intellectual property thereby adding the second dimension of the innovation equation cited at the start of the article.

If anyone is interested in finding out how the Enterprise Acceleration Centre can assist your business venture during your set-up phase, please visit our website www.lit.ie/eac and then you are more than welcome to contact me to arrange a tour of our new centre and the LIT campus.

References:

• What do we know about Innovation? Professor Jan Fagerberg, University of Oslo
• The Innovation Supply Chain - Generating Economic Benefits from Knowledge, Dr. Michael Raymont, CEO, Energy INet Inc. 
• Innovation, Culture & Leadership: Creating a 'Culture of Innovation', Professor Keith Goffin , Cranfield School of Management
• Innovation in Services, Catherine Whelan, Programme Manager, AXA Insurance Ltd.
• Connect & Develop: A New Model for Innovation, Nabil Sakkab, Senior Vice-President, Corporate Research & Development, Proctor & Gamble  
• SMEs benefiting from RTD Framework Programme, Thomas Arnold , Head of the Research & SMEs Unit, Directorate-General for Research, European Commission

The brochure for the Innovation Forum and Showcase 2006 is available at: http://www.enterprise-ireland.com/NR/rdonlyres/D8FF6E6A-3A88-4073-B073-B114181511E5/0/InnovationForum06.pdf