Managers continue to invest in innovation

Despite the current economic climate, European managers are continuing to strengthen their competitive position through innovation. Mark Fletcher reports

Despite the current economic climate, European managers are striving to strengthen their competitive position through innovation, concludes the 2002 Innobarometer survey. Mark Fletcher reports. Commissioned by DG Enterprise, the poll reveals that managers continue to be upbeat about the innovation performance of their companies compared with their competitors. It also found that access to innovative markets and financial resources, better co-operation with suppliers and customers and a strengthened European single market are key factors to increasing innovation in Europe. However, above all: "Europe's most valuable economic resource is its people, and the skills that they have. According to Innobarometer 2002, staff skills and knowledge, as well as the potential offered by the European dimension of innovative markets, are key factors in innovation performance," said Enterprise and Information Society Commissioner Erkki Liikanen. Of over 3,000 European managers interviewed, nearly half agreed that it was the qualifications and professionalism of their staff that contributed most to their company's strength in innovation. However, the results suggest that to be more innovative, management practices need to be addressed in order to encourage and motivate staff at all levels, to acquire new competencies and to adapt to an innovation environment. When asked to pinpoint a particular level of qualification in need of attention, managers said that further efforts should be focused on the apprenticeship and training of technical staff. Indeed, the poll reveals that time and commitment allocated to training is severely lacking and merely symbolic in a lot of European countries. While emphasis was placed on staff skills, training and management practices, the poll shows that the focus of managers' innovation efforts is relatively evenly distributed, and similar emphasis is placed on new products and production processes. Resources devoted to investment now account for 25% of expenditure on average. Ranking highest is the manufacturing sector, which allocates 33 per cent of investment to innovation, followed closely by export and 'younger' companies. The increased introduction of new or renewed products and services has also led to a strengthening of innovation activities. Such developments account for 22 per cent of companies' turnover, which is an increase of two points since the previous poll. The 2002 survey also shows a substantial change in the priorities of European managers concerning ways to access advanced technologies. While in 2001, the purchase of machinery and equipment was the most important way to obtain these technologies; co-operation with suppliers or customers is now ranked the most effective way of gaining access. Co-operation agreements and sharing knowledge between enterprises is also cited as an important tool for innovation. A third of respondents say that access to innovative and open customers and markets is extremely difficult in the current business climate. However, it is expected that markets will become more receptive to innovative products in the coming years. Finally, with a marketplace of 380 million people and the free movement of goods and services, the majority of managers are in agreement that the European single market is the most important driving force for innovation. MF To see the 2002 Innobarometer, please visit the report's website. If you innovate, you need to protect your IP or you could lose the benefits of all your research. Get your own Innovation Logbook, a publication created by the DTI and The Patent Office.