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2. Innovation activity related to product and process innovations 2008-2010

A total of 46 per cent of the surveyed enterprises reported innovation activity related to product and process innovations between 2008 and 2010. The majority of these enterprises had also launched product innovations on the market or adopted process innovations.

As before, innovation activity related to goods, services and processes was more common in manufacturing enterprises than in service enterprises. Enterprises with innovation activity accounted for 52 per cent of manufacturing and for 41 per cent of service enterprises.

Prevalence of innovation activity by size category of personnel 2008–2010, share of enterprises

Prevalence of innovation activity by industry in manufacturing 2008–2010, share of enterprises

Prevalence of innovation activity by industry in services 2008–2010, share of enterprises

As in the previous results, innovation activity was more common in group enterprises than in independent enterprises. Furthermore, the launching of product innovations on the market was much more common among enterprises belonging to foreign groups than among those belonging to Finnish groups.

In relative terms, enterprises acting as system suppliers in the production value chain were more likely to report that they had adopted innovations; 43 per cent had launched product innovations on the market, and a total of 58 per cent reported innovation activity connected with product and process innovations. As for main suppliers, the percentages were slightly lower, 38 and 51 per cent, respectively. Slightly more than one-fifth of sub-contractors reported product innovations and a total of 38 per cent reported innovation activity connected with product and process innovations.

Launching of product innovations on the market

One in three of the surveyed enterprises reported that they had launched product innovations on the market between 2008 and 2010. In manufacturing, this applied to 35 per cent and in services to 31 per cent of enterprises.

Enterprises with product innovations in manufacturing and services 2008–2010, share of enterprises

Three out of four enterprises that had launched goods innovations on the market reported having developed new or significantly altered goods in-house. Nearly one-half of the enterprises had engaged in development work jointly with other enterprises or institutions. More than a quarter of the enterprises that had launched innovative goods on the market reported that they had modified goods originally developed by other parties, and for 15 per cent of these enterprises, the actual innovations had been developed by other parties.

Sixty-nine per cent of the enterprises that had launched service innovations on the market reported having developed the innovations in-house. More than half, or 55 per cent, of the enterprises had engaged in development work jointly with other enterprises or institutions. More than one-third of the enterprises had modified services originally developed by other parties, and approximately one-fifth of the enterprises having reported service innovations had launched novelties developed by other parties on the market.

In all, 58 per cent of the enterprises with product innovations between 2008 and 2010 reported having launched such product innovations that were new to their market. Around three out of four of the innovating enterprises reported innovations that were new only to their enterprise. Approximately one enterprise in three having reported product innovations could offer to the market products that were either new or essentially improved to both their own enterprise and the market.

In 2010, around 25 per cent of the total turnover of innovating enterprises came from innovations launched on the market between 2008 and 2010.

The turnover from innovations made up around 15 per cent of the total turnover of the surveyed enterprises. In manufacturing, turnover from innovations accounted for around 25 per cent of the total turnover of the enterprises. In services, the respective share was only four per cent.

More than one-fifth of the enterprises that had launched product innovations believed that one of their innovations was the first of its kind in Finland. Fewer, or six per cent, of the enterprises estimated that one of their innovations was the first of its kind in Europe. By contrast, one in six of the enterprises having reported product innovations considered that they had launched on the market an innovation with globally unique characteristics between 2008 and 2010.

Adoption of process innovations

Around 30 per cent of enterprises had adopted process innovations between 2008 and 2010. In manufacturing, this was the case with 34 per cent and in services with 25 per cent of enterprises. As in previous years, process innovations most often concerned manufacturing and production methods and supporting activities related to processes.

Enterprises with process innovations in manufacturing and services 2008–2010, share of enterprises

Half of the enterprises that had adopted process innovations had developed the processes in-house. Another half of the enterprises had developed process innovations jointly with other enterprises and institutions. More than one-fifth had adapted or modified processes developed by other parties, and less than one-fifth had adopted processes developed by other parties.

Innovation projects interrupted during the survey period and innovation projects ongoing at the end of the survey period

Between 2008 and 2010, one-quarter of all enterprises reported innovation activities or projects that had either been interrupted or not been completed by the end the survey period.

In manufacturing, around 12 per cent of the enterprises had interrupted projects, and 30 per cent reported projects that had not been completed by the end of the survey period. In services, seven per cent of the enterprises had interrupted projects, and 19 per cent reported projects that had not been completed by the end of 2010.

Innovation activities and expenditure

The majority, or 79 per cent, of the enterprises having developed products and processes between 2008 and 2010 had engaged in research and development activities. Slightly over half of them said their R&D activity had been regular. About half of those with innovation activity had outsources research and development activities, and two out of three had purchased machinery, equipment and software to develop and implement innovative products and processes.

A total of 43 per cent of those having developed products and processes had acquired competence, such as patents and non-patented inventions or know-how and other competence. Around one-third had organised or commissioned training related to innovation activity. Four out of ten enterprises reported activities related to the launching of innovations on the market, such as market research and advertising. With one-quarter of the enterprises, the innovation activity also included design not related to R&D activity. More than one-third of the enterprises reported that they had considered other actions to adopt new or improved products and processes, such as feasibility studies and technical preparation work.

Innovation activities 2008–2010, share of enterprises with innovation activity relating to product and process innovations

Enterprises reported innovation expenditure to the tune of EUR 7.3 billion in 2010. The expenditure covers their own research and development activities (a total of almost EUR 4.7 billion), research and development activities commissioned from outside the enterprise (more than EUR 1.3 billion), machinery, equipment and software purchases related to innovation activity (good EUR 1 billion) and EUR 160 million spent on the acquisition of know-how.

In manufacturing, the total innovation expenditure of enterprises was nearly EUR 6 billion in 2010, and in the services examined in the survey, a good EUR 1 billion.

Distribution of innovation expenditure in manufacturing 2010

Distribution of innovation expenditure in services 2010

More than one-third of the enterprises with innovation activity had received public funding for their activity between 2008 and 2010. In manufacturing, 43 per cent had received funding and in services, 26 per cent.

The State is the most important source of public funding, since a total of 31 per cent of the innovating enterprises had received financial support from the State. A total of seven per cent of the enterprises had received funding from local or regional authorities, and six per cent from the European Union.

Information sources for innovation activity

Between 2008 and 2010, manufacturing enterprises were a little more likely than service enterprises to use different sources of information in their innovation activity.

Own enterprise or group is still one of the most significant information sources for innovation activity. From the enterprises’ viewpoint, the customers also play an important role: for 75 per cent of innovating enterprises, customers were significant or moderately significant information sources for development work.

In relative terms, the least mentioned information sources were universities, polytechnics as well as public and private non-profit research institutes.

Information sources for innovation activities in manufacturing and services 2008–2010, share of enterprises with innovation activities related to product and process innovations

Co-operation in innovation activity

A total of 40 per cent of the enterprises having developed and adopted product and process innovations had engaged in co-operation related to innovation activity between 2008 and 2010. In manufacturing 44 per cent and in services 35 per cent of enterprises had engaged in such co-operation.

For group enterprises, the group and the other enterprises within the group are naturally important partners. As in previous surveys, the other most important reported partners were customers and equipment and material suppliers.

In relative terms, the public sector was the least mentioned in terms of collaboration.

Co-operation partners for innovation activities in manufacturing and services 2008–2010, share of enterprises with innovation activities

Nearly all innovating enterprises reported having co-operated with Finnish partners. Two out of three had partners in Europe and nearly one in three in the United States. Twenty per cent co-operated with partners in China, and nine per cent of the enterprises having engaging in co-operation reported partners in India. Under one-fifth engaged in co-operation in other regions.

Location of co-operation partners 2008–2010, share of enterprises with innovation activity related to product and process innovations

Obstacles to innovation activity

Between 2008 and 2010, enterprises having engaged in innovation activity related to products and processes regarded lack of their own funding and lack of qualified personnel as the most important obstacles to innovation activity. Development is particularly complicated by the uncertainty of demand for innovative products and excessive cost of innovation activity. The disadvantages were considered quite similar in both manufacturing and services although a relatively higher number of manufacturing enterprises reported on obstacles to innovation activity.

Factors hampering innovation activities in manufacturing and services 2008–2010, share of enterprises with innovation activitiy related to product and process innovations

For enterprises that had not engaged in innovation activity related to products and processes between 2008 and 2010, the most important obstacles to innovation activity related to the uncertainty or lack of demand and to the fact that there was simply no need for innovations. For nearly one-half of the enterprises, lack of qualified personnel was an obstacle to innovation. The availability of funding or the cost of innovation may be a critical factor for many enterprises, since one in ten considered the lack of their own funding a major obstacle to innovation. Likewise, 10 per cent of the non-innovating enterprises considered excessive cost an obstacle to innovation.

Source: Innovation 2010, Statistics Finland

Inquiries: Mervi Niemi 09 1734 3263, tiede.teknologia@stat.fi

Director in charge: Leena Storgårds

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Updated 7.6.2012