Barriers to Innovation Mean One-Third of Firms in Ireland do not have an Innovation Strategy

One-third of firms in Ireland have yet to put an innovation strategy in place, a new survey has found. The research, which was published by the Innovation Exchange this week found that the main barriers to innovation are not having a dedicated budget for innovation initiatives, lack of time to identify and implement them, and difficulty prioritising where innovation needs to be applied.

According to the survey, 90 percent of large firms are open to collaborative innovation, however, 39 percent said the sensitive nature of the business is the largest barrier to working with a third party, while 29 percent said the lengthy procurement process or onboarding of suppliers was an issue. 

Other barriers to implementing a collaborative innovation strategy included the direct cost for third party involvement at 29 percent, lack of technical staff at 27 percent and lack of managerial staff and innovation leaders at 24 percent.  

While 80 percent of large organisations expect that innovation will become more important to their business in the next 1 to 3 years, 34 percent of large businesses who responded to the survey do not have a defined innovation strategy. Further, 45 percent of those do not expect to have an innovation strategy in place in the next 3 years. 

In AmCham’s 2024 pre-budget submission ‘Building an Impactful Ireland – For 2050 and Beyond’, AmCham outlined the importance of the continued enhancement of Ireland’s research and innovation ecosystem, both to attract top talent and to ensure Ireland is a location of choice for investment in research. In this context, AmCham recommended the increase of the R&D tax credit from 25 percent to 30 percent to show Ireland’s commitment to research, development and innovation in the long term and the on-going mapping of skills needs to support the development of skills in line with the pace of innovation and change within industry. 

AmCham members are already prioritising investment in research and innovation. In AmCham’s latest Quarterly FDI Insights survey, 76 percent of members surveyed said they are in favour of greater collaboration between third level institutions and industry. In the same survey 52 percent of respondents said they are undertaking one or more research projects in Ireland, with AI, sustainability, and medical technology being identified as the most common areas of focus.  

However, 69 percent of respondents said they are currently experiencing a skills gap, with the greatest gaps being identified in engineering, digital and data, and machine learning in AI.  

To engage with AmCham on matters related to innovation, skills and talent, please contact Christina Kelly, Public Affairs and Advocacy Manager at c.kelly@amcham.ie.