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Boosting Innovation and Productivity in Enterprises: What Works?

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  • Ruane, Frances
  • Siedschlag, Iulia

Abstract

A return to economic growth and higher employment requires growth in the number and sustainability of Irish enterprises. Innovation at enterprise level is essential for sustainability and competitiveness and plays a major role in increasing overall productivity. Understanding the determinants of enterprise innovation and how it affects productivity is important for designing effective innovation policies. The tight fiscal constraints and the urgency of achieving successful outcomes require that government policies aimed at enhancing enterprise innovation and raising productivity need to be very effective. This paper draws on recent international theoretical and empirical literature based on enterprise level data to explore four questions: Does innovation contribute to higher productivity? Which types of enterprises invest in innovation? Which enterprises have higher innovation expenditure per employee? Which types of enterprises are more likely to innovate successfully? We then look at what these findings imply for policy in relation to indigenous enterprises, whether the current policy mix is appropriate and how it might become more effective.

Suggested Citation

  • Ruane, Frances & Siedschlag, Iulia, 2011. "Boosting Innovation and Productivity in Enterprises: What Works?," Papers EC3, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esr:wpaper:ec3
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    File URL: http://www.esri.ie/pubs/EC003.pdf
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    References listed on IDEAS

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    1. Rachel Griffith & Stephen Redding & John Van Reenen, 2004. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 883-895, November.
    2. Davide Castellani & Francesco Serti & Chiara Tomasi, 2008. "Firms in International Trade: Importers and Exporters Heterogeneity in the Italian Manufacturing Industry," LEM Papers Series 2008/04, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    3. Hans Loof & Almas Heshmati, 2006. "On the relationship between innovation and performance: A sensitivity analysis," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 317-344.
    4. Paula Bustos, 2009. "Trade Liberalization, Exports and Technology Upgrading: Evidence on the Impact of MERCOSUR on Argentinean Firms," 2009 Meeting Papers 1029, Society for Economic Dynamics.
    5. Massimiliano Bratti & Giulia Felice, 2012. "Are Exporters More Likely to Introduce Product Innovations?," The World Economy, Wiley Blackwell, vol. 35(11), pages 1559-1598, November.
    6. Paula Bustos, 2011. "Trade Liberalization, Exports, and Technology Upgrading: Evidence on the Impact of MERCOSUR on Argentinian Firms," American Economic Review, American Economic Association, vol. 101(1), pages 304-340, February.
    7. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    8. Julio Raffo & Stephane Lhuillery & Luis Miotti, 2008. "Northern and southern innovativity: a comparison across European and Latin American countries," The European Journal of Development Research, Taylor and Francis Journals, pages 219-239.
    9. Justin Doran & Eoin O'Leary, 2011. "External Interaction, Innovation and Productivity: An Application of the Innovation Value Chain to Ireland," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(2), pages 199-222.
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    Cited by:

    1. Peters, Bettina & Riley, Rebecca & Siedschlag, Iulia & Vahter, Priit & McQuinn, John, 2014. "Innovation and Productivity in Services:Evidence from Germany, Ireland and the United Kingdom," Papers WP480, Economic and Social Research Institute (ESRI).
    2. Casey, Eddie & O'Toole, Conor, 2013. "Bank-lending constraints and alternative financing during the financial crisis: Evidence from European SMEs," Papers WP450, Economic and Social Research Institute (ESRI).

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    Keywords

    Productivity;

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