Industry studies of innovation using CIS data - Manufacture of machinery and electrical machinery
The European Innovation Monitoring System (EIMS) has published a report examining the innovation process in the European Union Member States, with particular focus on the industrial machinery and electrical machinery sectors. The study, prepared on behalf of EIMS by the Centre for European Economic Research (ZEW), looks at national innovation systems and the economic structure of the two sectors concerned and the influence of these factors on the innovation process. The study reveals a higher degree of innovation in the industrial machinery sector as compared to the electrical engineering sector. This may be accounted for in part by the fact that while innovation activities in the electrical engineering sector are dominated by large firms (more able to put up the necessary investment), in the mechanical engineering sector SMEs also play an important role. In addition, technological development in "niches", the predominant market structure for the micro business, seems to be an ongoing process in mechanical engineering sector. Market niches in electrical engineering seem, on the contrary, to be far less dynamic. The study finds, however, that differences in the participation and intensity of innovation activities and technology transfer can not be explained by industry-specific barriers to innovation. It therefore suggests that we should look less closely at industry-specific barriers to innovation but rather at barriers to innovation in general. The most important barriers to innovation are identified as being: - Low expected profits from innovation due to the high level of financial investment needed and the too long pay-off period; - Difficulties in financing innovation activities.