Innovation in the business enterprise sector, 2001

Most of the innovative enterprises have introduced new or significantly improved products for the enterprise, 26 per cent. It is, however, only 12 per cent that have introduced products not only new or improved for the enterprise, but also new for the market.

The previous innovation survey was carried out for the year 1997. In general, Norwegian enterprises have not been more innovative since the former survey, neither measured by number of innovative enterprises, sales of new or improved products or costs related to innovation activity. In 1997 30 per cent of the enterprises were defined as innovative. This seems a bit contrary to the increased research and development activity (R&D) among Norwegian enterprises in the same period. This fact may indicate low outcome of R&D, even though R&D is not the only factor behind innovation. Some time lag effects may also have influenced this. Compared with the Swedish and Finnish Innovation surveys for the period 1998-2000 Norwegian enterprises are also lagging behind in introducing new products and processes.

Manufacturing ahead

Manufacturing enterprises are more innovative than enterprises within services. While 36 per cent of enterprises within manufacturing are innovative, the corresponding figure is 30 per cent for services. Some industrial branches stand up as highly innovation intensive. Within Chemical industry 65 per cent of the enterprises are innovative. Within Communication equipment and Medical equipment industry the percentages are 61 and 60 respectively. The dominating industries within services are Telecommunications and Computer and related activities with a share of innovating enterprises of 59 and 63 per cent respectively.

Large enterprises more often innovative

The innovation intensity varies significantly by the size of the enterprises; a higher share of the large enterprises has introduced new products or processes than the smaller enterprises. For the entire business enterprise sector 64 per cent of the enterprises with 500 employees and more are innovative, while the figure for enterprises with 10-19 employees was 21 per cent. The difference between small and large enterprises is higher within the manufacturing industry than within the service industries.

Of total turnover in manufacturing in 2001 the share of new or significantly improved products was 13 per cent. This share increases from below 4 per cent for the smallest enterprises to more than 17 per cent for the largest ones. If we only consider the turnover of innovating firms the corresponding share for the total manufacturing is 21 per cent. Among innovative enterprises this share is falling from 25 per cent for the smallest enterprises till 20 per cent for the largest. This situation is due to the lower number of innovative enterprises among the smallest units.

Innovation cost of NOK 23 billion

The enterprises cost of the innovation activity amounted to NOK 23 billion in 2001, equal to 1.5 per cent of the total turnover. If we only take into account the turnover from the innovating enterprises the corresponding share is 2.4 per cent. More than half of the innovation expenditure relates to R&D. Still, more than 40 per cent of the innovating enterprises have developed new products or processes without the use of R&D. Other types of costs are design, training, market introduction and acquisition of external knowledge.

Many cooperates

41 per cent of the innovative enterprises had cooperated actively with other actors. The most common partners are suppliers. 66 per cent of the enterprises with cooperation reported that they cooperated with suppliers, while 31 per cent stated that this cooperation had been important for the project. Even though a lower number specify clients and customers as cooperation partner, 56 per cent, this group is considered as the most important partner, reported by 39 per cent. Other enterprises within the same group are also an important cooperation partner, in specific for larger enterprises. 28 per cent of the enterprises cooperated with universities or other higher educational institutes and 33 per cent with government or private non-profit research institutes, but only 9 and 12 per cent respectively consider this cooperation as important.

Information within the enterprise is the most common source for innovation; 47 per cent of the enterprises reported this. Clients and customers are also important sources; specified by 36 per cent.

Positive effects

Improved quality in products and Increased range of products are the two most common effects of the innovation activity; specified by 28 and 23 per cent of enterprises. 16 per cent of the enterprises had increased their market or market share. Within aquaculture, oil and gas extraction, manufacturing and construction process oriented effects as Improved production flexibility, Increased production capacity and Reduced labour costs were also quite common, while these effects had low importance within service industries.

Economic factors a barrier

Innovation is a complicated process and enterprises may face several kinds of problems. A large number of enterprises reported that their innovation activity, or lack of innovation activity, was hampered by serious problems. Economic factors like Innovation costs too high, Excessive perceived risk and Lack of appropriate source of finance are the most decisive ones. Other factors like lack of qualified personnel or lack of technological information were of minor importance. Of the enterprises without innovation in the period 16 per cent reported that this was due to prior innovation and as much as 49 per cent reported that there was no need for innovation due to market conditions.

18 per cent applied for patent

18 per cent of the innovative enterprises had applied for at least one patent in the period 1999-2001 and 21 per cent of these enterprises had a valid patent at the end of 2001. Only 3 per cent of enterprises without introduction of new products in the last 3-year period had a valid patent at the end of 2001.

The Norwegian Innovation survey is part of Eurostat's Community Innovation Survey and is based upon common definitions and methodology. Norwegian results compared with the EU countries will be published later.

Tables:

• Table 1 Innovative enterprises, by industry. 1999-2001. Per cent
• Table 2 Innovative enterprises by size classes. 2001. Per cent
• Table 3 Innovation expenditure in per cent of turnover by industry
• Table 4 Innovation expenditure in per cent of turnover, by size classes. 2001
• Table 5 New or significantly improved products in per cent of turnover. 2001
• Table 6 New or significantly improved products in per cent of turnover, by size classes. 2001