You will often hear Cypriots complaining that their compatriots are followers, not innovators. And new figures from the Statistical Service bear this out.
According go the “Innovation Survey” of enterprises with 10 or more employees carried out by the Statistical Service, well over half of all companies were not engaged in any innovation at all in 2004-2006.
Only 39.6% of enterprises had some form of innovation activity during the period 2004-2006.
Moreover, although Cyprus is a services-oriented economy, there was even less innovation in the services sector (33.5%) than in the industrial sector (46.3%).
However, among services companies with more than 250 employees (think banks, insurance firms, big accounting firms and possibly the Shacolas empire), there was an innovation rate of 86.7%.
Across all sectors, the larger the enterprise the more likely it was to have had some form of innovation activity during the period: 35.0% for enterprises employing 10-49 people, 56.7% for enterprises with 50-249 employees and 82.1% for enterprises with 250 and more employees.
Chemicals outperform
By manufacturing subsector, the greatest innovators as regards technology innovation were manufacturers of chemicals and chemicals products, which include pharmaceuticals. Pharmaceuticals are now Cyprus’ biggest merchandise export, amounting to EUR 104 mln in 2007.
Other manufacturing subsectors which had a technology innovation rate of over 50% were food, beverages and tobacco producers (54.7%); rubber and plastic products (52.5%); electrical and optical equipment (52.9%); and wood and wood products (51.1%).
The shrinking leather sector had zero technological innovation.
Companies engaged in organisational or marketing innovation were broadly the same, though to a lesser degree.
Innovation works
The key lesson for those still using Windows ‘98 is that innovation has a positive impact on the business.
Among all innovating enterprises 69.7% reported a “high impact” on improving production flexibility; 62.5% reported a high impact on increasing production capacity; 57.5% on improving the quality of goods and services; 55.9% on meeting regulatory requirements; 45.3% on increasing the range of goods or services; 38.0% on reducing environmental impacts or improving health and safety; 37.9% on entering new markets or increasing their market share; 29.2% on reducing labour costs per unit output; and 19.9% on reducing materials and energy per unit output.
There was no dominant single reason why the non-innovating companies were not innovating.
The three main factors were prior innovations (32.2%), the absence of demand for innovations (30.8%) and high costs (20.6%).
Other factors cited were the uncertain demand for innovative goods or services (16.0%), the lack of funds within the enterprise (15.4%), the lack of finance from sources outside the enterprise (13.3%), the lack of qualified personnel (12.8%) and others.
Fiona Mullen
