Half of Cypriot enterprises are innovating

…And see the benefits in productivity

Innovation, as we are constantly being told, is the key to competitiveness, and according to recent research by the Statistical Service Cystat, around half the companies in Cyprus have got the message.

According to the Innovation Survey among enterprises with 10 or more employees, 46.1% of enterprises had some form of innovation activity during the period 2002-2004.

Among industrial enterprises, this proportion stood at 53.2% compared to 37.9% in the services sector.

However, the amount of innovation appears to have fallen compared with earlier years. In 2000-2002 were 48.4% of enterprises innovated, with 50.6% for industry and 46.1% for services.

Larger enterprises were much more likely to innovate than smaller ones. The proportion was 81.5% for enterprises with 250 and more employees, 60.9% for enterprises with 50-249 employees and 42.7% for enterprises employing 10-49 persons.

Innovation brings productivity gains

If you are still wondering about the short-term costs of innovation, another statistic might persuade you. According to the research, 64.7% of all enterprises with innovation activity said that innovation had a high impact on improving their production flexibility.

About 56.8% reported a high impact on increasing their production capacity, 46.8% on meeting regulatory requirements, 29.8% on reducing environmental impacts or improving health and safety, 29.7% on improving the quality of their goods and services, 27.0% on reducing labour costs per unit output, 26.6% on increasing the range of their goods or services and 17.1% on entering new markets or increasing their market share.

Among enterprises with no innovation activity, the main factors declared as having a high degree of impact on hampering innovation were the high costs (26.6%), the lack of funds within the enterprise (21.0%), the lack of finance from sources outside the enterprise (14.7%), the lack of qualified personnel (16.1%) and other reasons.