Services Innovation in Ireland - Options for ... - Europe INNOVA

Key agencies have responded to the challenge of services innovation but generally implicitly and with
an essentially technologically based approach. Consequently, types of services innovation identified
in this study, including innovation through new customer interfaces and the development of new
business models, are only implicitly receiving policy and programme support.
One of the potential weaknesses of this approach to service sector innovation, in which supports for
new services or products focus on technological innovation, is that the development of new services
may receive less support than the development of new manufacturing products.
Although many of the Enterprise Ireland and IDA Ireland supports, in general terms, have the
"potential" to be re-oriented and expanded with the service sector in mind, it is arguable whether
they would, as a result, be as effective as they need to be. In fact, seeking to broaden innovation
policy to ‘embrace’ services innovation could dilute existing innovation policy to such an extent that
its current clear messages and relevance to the manufacturing sectors and those services companies
with capital investment plans would be significantly damaged. A distinct services innovation policy
will therefore also help to protect the integrity and visibility of the traditional RTD innovation brand.
Our research on the role of public policy in the six dynamic sector concentrations indicates that
no explicit services innovation policies have been delivered to services companies, although a
number of the sector concentrations have developed important innovation and enterprise policy
support initiatives, while others have adopted a light touch regulatory approach that is sympathetic
to innovative activity. However, the OECD research emphasises the relative scarcity of national
innovation policies that are designed around the needs of services companies.
In addition to the traditional preoccupation with research and technological development it
would appear that a major obstacle to the development of services innovation policies is the
diversity that characterises the policy needs of different services sectors, once again underlining the
heterogeneous nature of services innovation. Other barriers that are likely to be encountered in
developing services innovation policy include the technical constraints posed by EU regulation as well
as more the attitudional constraints associated with culture change among businesses and across
delivery agencies.
5.5 Summary
Ireland is increasingly being viewed as a pioneer in the area of policy development for services
innovation. Ireland’s policy makers therefore have the opportunity to enhance Ireland’s international
reputation as a leading European economy in the 21st Century. In the Irish policy context it is clear
that innovation is a key priority for the achievement of future economic growth in Ireland. National
policy documents, such as the NDP, highlight the importance of support for research, development
and innovation within the manufacturing and internationally traded services sectors.
Policy support for innovation is largely sectorally ‘neutral’ in the sense that manufacturing and
internationally traded services are viewed alongside each other in relation to support. This approach
is fairly typical of most countries. The policy and economic context of Ireland, however, is changing as
evidenced by the growing significance of the services sector.
Recent policy debate in Ireland has considered the challenges posed by a service-based economy.
‘Ahead of the Curve’, for example, concluded that the traditional policy approach to innovation is
dominated by a largely technological view of innovation, notably one based around technological
R&D and so on. However, innovation in the service sector is characterised by both technological and
non-technological innovation in areas such as the development of new business models, customer
interfaces and new services. Other policy priorities, particularly those associated with enterprise,
provide the basis for support to other, non technological, dimensions of services innovation.
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