The survey also sought to find out the reasons why the companies undertook innovation activities.
According to Oslo Manual 2005, identifying the companies’ motive for innovating and their importance is helpful when we could examine the driving forces behind innovation activities, such as competition and opportunities for entering
new markets. Based on this, companies rating on the degree of importance of their objectives for undertaking the innovation activities are also illustrated.
Table 5.13 and Figure 5.21 illustrate the companies’ objectives of introducing innovation.
Generally it is found that to improve product quality is the most important objective perceived by the respondents with mean 2.03 followed Table 5.12: Innovation Activities Based on Business Sector
Types of Innovation Activities Manufacturing Services
Yes % Yes %
In-house R&D 291 65 187 26
Acquisition of R&D 73 16 64 9
Acquisition of machinery, equipment and software 251 56 261 36
Acquisition of external knowledge 93 21 85 12
Training 301 68 292 40
Market introduction of innovations 202 45 179 24
All forms of design 194 44 167 23
Preparation for marketing innovation 137 31 84 11
Preparation for organisational innovation 134 30 82 11
Figure 5.20:Innovation Activities Based on Business Sectors
65%
16%
56%
21%
68%
45%
44%
31%
30%
26%
9%
36%
12%
40%
24%
23%
11%
11%
In-house R&D Acquisition of R&D Acquisition of machinery, equipment and software Acquisition of external knowledge Training Market introduction of innovations All form of design Preparation for marketing innovation Preparation for organisational innovation In-house R&D Acquisition of R&D Acquisition of machinery, equipment and software Acquisition of external knowledge Training Market introduction of innovations All form of design Preparation for marketing innovation Preparation for organisational innovation
ManufacturingServices
Business Sectors and Innovation Activities
Percentage (%)
0 50 100
by to open up new markets or increase market share (mean=1.96) and to extend product range (mean=1.87). The same answers are portrayed by the manufacturing sector where the three most important objectives are to improve the quality product (mean=2.37), followed by the need to open up new markets or increase market share (mean=2.29), and to extend the product range (mean=2.22). The least important objective is to replace products being phased out (mean=1.54).
For the service sector, the most important objective was to improve product quality, with a mean value of 1.69. This is followed by the need to open up new market or increase market share (mean=1.62), and to fulfil regulation and standard (mean=1.57). The objective regarded as the least important by the service sector is similar to the manufacturing sector that is to replace product being phased out (mean=1.09).
Table 5.13:Degree of Importance of Objectives on Innovation Activities
Objectives Mean
Manufacturing Services Overall
To replace products being phased out 1.54 1.09 1.32
To improve product quality 2.37 1.69 2.03
To extend product range 2.22 1.51 1.87
To open up new markets or increase market share 2.29 1.62 1.96
To fulfil regulation and standard 1.98 1.57 1.78
To reduce labour costs 1.96 1.43 1.70
To reduce materials consumption 1.96 1.14 1.55
To reduce energy consumption 1.92 1.14 1.53
To reduce environmental damage 1.98 1.23 1.61
To utilise incentives, grants, loan, etc. 1.60 1.18 1.40
Total Average Mean 1.98 1.36 1.67
Note: Mean indicator: 0 = not relevant, 3 = highly important
Figure 5.21:Degree of Importance of Objectives on Innovation Activities Based on Business Sectors
1.54 2.37 2.22 2.29 1.98 1.96 1.96 1.92 1.98 1.6 1.09 1.69 1.51 1.62 1.57 1.43 1.14 1.14 1.23 1.18 To replace products being phase out
To improve product quality To extend product range To open up new markets or increase market share To fulfil regulation and standard To reduce labour cost To reduce materials consumption To reduce energy consumption To reduce environmental damage To utilise incentives, grant, loan, etc.
To replace products being phase out To improve product quality To extend product range To open up new markets or increase market share To fulfil regulation and standard To reduce labour cost To reduce materials consumption To reduce energy consumption To reduce environmental damage To utilise incentives, grant, loan, etc.
ManufacturingServices
Business Sectors and Innovation Activities
Mean
0 1 2 3
NATIONAL SURVEY OF INNOVATION 2012
Figure 5.22 shows the comparison by company size on how product and process innovation activities were impacted during the period. The findings indicate that all companies whether small, medium and large show some degree of impact on product and process innovations. Generally to improve quality of goods and services was the highest impact in large, medium and small
companies with 3.09%, 4.44% and 3.63%
respectively; while to reduce materials and energy per unit recorded the lowest impact among large and medium size companies with 2.46% and 3.25% respectively, and to reduce labour cost per unit produced and to reduce enviromental impact/
health safety with 3.22% recorded the lowest in small companies.
Figures 5.23 shows the comparison on how marketing and organisational innovation activities were impacted during the period by company size. The findings also indicate that all companies small, medium and large show high percentages of impact on marketing and organisational innovations. It is found that the highest impact for large, medium and small firm companies is
to improve quality of goods and services with 7.38%, 10.27% and 8.80% respectively. On the other hand, the variable to improve employees satisfaction and reduce turnover rate with 6.47%
recorded the lowest in large companies, to reduce cost per unit with 9.08% and 8.05% respectively were lowest in medium and small size companies.
Figure 5.22:The Impact on Product and Process Innovation Activities Based on Company Size
2.70%
2.78%
3.09%
2.86%
2.74%
2.56%
2.46%
2.78%
2.95%
2.51%
4.10%
4.09%
4.44%
4.10%
4.06%
3.66%
3.25%
4.03%
3.75%
3.52%
3.40%
3.40%
3.63%
3.26%
3.44%
3.22%
3.25%
3.27%
3.47%
3.22%
Percentage (%) Large
Medium
Small
0 1 2 3 4 5
Company Size and the Impact of Product and Process Innovation
Increase range of product Entered new market or increased market share
Improved quality of goods or services Improved flexibility of
production of service provision Increased capacity for production or service provision Reduced labour costs per unit produced or provided Reduced materials and energy per unit produced or provided Reduced environmental impacts or improved health and safety Met regulations or standards Increased value added
Figure 5.23:The Impact on Marketing and Organisational innovation Activities Based on Company Size