Frontiers of Entrepreneurship Research
1996 Edition

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Thomas M. Cooney

Aidan O’Connor

Dublin Institute of Technology
Mountjoy Square, Dublin 1

+353 1 402 4229
+353 1 402 4233

+353 1 402 4298
+353 1 402 4298


Principal Topics

A major report published in January 1995 highlighted the dearth of innovation in Irish SMEs. This followed other research published in recent years that emphasized this shortcoming in Irish industry and while it was addressed by large organizations, small enterprises failed to respond.

A review of international literature confirmed Ireland’s lowly position in comparison to other European Union and OECD countries. Further literature research offered possibilities and thoughts on potential causes and solutions. The primary objectives of this research therefore became the desire to examine t he deterrents to innovation and the proposal of measures to rectify the situation.

This research focused initially on the perceived barriers to innovation as rated by SME owner/managers. Based on these findings, the authors then separated those that they judged to be real barriers as opposed to imaginary obstacles. Government agencies were then interviewed to offer their interpretation on the real and imagined obstacles. Particularly they were asked to offer ways in which their organizations could offer solutions to the perceived barriers highlighted by the owner /managers; a positive response to negative apprehensions.


A survey population of 898 companies that employed less than 50 people was identified, and utilizing a postal survey a valid response of 375 enterprises was attained. The design of the questionnaire was enhanced by similar work carried out in New Zealand, Canada, and the U.S. Detailed analysis using SPSS clearly identified the principal perceived barriers to innovation, particularly the government influenced policies. In-depth interviews were then carried out with Senior Managers from five government agencies. The initial objective was to determine a "gap analysis", and then to seek views on how each agency could engender growth in SMEs through innovation.

Major Findings

The findings highlight a number of key issues that need to be addressed: reward, the cultural shift to embrace rather than avoid risk, accessing financial support, and a dramatic reduction in the administrative duties. The measures required are both long-term and short-term ones, both operational and attitudinal. For some barriers, it will require industrial policy decision-makers formulating programmes to stimulate more successful innovation, while with other barriers long-term educational and training programs are essential where it is the perception rather than the fact that constitutes the barrier.


The SME sector has a vital role to play in both innovation and economic growth in Ireland. However, companies must reflect upon their own performance and seek ways to stimulate innovation at project level and at organizational level. But to offer encouragement, the government agencies should be positive and proactive by taking the lead and dealing with difficulties that have been a part of the Irish culture for too long.

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