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SMEs urged to 'pick up the innovation ball'

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Innovate or die was the stark warning issued to SMEs by a University of Limerick (UL) professor at a conference in the city on Friday.

Professor Eamonn Murphy told attendees at the symposium of Collaborating European SMEs that Irish SMEs risk going out of business if they fail to invest in research and development (R&D). Representatives of a number of Ireland's largest manufacturing firms along with SMEs and leading researchers from all over Europe attended the event

"Innovation and R&D are central to the operation and competitive success of every Irish SME," Professor Murphy told those in attendance.

"The length of time and resources that indigenous companies invest in R&D dictates whether they remain competitive and gain new markets. Therefore, it is imperative that the indigenous business sector is supported and encouraged to participate in such activity, which is pivotal to the survival and success of the sector."

Professor Murphy said the government and other bodies such as Enterprise Ireland had created an environment for SME where there were incentives for SMEs to invest in R&D.

"Ultimately, however, it comes down to the companies themselves to pick up the innovation ball and run with it," he said. "Irish SMEs have traditionally always had significant innovation and R&D challenges, as they possessed limited resources to invest in new and improved products, skills and technologies. However, in 2007, there are increased resources available to small businesses that wish to develop into medium sized enterprises including various courses and programmes that the third level educational sector is now providing."

Attendees at the event were told that the launch of the European Commission's €54bn seventh Framework Programme (FP7) would give Irish SMEs access to funds for R&D that were not previously available. Irish firms received €45m under the last framework programme but Liam Brown, marketing chairman of Supply Network Shannon, estimates that €200m will be available to Irish firms under FP7.

"Previously, undercapitalised companies who sought to undertake research and development and invest in new technologies ran a serious risk of destroying the wealth they already had instead of generating it," said Brown.

"The EU Framework Programme, however, complements the existing R&D and innovation strategies of SMEs, large organisations, third level institutions, and research institutes. The key difference between national and EU programmes is that of scale. National projects are typically of the order of magnitude of hundreds of thousands of euro, while EU projects are typically multi-million euro projects," he said.

Copyright © 2007, ENN

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