Clever Products Not Enough, says Innovation Expert

Ireland must be able to commercialise research if it is truly going to make the Smart Economy work and see off the emerging economies with cheaper cost bases.

This is according to Professor Peter Russo, Chairman of Strascheg Institute for Innovation and Entrepreneurship at the European Business School (EBS), Frankfurt, who is spoke at an Engineers Ireland lecture on innovation.

Professor Russo said that Ireland, like Germany, must do more than just create clever technologies to succeed commercially.  “Germany, like Ireland, has a tradition of engineering strength and know-how.  The ‘made in Germany’ stamp is associated with accuracy, durability and quality.  But now, to succeed commercially, this is no longer enough.” 

“Emerging economies are now directly competing, from a lower cost base, to create similar technologies and products.  Countries like Germany and Ireland must now innovate continuously, stand-alone innovation and the creation of a clever device is not enough.  Specifically, we need to develop associated services to go with innovative products to create a unique offering.  A perfect example of this is the iPhone, where an innovative product is packaged with valued services. This is how countries like Ireland and Germany, who have engineering and technological expertise but relatively high cost bases, will succeed.  Otherwise, we risk missing opportunities as with the MP3, a technology that was created in Europe but commercialized elsewhere.”      

Director General John Power said: “There are many parallels between Germany and Ireland, particularly with regards to our strength in engineering.  But it is clear both countries face a similar threat in the form of competition from emerging economies.  Professor Russo rightly points out that we must combine our engineering and technological expertise with a greater sense of commercial savvy to ensure innovation results in business success.” 

Professor Russo also said countries like Ireland and Germany needed a greater willingness to embrace technological development and change and this must be done with an appropriate education system that provided graduates with the right skills.  He said Germany has an underfunded and inefficient education system that was resulting in a skilled worker shortage.

Anna Scally, Tax Partner in KPMG and member of the Taoiseach's Innovation Taskforce, also spoke on the work of the taskforce and addressed tax efficiency issues around intellectual property arrangements.  There was also a presentation by Damien Callaghan, Investment Director, Intel Capital, on the role of venture (risk) capital in the Smart Economy and the challenges facing Irish entrepreneurs in raising capital.