Innovation Policy in Israel, Ireland and the Uk - an Evolutionary Perspective

Dr Amnon Frenkel without whose patience this paper would not have been completed. The opinions and mistakes in the paper are of course my own. Abstract An appreciation of the importance of innovation in promoting economic growth has long been matched in the UK, Israel and Ireland with uncertainty about each nation's ability to exploit the results of scientific research. This paper examines how government in each country has sought to increase the level of innovative activity by business and promote diverse innovative behaviours. Marked differences in approach emerge between Israel on the one hand and the UK and Ireland on the other. In Israel, development of the national system of innovation (NSI) has been a high priority of policy backed up by liberal support for R&D and innovation. By contrast, as Walker (1993) remarked, 'the first thing to note about Britain's contemporary innovation system is that its development … has become a relatively low priority'. Consistent with its more interventionist approach to institutional development, public support for civil R&D and innovation in Israel covers a higher proportion of R&D costs, is automatic rather than discretionary and covers more types of R&D activity than in either the UK or Ireland. Up-front R&D grant rates are highest in Israel both for new and existing businesses with high levels of public support also available for national and international research collaboration. In 1994, the Israeli government funded 26.1 per cent of all civil R&D by businesses in 1994 – more than two and a half times the proportion in Ireland and more than four times the proportion in the UK. Of the three countries, the internal dynamic towards the generation of diverse innovation behaviours is probably strongest in Israel. This dynamic has its roots in the flow of research trained manpower coming from the Israeli university network, from immigration and from R&D undertaken in Israeli higher education institutes and is sustained by high levels of public commitment to supporting commercial R&D and innovative activity. In international terms, substantial FDI in Ireland for the last three decades has created the potential for substantial learning by indigenously-owned enterprises. For Israel, international collaboration in R&D has provided an important channel through which knowledge generated outside Israel can flow into the country and through which knowledge generated inside the country can be commercially exploited. EU initiatives, such as the 5 th Framework Programme and EUREKA, play an …