Innovation Survey 2004-2006

Methodological Note on the Innovation Survey 2004-2006
The Innovation Survey was carried out during the fourth quarter of 2007 with reference period 2004 - 2006. The aim of the survey, which was
carried out for the third time in Cyprus, was the collection of data about new or significantly improved products and processes and other related activities (such as organisational and marketing innovation) as well as on the impact and benefits of such activities on enterprises. The previous similar surveys referred to the periods 2000 - 2002 and 2002 - 2004.
The survey covered only enterprises with 10 or more employees. The population of the survey numbered 1.232 enterprises, active in one of the
following branches of economic activity (in brackets, the NACE Rev. 1.1
Industry - Mining and quarrying (section C) - Manufacturing (section D) - Electricity, gas and water supply (section E)
Services - Wholesale trade and commission trade, except of motor vehicles and
motorcycles (division 51) - Transport, storage and communication (section I) - Financial intermediation (section J) - Computer and related activities (division 72) - Research and development (division 73) - Architectural and engineering activities (group 74.2) - Technical testing and analysis (group 74.3)

The survey was fully harmonised with the methodological guidelines set out by the Statistical Office of the European Communities (Eurostat), on the basis of the core questionnaire adopted by all EU Member States within the context of the Community Innovation Survey (CIS 2006). The survey was carried out in accordance with the provisions of the Commission Regulation (EC) No 1450/2004. To enable international comparisons, the definitions and concepts of the Oslo Manual, developed by the Organisation for
Economic Co-operation and Development (OECD) were used.
The survey was carried out by personal interview at the enterprises’ premises. Since the majority of the questions posed related to strategic planning and management issues, efforts were made to ensure that the interviews were carried out either with the general manager or with other senior staff of the enterprise who would be familiar with its performance, objectives and prospects.

The survey was partly financed by the European Commission through funds from the Transition Facility 2005 for the ten new Member States of the EU.

Types of innovation There are 5 types of innovation activities which create 2 innovation Technological product and process innovation Technological product and process innovation - Product innovation
- Process innovation - Ongoing and/or abandoned innovation activities Organisational and marketing innovation - Organisational innovation - Marketing innovation
The survey focussed mainly on the first category of innovation activities.

Technological product and process innovation
Technological innovation is a new or significantly improved product (good or service) introduced to the market or the introduction within an enterprise of a new or significantly improved process. Innovations are based on the results of new technological developments, new combinations of existing technology or the utilisation of other knowledge acquired by the enterprise.
Innovations may be developed by the innovating enterprise or by another
enterprise; however, purely selling innovations wholly produced and developed by other enterprises are not included as an innovation activity.
Innovations should be new to the enterprise concerned; for product innovations they do not necessarily have to be new to the market and for process innovations the enterprise does not necessarily have to be the first to have introduced the process.
Product innovation is the market introduction of a new or significantly
improved good or service with respect to its fundamental characteristics and capabilities, technical specifications, incorporated software or other immaterial components, intended uses, or user friendliness. Changes of a solely aesthetic nature are not included.
Process innovation is the implementation of a new or significantly improved production process, method of supplying and distribution, or support activity for the goods or services. The outcome (of the process)
should be significant with respect to the level of output, quality of products or costs of production and distribution. Purely organisational or managerial changes are not included.
The ongoing and/or abandoned innovation activities include the acquisition of machinery, equipment, software, and licenses; engineering and development work, training, marketing and Research and Development activities (R&D) when they are specifically undertaken to develop and/or
implement a product or process innovation and for some reasons either they are not completed and continue or either they are abandoned and terminated.
The degree of innovation activity in an enterprise is summarised as
1. Total enterprises 1.1. Innovation active enterprises 1.1.1. Product and/or process innovator 1.1.1.1. Product innovator only
1.1.1.2. Process innovator only 1.1.1.3. Product and process innovator 1.1.2. Ongoing and/or abandoned innovation activities 1.2. Non-innovative enterprises

Organisational and marketing innovation Organisational innovation is the implementation of new or significant changes in firm structure or management methods that are intended to
improve the firm’s use of knowledge, the quality of goods and services or the efficiency of work flows. Marketing innovation is the implementation of new or significantly improved designs or sales methods to increase the appeal of goods and services or to enter new markets.

The data in the tables The file consists of 7 tables which give the proportion of enterprises, by
sizeclass and economic activity, engaged in technological innovation and organisational and marketing innovation.
In sources of information, the degree of importance of various information sources that provided information for new innovation projects or contributed to the completion of existing innovation projects is covered.
Innovation co-operation is the active participation with other enterprises or non-commercial institutions in innovation activities. Both partners do
not need to commercially benefit. The pure contracting out of work with no active co-operation is excluded.
Funding of innovation includes the financial support via tax credits or deductions, grants, subsidised loans and loan guarantees. Research and other innovation activities conducted entirely for the public sector under contract are excluded.

Interpretation of the tables
In the table for technological product and process innovation, the number 35,02 means that in sizeclass 10-49 the proportion of all enterprises with innovation activities was 35,02%. Within this sizeclass falls 81,81% of the total number of enterprises covered by the survey.
Likewise, in the table for organisational and marketing innovation, the number 27,56 means that in sizeclass 10-49 the proportion of all enterprises with innovation activities and also with organisational and/or
marketing innovation was 27,56%. The remaining 7,46% (= 35,02 - 27,56) had innovation activities but no organisational and/or marketing innovation.
If one wants the respective proportion among enterprises with innovation activities, he needs to divide the number 27,56 with 35,02 (= 78,70%).
The opposite holds for the tables where the proportions are among enterprises with or without innovation activities. If one wants the
respective proportion among all enterprises in sizeclass 10-49, he needs to multiply with 35,02%, etc.


Last Updated: 24/07/2008