Expenditure made by Basque companies during 2006 on technological innovation activities came to 2,352 million euros, having increased by 8.8% as regards the previous year, according to Eustat data. This expenditure represented 3.8% of GDP and if this figure is broken down into the main activities needed for innovation, most notable is expenditure on internal R&D with 38.6% of spending, acquisition of machinery and equipment, with 37.4% and acquisition of external R&D, with 15.6%, leaving 8.4% for other activities.

It can be seen that while expenditure on innovation increases year after year, the percentage of companies carrying out innovation remains at a similar rate. During the period 2004-2006, 16.6% of companies in the A.C. of the Basque Country were innovators, corresponding to 29,880 companies. Innovating companies are those either capable of introducing a new or distinctly improved product, whether goods or services, onto the market (5.8% in 2006), or those that implement a new or distinctly improved process within their own establishment (15.1%).

These percentages rise to 32.7% if only companies with 10 or more employees are taken into account, with product innovators representing 14.4% and process innovators 27.9%.

Table 1: Innovating companies and expenditure on innovation activities according to period.

Source: Eustat

Graph 1: Distribution of expenditure on innovation according to different activities in 2006. (%)

Source: Eustat

The economic impact of product innovation on turnover accounted for 25.3% during the period 2004-2006

Elsewhere, 25.3% of the turnover of innovating companies came from innovation products, while unaltered or slightly modified products represented the remaining 74.7%. When these products were not only innovative for the company that carried them out, then the average economic impact represented 13.6%.

These percentages varied slightly in companies with 10 or more employees, with new or distinctly improved products here accounting for an average of 23.7% impact on turnover. If the product was also new for the market, the average economic impact was 8.7%.

27.6% of innovating companies received public funding. This percentage rose to 47.4% of companies with 10 or more employees

27.6% of innovating companies received some form of public funding for their innovation activities. Turning to the origin of this aid, most notable was that coming from the Basque Government, which came to 20.3% of the total of these companies. These percentages were smaller when it came to aid coming from other administrations. In the case of companies with 10 or more employees, 47.4% received aid, with the Basque Government once more responsible for funding the most companies, specifically 36.2% of innovating companies of this size.

As regards cooperation on innovation, it is noticeable that it practically did not take place in the smaller establishments. Indeed, only 6.9% of establishments that carried out innovation signed a cooperation agreement concerning innovation activities or R&D.

Table 2: Innovating companies receiving public funding according its origin. 2004-2006. (%)

Source: Eustat

Establishments with 10 or more employees that carried out innovation cooperation accounted for 23.7%. Within this size of establishment, among those that had signed an agreement, cooperation with Technology Centres (54.3%), Other establishments in the same company (41.3%), Equipment and materials suppliers (40.7%), Customers (32.2%) and Universities and other institutes (30.4%) were the most outstanding.

Over half the number of companies felt that there are factors that hinder technological innovation

Over half the companies, specifically 53.8%, felt that there are certain factors that hinder technological innovation. Among these factors, companies pointed to the high costs involved in carrying out innovation (41.7%), as well as the excessive economic risks (39.9%). Among companies with 10 or more employees this percentage rose to 64.1%, with the same hindrances highlighted.

Table 3: Companies according to factors that hinder innovation. 2004-2006. (%)

Source: Eustat

Finally it should be pointed out that, during the period 2004-2006, 19.0% of innovating companies employed a patent or other methods to protect their inventions or innovations. Over this period, 1.5% applied for a patent to protect inventions or innovations developed in their establishment and 2.2% had one in force by the end of 2006. As for other methods of protection, 18.5% of innovating companies used methods such as registered models, trademarks, copyright, etc.

Again, these percentages were higher if only innovating companies with 10 or more employees were taken into account. To be more specific, 28.4% used, over this period, a patent or other method of protection, 6.6% applied for a patent and 10.9% had one in force by the end of 2006. Additionally, 25.6% used other protection methods.

Methodology note: The Survey on Technological Innovation, carried out by Eustat, is aimed at Basque companies of any size and any activity sector, except the primary one, public administration and domestic service. Its aim is to offer information on technological innovation activities carried out by companies. The survey is based on a representative sample of 3,400 establishments located in the A.C. of the Basque Country.