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Northern Ireland - Making a Transformation through Service Innovation Published on: 14/08/2014, Last update: 02/10/2015

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Northern Ireland’s economy is evolving and regional stakeholders recognise the challenges they face in ensuring that the region’s strengths and resources are channelled into the exploitation of future opportunities. A key challenge to be addressed is a lack of effective collaboration. The region must continue to develop strategic partnerships and recognise that traditional concepts, such as differentiating between manufacturing and services, have been superseded by ‘joined up approaches.’ This requires a cultural shift in the perceptions, attitudes and activities of Northern Ireland’s businesses and stakeholders that will make them more open to the wider innovation context and its potential benefits.


The areas to be promoted through service innovation

Initially, Invest Northern Ireland expressed a wish to focus the support for service innovation on the traditional manufacturing sector. During the assessment phase, three areas were identified in which a Large-scale Demonstrator could be implemented: the food and drink sector; the health and social care sector; and a combination of both sectors. During the Belfast peer review workshop in January 2014, the sustainable energy sector was also discussed as a possible option. The potential for service innovation was recognised by stakeholders who suggested some lead markets in all the proposed sectors.

During discussions on potential service markets, health was widely seen by Northern Irish stakeholders as a leading market for service innovation, particularly as the role of big data analytics is supporting patients in research trials and providing them with improved health outcomes. There are two internationally recognised research centres for computational biology and Northern Ireland also has one of the best molecular research centres working on cancer treatment, which is funded by the private sector.

Another lead market where the region has great potential is in distributed energy solutions and their integration into Smart Grid technologies. The aim here would be to build the expertise that could demonstrate the commercial scalability of these solutions to a global market.

A further topic that is relevant to advance computational analytics or big data is its application to the food industry. Within the food sector there is a larger potential for spill-overs, as food is less regulated than healthcare and is more industry driven. For example, the meat sector is keen to conduct research into genetics and within agri-tech there is additional expertise related to data analysis.


Strengths and weaknesses in Northern Ireland’s innovation system


Lessons being learned that might be reflected in future policies

As in most of the other demonstrator regions, the ESIC team’s analysis revealed a need to review the current policy mix and adjust it so that it becomes more favourable to service innovation. 

Also, the team indicated that efforts were required to ensure that policy-makers better understand and harness the innovative behaviour of those Knowledge Intensive Business Services (KIBS) that have export potential.

The region recognises that a decision still has to be made in Northern Ireland as to whether the Large-scale Demonstrator will be implemented through a cross-cutting application combining several business sectors or applied in a specific sector or field.

Finally, a decision also has to be taken on the launching of a key or focal pilot action for service innovation through the establishment of the proposed Open Innovation Centre or an open innovation support service. 


Practices that have the potential for transfer

The Northern Ireland Connected Health ECO System[1] is a good example of how service innovation can be fostered and enhanced through collaboration between relevant stakeholders. The ECO System is the forum that brings together stakeholders from the Health and Social Care Services, academia and businesses to discuss and develop connected health solutions for the region.

It is important to note that service innovation does not only mean new individual services being developed, as an equally important manifestation of service orientation is a new or renewed emphasis on customer value. Because technological R&D and traditional manufacturing occupy important positions, it is reasonable to start from a value-based interpretation of service innovation that makes the goal of the exercise more understandable to practitioners. Experience from other regions indicates that innovative ideas often follow on from customer-oriented business models.

According to the assessment of the ESIC team the existing policy mix seems to be biased towards support for manufacturing R&D and technological innovation. It is also dominated by technology-push measures, with a limited presence from the demand side. Thus, it appears to be important for Northern Ireland to integrate the concept of service innovation into the existing policy mix. This will require the current policies, which focus on manufacturing R&D and technological innovation, to be extended to cover the service sector and to promote service innovation. As a consequence, the overall goal in the short to medium term is to implement the necessary changes to the selection criteria and the funding rules of a number of chosen policy measures.