Barriers and Limitations in the Development of Industrial Innovation in the Region

The growing interest in public policy contributing to the expansion of industrial innovation, has become increasingly significant, resulting from the interrelationship between innovation, competitiveness, and economic growth. This article presents the results of an empirical study in identifying the most important barriers to the development of innovation, as ascribed by industrial firms belonging to the high-tech sector alongside the more traditional industries. The data were collected through field survey of industrial firms, located in the Northern region of Israel. A considerable unexpected similarity was identified in the most important factors that constitute barriers to innovation, between the industrial sectors and the different regions investigated. The most significant limitations are those that relate to the high risk involved with the engagement in innovation. The risks are related, on the one hand, to the lack of financial resources, and on the other hand, to the high cost needed for this engagement, thereby affecting the time needed for return on investment. Additionally, the lack of highly skilled workers was also found to be a significant barrier.