Northern Ireland business needs to be more innovative to ensure economic growth because it can no longer compete on cost, enterprise minister Angela Smith said today.
She issued her call as the Department of Enterprise, Trade and Investment published its Quarterly Economic Review.
It indicated a positive outlook for the Northern Ireland economy in the context of a buoyant global economy and continued UK growth.
Ms Smith said the province had continued to perform well against the backdrop of global recovery.
But she added: "For a region such as Northern Ireland, which can no longer compete on cost, the capacity to innovate is the most critical element in sustaining economic competitiveness."
The review, she said, acknowledges the challenges in increasing innovation and research and development expenditure.
"We will continue to commission research that helps to improve the information and evidence base, which allows for better policy development," she added.
An assessment of the case for a higher rate of R&D tax credit in Northern Ireland and the subsequent impact on the local economy is currently being undertaken for the department by a prominent academic.
The report showed that private sector spending on R&D dropped by more than 25 per cent over the period 2001-2003.
That meant that in 2003, for the first time, Northern Ireland's public sector R&D outweighed that of the private sector - 53.7 per cent to 46.3 per cent.
The report also highlighted two key weaknesses in the Northern Ireland labour market, individuals with no qualifications and work based training.
On a more positive note the report sighted the supply of graduates within Northern Ireland as one of its strengths.
Over the last decade, the number of graduates of working age had almost doubled from 86,000 to 168,000.
PA