Ireland's productivity is above the European Union average, a new report on competitiveness said today.
The annual EU report, which looks at industrial competitiveness across the region and policy measures adopted by member states to improve competitiveness, named Ireland as one of the best performers in the region.
Ireland scored highly in labour productivity, rate considerably above the EU average, along with the Netherlands, Austria, Finland, Belgium, Luxembourg, Sweden and Germany.
The economy was also rated above the EU average in many aspects of the business environment and work force here.
The proportion of firms in Ireland classed as "innovating" - those who had introduced new or significantly improved goods, services, processes, in addition to marketing or organisational innovation over a three-year period - was more than 50 per cent, the same amount as Belgium, Portugal, Estonia, Austria, Greece and France, among others. Only Germany and Luxembourg scored higher, with more than 60 per cent.
The UK fell into the group where more than 30 per cent of all companies were innovating firms.
The study also highlighted the State's efforts to shift growth in the economy to the innovative sectors and services, noting that the move had already shown some success before the economic crisis took hold.
"Long-term efforts to provide incentives for more sustainable growth also go in the right direction, the report said.
However, the report warned that the State will be challenged in returning to balanced growth, while also consolidating public spending and finances. The report said a "careful review of spending and taxation priorities" was needed to to avoid future bottlenecks to growth.
It also said the capacity of indigenous firms to innovate could be increased, encouraging firms to capitalise on increased investment in public research and development and the development of a green tech sector.
