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UK: Innovation Nation?
Intellect, in partnership with Computing, launches the “Innovation Nation?” initiative
The UK stands on the brink of the knowledge economy, where technology has the potential to make us more productive and more capable than ever before.
But our place within this new economy is not yet secured, and will depend on us tackling one of the biggest challenges facing the UK – our ability to exploit technology for socio-economic gain. To ensure the UK can successfully meet this challenge we need to further understand the current practices, threats and opportunities of innovative ICT use by UK’s Businesses, Government and Consumers and as determined by its cultural environment. The ‘Innovation Nation?’ initiative aimed to provide this understanding through engagement with industry, government and academic experts and the publication of a report. Our partnership with Computing forms part of our overarching Knowledge Driven Economy Campaign; and our mission is clear, to help progress the UK’s status as an Innovation Nation.
The UK is facing the recognised challenge of increased competition from low-cost economies using new technologies, highly educated and skilled workforces and mobile capital - the challenge of global competition. Innovation, the successful exploitation of new ideas, often involving new technologies or technological applications, has been identified by UK government as key to the UK’s ability to face this challenge, to higher productivity and greater prosperity for all. However, overall UK performance does not currently meet the levels required to meet the innovation challenge.
Intellect believes that Britain must respond to this challenge by becoming an innovation nation that not only champions its own technology industry, but utilises technology across all industries to gain competitive advantage. It is my belief that if we are to compete against aggressive new economic entrants such as India and China then we are going to have to develop new ways to exploit products and services, and specifically, to become adept at innovatively exploiting technology for socio-economic gain. I’m not alone in this belief.
Government has shown a commitment and willingness to forward the innovation agenda; indeed they have placed innovation at the very heart of future economic growth.
In December 2003 government published ‘Competing in the global economy: the innovation challenges’, a document which set out government strategy to improve the UK’s innovation performance. Its principal aim was to make the UK the leading major country in Europe in R&D within a decade.
The report identified six areas of priority, with a series of commitments under each:
- Encouraging knowledge transfer between business and the science base, from business to business, and in collaboration with international partners
- Procurement: using government’s enormous purchasing power to stimulate innovation from businesses Supporting high-level skills and high performance workplaces
- Innovation as a key driver of economic development in the Regions
- Impact of the regulatory framework on the ability of business to innovate: use of IPR, standards and the design of regulations
- Supporting SMEs and entrepreneurship as key sources of innovation
In July 2004 government published its Science and Innovation Investment Framework 2004 - 2014, and followed this with the publication of the DTI Five Year Programme, published in November 2004.
The framework sets out the government’s ambition for UK science and innovation over the next decade, in particular the contribution to economic growth and public services, and the attributes and funding a research system capable of delivering this. The Science and Innovation Investment Framework’s aim to improve the amount of R&D invested in the UK only adds up if private sector, as well as public sector, investment increases. If the UK is truly committed to creating the best incentive system for R&D in the world then the effective tax credit rate must be raised above the ‘noise level’. The effective rate for large companies is currently between 3.75% and 5%. Anything short of 10% fails to provide British companies and multinationals with the incentives they need to invest in R&D in the UK.
Too many companies find the system is overly complex and to compound matters tax inspectors are often woefully uninformed of technology R&D, dis-incentivising the R&D Tax Credit yet further. Intellect has recommended the creation of a small group of specialist tax inspectors who understand technology and the development process and who speak the same language as the R&D community. To date this recommendation has fallen on deaf ears. In addition to creating a policy framework to support the innovation process, the UK has a number of cultural ‘barriers to innovation’, which need to be addressed. These include (but are not restricted to):
- “Innovation” is associated with basic research in science and is closely allied to “eccentricity”
- The procurement and protection of intellectual property is considered protectionist and anticompetitive
- Businesses regard Academia with distrust or as irrelevant to business innovation
- We associate “engineering” with oil, overalls, and car maintenance. Engineering and technology is seen as a man’s world
- Innovations are often perceived as more likely to generate problems than to deliver benefits conversely, getting a true debate on the table is often difficult as innovators want to protect their product’s image.
- Short-termism in business objectives and financial infrastructure preventing long-term investment
- Businesses that miss the opportunity of ‘widening the gene pool’ by requiring job applicants with proven role experience rather than relevant an innovative skill sets.
Intellect, representing the hightech industry, is determined to ensure that innovation is at the heart of the UK’s future. It is committed to working with government, academia and other stakeholders to raising the UK’s innovation success. Innovation Nation aims to take the debate to the next stage, put innovation in the context of business, government and in the UK as the place we all live and work. Its recommendations will provide us with a roadmap for our innovation evolution. Working together Intellect and Computing have created and published a series of three roundtable debates, focusing on the three core pillars of our nation; culture, business and government.
The Innovation Nation debates focused on:
Culture: Does the UK have a culture of Innovation? What are the UK’s cultural strengths and weaknesses, attitudes to entrepreneurship, citizen culture and adoption and exploitation of technology, trust & confidence and what role should government take in creating the right cultural environment.
Business: Is UK plc innovatively exploiting technology for economic gain? Do businesses recognise the challenges posed by the knowledge economy, and what role will technology play in overcoming these challenges Is the current academic system producing the graduates UK firms require in order to compete. Are UK firms incentivised and motivated to innovate and do they have the skills to exploit technology in order to grow their business.
| The Science and Innovation Investment Framework’s aim is to improve the amount of R&D invested in the UK |
Government: Is government doing the right things to foster our Innovation Nation? What role should government take in the UK’s development as an innovation nation, as a user of technology, a procurer and implementer and also as a regulator. Do politicians get ‘IT’, should the UK government strive to be a beacon for innovative exploitation of technology, should steps be taken to ensure that innovation is embedded within the procurement process, and does the UK’s regulatory system enable or impede innovation in the UK.
Innovation Nation – Recommendations
- Encourage risk takers; overcome fear of failure
- Support the innovators
- Build better models for moving research into development
- Emphasise creative skills in education
- Business leaders must create a culture of innovation
- Think global
- Support success
- Innovative boardrooms need innovative leaders
- Encourage government to lead
- Collaboration is key
- Know when to innovate – and when not to
- Develop hybrid professionals
- Improve cross-government cooperation
- Government must lead – but not centralise
- Focus on people and processes, not just IT
Of the 15 valuable recommendations that came out of the project so far, and detailed in our Innovation Nation? report, one that Intellect will pursue is to encourage government to lead on innovation. We are also committing to feed the findings of the Innovation Nation? report into our Intellect Index, which will help us to effectively select the measures through which we will track the UK’s innovation progress. The Index is scheduled for publication in the spring of 2006 and its objective is to measure the UK’s progress towards a knowledge economy. Intellect, representing the hightech industry, is determined to ensure that the innovation is at the heart of the UK’s future. We are committed to working with government, academia and other stakeholders to raising the UK’s innovation success.
For more information about Intellect visit www.intellectuk.org or contact To see the full Intellect/Computing Innovation Nation? visit: www.intellectuk.org/publications/reports/innovation-nation.pdf