A springboard to global growth
Andrew Cahn, UK Trade & Investment

Innovation: the business of shaping our world
David Golding, Technology Strategy Board

Going global
Jonathan Kestenbaum, NESTA

Diversity is good for innovation
Annette Williams, UKRC for Women in SET

Promoting physics supporting physicists
Institute of Physics

The cost-saving CEO
Taylor Wessing

The BIC network
UK Trade & Investment

Innovation inspires R&D tax relief



Addressing cross sectoral issues
Integrated Products Manufacturing KTN

Research Councils

Meeting the global challenge
Research Councils

The UK?s National Science and Innovation Campuses
Science & Technology Facilities Council

Aerospace & Defence

Enabling technology through innovative approaches
Aerospace & Defence KTN

Defence technologies for civilian applications
Ploughshare Innovations


Securing the future
Intellect Association for Biometrics


Supporting life sciences in the capital
London First

Tackling the threat of electronic crime
Cyber Security KTN


From invention to innovation
Electronics KTN

Grid Computing Now! KTN


A global fusion
UK Atomic Energy Authority

Design for a one planet economy
Giraffe Innovation

Managing carbon in the corporate and public sectors
Greenstone Carbon Management

Towards an energy efficient future
British Electrotechnical and Allied

Manufacturers Association (BEAMA) Home help
Energy Institute


Connecting people and technology
Health Technologies KTN

A centre of excellence for innovative translational research
University of Birmingham

Feeling your way to design success
NHS Institute for Innovation and Improvement

University-industry collaborations
Imperial College London

Lost in translation
Pearson Matthews Innovation Consultants

Location and Timing

Location and Timing KTN
Intelligent Transport Systems

Mapping the route to intelligent transport systems deployment
Innovits KTN

Drive down fleet costs and reduce carbon emissions?
Energy Saving Trust

DRIVENet and sustainable vehicle engineering
Oxford Brookes University


Breaking the mould
Manufacturing Technologies Association

University of Nottingham

An innovative history
Scott Bader

Innovation for tomorrow?s built environment
Modern Built Environment KTN


Innovations in materials deliver value for money
Materials KTN


Nanotechnology in the UK
Nano KTN

Linking technology push with market pull

Running the risks
European Nanotechnology Trade Alliance

Nanofabrication solutions
Kelvin Nanotechnology

Innovative science for global applications
Oxford Instruments

Leading positive change for global industry
The Centre for Process Innovation


Making light work for industry
Photonics KTN


Unlocking the potential of the UK?s sensing community
Sensors & Instruments KTN


Investing in the future
Invest Northern Ireland

Ulster innovation delivering business success
University of Ulster

Focus: Northern Ireland

Belfast ? a city of creativity and innovation
Belfast City Council

A natural centre for innovation
London Development Agency

England?s East Midlands ? an innovative region
East Midlands Development Agency

Making it in Leeds
The City of Leeds

Collaboration in wireless technologies
Wireless Centre of Industrial Collaboration

Industrial Collaboration at the University of Leeds
Engineering Design CIC

One North East

Focus: North West of England

Connectivity, Catchment, Cost
St. Helens

Focus: South West of England

Be part of the equation
West of England Partnership

All change for Hastings
Innovation Centre Hastings

ITI Scotland


Raising the standards
UK Science Park Association

Special focus: collaboration
Edinburgh Science Triangle

Innovation: the key to economic growth
County Durham Development Company

Solutions across boundaries
Norwich Research Park

Partnership provides innovation success
Wolverhampton Science Park


The outsourcing advantage
Business Services Association

Fast start UK
Tenon Outsourcing

Inward investment trends

Divine intervention
British Business Angels Association

Know your rights
Intellectual Property Office

A perfect patent
Beresford & Co

Putting IP at the centre of business strategy
Cambridge Intellectual Property


Science lessons
GovNet Communications

Useful addresses


business services ASSOCIATION

The outsourcing advantage

The UK?s outsourcing industry is one of the largest in the world, second only in size to the US. Mark Fox, Chief Executive of the Business Services Association looks at how the industry is facing up to the current economic challenges to continue to be a major driver in the UK?s economy

The UK outsourcing industry is a major driver of the UK economy, across every region of the country. It delivers choice, innovation and diversity. These are the talents and the attributes that will help see it through the increasingly tough economic and political environments.

The Business Services Association (BSA), as the industry?s principal representative body, is well placed to argue the case for light regulation and competitive taxation with the government and in Parliament. This work is even more important in the tough economic times arguably than it is in the good times.

In recent weeks, the BSA has played a leading role in the drawing up of the DeAnne Julius review of the Public Service Industry, commissioned by BERR Secretary of State John Hutton, and the publication of the Joint Statement on Access to Skills. We welcomed the findings of the review, which praised the role of the industry in delivering the full range of public sector services. It outlined ways to improve engagements with the private sector and also encouraged a broader role for the industry.

One of the BSA?s principal roles is to champion the benefits of outsourcing across the private and public sectors. The industry plays a crucial role in keeping the economy flexible and dynamic, and the Julius Review provides many new and good reasons why the industry?s role in delivering public services needs to be deepened and broadened. Worryingly, however, the review was given a cool reception by the trade unions and in recent weeks union leaders have renewed their calls for a slowing down of government outsourcing. The BSA is committed to positive and constructive relations with the unions, as evidenced by our participation in the Public Services Forum, but they will not inhibit us from energetically championing the real contribution the industry makes to creating employment, providing skills and training, and improving productivity.

The provision of public services on increasingly limited budgets is at the heart of the political debate and is set to be one of the dominating themes of the General Election, whenever it comes. Competing visions about how this can be done most effectively have been outlined in recent weeks by Gordon Brown and James Purnell for Labour, and Davids Cameron and Willetts for the Conservatives. The stakes are high because at the centre of the debate is how a whole swathe of central and local government services should be delivered, from education, health and defence through to environmental, transport and welfare services. That is why John Hutton has asked DeAnne Julius to conduct a review of the Public Service Industry.

At the moment, all the political parties agree that the private sector has an increasing role to play in delivering public services but there is little consensus on how it should do it. There is no agreement at all between the parties about how the private sector?s involvement in public sector service delivery should be characterised. The government, led by John Hutton and his Special Advisor John Williams, have developed the concept of the Public Service Industry. The Conservatives are deeply sceptical of the notion and talk straightforwardly about outsourcing contracts to the private sector.

The DeAnne Julius report says innovation in the services sector is hard to define and the Department of Business, Enterprise and Regulatory Reform, in partnership with NESTA, will be producing a report that will contribute to a better understanding of service innovation.

Also, developing innovative solutions for the public sector rather than for the private sector is more difficult. In a competitive market a firm can implement the innovative and if successful, reap its benefits. If there is a contract between a private supplier and the public agency the implementation of an innovation may require renegotiation. However, the BSA believes that innovation from the private sector has brought about cost savings for the public and improved standards in quality.

The evidence reviewed in the DeAnne Julius report showed that significant cost savings are generally achieved when services are opened up to competition, and this itself is indicative of innovation. Early experiences show 20% savings from competitive tendering and contracting. The prison sector has experienced cost savings of over 20% (CBI, 2003) and internationally across sectors, savings are found to be 10-30%. In the UK, contracting alternative providers of medical services found comparable results. The BSA/KPMG report on PFI contracts (2007) found that innovation in PFI contracts can be an important driver behind contract performance improvements; new ways of working helped 60% of the UK?s PFI contracts in place at the end of 2006 over-deliver.

However, contractors currently face a number of barriers to bringing innovative solutions to the public sector. Detailed contract specifications based on existing service delivery process means contractors are unable to renegotiate when they want to suggest a new way of delivering services. Many contractors experience that public sector workers are not prepared to accommodate proposed change and prefer to stick to old solutions.

Also, cost-saving innovations are usually preferred over innovation that improves quality. This is particularly the case if quality improvements are hard to measure or not incentivised by the contract. There are a number of solutions that can be used to break down these barriers and deliver improved public services to consumers. Public-private contracts need to be more flexible and allow for procurement teams and contractors to renegotiate initial terms in the contract. There needs to be a change in attitude towards embracing innovation in the public sector. For instance, contractors who work in the health sector have seen the NHS refuse to implement some of their innovative solutions to problems such as cleaning and combating healthcare ? acquired infections. Such behaviour reduces the benefits of contracting out support services.

Reducing bureaucracy in the process of delivering services will also significantly improve dialogue between contractors and the public sector and speed up implementing innovative services. This could include making documentation more consistent across certain sectors and reducing the contractors? obligation to achieve many social and environmental objectives. In the middle of this increasingly heated debate sits the UK outsourcing industry. The industry is the largest in the world, second only in size to the US, and operates across the private as well as the public sector. The public sector part of the industry, of course, is the bit that grabs the headlines and interests politicians and policy makers.

The scale of the industry in the public sector alone is impressive. In 2007/8, its revenues totalled £79bn, generating £45bn in value added and employing over 1.2 million people. Add indirect growth and employment and the PSI contributes £88bn of value added to the GDP and supports 2.3 million jobs. From this period and through the next general election, the BSA and the industry have to negotiate through an increasingly heated and fractious political debate. This task is increased by the very real economic challenges everyone is facing.

So this is an important time for the BSA and the industry ? and it is an exciting one too. There are huge opportunities to explain the positive aspects the industry brings across the private and public sectors. We will continue to work with policy makers and regulators to ensure the environment remains as competitive as possible and take on the critics to promote the value of what we offer.

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