NESTA's first Innovation Index finds innovation driving private sector growth.
Two thirds of private sector productivity growth between 2000 and 2007 was driven by innovation, claims a new report by the National Endowment for Science, Technology and the Arts (NESTA).
The findings are revealed in NESTA?s first annual Innovation Index, which it claims is the most ambitious attempt yet to measure the contribution of innovation to the economic growth in the UK.
The Index has found a direct link between the amount of investment in innovation by companies and productivity. UK businesses invested £133bn in innovation in 2007 (the most recent year covered by the Index), representing 14% of private sector output.
Two-thirds of UK private sector productivity, which represents 1.8 percentage points of productivity growth per year between 2000 and 2007, was a result of innovation. NESTA says this compares favourably with the best data available for countries like France and Germany, and is similar to US levels.
?For people who care about the prospects for our economy, this Index will be as important as the Consumer Price Index,? says Jonathan Kestenbaum, Chief Executive of NESTA. ?The Innovation Index measures arguably the most important driver of growth.?
Chaired by Lord David Currie, the Innovation Index has been designed with leading innovation experts, practitioners, policymakers and economists. It measures innovation ?in the round?, making it broader than the current measure of R&D, which represents only 11% of investment in innovation in 2007. It includes factors such as product design, training in new skills, organisational innovation, developing new customer offerings and brands, and copyright. NESTA has referred to this as ?hidden innovation? which is as important to productivity as R&D.
Added the 27 November 2009 in category Innovation News