Innovation & Business Growth
Globalisation brings both opportunities and challenges. To share in global growth, the UK has to compete effectively. This will depend on rapid technological innovation, effective strategic management of knowledge, and a clear focus on higher value added goods, services and industries.
The world also faces major issues – such as climate change, limited natural resources, and changing age demographics. The need for transition to a more sustainable and balanced economy is creating global market opportunities for entirely new solutions and business models.
Historically UK business investment in innovation has tended to lag behind the curve and at a lower level than is desirable for strong growth. There are risks and uncertainties in investing in early stage technologies, and companies can struggle to find finance or partners. Emerging technologies can disrupt business models, creating opportunities - but also potential threats. Government action can also create both opportunity and disruption. All this takes place in an innovation landscape which for business can be complex, fragmented and difficult to navigate.
Our goal is to help SME’s address these challenges; accelerating economic growth by stimulating and supporting business-led innovation.
Research shows that two-thirds of UK private sector productivity growth between 2000 and 2007 was the result of innovation, and a separate worldwide study confirmed that innovation is central to growth in developed countries.
Innovation is also vital for competition. In a global market, the competitive advantage of UK businesses will depend on effectively managing the knowledge we have, rapidly commercialising technologies and focusing clearly on higher value-added goods, services, and industries. A country rich in innovation will gain a decisive advantage in both trade and inward investment.
The world faces major issues which must be addressed, such as climate change, limited natural resources, and changing age demographics. The need for transition to a more sustainable
economy is creating global market opportunities for entirely new solutions. The countries which can innovate most rapidly will be most likely to benefit from these shifts in markets.
As the Government’s Growth Review has made clear, strong, sustainable and balanced growth is a central government priority for the coming years. The task of the UK Government is to work with business and other partners to stimulate the business-led innovation which will accelerate this growth.
The innovation challenge
The UK is in a strong position. Our universities and research institutes produce world-leading research and we have a track record of technology commercialisation. In many industrial sectors we are global leaders, ranking second in aerospace and sixth in manufacturing generally. We are frontrunners in finance, advertising and the creative industries. We have a wealth of entrepreneurial small businesses. The country is full of potential.
However, innovation is not easy. It does not happen spontaneously. There are many reasons for this:
- In new and emerging markets the timing and levels of return on investment are uncertain; it can be hard to build a business case. Small companies especially, although major contributors to growth, can struggle to find finance for their ideas, or partners to bring their concepts to market.
- New technology in a market can disrupt existing supply chains and business models, requiring new partnerships and simultaneous innovation at multiple points; this is difficult for individual businesses, particularly smaller firms.
- Longer-term trends and business opportunities, such as those generated by the major challenges facing society, are not universally apparent.
- Government has not yet fully realised the full potential of policy, standardisation, regulation and procurement to encourage innovation.
- The help available to businesses needing to innovate is often fragmented and complex.
To accelerate innovation, these barriers must be tackled.
Building on experience
Our 25 years of experience in this field has confirmed several key principles. The first is that global challenges can drive innovation. We place a strong emphasis on encouraging challenge-led innovation, supported by the technology development that will enable new solutions to be found. The second principle is collaboration. To tackle the barriers to innovation, businesses need to work with supply chain partners, universities and research institutes, government departments, funders and investors - sharing perspectives and working towards common goals. By bringing organisations and individuals together, and adding support and investment, we can make things happen which otherwise would not.