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2 February 2018 | By Ruth McKernon Community

British firms need to rethink innovation

The economy depends on getting more businesses to adopt new ideas, says Innovate UK’s Ruth McKernan

Doing something different, something that no-one else is doing is a risk. What if it doesn’t work? What if the returns don’t justify the investment? What if I lose so much money I have to lay people off?

But the pace of change generated by technology and new business practices means that a failure to adapt is likely to put a ‘Best Before’ date on many businesses. In their recent report, From ostriches to magpies, the CBI highlighted the importance of getting more firms to adopt tried and tested technologies faster. It was right to do so.

At Innovate UK, we support the best of British innovative businesses. The first movers, the risk takers, the entrepreneurs. Definitely not ostriches with their head stuck in the sand.

The support that we give to leading businesses to help them develop new products and services is critical to our future prosperity. But if those new ideas aren’t adopted more broadly by businesses, if we don’t diffuse that innovation, then the UK is destined to underperform.

Without improvements in diffusion within the UK, we agree with the CBI that we risk over-representation of ostrich businesses compared with the magpies of other nations. This is a vision of the future I certainly don’t want to see, particularly as the significant investments the government is making through the Industrial Strategy Challenge Fund are specifically aimed at solving problems where the UK has the potential to be a global leader.

Our work helps to encourage the vital diffusion of innovation, both from our fantastic research base to businesses, and also from those risk taking, first mover businesses to others; both types of diffusion are crucial if we are to get the leap in productivity we need.

Knowledge transfer

Diffusion of the very latest thinking from our research base into the business environment is supported by our Knowledge Transfer Partnerships. These partnerships transfer a graduate or more senior researcher into a business for between 12 and 36 months to deliver an innovation project identified by the business. This is a three-way partnership between the business, the university and the academic in which all benefit.

The CBI noted the value of KTPs in their From ostrich to magpie report, and I’m delighted that we will be substantially increasing the scheme in 2017/18, thanks to an additional £30m announced in the Industrial Strategy. I’m hopeful that this extra funding will drive greater access to the UK's world-class knowledge.

By promoting the businesses that Innovate UK supports, we also help to drive the broader uptake of innovation across the business community. Whether that’s through showcasing what they can do through our business success stories, at events such as this year’s International Business Festival, or helping them find overseas markets through our entrepreneur missions programme.

Fuelling a broader innovation culture

However, these programmes focus on one individual project driven by a highly motivated team. If we really are to tackle our productivity problem, we need to create a critical mass of businesses that have the skills and confidence to adopt those innovations so they are as efficient as they can be. This is what the Productivity Leadership Group’s #BetheBusiness campaign is trying to achieve. 

To do this, we need to see businesses adapt and improve the way they operate, so they can maximise their productivity within their own unique environment.

To make sure that these businesses are willing and able to adapt, making sure that we create strong businesses that are able to survive, we will need to seed a change of mindset, and equip businesses with the right skills and information so they can spot the latest movement and follow suit.

To start making that happen, we have our Innovate 2 Succeed programme, delivered by the Enterprise Europe Network, which provides fully-funded, one-to-one support to help SMEs make a commercial success of their innovations.

Businesses that have been successful in securing Innovate UK funding are signed up to this programme and it is already having some great successes. For example, it helped family owned Bradshaw Electric vehicles from Peterborough take a leaner and more innovative approach to sales and marketing and move into new markets. It also helped Nims crisps from Kent, which saw sales of its healthy, air-dried fruit and vegetable crisps soar by 70 per cent in 2017 after one-to-one coaching through EEN’s Innovate 2 Succeed programme.  

But we are determined to do more. Starting later this year, Innovate UK will formally support the #BetheBusiness campaign to raise productivity and business performance. All businesses that apply for support from Innovate UK will also be encouraged to register with #bethebusiness to access tools and advice to help their business perform at its best. We are also supporting development of a tool to help answer the question ‘How innovative is my business?’ that is just starting to work with SMEs to test their ideas.

I want us all to play a significant role in shifting how British firms approach innovation. Not just thinking of it as a new product or service, but including a constant focus on process improvement, right across the economy, through supply chains, between sectors and all over the country.

We must create a culture of innovation in all British businesses so that, whatever their sector, they are confident enough to be constantly looking around for best practice to emulate, learn from it and adapt and improve their own business so that they are able to fly higher. That is the real benefit of diffusion. 

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