Is innovation policy in the UK really so technocentric that it discounts other sources of new ideas?
It is nice when the rest of the world catches up with you. Well, it would be if everyone really had been underestimating the value of forms of innovation that do not hinge on science and technology.
A new report from the National Endowment for Science, Technology & the Arts (NESTA) kicks off with the assertion that "traditional indicators of innovation performance are heavily biased toward investments in scientific and technological invention and so do not capture innovation in those sectors that represent the vast majority of the UK economy".
Maybe NESTA mixes with the wrong people, but for years now the UK's financial sector, to pick just one example, has long been recognised as a major source of innovation. Actually, the press release that announced the new report says as much. "In the UK, financial services, retail, consultancy and the public sector make up 94% of the economy but [do] not generate high numbers of patents or operate traditional R&D departments." (The brackets denote a typo in their original – let's hope we have got it right.)
One of the problems, it seems, is the way in which people look at, and account for, R&D. It is perfectly possible for, say, a media organisation to do "R&D" on new publications. The letters do, after all, stand for "research" and "development", neither of which are exclusively related to science and technology.
Jonathan Kestenbaum, the CEO of NESTA is certainly on the mark when he writes in his Foreword: "We need a deeper understanding of innovation based on where it actually happens, and we need
to develop our approach to innovation policy based on this understanding."
to develop our approach to innovation policy based on this understanding."
The rest of their report, which they have given the titled The Innovation Gap (pdf file here), is pretty straightforward, and hardly original.
"We need a textured innovation policy that recognises one size does not fit all sectors. The recipe in the pharmaceuticals sector will not work for financial services or for public services. This leads to a requirement for us to gather sounder intelligence and analysis of the sources and contribution of innovation across different economic sectors. We need a much better understanding of the dynamics driving innovation in areas such as the City of London, popular music and construction."
But where is the evidence that we don't have this already?
The report does a pretty good job of reviewing the recent analyses of R&D and innovation, and goes through a bunch of "innovation indicators" and shows that the UK does badly on many. The message seems to be that if policy strives to improve the UK's position on these indicators, then it will miss the bits of innovation that they do not capture. So, the argument goes, change the indicators, and get more data on the bits they currently miss.
There's nothing really to argue about here, but before rushing off and investing lots of time, effort and money into yet another round of introspection, followers of the innovation scene might care to look back to 1994. One of the documents put out during the easily overlooked John Major administration had the title "Competitiveness – Helping Business To Win". This pretty well summed up the issue:
"Innovation is about the successful exploitation of all new ideas, whether they are major cultural, organisational or technological changes, or incremental improvements to keep one step ahead. Scientific and technological advances can be an important element of innovation, but developments across the whole range of industrial and commercial activities, for example design and marketing are also important. These are challenges for all companies, not just those in manufacturing."
The report then went on to draw attention to the original foresight programme which, surprise surprise, included all sorts of areas and economic activities where the traditional "technocentric" view of innovation did not prevail. Unfortunately, these reports came out in the pre-PDF days, not to mention being an output from a Conservative, almost guaranteeing their removal from the official memory.
Maybe NESTA could get hold of a set of the many reports from Foresight and see what lessons they might contain for today.
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