In what can be seen as a series of moves to drive innovation in the UK, the government recently issued an announcement recommending the Competition and Markets Authority (CMA) focuses more on encouraging business innovation and disruption.
Government concern over innovation stems from the UK’s chronically low productivity, which many economists see as the biggest long-term threat to UK growth and competitiveness. Analysts expected productivity to increase as the economy recovered from the 2008 financial crisis.
However, while economic expansion has returned and remained consistent, our productivity remains poor – especially compared to rival developed nations around the world. Britain’s GDP per hour worked is lower now than in 2007. American workers’ output per hour is 9% higher, while France has increased more than 2% during the same period of time.
Add to this the fact UK research funding fell this year to below 0.5% of GDP – the lowest of all G8 nations – and the picture is pretty bleak.
More effective innovation can certainly reverse this trend. We identify a number of ways UK firms can close the gap and create a more innovative economy:
Create a culture of innovation
Successful innovation relies on the participation of a workforce as a whole, not just a handful of senior decision makers. For this to work, however, employees need the confidence and permission to innovate as part of their day-to-day jobs. Many employees worry they’ll get in trouble for spending time thinking about things outside of their immediate job spec.
Google famously allows staff to spend 20% of their time working on innovative projects. Whether the percentage needs to be that high, or defined at all, is up for debate, however, setting guidelines or encouraging people to set aside specific times for innovation, can give employees the confidence to get creative.
Once the enthusiasm from your employees is there, you need an effective way to harness their creativity and from this surface the best, actionable ideas. Depending on how many people you involve in your innovation programme, you could end up with thousands of ideas to sift through. Technology can provide the solution to this problem.
For example, one way of coping is to deploy crowdsourcing or innovation software which allows your employees (and even partners and customers) to submit ideas that address a specific question or challenge. As well as collecting responses, the process of identifying the most suitable ideas to progress can also be thrown to the crowd through social algorithms such as voting and commenting.
Additionally, functions such as the Predictions module of Mindjet’s Spigit innovation platform can enable the crowd to estimate how much an idea will cost to implement, its potential ROI, as well as how long it will take to bring to market – all adding extra insight to the evaluation process and prioritising ideas for development.
Idea to impact
Identifying the best ideas is one thing, but helping them become reality poses another major challenge, especially if focus is drawn towards the day-to-day running of the business. While using the breadth of a workforce is the best way to generate ideas, tasking a handful of individuals with progressing them is often the most effective next step.
One method of doing this is to set up a dedicated innovation lab or incubator, focusing 100% on the development of ideas selected for progression. Labs can be either staffed internally, or be formed through external partnerships with start-ups or specialists in that particular area.
For example, a utilities company could avoid the risk of developing a new digital application that never makes it to market due to its lack of experience in this field, by letting an energy tech start-up take the reins.
We’re starting to see this type of collaborative innovation in a number of sectors. The Emerging Payments Association (EPA), for example, recently launched the Catalyst, a new incubator for early stage payments companies.
Consumer goods giant Unilever has its ‘Unilever Foundry’ lab to provide an environment for external collaboration and product development. London has seen an increase in the numbers of these incubators, used by businesses such as UBS which recently opened a lab at the Canary Wharf Group’s technology accelerator space, Level 39.
Taking the lead
The government’s latest announcement to help drive innovation and shake-up existing industries must be seen as a good thing. However, a lot of businesses don’t yet have the know-how to get started. Rallying calls from the Cabinet Office are all well and good, but what UK firms need is clearer advice on how to go about improving productivity.
The government can certainly play a greater part here, via advisory bodies, or investing in promising schemes. Coupled with the creative drive of individual fast-growth firms, the UK can become an innovation powerhouse on the global stage.
Matt Chapman is Vice President and Head of Innovation Services at Mindjet.