Innovation has become an every-day ‘Barnum’ word in today’s
workplace, if PR is to be believed everybody seems to be doing it - and doing
it well, but how true is this? The
fruits of innovation are easy to identify, like improving consumer goods and
medical treatments but, at the same time, there is a lack of general understanding
about how people engage with the process of innovation. Misconceptions exist about innovation
and invention, and what innovation activity is.
Moreover, the value of innovation (both in monetary and organisational
terms) and the management factors that enable innovation are also not generally
understood.
What is Innovation? - Isn’t it another word for inventing?
The good news is
that you don’t need to invent a new vacuum cleaner to be innovative; a broad definition
of innovation is ‘the successful
exploitation of new ideas’. The innovation
doesn’t have to be a thing, it can be a new way of organising or doing
things. The National Endowment for
Science, Technology and the Arts (NESTA)
sees innovation encompassing the “exploitation of technologies, organisational innovation
and innovation in services”[1]
Can a Business Case be made for Innovation?
Innovation has undoubted commercial value. Around two thirds (63%) of UK labour
productivity growth since 2000 has been gained through workplace innovation[2]. Moreover, in firms profit-margin is the most
common business driver of innovation, followed by sales/turnover growth[3].
NESTA reported that innovating firms in the UK tend to grow more
rapidly, and averaged four times the sales growth of their peers. Recession resilient high-growth companies exemplify this effect, these firms average 20% or
more annual growth and innovation has been identified as the driver of their growth[4].
How widespread is Innovation in the UK?
The UK Innovation
study 2009, carried out by the BIS, estimated that in the period 2006-08 around
58 per cent of UK enterprises were ‘innovation active’, a fall from 63% in the
previous study based on 2007. Just
under a quarter (23.9%) of the surveyed firms had undertaken product innovation
(over 40% of these new-to-market goods), and one in eight firms (12.6%) process
innovation[5].
The survey also looked at innovation focusing on strategy,
management methods, organisational structure and marketing. The BIS reported that around a quarter
(26.5%) of all surveyed firms had undertaken these activities during 2008,
amongst medium and large firms this rose to nearly 40%[6].
Learning and Innovation Management
Innovation skills and experience is an increasingly important
part of life-long learning and an individual will make use of these throughout
their career. However, the UK compares
poorly against other leading nations in terms of workforce innovation
capability. An IMD survey rated the UK joint
bottom of nine nations in terms of ‘Extent of staff training’ and within the
bottom three for ‘Employee’s ICT skills’[7]. Individual and organisational learning is a
central pillar of effective innovation and organisations need to demonstrate
that they “are always willing to learn”[8].
[1] (p6) Hidden Innovation, NESTA, June 2007
[2]
(p10) 2010 Annual Innovation Report,
BIS and NESTA, 2011
[3]
(p6) UK Innovation Survey 2009, BIS, December 2010
[4] (p3) The Vital 6%, NESTA,
October 2009
[5]
(p7-8) UK Innovation Survey 2009, BIS, December 2010
[6]
(p23) UK Innovation Survey 2009, BIS, December 2010
[7]
(p74-79) The Wider Conditions for Innovation in the UK, NESTA, November 2009
[8]
(p6) Excellence in Service
Innovation, CBI, 2008
