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Rebalancing The Innovation Policy DebateMark Dames1, David
Robson2, Madeline Smith3 and Tom Tumilty4
[email protected]
ABSTRACTInnovation, the successful exploitation of new ideas, is
an important driver of economic
growth. The traditional view of innovation as a pipeline process
based around
commercialising scientific or technological invention has today
been replaced by a
broader understanding that innovation is not necessarily linear
and reaches far beyond the
production of products to be focused on successful market
outcomes. Based on the
authors experience of innovation policy development in Scotland,
this paper concludes
that there needs to be a dramatic change in approach to
innovation policy if Scotland is
to sustain long-term economic growth and competitive
advantage.
1. INTRODUCTIONInnovation is one of the principal drivers of
economic growth, standard of living and competitive
advantage. Successful innovation creates customer value through
new products, services and processes,
giving rise to new markets and economic growth, as well as
contributing to higher productivity, lower
costs, increased profits and employment. Firms that innovate
have higher global market shares, higher
growth rates, higher profitability and higher market valuations.
Innovation also generates spill-over and
cascading effects as competing firms absorb new innovations. As
innovations are adopted and diffused,
the knowledge stock of the nation accumulates, providing the
foundation for market growth, long-term
wealth creation and higher living standards.
The traditional conception of innovation as a linear process
from research to invention, from
engineering to product, and from manufacturing to marketing is
now outdated. That model would
suggest that the method for increasing innovation by increasing
R&D inputs (technology push) would
be sufficient. It is now widely accepted that the emphasis on
technology-based innovation and R&D is
necessary but not sufficient for success5. New knowledge can be
an important ingredient for innovationbut it does not necessarily
lead to innovation. Work undertaken by NESTA demonstrates that
innovation
can result from a wide range of situation not all involving
R&D [ref(1)]. What seems to be critical is
effective diffusion of knowledge, longer term
engagement/interaction between a wide range of players
in the innovation system and a strong enterprise culture and
capacity.
Government policy across Europe is currently being adapted to
recognise innovation as a broadly spread
capacity that is about successful market outcomes and the
process by which those outcomes are generated.
Here, innovation applies across the economy, including within
the service sector and public services6, and
1Innovation and Enabling Technologies, Scottish Government,
Business, Enterprise and Energy Directorate, 6 Cadogan St, Glasgow
G2 6AT.
Seconded from British Telecommunications plc, 81 Newgate Street
London EC1A 7AJ.
2Scottish Government, Business, Enterprise and Energy
Directorate, 6 Cadogan St, Glasgow G2 6AT. Seconded from Scottish
Enterprise.
3Head of Innovation, EKOS Ltd, St. Georges Studios, 93-97 St.
George's Road, Glasgow G3 6JA.
4Head of Innovation and Enabling Technologies, Scottish
Government, Business, Enterprise and Energy Directorate, 6 Cadogan
St, Glasgow G2 6AT.
5The linear Science/R&D-push model has been losing support
because it is not able to deal satisfactorily with the complexity
in the innovation
system. The linear model is rooted in a very traditional and
rational understanding of scientific research utilisation which
assumes a simple model of
research producers on the one hand and research users on the
other. It presupposes that knowledge created by the producers can
be parcelled and
pushed out to the relevant users and that users know what
knowledge they need to secure to create innovation in their
businesses and so pull this from
the research base. As understanding of research utilisation and
how innovation systems work has developed, it is clear that the
push-pull model does
not satisfactorily describe the complex and contextually
contingent way in which knowledge is created and used. The concept
of knowledge exchange
is more helpful than the linear science-push model but even it
is not fully satisfactory as a model for understanding the
innovation process.
6The EU has acknowledged this shift and is working towards
redressing the balance. A recent communication from the Commission
to the Council
of Ministers and the European Parliament showed the extent to
which this is changing. It acknowledged that existing EU or
national innovation
policy instruments do not adequately take into account the
overall importance and specific needs of the services sector, and
they regularly fail to
acknowledge the need for innovation also in public sector
services. It stated that there is a need to take a comprehensive
look at policies relevant
for services and reassess their focus from the viewpoint of
service-related and non-technological innovation.
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