The recent Global Innovation Index provided its annual walk through the innovation landscape to explore which countries are doing best. While the UK remains in the top ten, concerns persist, not least around the various mobility issues involved in the turgid Brexit negotiations.
There seems a tendency for most policy related discussions on innovation to focus exclusively on the generation of innovations rather than their diffusion throughout society, but new research from Cambridge University highlights the importance of this, especially if the whole economy is to benefit.
The paper suggests that diffusion is crucial if the regional inequalities that blight the UK are to be addressed. To do so requires new approaches and metrics to develop the networks needed to support local economies. These networks could be especially robust if they have ‘anchors’ such as local hospitals or universities who provide vital resilience and expertise as well as innovation generation.
Productivity gap
The authors highlight the stark productivity gap across the UK economy, with the gap between the best performers and the laggards growing ever more stark, especially in relation to other G7 countries. This is especially so in the services sector, which drives the British economy.
They argue that diffusion of innovation has been key to economic success since the Industrial Revolution. They intuitively highlight that the parts of the economy that will use an innovation is much larger than the parts that generate innovations, with examples ranging from the steam engine to the mobile phone amply illustrating their point.
They argue however that government attention has been wrongly focused purely on the generation side of the equation, whether in terms of more R&D or better STEM education. While things like this, and encouraging the commercialization of science, are important, they become politically convenient to attract an undue amount of attention because it’s easier to understand, very uncontroversial and the metrics for success are clear.
It’s an understandable approach, but a wrong one, as it conflates technology with innovation, with policies often neglecting the exploitation side of the equation. This is compounded by the fact that so much energy is focused on creation in a relatively small number of industries and firms, with many of the tech giants of today employing a relatively low number of people.
Key to shifting attention is the creation of better metrics for measuring diffusion of innovation. The authors argue for metrics that focus on long-term impact rather than a more narrow focus on hard economic indicators. These could involve behavioral change and innovation trajectories that better showcase the long-term development of an innovation and the transformation it brings to society.
Such an approach would require politicians to look beyond the short-term but would, the authors argue, provide a better boost to the long-term prosperity of the entire country.
