Several government studies suggest many SMEs are engaged in innovation – but is this enough to fill the so-called gap and guarantee the future prosperity of UK business? David Adams examines the evidence.It can sometimes be hard to see what it is about a product or service labelled innovative that is anything more than just a new iteration of an existing prospect. In fact, defining innovation in the simplest terms as a “new method, idea or product” is perhaps what most people think of when the concept is mentioned. But innovation is more than just a question of semantics in business.
When seen as the disruption of established routines and ways of thinking, or as introducing people to new behaviours and products through invention or by leveraging social and technological situations, true innovation is a component vital to UK growth. This is especially true as the future of traditional industries such as steel and long-standing retailers hangs in the balance.
The government’s innovation agency Innovate UK aims to develop small high-growth firms into mid-sized businesses strong on export and productivity – it claims to have helped add £7.5bn and 35,000 jobs to the economy since 2007. However, the Office of National Statistics’s (ONS) latest Index of Production for the UK in February noted a 0.5% decline in output over the same month in 2015. The fall is most marked in manufacturing – productivity decreased in 10 out of 13 tracked manufacturing sub-sectors.
This is an extract from the Finance & Management Magazine, Issue 244, June 2016, p.16-19