How new approaches to innovation can help deliver growth and a better society

As cuts to public expenditure are ramping up, demand for public services and economic growth remains as high as ever. Pressure to deliver more for less is resulting in an increased focus on innovation – in the way that public services and the economy are provided, supported and managed.

On 25 November 2010 the Centre for Science and Policy and the UK Innovation Research Centre (UK-IRC) met with senior policy makers from a number of government departments: MoD, DH , CLG BIS, DECC, DfT, and the Home Office. The meeting was held at the Institute for Government and chaired by Professor Frank Kelly.

The discussion was kickstarted by three informative and engaging presentations from:

• Professor Alan Hughes on the narrowness and ineffectiveness of market failure based policies and the opportunities for use of system based thinking for policy and strategy.
• David Connell on three policy myths – that innovation is (1) all about university IP; (2) about partnerships between universities and business; and (3) that it is all about venture capital – and the positive role that government can play through procurement.
• Karen Livingstone on how the Health Service has a role as a lead customer and can use open and discursive procurement to encourage innovation.

The following discussion traversed a range of topics: dialogue with supply chains, scalability, diffusion, adoption, timing and time constraints, intelligent customers, lead customers, enacting change, open versus closed systems, competitive pressures, and architecture and modularisation.

Over dinner, Professor Ben Martin brought a lot of these issues together by giving an historical perspective on research in innovation policy, pointing out a lot has been learned and forgotten about innovation in the last 50 years. And Professor Brian Collins stoked debate by noting the mix of relationships in innovation systems, the overlap between public and private sectors and the need for lead customers to describe their problems rather than try to solve them.

Throughout the workshop, the importance of procurement and how it is managed was a key theme, with methods such as prizes and the provision of lead customers being held up as good ways of adapting the system of procurement. The timing of diffusion and adoption were also noted as being extremely important in determining the value of potential technologies.
It was argued that systems lose all capacity for innovation when incentives are structured to encourage people to focus on the bottom line: this is true for both the private and public sectors. The incentives for these systems are an emergent property and as such need analysis from a systems-failure perspective. Both public and private sectors seem to face the same problems in procurement, investment and innovation – it is only the rewards and incentives that differ between them.

The success of the event was summed up by Professor Martin, who commented that it reminded him of the Lunar Society of Birmingham, which, 200 years ago, found "practical application for the scientific discoveries of [... its] members which [...] would have broad social value" (Schofield, 1966 [http://www.jstor.org/stable/531065]). Through CSaP and UK-IRC, this event brought together those with a detailed understanding of innovation with those who could use their knowledge to effect change.