Pre-budget report should support business innovation
-Danny Wootton is UK Innovation Director at Logica. He will participate in a Reuters pre-budget live blog on Dec. 9, at 12 p.m. British time. The opinions expressed are his own. -
The importance of innovation to PLCs and individual companies while the economy is in recession is relatively well understood. Recent research has shown that innovation funding has either remained protected or increased through this period.
However, teams have been pushed to meet their year and half-end sales targets, often at the expense of completing innovation projects and reaping the benefits. This is causing concern that businesses might lose sight of the bigger picture – the long-term advances that will really stimulate economic growth.
I’d like to see Chancellor Alistair Darling appreciate this notion by announcing means to help support and foster innovation in organisations of all sizes in his pre-budget report next week, plus recognising that innovation isn’t just about research and development, it’s about actually realising an economic, social or environment benefit from the idea.
At one end of the scale, the recession has historically seen an influx of new start-ups – evidence that while the realisation of initiatives may have suffered, the strong flow of ideas has continued. It’d be positive to see new steps put in place which support and protect small businesses as they look to grow and become more established – the failure rate of early stage businesses is still way too high.
Darling could even be bold and provide incentives that foster and support collaborative innovation in a way that helps start-ups to flourish. This would stimulate these connections, and will benefit parts of the supply chain in the near future as they help to spread good, new ideas across different areas of business.
On the other side of the coin, research that Logica has conducted with the French business school, INSEAD, has shown that large enterprises are failing to commit in practical terms to their long-term innovation priorities. Indeed, only 28 percent of board members feel that innovation is deeply embedded in their culture.
This is concerning when we think of the British industry’s ability to compete with the likes of China and India in the near future. We would welcome the thinking around this topic and should take this opportunity to re-address the balance by placing financial incentives on large organisations to commit to innovation in real terms in the day to day activities of their business.”