Competing in the Global Economy – The Innovation Challenge

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Fig 11. Proportion of sales from new or improved products, by country and size class, manufacturing sector, 1994 - 1996 60% 50% 40% 30% 20% 10% 0% The data also shows that the share of UK firms introducing novel innovations – those that are new to the firms’ market – is below the EU average (Fig 12). There is evidence that innovation by UK enterprises declined between the two Community Innovation surveys 15 with lower incidences of novel product innovation, product and process innovations and higher incidences of unsuccessful innovations 16 (Fig 13). 11 Germany Ireland European Union Spain Denmark Small 20-49 employees Medium 50 - 249 employees Large 250 plus employees Source: CIS 1994-1996. Italy Austria Sweden Netherlands Finland Fig 12. Proportion of 'novel' innovators by country, manufacturing sector, 1994 - 1996 30 25 20 15 10 5 0 Netherlands Ireland Source: CIS 1994-1996. Denmark Italy Sweden Germany Austria European Union Luxemburg United Kingdom France France United Kingdom Finland Belgium Portugal Spain Belgium Portugal
Fig 13. Output measures of UK innovation in CIS 2, CIS 3 and changes. 40% 35% 30% 25% 20% 15% 10% 5% 0% Indicators of technological innovation inputs Business expenditure on R&D (BERD) and patent data are typically used to measure countries technological performance. The data broadly shows that UK ranks fifth in the G7 in the share of national income invested in R&D 17 and below the average for all OECD countries (Fig 14). BERD intensity declined during the 1990s but stabilised after 1998. Fig 14. Business Enterprise Research and Development as a percentage of GDP Percent 2.5 2 1.5 1 0.5 0 Source: OECD. Novel product innovation Product innovation (goods and services) CIS 2 (Excl SIC 50,52,55) CIS 3 Source: M Frenz, 2002. Process innnovation 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Year Canada France Germany Italy Japan OECD UK US Unsuccessful innovation 15 This effect is more than a statistical sampling effect. Enterprises that completed both the CIS2 and CIS3 questionnaire also reported a lower incidence of innovation in CIS 3 compared to CIS2. 16 Frenz M, A Comparison of the Second and Third UK Community Innovation Survey, Unpublished paper available on dti.gov.uk\tese (2002). 17 Although R&D typically only accounts for 40% of all UK firms spending on innovation. Source: Community Innovation Survey. 12
Page 1 and 2: DTI ECONOMICS PAPER NO. 7 Competing
Page 3 and 4: Foreword The recent DTI strategy sh
Page 5 and 6: Key factors determining UK innovati
Page 7 and 8: Challenges facing the UK • The op
Page 9 and 10: Contents Introduction..............
Page 11 and 12: Part I: Innovation and productivity
Page 13 and 14: Relatively weaker performance has l
Page 15 and 16: UK owned establishments. And simila
Page 17 and 18: Growth accounting studies 8 have be
Page 19: Community Innovation Survey The Com
Page 23 and 24: Fig 16. Share of foreign affiliates
Page 25 and 26: Analysis 25 of patents and other IP
Page 27 and 28: Fig 22. The barriers to lean manufa
Page 29 and 30: • Institutional economics which s
Page 31 and 32: The mapping of the ‘national inno
Page 33 and 34: The UK has for a number of years la
Page 35 and 36: Fig 25. Share of total S & T gradua
Page 37 and 38: • Furthermore, employees77 feel t
Page 39 and 40: Fig 28. Summary indicators of the s
Page 41 and 42: Fig 30. Proportion of enterprises t
Page 43 and 44: But firms appear to base their deci
Page 45 and 46: There is usually no simple way of d
Page 47 and 48: However if the economic models that
Page 49 and 50: Turning to the demand for finance,
Page 51 and 52: Despite lower levels of funding com
Page 53 and 54: Investments in design can help busi
Page 55 and 56: Sources of information for innovati
Page 57 and 58: Fig 42. Services value added as % o
Page 59 and 60: Fig 45. Imports of goods in high-te
Page 61 and 62: Fig 47. Share of labour force who h
Page 63 and 64: Increasing internationalisation Inn
Page 65 and 66: As a result of lock in, and the fac
Page 67 and 68: Illustrative classification of serv
Page 69 and 70: Company Manufactured Service Final
Page 71 and 72:
Industry benefits from access to th
Page 73 and 74:
technologies developed in new appli
Page 75 and 76:
• Procures goods and services wor
Page 77 and 78:
Annex B: Private and Social returns
Page 79 and 80:
On balance it is likely that nation
Page 81 and 82:
Fig 53. Business R&D spend per head
Page 83 and 84:
Fig 56. Novel process innovation by
Page 85 and 86:
Fig 59. Region of enterprises findi
Page 87 and 88:
Some authors have lamented the rela
Page 89 and 90:
A number of schemes, in particular
Page 91 and 92:
• Faraday partnerships aim to add
Page 93 and 94:
References Aghion, P. and Howitt, P
Page 95 and 96:
Council for Excellence in Managemen
Page 97 and 98:
HM Treasury, Small Business Service
Page 99 and 100:
OECD, Technology, Productivity and
Page 101:
Tamkin, P., Hillage, J. and Williso
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