Measuring innovation

January 6, 2010

The measurement of innovation is a difficult and challenging task, but having reliable metrics of innovation is important for research and innovation policy. There are two principal reasons why policy makers need this: first to provide an evidence base for the targeting of public sector interventions to stimulate innovation; and, second to assess the impact of those interventions.

In the UK the Government, in its 2008 Innovation Nation whitepaper, challenged the National Endowment for Science, Technology and the Arts (NESTA) to produce an innovation index to address this need. A pilot version of the index was published (together with three supporting studies) at the end of November 2009. These reports represent interim outputs in the 2-year project to produce the index, and comments are invited on the pilot index which will be refined in the next year.

NESTA are to be congratulated on the progress they have made with the index in a comparatively short space of time. The index looks at three aspects of the ‘innovation ecosystem’:

  • Component 1: A measure of how much the UK invests in innovation and the economic impact of this
  • Component 2: A measure of innovation at firm level
  • Component 3: An assessment of the wider conditions for innovation in the UK

This seems like comprehensive coverage, and, as you would expect from NESTA, covers innovation across the economy, not just those sectors where ‘traditional’ innovation happens. But this focus away from traditional sectors has led to an underplaying of the importance of research, especially public-sector funded research.

Research features in Component 1, and it is concluded that R&D only represents only 11% of the national investment in innovation. On NESTA’s overall measure of innovation investment the UK fares better in international comparisons that those based on R&D investment alone, and, according to NESTA’s analysis, investment in R&D accounts for a very small proportion of growth (see Figure 7 in the summary report although it is acknowledged that this may be an underestimate). The real problem here is that the R&D investment figures used are only those made by the private sector itself (the so-called BERD figure), where I think the public investment in R&D (some £10 million per annum) should also be included. There is evidence that this investment complements rather than replaces private R&D investment and much of the private R&D investment will build upon (and only happen because of) public sector spend. This relates to knowledge generated, but perhaps even more so to expertise. It is often through expertise built on long periods of public funded research that business funded R&D can happen at all.

Which brings me to my second point. Public sector R&D spend does feature in Component 3, where it is one of the aspects of the wider environment that favours innovation. However, as presented in the index public research spend appears as one of the least important with only 46% of firms reporting this factor as fairly or very important (Figure 12 of the summary report). This figure may be an underestimate, as it is based on a survey of only specific sectors of UK business (this supplementary report has the details). But even if this figure is correct it still misses something. The most important ‘wider condition’ reported in Component 3 is ‘Availability of talented people’, and many of those ‘talented people’ are only available because of a vibrant, healthy research base which depends strongly on public investment. Without that investment many of these people would either leave the UK (or not be attracted there in the first place), or would opt for other career paths where their impact on innovation would be lower.

So, innovation really is difficult to measure, but it is vitally important that the measures used reflect the complexities of the process of innovation. Only then can we make the best policy interventions for stimulating innovation.

Emerging technology debates

January 4, 2010

What are the new technologies that are going to shape the coming decade? This is a question addressed by Andrew Maynard in a recent post on 2020Science. In my opinion Andrew has come up with a pretty sensible list, but, as I commented on his blog, for me the real issue is whether society has the means to have a robust and realistic debate about the deployment of these and other new and emerging technologies.

The record of the past isn’t encouraging. On the one hand we have spent 200 years driving technology based on fossil fuels while only recently beginning to understand the negative consequences of climate change; on the other hand many would see the debate about genetically modified crops as having limited the deployment of a potentially useful technology. We need to get better at this, so we can reap the benefits of technological innovation while avoiding or mitigating the risks.

Ultimately, I think this comes down to democratizing the decision-making about new technologies, but while that is easy to say, in practice it is much harder to achieve. We know what hasn’t worked in the past:

  • One-way transfer of information. The ‘Public Understanding of Science’ model is widely held to be ineffective and this is supported by considerable evidence. Having said this, the approach is still sometimes used, albeit in a veiled way, both within the scientific and technical communities and in Government.
  • Dialogue without influence. This is how I would characterise the present situation. Over the last decade there has been a real effort to engage society with the issues around new technological innovations but these often lead to limited impact on either research agendas or the trajectory of technology development. Take nanotechnology for example. Although in some senses this is a success story, with many examples of excellent public engagement activities, little has changed and the products of nanotechnology continue to be deployed. In many cases it is not even possible to identify whether products contain nano-materials in order for consumers to make informed choices. Is this really the result of informed debate?

So what is the solution? What can be done to help society make choices about technological innovation? I would offer up a few thoughts:

  • We need to be clear about the underlying principles and assumptions on which technological innovation is based. In my view the fundamental assumption is that the Market drives technological innovation. Under this assumption any technology that someone believes will make a profit will be developed; the role of Government is only to protect the safety of citizens. Whether you agree with this framework or not, we need to be clear that these are the rules of the game, and to change them we would need to raise the debate well above the level of individual technologies.
  • We need to develop and nurture trusted sources of information. Information about benefits and risks is at the heart of any debate about the deployment of new technologies. But often those that hold that information – scientists, businesses or NGOs – have, or are perceived to have, strong vested interests. Society needs some way of interrogating and weighing up the information to make balanced assessments. Of course, some would say this is a role fo Government, but for many the closeness of Government to business and the emphasis on economic objectives means that there is also a vested interest here too.
  • We need citizens who understand and interact with the process of research as well as its content. I think that the communication of science to the general public is lacking in the area of the process of research. In order to make balanced judgements about risks and benefits people need to not only engage with the ‘answers’ that research provides but also debate the robustness of those answers. In turn this means that citizens should engage with the way science works, the strengths and weaknesses of peer review, the interpretation of data and statistics and the nature of hypothesis testing. I don’t believe these and related issue are covered enough in our efforts to engage society with science and technology.

And finally, debates about emerging technologies need to happen on a global stage if they are going to make a difference. This is certainly a challenging agenda, but one that we must get right.

Earlier this week I attended two events aimed at celebrating UK research and innovation. The first was the Pioneers 09 event organised by the EPSRC to showcase a selection of their leading edge research; the second was the Innovator 09 awards, a Yorkshire Forward event to celebrate and reward innovative, knowledge-led enterprises in Yorkshire. These events taken together (and separately) demonstrated to me the real strength and vibrancy in the UK research base, and the amazing ways in which that strength is being transferred into practice for real societal benefits. There is often the sense that we need to do more – more research, more knowledge exchange, more risk-taking entrepreneurial activity. But we shouldn’t loose sight of the really strong baseline on which we are building.

Part of the strength of the UK research base is its diversity. These two events demonstrated research and knowledge exchange of the highest quality going on not only in universities, but also in other research institutions and in business. It was particularly pleasing to see the Innovator 09 award for knowledge exploitation (which Research Councils UK supported) going to the Central Science Laboratory, one of the UK’s many top flight public sector research institutes. A key policy challenge for the future is ensuring that we have a research environment that nurtures and support a diverse mix of institutions.

The events were bracketed by two excellent talks which, as it happened, had a common theme. Pioneers 09 was opened by Richard Noble, developer of ultrafast cars and breaker of land-speed records. The after dinner speaker at Innovator 09 was business guru Jonas Ridderstrale. Both, in rather contrasting ways, talked about the importance of ideas, as opposed to institutions, for inspiring and motivating people. For Noble it is the idea of breaking records and over-coming seemingly insurmountable engineering challenges that inspires him, and has a real role to play in inspiring the next generation of scientists and engineers. Ridderstrale made a convincing case that to be successful and innovative businesses need to sell ideas and much as they need to sell products and services.

Ridderstrale also made the interesting point that exciting ideas tend to encourage debate and provoke strong emotional reactions. People will either love them or hate them. This had a strong resonance for me professionally. Research Councils UK, as the strategic partnership of the seven research councils, is an idea not an institution. Perhaps I should be less surprised about the strong reactions the idea of RCUK sometimes generates.

Innovation planet

October 24, 2008

This week’s Nature has an interesting essay by David Edgerton as part of their series on innovation (unfortunately you need a subscription to access the full article. but there is an editor’s summary available for free). The basic thrust of the essay is that national investment in research is not related to the national capacity for innovation, because the knowledge generated by publicly funded research is available globally. The output of R&D is the raw material of innovation, but can be relatively easily sourced globally rather than locally. Fairly obvious stuff really, but, as the essay points out, this is not always reflected in innovation policies. For example, Innovation Nation, the UK Government’s innovation policy, promises that the Government will “…maintain the growing investment in UK science…” as a key part of the strategy to boost national innovation.

Of course, there is an obvious risk here. If Governments across the globe all decide to rely on importing knowledge rather than generating it at home, the globally supply would soon dry up. But this ignores the real value of locally carried out R&D; the skilled people generated by a vibrant research environment. Although people can also move around the world, the barriers to movement are much higher than for knowledge, so a country that wants to be innovative needs to make sure that is has a good supply of people with the right skills. The way in which dynamic and innovative science parks grow up around world leading research universities provides compelling evidence of the importance of appropriately skilled people ‘on the ground’.

On this basis, the real value of national investment in research is the people involved, not the knowledge generated. This has a profound implication for research policy. Research funding needs to be targeted at generating people with the right skills, rather than at highly directed innovation targets. If public research is targeted, then better to address public policy challenges where the most important impacts are on national policy-making rather than innovation. And measuring the value of public research investment would be better focussed on human rather than financial capital.

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