Capitalising on innovation

Government is to spend £1bn over the next three years on supporting the commercial exploitation of new technologies

Despite the turmoil on the financial markets, there has never been a better time for technology innovation in the UK, according to experts, and firms with IT teams capable of delivering new business models and services should reap the rewards.

That is the view of Allyson Reed, director of strategy and communications at the Department for Innovation, Universities and Skills’ Technology Strategy Board, who insisted that growing demand for innovative products and services was making IT professionals an increasingly influential component of the corporate hierarchy.

In her keynote address at the UK Technology Innovation and Growth Forum this month, Reed said that recruitment companies were reporting growing demand for executives who could display a combination of “technology and marketing savvy” and were capable of delivering the level of innovation that companies now demand. Reed cited research indicating that 64 per cent of executives now feel their companies are more innovative than this time last year, a figure that has climbed from just 40 per cent in 2001.

She also noted that the presence of a vice chancellor for technology transfer “at almost every university” proved that the chasm between academic research and business was finally being bridged. This point is further underlined by the fact that the UK now boasts more than 590 university-spawned companies that have raised over £2bn of external finance.

Reed said the Technology Strategy Board is seeking to nurture this emerging innovation culture and will invest £1bn over the next three years in innovative R&D projects, covering sectors as diverse as network security, intelligent transport systems and clean technology.

“The aim is to provide the collaboration and funding to de-risk new technologies and make them attractive to a bank or investor,” she explained. “We focus on that ‘valley of death’ [between R&D and commercialisation] where so many ideas fail. We do that by putting money where we see a funding gap and using our expertise to bring together different groups that would not otherwise meet.”

At the same event, others warned that unless UK business leaders become better at fostering innovation they risk being out-gunned by international rivals.

Ian Pearson, science and innovation minister, urged business leaders to embrace a culture of innovation. UK businesses have made huge strides in becoming more innovative over the past 10 years, but they still lag behind international competitors, he said. “We must unlock the talent and become an innovation nation.”

He also confirmed the government watchdog, the National Audit Office (NAO), was being tasked with evaluating how the public sector could embrace innovation. “The public sector is very risk-averse and we need the NAO to detail ways we can increase our risk taking,” he said. “Innovation depends on people being prepared to take risks.”

One of the biggest problems facing UK businesses is how to sustain an entrepreneurial spirit, suggested Colin Tenwick, chief executive at people management software firm StepStone. There is a tendency for UK firms to become markedly more risk-averse once the company founders have moved on, he said. “This is fundamentally different to what happens in the US.”