Innovation: the X factor that promotes success in our region
‘Innovation‘ is an essential pillar of the JRC. Next to Connectivity, Durability and Inclusion, it’s at the heart of everything we do. But what is “Innovation”? What are its main characteristics? And how do we compare to other regions and countries as an “innovator”? This feature provides an overview of innovation and gives perspective to CCR’s own strategy #InnovationInAction ….
In a time of global transformation and complex change, it may seem rather simplistic to imbue a single word with the global power of being “the key to our future success”.
But ‘Innovation’ is just that.
It is the oxygen that breathes life into every breakthrough made in every corner of the Cardiff Capital Region.
It’s the thread that pulls and drives all the progress made in our region – from targeting our investment activity and redesigning our infrastructure, to the vision that is transforming our transportation, to the collaborations that strengthen our skills framework and to the pioneering spirit that is nurturing our priority sectors.
It optimizes digitalization and stimulates decarbonization in our region, bringing us closer to the connectivity we need, the sustainability we need and the socio-economic conditions inclusion we want.
It completely changes our game: to produce new ideas and technologies that increase productivity and generate greater value – by not using more (and ideally less) resources.
In the months and years to come, the CCR #InnovationInAction will showcase the ingenuity and far-reaching inventions that are transforming our region. And we start by highlighting the crucial nature of innovation for modern economies – discovering why radically innovative and inspired incremental improvements are particularly essential to realizing the ambitions we have here in South East Wales. …
How innovation drives our economy and shapes our society
In today’s world, the most successful economies, communities, businesses and organizations have the highest levels of innovation.
And it is a fact.
The Institution of Engineering & Technology has shown that a company that invests in innovation enjoys an average return of £1.70 for every pound spent.
Stanford University in the United States recently published a report detailing how innovation is responsible for up to 85% of all growth in developed economies.
The emerging combination of technology and data-driven decision-making means we to know how to improve – and continually improve – our health and public sector service delivery, our workplace productivity, our carbon footprint and sustainability, our collaboration and connectivity, our business performance, our overall well-being, and even more.
Innovation is the key to unlocking many improvements, large and small, in all of these areas: enabling us to transform our vision of a sustainable future based on a resilient economy into a reality appreciated by everyone in our region.
But how to measure ‘Innovation’ in action? It’s all around us, which can make it hard to categorize, as it covers everything from those rare ‘Eureka’ moments such as a world-changing vaccine breakthrough, to the countless ‘baby-step’ iterations that occur. on an endless journey of improvement and refinement.
“Innovation”, associated with connectivity, sustainability and inclusion, is a key pillar of the CCR. For us, this is characterized by an inquisitive vision, an appetite for collaboration, and the courage to embrace progressive practices that deliver new and broader benefits.
It could be a new way of working, a process improvement, a new application, a unique solution, a major breakthrough or a world first.
It can be the catalyst for increased productivity, reduced waste, opening up new opportunities, improved economic performance, a better way of life, a more happy.
And because ‘Innovation’ is everywhere – and for everyone – it is worth putting its true place into perspective…
Putting innovation in its place
Given the importance of innovation in achieving a country’s strategic goals and ambitions, it is recognized that government agencies should fund some of this vital ‘practice’. Some 33 of 35 OECD countries have national science, technology and innovation strategies, usually pairing ‘Innovation’ and ‘Research’ as the main category – R&I – innovation being seen as the actions and results that bring research findings and results to life.
OECD data tells us that countries invest between 1% and 7% of their total annual budget in R&I activities; with the UK government industrial strategy report aiming to increase investment in R&I from the current 1.7% to 2.4% of GDP by 2027 (a huge commitment that will bring public funding to £22bn a year by 2024-25 ).
Reviewing all the percentages and figures, it is clear that an increase in both and private spending on R&I is highly desirable, with the UK government’s latest economic development policy paper Building back better: our growth plan explaining that: “Public investment in R&D attracts private investment at the rate of about two pounds on average for every pound of public funding”.
The need to optimize this balance of public/private investment in Innovation is even more acute for our region. While CCR has a research base and an R&D activity with a high impact and demonstrable world-class researchWales’ research and innovation system as a whole Iacks volume and mass – it’s impactful but small, with Wales currently investing just 1% of its GDP in R&I, well below the OECD average of 2.4%.
This means we need to be even smarter about how we innovate – and history tells us we need to innovate more than most, taking more targeted approach to achieve clear strategic objectives and sustainable ambitions.
We need to innovate more than most….
The inequality in economic performance and productivity between Wales and other regions and nations of the UK is a long-standing problem. A review by the Industrial Strategy Council of regional productivity differences in the UK found that in 1901 income per worker in Wales was 15% below the UK average and that despite some convergence in productivity in the middle of the 20th century, pre-pandemic figures from 2017 show Wales were still 16% below the UK average.
No wonder the Welsh Government Prosperity for All: The National Strategy has emphasized innovation and research – alongside investment in skills and infrastructure – as key to raising the productivity needed to drive economic growth and improve living standards here in our region.
ONS figures for 2018 show all Welsh areas below UK average in output per hour; and those stats don’t look any better in a bigger picture, with Wales – like the rest of the UK – in the midst of a productivity puzzle‘: an entrenched problem with parts of the nation trapped in “a cycle of low skills, low wages and low productivity”.
Post-2008 figures for the UK as a whole show an annual increase in productivity of just 0.3%compared to a 2.3% annual growth rate between 1971 and 2005, suggesting we are experiencing Britain’s worst productivity in 250 years – with Wales in the bottom quartile of this performance.
So a lot of work needs to be done. Many innovations are needed to build a connected, sustainable and inclusive region. And therein lies our opportunity here in the CCR. We have the unique opportunity presented by the dawn of the fourth industrial age to leapfrog rather than simply “catch up” – using our innate abilities to collaborate and innovate: building on our strengths and unlocking the enormous potential that has remained largely dormant for decades in many skill sets, communities and parts of our economy.
Choosing the smartest ways to innovate
In many ways, CCR’s maturation into a catalyst with broader remit has come at a time when the whole subject of innovation in our region is approaching something of a crossroads.
ONS data shows that most innovation spending in Wales is made by the business sector, accounting for 55% of all R&I spending in 2018 (compared to 68% of all R&I spending by businesses). businesses across the UK) – and given that the current state of play, CCR is well placed to play a key role as catalyst, co-partner and investor in innovation.
There has been a lot of debate about the paths of innovation that our region should take. This raised many different questions. How can we make the most of groundbreaking basic research and translate it into real-world uses? Should the focus be on centers of excellence or places in need? How can we harness the innovation of private enterprise and our exceptional universities to build the best possible future? Can we bring more grassroots SMEs into the equation?
CCR has challenged itself to answer these questions and more – and In our next article we will look at how innovation is taking place in South East Wales: exploring in detail how innovative DNA is driving CCR’s priority sectors… how our three world-class universities are working in working closely with government, industry, SMEs and individuals to bring their ideas to the real world…how CCR’s investment in pilot projects and large programs is paying off…how our challenge bring together the spirit of innovation that lives in both the public and private sectors – and how we are training our region to ‘think new’, developing an innovation mindset focused on implementing #InnovationInAction.