Innovation Evidence Base RS2010
Regional Intelligence Unit NWDA Renaissance House Centre Park Warrington WA1 1XB Tel: 01925 400 291
This report is published by the Regional Intelligence Unit as part of its continuing commitment to inform the sustainable economic development of the Northwest of England. It has been produced by the NWDA Research Team, and whilst ever effort has been made to ensure the accuracy of the material in this report the NWDA or the RIU cannot accept any responsibility for decisions based on the material that follows Further Information If you require further information on this report, please contact: Doug Watts Senior Business Analyst doug.watts@nwda.co.uk 01925 400 566
Please note that all data provided by Office for National Statistics is Crown copyright material is reproduced with the permission of the Controller of HMSO. All analysis is prepared by NWDA Research Team.
Innovation Contents 1.
What does innovation look like? ....................................................................................................... 4
2.
How do we measure innovation? ...................................................................................................... 6
3. How does the UK / Northwest perform? ............................................................................................8 Technical & traditional innovation...................................................................................................................8 Patent Applications.......................................................................................................................................10 Intangible, hidden, and service-based innovation ........................................................................ 13 4. Investment in intangibles ..............................................................................................................................13 Services-related innovation in the Northwest ...............................................................................................14 Knowledge-based employment ....................................................................................................................15 Product and Process innovation...................................................................................................................18 5. Where does the Northwest need to be? .......................................................................................... 23 Sources of information for innovation ...........................................................................................................23 Access to capital...........................................................................................................................................23 Business support ..........................................................................................................................................24 Skills and graduate retention ........................................................................................................................26 HEI collaboration ..........................................................................................................................................28 6. Sources .............................................................................................................................................. 30
Table of Figures Figure 1: Innovation Performance Summary – Northwest................................................................................................8 Figure 2: Business expenditure on R&D as a % of GDP, 2006 .......................................................................................9 Figure 3: Patent applications granted by region .............................................................................................................11 Figure 4: Patent applications, filed and granted, 2002-2008 ..........................................................................................12 Figure 6: Ratio of intangible to tangible investment (Intangible investment / tangible investment)...............................14 Figure 7: Shares of Innovation Expenditure by region ...................................................................................................15 Figure 8: Percentage share of knowledge based companies in the Northwest, 2003-07 ..............................................16 Table 1: Percentage growth in knowledge-based businesses in the regions 2003-7 ....................................................17 Table 2: Knowledge-based business performance by individual sector in the Northwest 2003-7 .................................17 Figure 9: Share of turnover from product innovations 2004-2006, % of total turnover ..................................................18 Figure 10: Shares of innovation-active businesses, by region .......................................................................................19 Figure 11: Proportion of product and process innovators, 2004-2006 ...........................................................................20 Table 3: Has your business introduced a new product or process innovation in the past 12 months? .........................20 Figure 12: Percentage of new products to market/new processes to industry...............................................................21 Figure 13: Regional view: distribution of turnover from product innovation...................................................................22 Table 4: Sources of information for innovation, all enterprises ......................................................................................23 Table 5: Venture capital by region ..................................................................................................................................24 Figure 14: Awareness of Business Link (%) ...................................................................................................................24 Figure 15: Have you used Business Link? .....................................................................................................................25 Figure 16: Working age population with at least NVQ level 4 qualifications ..................................................................27 Figure 17: Shares of higher education students by region, 2007/08..............................................................................27 Figure 18: Graduate retention rates, 2007-08 ................................................................................................................28
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Innovation 1.
What does innovation look like?
1.1
There are numerous and wide-ranging definitions of innovation, though most centre on the successful exploitation of new concepts, products or processes. These may not be ‘great discoveries’ but could be firms utilising existing techniques in a novel way to add value to their business.
1.2
The picture of innovation in the UK has evolved, and continues to evolve, based on the development of the country’s economy. Specifically, the movement from a manufacturing economy to a services economy has resulted in there being greater and more diverse opportunities for innovation. Innovation is no longer restricted to the linear model associated with product development - from research to technological development to diffusion. While such a model still accounts for some innovation in the UK and the Northwest economy, on account of the retention of a relatively strong manufacturing base, there are now far more inputs to innovation.
1.3
These inputs are centred around innovation related investments in a number of areas, often associated with intangibles, which are not captured in traditional innovation reporting. Innovation Nation has identified this weakness and has tasked NESTA (National Endowment for Science, Technology and the Arts) to develop a new ‘Innovation Index’ to measure UK innovation drawing on input and expertise from a broad range of partners.
1.4
The NESTA Innovation Index pilot, launched in November 2009, describes seven categories of investment in innovation: R&D, design, organisational improvement, training and skills development, software development, market research and advertising and other (copyright development and mineral exploration).
1.5
To illustrate the importance of capturing the degree of investment in the various categories, the NESTA index calculated that R&D accounted for only 11% of investment in innovation. The vast majority of such investment is in the other areas. This explains why the UK performs relatively poorly when the level of R&D spend is compared with other European markets, yet against this backdrop the country has achieved relatively strong productivity growth – driven by these other innovationrelated investments. Essentially the UK invests significantly more in innovation than basic and traditional R&D measures would suggest.
1.6
The transition from the linear model of innovation to an open model recognises that new knowledge does not need to be developed through ‘in house’ R&D and can be acquired by collaborating with outside partners.
It is important to note that the vast majority of innovation is incremental. It is not the development of revolutionary new products or processes; it is in the fine tuning of existing operations in order to make efficiency gains. An environment that encourages innovation can be fostered by recognising that the great majority of ideas that are new to a business or a public service organisation arise from other businesses, particularly from suppliers, and from customers. By developing more numerous and deeper relationships and engaging in collaborations with other businesses across the supply chain, companies can maximise their chances to benefit from innovation. Why does innovation matter? Innovation is widely recognised by economists, businesses and Governments as a key catalyst for growing economic productivity, driving enterprise by creating new products and markets, improving efficiency which in turn delivers benefits to firms, customers and society in general. It is regarded as the major source of wealth creation and competitive advantage, within an increasingly competitive global economy. Cross-country comparisons of economic performance illustrate that the intensity of nations innovative activity is correlated with higher rates of productivity growth and standards of living, as follows:
The Organisation for Economic Co-operation and Development (OECD) estimate that more than half the total growth in output of the developed world has resulted from innovation over the last 30 years;
Innovation is said to now account for 80% of productivity growth in advanced countries;
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Innovation
The European Commission estimates that over 40% of the variation in per capita regional income can be explained by differences in innovative performance across the EU and
Benchmarking studies suggest that innovation accounts for over two-thirds (69%) of the productivity gap between the UK and US economies, and just under half (45%) of the gap with that of Germany.
It is also recognised that innovation happens in particular locations often as a result of a combination of ‘soft’ (networking, flow of ideas) and ‘hard’ (innovation parks, high bandwidth internet) infrastructure elements combined with talent and financial flows. It is because of these reasons that Economic policy in industrialised countries has assigned increased importance to regional innovation as a means of increasing national economic growth.
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Innovation 2. How do we measure innovation? 2.1
Following on from the discussion around the movement of the UK economy from manufacturingbased towards services, innovation can broadly be classified into technical / traditional innovation and intangible / hidden innovation. Different approaches are required to capture the investment associated with each of these areas.
2.2
The NESTA Index builds on a range of existing attempts to measure innovation, how innovative firms are, and the innovation friendliness of different countries.
2.3
Among the key works which have addressed this issue is the OECD Oslo Manual and Reviews of Regional Innovation. OECD definitions have expanded over time from a narrow focus on technological product and process innovation to include a much wider range of activities, including marketing and organisational innovations, and to take account of innovation in services and lowtechnology sectors. However, there remains a limited focus on capturing innovation in services.
2.4
The OECD’s definition has played a key role in shaping the Community Innovation Survey (CIS). This business-level survey, which has been conducted since 1991 by EU member states and Eurostat, asks businesses across the EU about their innovation activities. Six waves of the CIS have now been completed, providing an increasingly comprehensive view of innovation at the firm level, including product, process, organisational and marketing innovations. The indicators used in the Community Innovation Surveys to measure regional/ national innovation performance are heavily influenced by the traditional aspects of spend on R&D, patents registered, new products introduced.
2.5
The European Innovation Scoreboard (EIS) further evaluates conditions for innovation at the national level. It is a composite of a large number of indicators used to rank EU countries (and a number of others, including the US) in order of innovation-friendliness.
2.6
Research has also taken place to address the wider question of the impact of innovation on economic growth. Particularly important to this have been macroeconomists’ attempts to measure investment in intangible assets and their impact on economic growth. Intangible assets have been described as investments in knowledge capital, as distinct from physical capital or labour, the two factors of production at the heart of the traditional growth accounting approach which is consistent with national accounts.
2.7
The NESTA methodology aims to bring together the various elements of measuring traditional innovation with more modern thinking on capturing innovation in services. By tracking metrics associated with a range of innovation-related metrics the index aims to capture the true picture of innovation investment and impact.
2.8
Technical & traditional innovation
2.9
The traditional measures of innovation (R&D investment, patent registration) are not perfect – particularly, as stated above, in the service sectors. Close to 30% of engineering based manufacturers use patents to protect their intellectual property, fewer than 20% of companies in knowledge intensive services use the same tool 1 .
2.10 Existing policy and metrics have focused on the perceived inputs to innovation and indirect drivers for the innovation processes. Many of these metrics account for ‘invention’ but not ‘innovation’ and have a basis in science and technology. Even with these limited measures there is greater difficulty assigning them at the regional or sub-regional level. 2.11 Traditionally innovation has been measured by R&D spend and patents. These metrics are suitable for gauging innovation in manufacturing and so served their purpose when the UK economy was manufacturing based, though they are less suitable for capturing innovation now that the UK economy model has changed to be services based. However, traditional metrics remain an important input into measuring innovation activity in the UK and particularly in the Northwest, on account of the region’s relatively strong manufacturing base. 2.12 Patent applications are used as a key measurement for traditional innovation in this paper. 1
“The Race to the Top”, Lord Sainsbury Review, October 2007
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Innovation 2.13 Intangible, hidden, and service-based innovation 2.14 As the UK economy has shifted further away from manufacturing and towards services, the traditional measures for innovation have become less and less relevant. The services sector now accounts for more than 75% of value-added [source: NESTA, Measuring Innovation] and so it is critical to find a way to capture innovation in this area in order to provide a true reflection on the level and nature of innovation in the UK. 2.15 Much service innovation is linked to the business model or to activities which assist productivity in other sectors. It is often the application of technical or product innovation in the delivery of the service e.g. ICT. 2.16 Certain aspects of innovation in the service industries are ‘hidden’ from existing metrics and there is a need for a broader understanding of the sources of innovation and the skills required to absorb and apply this innovation 2 . 2.17 There has been widespread support for the development of a new index or methodology to measure innovation. Research has indicated that productivity performance reported at a national level may be understating the full impact of UK business engagement in the knowledge economy. When intangible investments in skills, innovation and intellectual property are included in productivity measures, the UK shows marked improvement rather than flat performance over the last few decades 3 . 2.18 Of the categories of investment NESTA identified when it created its Innovation Index, most related to service level innovation. These included organisational improvement, training and skills development, software development, market research and advertising and other (copyright development and mineral exploration). 2.19 To capture this hidden innovation this paper showcases data around investment in intangibles, product and process innovations and growth in knowledge-based businesses.
2 3
The innovation Gap, Nesta report, October 2006 ‘What can management do to enhance productivity & performance?’, Professor J Haskel, ESRC/AIM
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Innovation 3.
How does the UK / Northwest perform?
3.1
This section looks at the performance of the UK and, where data is available, The Northwest.
Technical & traditional innovation 3.2
3.3
As discussed above, one of the key sources for tracking innovation performance in the Northwest is the regional breakdown of the Community Innovation Survey. However, as part of the Northern Way innovation workstream, the OECD completed a Review of Regional Innovation for the North of England in 2008. According to this source, and bearing in mind the OECD tends to focus on traditional metrics, innovation indicators can be divided into three main categories;
Input indicators including R&D expenditure from business, Government, HEIs etc,
Linkage indicators which measures the interaction amongst regional actors in the innovation system
Output indicators which captures the likelihood of an innovation and its impact on the economy
Indicators on innovation at the regional level are extremely limited; the innovation snapshot of the Northwest according to OECD is shown in figure 1 below: Figure 1: Innovation Performance Summary – Northwest
3.4
With respect to these basic innovation input and output indicators, the North of England appears to have lower levels than other regions in the UK and significantly lower than some other OECD regions.
3.5
As discussed previously, the metrics required to create a true picture of innovation are becoming more numerous and diverse as the UK and regional economies evolve. However, based on traditional indicators such as those described above, the UK and the Northwest can be said to be underperforming relative to peer group countries and regions.
3.6
Much research has been done into the relevance and effectiveness of using R&D spend, on the part of businesses, Government and higher education institutions, as the definitive measurement for innovation spend. As discussed in further detail later in this paper, the UK fares better, in comparison with other countries, when intangible spending is considered in judging productivity and innovation.
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Innovation The OECD picture does not include such spending, and this in part explains the UK’s relative underperformance. 3.7
Science, Research and Development
3.8
Both science and R&D are crucial to innovation levels, enterprise and the wider economy; in order to achieve faster economic growth productivity must be improved through an improved rate of technological change.
3.9
In addition, sciences will play a key role if the region is to hit its target of creating a ‘dynamic, sustainable international economy, which competes on the basis of knowledge, advanced technology and excellent quality of life for all’ Sciences will have a significant role to play through its impact on business, health, education and culture.
3.10 These issues are not explored in this paper but are assessed in an additional paper called ‘Science, Research and Development’. This paper sets the scene on science in the region and R&D, for businesses, Government and Higher education and should be read in conjunction with this paper for a fuller picture of the overall innovation landscape. 3.11 Business R&D expenditure 3.12 According to data published by the Office for National Statistics, civil R&D expenditure in the UK increased by 11% to £13.7 billion in 2007. In this context R&D is defined, in accordance with internationally agreed standards defined by the Organisation for Economic Cooperation and Development (OECD), as “creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society and the use of this stock of knowledge to devise new applications”. This clearly has a strong alignment with innovation, and expenditure on R&D by businesses is commonly used as a measure of innovation. 3.13 It is important to note that the OECD definition excludes education, training and any other related scientific, technological, industrial, administrative or supporting activities. However, as discussed previously in this document, it is widely acknowledged that innovation depends on a wider set of inputs than R&D, including skills training, design, software and organisational investment by firms. Work has been done to quantify such knowledge economy inputs at the national level, though further work is needed before these factors can be measured effectively at regional level. 3.14 The graph below shows the position of the UK relative to the EU15 and the US as measured by business expenditure on R&D as a percentage of GDP. Figure 2: Business expenditure on R&D as a % of GDP, 2006
Source: Eurostat
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Innovation 3.15 The UK sits approximately in the middle of the group of countries on this metric, and the Government has made it a priority to address this weakness by adopting a greater focus on science and research. 3.16 Looking at the regional level, based on a three year rolling average (2005-2007), businesses in the Northwest spent £1.89bn on R&D per year according to Business Enterprise Research and Development (BERD) data from the Office of National Statistics. This ranked the region 3rd for business R&D spending, behind the East (£4bn) and South East (£3.36bn). When considering these figures it should be remembered that R&D spend in the Northwest may be impacted by the changing business models for large companies in the region, including AstraZeneca, BAe, Novartis and Lilly. The region’s relative overreliance on a small number of large businesses means it is particularly vulnerable to these organisations adopting changes to their business models. 3.17 The same source provides data for the number of employees engaged in R&D functions within businesses. The categories of employment are researchers, technicians and others participating in R&D projects. Taking these two data sets together as a means of measuring R&D expenditure per employee (engaged in R&D functions), the Northwest figure is shown to be relatively high. More than £113,500 is spent by businesses on R&D for each full time equivalent employed in R&D functions. This is second only to the East of England, where the figure is a little over £140,000. 3.18 To add some context to this, the number of FTE employees engaged in R&D in the Northwest is 0.4% of the economically active population of the region. This is relatively low, with the East of England having the highest percentage (0.85%) and London the lowest (0.19%). The Northwest is lower than all regions except London and Yorkshire and the Humber. As above, these figures are based on a three year average across 2005-2007. 3.19 To summarise these various data sets, the Northwest has a relatively low proportion of its economically active population engaged in R&D functions, though average business R&D expenditure is quite high. Although this masks reliance on a very small number of firms who invest heavily in R&D. The picture is relatively positive from the point of view of encouraging innovation in the Northwest, though the deployment of additional FTE employees may help to achieve the right balance in terms of generating optimum value from the absolute R&D spend. 3.20 The issue of business R&D is discussed further in the Science and R&D evidence paper.
Patent Applications 3.21 As discussed, there is increasing evidence that traditional innovation measurements or proxies such as R&D spend and patent activity are a poor guide to innovation performance. Ideally a wide range of metrics would be reported that could be used to capture wider innovation. Such metrics range from the sales of new and adjusted products to efficiency gains from training, to software development, the traceable impact of marketing spend and the impact of investment in business research. However, with efforts to create a representative innovation index in the pilot stages, and being particularly limited at the regional level, traditional metrics remain useful to report. 3.22 A patent protects new inventions and covers how things work, what they do, how they do it, what they are made of and how they are made. It gives the owner the right to prevent others from making, using, importing or selling the invention without permission. Patents are one of the ways to protect valuable Intellectual Property and applications is a robust indicator in monitoring new products. 3.23 Figure 3 demonstrates the number of patent applications granted by region. The number of applications made in the South East and London is immediately obvious as being significantly higher than any other region. 3.24 The graph demonstrates the South East has the highest number of patents granted in the UK with 411 patents (20% of the UK total) were granted to firms based in the region in 2008. In comparison the Northwest had 167 patent applications granted in 2008, significantly lower than the South East, and giving it a regional ranking of fifth from the nine English regions.
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Innovation Figure 3: Patent applications granted by region
450 400 350 300 250
2007
200
2008
150 100 50
So ut h
Ea st Ea L on st d of En on So gla nd ut h W No e W rth st es W t M es t id l Yo an d s rk sh ir e * Ea Sco * t st la n M id d la nd s W al N No o rt e s rth h E as er n Ire t la nd
0
Source: Intellectual Property Office
3.25 The high number of patent applications granted in London and the South East may be influenced by concentration of world renowned universities and scientific institutes in the South East who undertake collaborative research projects with global businesses such as Nokia, QinetiQ and Microsoft. Additionally, it should be considered that many companies choose to have their headquarters in London and the South East, although the actual research & development activities may be carried out elsewhere. Because patents are registered at the head office location, this would mean that regions with a relatively high number of R&D locations but a low number of head offices may show a disproportionately low number of patent applications relative to the size of their R&D function and workforce employed in a region. 3.26 Over the last few years the number of patent applications filed and granted has declined across many regions. At the national level the number of patent applications filed has fallen from 20,196 in 2002 to 16,523 in 2008. The Northwest figure has fallen by a similar proportion, from 1,735 to 1,447 over the same period. The number of patent applications granted has fallen too, though not quite as sharply.
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Innovation Figure 4: Patent applications, filed and granted, 2002-2008 25,000
20,000
15,000
10,000
5,000
0 2002 UK - Filed
2003
2004
UK - Granted
2005
2006
NW - Filed
2007
2008
NW - Granted
Source: Intellectual Property Office 3.27 This trend is in line with the global picture, where the general trend in patent applications is on a downward curve. In the UK the Intellectual Property Office announced a review of its trademark fees and services in March 2009, prompted by a reported 12% fall in patent and trademark applications in 2008. Other trade mark offices, including the European trade mark office and those in Japan and Australia have also seen reductions. This supports the notion that patent applications and grants should only be considered as a measure of innovation alongside other, more appropriate measurements. 3.28 Research has shown that in previous recessions patent applications hold steady or even increase. The current picture may reflect the evolving economy models of markets all over the world, with innovation based around R&D investment leading to patents no longer among the key drivers used for businesses to pull out of a recession. Instead innovation in other areas – the hidden innovation more applicable to the service economy discussed previously in this report – may have emerged as a more important driver.
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Innovation 4.
Intangible, hidden, and service-based innovation
4.1
The content in this section looks to assess the performance of the UK and where appropriate, and depending on data availability, the Northwest in terms of investment in services-related innovation.
Investment in intangibles 4.2
Research conducted by the ESRC (Economic and Social Research Council) has found that if the ‘intangible’ spending of modern businesses is included as investment, then the picture of UK productivity changes significantly from how it is currently reported. Such intangible spending includes design, training, marketing, advertising and market research. A research program led by Professor Jonathan Haskel in 2007 found that the UK’s lower productivity growth rate in the period 1995 to 2000 disappears when treating intangible expenditure as investment. The research showed that business investment in 2004 would have been about double the traditional measure if expenditure on intangibles was treated as investment rather than as intermediate consumption. Investment in intangibles was £123 billion, compared with tangible investment of £96bn.
4.3
The figure below shows the breakdown of investment in innovation as measured by the NESTA Innovation Index. Figure 5: Investment in innovation (£ billion), UK, 2007
Source: NESTA Innovation Index, 2009
4.4
The graph shows that of the £133 billion the private sector invested in innovation in 2007 (about 14% of private sector GVA), the vast majority was invested in ‘intangibles’ such as software development and employee training. The Innovation Index work builds on previous research into intangible investment. To illustrate the growing importance of investment in intangibles, the graph below shows the ratio of intangible investment to tangible investment.
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Innovation Figure 6: Ratio of intangible to tangible investment (Intangible investment / tangible investment)
Source: Intangible Investment and Britain’s Productivity, 2007
4.5
The relative importance of intangible investment can clearly be seen to be growing over time and there is a clear acceleration in the rate of increase after 1990. The ratio moves above 1 in 2001 indicating that intangible investment exceeded tangible investment.
4.6
As the global economy becomes more competitive and technological change accelerates there will be increasing rewards for innovation and knowledge-based sectors will grow in importance. Success in these areas will require firms investing in knowledge intensive activities, such as research and development (R&D), in finding new and innovative ways to organise the production of goods and services, and having access to a skilled and flexible labour force. It is clearly important to account for the increased focus on intangible investments in order to capture this economic activity and create a comprehensive picture of the market.
Services-related innovation in the Northwest 4.7
Figure 7 shows the breakdown of innovation directed investments by region. Much analysis and a range of government policy initiatives are focused on R&D, because of the breadth and depth of new knowledge it entails. But within the firm R&D is one part of the overall innovation investment picture, accounting for around one quarter of relevant expenditures in 2006, according to the DTI paper, ‘Innovation in the UK’.
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Innovation Figure 7: Shares of Innovation Expenditure by region
Source: DTI Occasional paper No 6 “Innovation in the UK” 2006
4.8
Figure 7 shows some significant geographical variation. In the Northwest marketing expenditure was equal to 9%, one of the lowest of all the regions. With regard to all forms of design, which was low across all regions, Northwest expenditure was equal to 3%, again one of the lowest of all the regions. Expenditure on training was equal to 5% again comparatively low. Acquisition of external knowledge equalled 3% in the region which was broadly consistent with the other regions. Acquisition of machinery in the Northwest equalled 39% which was in line with the South East but well behind the Northeast. R&D expenditure in the region equalled 41%, the highest of any other English region. This reflects the strong R&D base the Northwest has, largely on account of a small number of large firms such as AstraZeneca and Novartis.
4.9
What this indicates is that while the innovation efforts of the UK economy - its investments in innovation and productivity growth - cannot be accurately measured using traditional innovation metrics such as R&D spend, these metrics may be more relevant to the Northwest region. R&D spend still accounts for a large part of overall innovation investment, on account of the retention of the manufacturing base and the R&D efforts of large pharmaceutical companies. However, even in the Northwest, it is clear that these metrics alone do not capture the true picture of innovation, with a larger proportion of the spend in other areas such as software and marketing.
Knowledge-based employment 4.10 Knowledge-based businesses are characterised by being more innovative and internationally competitive than other businesses, and can exploit growth conditions in key sectors and locations. This section tries to identify the performance of knowledge-based businesses in the region using the following definition: Predominantly private sector employment sectors where nationally more than 25% of the workforce is of graduate level (NVQ 4 or equivalent or higher). The data comes from the Annual Business Inquiry (ABI) using 2 digit SIC code definitions and includes the following sectors:
Extraction of crude petroleum and natural gas; service activities incidental to oil and gas extraction excluding surveying
Publishing, printing and reproduction of recorded media
Manufacture of coke, refined petroleum products and nuclear fuel
Manufacture of chemicals and chemical products
Manufacture of office machinery and computers
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Innovation
Manufacture of radio, television and communication equipment and apparatus
Manufacture of medical, precision and optical instruments, watches and clocks
Manufacture of transport equipment
Electricity, gas, steam and hot water supply
Collection, purification and distribution of water
Air transport
Financial intermediation, except insurance and pension funding
Insurance and pension funding, except compulsory social security
Activities auxiliary to financial intermediation
Real estate activities
Computer and related activities
Research and development
Other business activities
4.11 Figure 8 below demonstrates the year on year percentage share increase in the Northwest from 2003 to 2007 which increased from 10.2% to 10.7%. Figure 8: Percentage share of knowledge based companies in the Northwest, 2003-07 Percentage Share of Knowledge Based Companies in the NW 2003-7 10.8 10.7 10.6 10.5 10.4 10.3 10.2 10.1 10.0 9.9 2003 2004 Source: Annual Business Inquiry
2005
2006
2007
Source: Annual Business Inquiry 4.12 Table 1 below demonstrates the percentage increase in knowledge based businesses between 2003 and 2007. The Northwest experienced a 22.5% increase during this period. This strong growth, in the order of 5% above the national average, enabled the Northwest to increase its share of knowledge based companies from 10.2% to 10.7% between 2003 and 2007. The North East experienced the greatest percentage growth with 23.5%. Details of growth achieved across the other regions are provided in the table below.
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Innovation Table 1: Percentage growth in knowledge-based businesses in the regions 2003-7 Region
Growth (%)
East
15.5
East Midlands
22.5
London
11.7
North East
23.5
Northwest
22.5
South East
15.3
South West
18.6
West Midlands
22.6
Yorkshire & Humber
19.4
Source: Annual Business Inquiry
4.13 There is a degree of correlation between the make-up of knowledge based business in the Northwest and the range of growth sectors identified by the Government in its industrial strategy, New Industry, New Jobs. This document references efforts to unlock potential in a number of sectors, including digital content, life sciences and pharmaceuticals, advanced manufacturing including aerospace and professional and financial services. The Northwest has key strengths across many of these sectors, and as such is well placed to benefit from a broader national focus on these knowledge-based industries. Table 2: Knowledge-based business performance by individual sector in the Northwest 2003-7 Industry
% Growth
Extraction of crude petroleum and natural gas; service activities incidental to oil and gas extraction excluding surveying
50
Publishing, printing and reproduction of recorded media
-6.2
Manufacture of coke, refined petroleum products and nuclear fuel
-2.3
Manufacture of chemicals and chemical products
-2.3
Manufacture of office machinery and computers
-1.3
Manufacture of radio, television and communication equipment and apparatus
9.4
Manufacture of medical, precision and optical instruments, watches and clocks
-4.7
Manufacture of transport equipment
0.4
Electricity, gas, steam and hot water supply
10.8
Collection, purification and distribution of water
31.4
Air transport
12.1
Financial intermediation, except insurance and pension funding
7.5
Insurance and pension funding, except compulsory social security
-17.9
Activities auxiliary to financial intermediation
50.8
Real estate activities
34.4
Computer and related activities
-2.1
Research and development
14
Other business activities
34
Recreational, cultural and sporting activities
10.5
Column Total
22.5
Source: Annual Business Inquiry
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Innovation 4.14 Despite the increase in the financial sector, according to members of the Regional Economic Forecasting Panel (REFP), a lot of the new financial services that have established in the region have been low value added. 4.15 When interpreting the number of Knowledge based-businesses by sector in table 2 caution must be applied. The number of businesses that reside in a particular sector does not truly reflect the impact this might have on the overall performance of the region. For example, although a business residing in a particular sector can be attributed as a knowledge-based business the activities which it undertakes could be considered low value i.e. a financial call centre.
Product and Process innovation 4.16 Data related to product and process innovations has been captured and analysed by a range of sources. Provided below are findings from the UK Innovation Survey - part of the wider Community Innovation Survey covering EU countries – the National Business Survey and the Government’s industrial strategy, New Industry, New Jobs, including data from Eurostat. 4.17 At a national level, the Government’s New Industry, New Jobs paper in 2009 showed that UK businesses generate a relatively high proportion of turnover from product innovations. Data from Eurostat shows that between 2004 and 2006 product innovations accounted for around a quarter of turnover for British businesses, higher than a host of other European markets including Germany and the Netherlands. This data is summarised in figure 9 below. Figure 9: Share of turnover from product innovations 2004-2006, % of total turnover
Source: New Industry, New Jobs, April 2009 data from Eurostat
4.18 The paper also noted that sustained investment has given Britain one of the strongest science and research bases in the world. Government support for innovation has been provided through a successful R&D tax credit which has provided £3 billion of support to UK businesses since 2000. Furthermore, the establishment of the Technology Strategy Board in 2007 has provided Britain with a business-led body designed to channel public funds into driving business innovation in areas where there are major opportunities for future growth. However, it also notes two important weaknesses: First, although those British businesses that do invest in innovation do so successfully, both UKbased businesses and the Government itself continue to invest less in R&D as a percentage of GDP than other comparator economies. This is showcased in figure 1. Secondly, knowledge is not consistently translated into innovative and commercially successful goods and services. These issues bridge both technical innovation and services-oriented innovation. 4.19 At a regional level, the intensity of product and process innovation is analysed through the UK innovation survey. The UK has now completed innovation surveys in 2001, 2005 and 2007 as part of the wider EU Community Innovation Survey sequence. The latest survey sampled around 15,000
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Innovation businesses of 10 or more employees in a variety of sectors. The 2007 survey represent the period 2004-06 while the 2005 version is for the period 2002-04. 4.20 In the UK survey a company is defined as ‘innovation active’ if it is engaged in any of:
Introduction of a new product or process
Engaged in innovation projects not yet completed
Expends funds on internal R&D, training, acquisition of knowledge or capital equipment
4.21 Because this criteria includes reference to non-traditional innovation measurements, such as training, this has been included in the intangible / hidden / service-based innovation section of this paper. However, it should be remembered that much of this may refer to traditional R&D type innovation. 4.22 For the most recent UK innovation survey some 67% of the firms sampled were defined as innovation active regardless of size or sector which is a significant increase over the 2005 survey (58%). 4.23 The Northwest has remained in the top 2 or 3 regions throughout the surveys although there is greater regional variation shown in the 2007 (69% to 55%) survey than the 2005 survey (60% to 55%). The most marked change being East of England moving from 55% (lowest) in 2005 to 69% innovation active in 2007 (highest). The regional data perhaps reflect local industrial structure and the cyclical nature associated with those differences. At national level the performances remained broadly the same. Figure 10: Shares of innovation-active businesses, by region
Source: UK Innovation Survey 2007
4.24 The graph below breaks this down further to look at the type of innovation, showing the share of product and process innovators in each region. Note: product and process innovators do not account for all innovation-active companies. Other factors such as a company reporting innovation-related expenditure are also considered.
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Innovation Figure 11: Proportion of product and process innovators, 2004-2006
Source: UK Innovation Survey, 2007
4.25 The graph shows that the Northwest sits in the middle of the other regions based on the proportion of product and / or process innovators in the region. 23% of enterprises in the region are product innovators, while 11% are process innovators. 4.26 In 2009 the National Business Survey conducted by Ipsos MORI captured information looking at the same issue. This shows that the Northwest ranks fourth out of all English regions in terms of the proportion of businesses which have introduced a new product or process innovation in the last year. This is summarised in the table below. Table 3: Has your business introduced a new product or process innovation in the past 12 months? Yes No, neither
Don’t know
40%
58%
2%
10%
40%
57%
3%
29%
10%
40%
54%
6%
North West
31%
7%
39%
59%
3%
East of England
28%
10%
38%
59%
3%
East Midlands
27%
9%
37%
60%
4%
Yorks & Humber
27%
9%
36%
58%
5%
South West
26%
8%
34%
63%
3%
North East
25%
9%
34%
64%
2%
Yes - a new product innovation
Yes - a new process innovation
Yes - Total
West Midlands
29%
12%
South East
31%
London
Source: National Business Survey 2009 (Ipsos MORI)
4.27 In total 39% of respondents to the National Business Survey in the Northwest have introduced such an innovation, the majority being a product innovation. Nearly a third of the Northwest’s businesses have introduced a product innovation, alongside the South East a higher proportion that that found in any other region. When considering the introduction of process innovations though, the Northwest ranks lower than any other region, with only 7% having invested in this way. This is a slightly lower
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Innovation value than that derived from the UK Innovation Survey two years earlier, but the trend remains the same with that survey too showing the Northwest underperforming in terms of process innovators. These figures perhaps reflect the traditional manufacturing base of the Northwest economy, and support the notion that the Northwest lags behind other regions in terms of innovation to suit the more contemporary services-based economy. 4.28 The UK Innovation Survey also allows deeper analysis, looking at the proportion of actual innovators have developed new to market products and new to industry processes. At this level the Northwest performs relatively strongly in terms of innovative processes, ranking third of the 12 regions based on its processes being new to industry (this data includes product / process innovative enterprises only), while ranking 12th based on the proportion of its products being new to market. This data is shown in the graph below. Figure 12: Percentage of new products to market/new processes to industry
Northern Ireland Scotland South West North West North East Yorkshire and Humber East Midlands East of England Wales London West Midlands South East 0
10
Product - new to market
20
30
40
50
Process - new to industry
Source: UK Innovation Survey 2007
4.29 The UK innovation surveys also provide analysis of turnover by product innovation at the regional level. Results from the 2007 survey are shown in the graph below.
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Innovation Figure 13: Regional view: distribution of turnover from product innovation Northern Ireland South West East of England East Midlands Yorkshire and Humber North East Wales Scotland West Midlands North West London South East 0% New to market
20%
New to the firm
40%
60%
Significantly improved product
80%
100%
Unchanged product
Source: UK Innovation Survey, 2007
4.30 The graph shows that the Northwest sits joint second with London in terms of the share of turnover derived from new to market, new to firm or significantly improved product sales. While unchanged products still account for the majority, as they do in all regions, only the South East is less reliant on unchanged product sales than the Northwest. In parallel with the trends described above, the Northwest has improved its performance on this metric compared with other regions since 2005. Results from the previous survey indicated the Northwest was the third most reliant region on unchanged products. Although the actual proportion of turnover derived from unchanged products has only fallen marginally in the Northwest, in most other regions it has risen between 2005 and 2007, indicating the difficulty businesses in these regions have had in generating turnover from new and innovative products. 4.31 To summarise this data, UK businesses generate a relatively high proportion of their turnover from product innovations, higher than many peer group countries including Germany and the Netherlands. At a regional level the Northwest ranks relatively highly in terms of the share of its businesses that are adjudged innovation-active, based on the Community Innovation Survey criteria. This is supported by the National Business Survey, which shows that the Northwest ranks fourth out of all English regions in terms of the proportion of businesses which have introduced a new product or process innovation in the last year. However, this is heavily weighted towards product innovations, with the data indicating the region does not perform as well in terms of enterprises developing innovative processes. 4.32 Of the product and process innovations that are made, Northwest innovators are relatively strong in terms of developing new to industry processes, but less so (relative to enterprises in the other regions) in developing new to market products. In terms of turnover derived from new to market, new to firm or significantly improved product sales, the Northwest sits joint second. Overall the picture is mixed, with some evidence to suggest the region is taking steps towards implementing more innovative solutions, though there looks to be a lack of innovative processes being developed by Northwest enterprises, which could help drive growth in non-traditional sectors.
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Innovation 5.
Where does the Northwest need to be?
5.1
This section looks at the steps required to encourage innovation in the Northwest and across the UK.
Sources of information for innovation 5.2
The Community Innovation Survey captured a wide variety of sources of information with regard to innovation. Table 4 shows the proportion of enterprises that report at least some degree of interaction with each of the listed information sources, split by region. Table 4: Sources of information for innovation, all enterprises Within your enterprise or enterprise group Suppliers Clients or customers Competitors Consultants, commercial labs, private R&D institutes Universities or other HEIs Government or public research institutes Conferences, trade fairs, exhibitions Scientific journals Professional and industry associations Technical, industry or service standards
NE
NW
Y&H
EM
WM
EE
LON
SE
SW
53 62 64 57
54 65 66 60
57 64 68 60
56 67 66 61
55 68 67 58
58 70 71 62
54 61 64 57
58 67 67 61
55 66 66 59
29 23 24 40 39 45 45
30 21 20 44 42 47 45
30 20 19 43 43 47 47
30 21 18 46 46 46 47
34 20 20 42 44 46 49
31 21 20 49 46 53 52
31 17 20 42 38 45 42
34 22 24 48 43 48 49
30 18 16 43 38 45 43
Source: UK Innovation Survey, 2007
5.3
The single most important sources of information for innovation across all regions were suppliers or clients and customers. Competitors were another important source of information. As mentioned earlier in the report, the vast majority of innovation is incremental and stems from interaction between companies in the same industry, or those with the supply chain and customers. One of the major barriers to investments in innovation is the effect of ‘spill over’ i.e. Intellectual property from one supplier acting as inspiration for other ideas for another supplier in the same sector.
5.4
The degree of collaboration between businesses and HEIs is relatively limited, with only 21% of firms in the Northwest reporting such an interaction. This is on a level with other regions. In order to promote innovation across the widest possible range of companies, collaborations and interactions between different companies and the knowledge base must be encouraged.
Access to capital 5.5
Improving access to finance, for SMEs particularly, is one way to encourage innovation. Developing product and process efficiencies by incremental innovation requires investment. Access to finance is often cited as a barrier to innovation across OECD regions. Venture capital is one form of finance particularly important for firms that have a proven idea but are seeking to grow, and constitutes an important element in allowing innovation to flourish. However, it should be remembered that venture capital can be used for non-innovation purposes too.
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Innovation Table 5: Venture capital by region Number of companies
% of companies
Amount invested (ÂŁm)
% of amount invested
Region
2007
2006
2005
2007
2006
2005
2007
2006
2005
2007
2006
2005
South East
220
224
237
17
17
18
2493
1835
578
21
18
9
London South East & London
334
330
292
25
25
22
5730
4297
2417
48
42
35
554
554
529
42
42
40
8223
6132
2995
69
60
44
South West East of England
92
98
88
6
7
7
198
532
448
2
5
7
104
95
122
8
7
9
531
639
636
4
6
9
West Midlands
92
90
78
6
7
6
416
276
271
3
3
4
East Midlands Yorkshire & the Humber
65
59
60
5
4
5
802
401
1122
7
4
16
108
83
71
8
6
6
499
1201
243
4
12
4
Northwest
154
146
144
12
11
11
600
614
426
5
6
6
North East
51
28
42
4
2
3
156
184
85
1
2
1
Source: BCVA & Price Waterhouse Coopers Private Equity and Venture Capital Report on Investment Activity 2007
5.6
The figures above demonstrate the strength of the South East and especially London and its increasing share of venture capital. The Northwest did however have the most activity beyond London and the South East with 12% share of companies and 5% of the investment in 2007 compared to 11% and 6% in 2006 and 2005.
Business support 5.7
In addition to ensuring companies have access to capital, providing support in other ways can also help to encourage innovation.
5.8
Business Link provides a range of support services, designed to provide clear, simple, and trustworthy information, to local businesses. The organisation offers assistance in areas such as managing finances, finding and retaining customers, complying with relevant legislation, paying taxes and international trade. It stands to reason that companies will be better equipped to drive innovation if they are both aware of and taking advantage of the various services available to them to help achieve success. Figure 14: Awareness of Business Link (%) 100% 80% 60% 40% 20%
Yo rk s
&
Hu So mb er ut h W No es r th t W es E t M as t id la n So ds ut h Ea Ea st st M Ea id la st nd of En s g No lan r th d W es Lo t nd on
0%
Source: National Business Survey 2009 (Ipsos MORI)
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Innovation 5.9
When the National Business Survey, conducted by Ipsos MORI in late 2009, asked respondents whether or not they had heard of Business Link 88% of businesses in the Northwest said they had. This represented the lowest proportion of ‘informed’ respondents of any region other than London. Although the difference between the proportion of respondents who were aware of Business Link in the Northwest and the other regions is relatively low – Yorkshire and Humber and the South West have the highest proportion of ‘informed’ respondents at 94% - it does indicate that the region may be able to better promote the services it can offer to its businesses to help encourage growth and innovation.
5.10 In addition to awareness, it is important to look at the level of usage in each region. Figure 15: Have you used Business Link? London East Midlands West Midlands North West South West East of England Yorks & Humber North East South East 0%
20%
40% Yes
60% No
80%
100%
N/A
Source: National Business Survey 2009 (Ipsos MORI)
5.11 Only 31% of businesses in the Northwest have actually used the Business Link service. This is the fourth lowest of all regions. 5.12 Together these two pieces of data suggest there is scope to better promote Business Link and to give enterprises in the region the opportunity to take advantage of its services. Data from the National Business Survey in 2008 highlights that businesses that have used Business Link are more likely to co operate with universities (52% compared to 38% (national figures)), to belong to specialist industrial networks (44% compared to 37%), and to have a formal growth business plan (46% compared to 38%). The survey also notes that a strategy for economic development in these challenging economic times may need to look at ways of further increasing the usage and awareness of business support services for the purposes of knowledge transfer and the sharing of innovation and best practice. Based on the 2009 data from the survey, the Northwest is underperforming in terms of leveraging the support of services like Business Link. 5.13 Business Link provides a range of support products and services for businesses to encourage innovation. These include:
Innovation Advice and Guidance - provides businesses that are experiencing challenges with expert knowledge and highly specialised, technical and advanced skills, enabling them to innovate and improve performance.
The Grant for Research and Development – encourages the introduction of technological innovation in businesses. It provides finance to individuals and small and medium-sized businesses in England to research and develop technologically innovative products and processes.
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Innovation
Collaborative Research and Development - provides finance to businesses that are working together and with a university or college to develop new products, services and processes.
Knowledge Transfer Partnerships - provides businesses with a grant to enable the placement of a recently qualified person at graduate level or above into their business.
Networking for Innovation - helps businesses to build relationships with universities and/or colleges, to develop and exploit new ideas. It is aimed at businesses with specific technical or scientific research and development requirements, which may be eligible for a grant to establish a network they can share information with.
Innovation Vouchers - enable businesses to buy support from a university or college, to explore potential opportunities for future collaboration in developing and exploiting new ideas.
5.14 Initiatives such as the introduction of innovation vouchers, and specifically the demand for such initiatives, may be used as a proxy for measuring the degree of low level enterprise and innovation in a region. Innovation vouchers are designed to help businesses owners, entrepreneurs and social enterprises to purchase a knowledge provider's expertise to develop innovation and enhance business. The scheme in the Northwest provides voucher of £3,000 and £7,000 to growing businesses and social enterprises and was set up to encourage and make it easier for more people to engage with the knowledge base; in particular universities and further education colleges. 5.15 In the Northwest there were 1,270 applications for innovation vouchers in the most recent round of voucher distribution. Across the region 67% of applicants were successful in securing a voucher. In Yorkshire the scheme is designed so that demand approximately matches supply, so that the proportion of successful applicants is even greater. 5.16 The model for these schemes, designed so that supply matches demand over the period of time, effectively dictates that this metric cannot be used to quantitatively assess the demand for such initiatives. However, the success of such schemes does indicate the appetite for business innovation in a region. By better promoting and marketing finance and support initiatives, and by encouraging companies to take advantage of those available to them, the Northwest can more actively encourage innovation amongst its businesses.
Skills and graduate retention 5.17 Human capital can be considered the skill set which an employee acquires on the job, through training and experience, and which increase that employee's value in the marketplace. In the context of innovation this is an important consideration: in order to carry out successful innovation projects, particularly in high-tech sectors, firms need employees with the necessary skills and qualifications. Figure 16 below looks at the level of NVQ 4 across the English regions.
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Innovation Figure 16: Working age population with at least NVQ level 4 qualifications % of Working Age Population with at least NVQ Level 4 Qualifications 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 Yorks and Humber
North East
West Northwest East Midlands Midlands
East England
% Working Age Population with NVQ4+
South West
South East
London
England
Source: Annual Population Survey 2007
Source: Annual Population Survey 2007
5.18 In 2007 25.4% of the Northwest’s population was educated to NVQ level 4 or above ranking the region 6 of 9. London, the South East, South West the East of England and the East Midlands all contain a greater percentage of the working age population educated to NVQ4 or higher. 5.19 The picture is somewhat different when looking at it from the point of view of the numbers of higher education students in each region. As demonstrated in Figure 17, below, the Northwest is second only to London in terms of the proportion of higher education students studying in the region. Figure 17: Shares of higher education students by region, 2007/08
Source: HESA Students Database 2007-08 5.20 There is scope for HEIs to play a role in driving knowledge generation within industry, research institutes and research and development performing businesses. However, it should be noted that there is relatively limited collaboration between businesses and HEIs.
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Innovation 5.21 The most innovative regions are those characterised by a greater share of Higher Education students. However, the relationship between a region’s level of innovation and its student numbers should not be exaggerated. There are many other factors which have a more direct influence on innovation, and as seen above, enterprises across all regions rank a range of sources above HEIs when considering the sources they use for innovation. 5.22 As shown in the graph below, the Northwest performs relatively strongly when measured by its ability to retain graduates. Only London holds stronger appeal for graduates studying in that region. Figure 18: Graduate retention rates, 2007-08
No rth
W
es t
Lo So ndo n ut Yo h W rk W es sh t M es t ir e id an la d nd th s e Hu m be r Ea So st ut h Ea Ea st st M id la nd No s rth Ea st
70% 60% 50% 40% 30% 20% 10% 0%
Source: HESA Destinations of Leavers Dataset 2007-08
5.23 This has positive implications for innovation in the Northwest, on the assumption that a better ability to retain qualified employees leads to increased opportunities for innovation. The ability of a region to retain graduates is often considered a better indicator of innovation potential than the proportion of students in a region, on account of the relatively limited degree of collaboration between businesses and universities. However, more important than the actual number of graduates is the relevance of skills they bring to businesses, in terms of encouraging innovation. This is reflected in the difficulties many students have in finding jobs upon graduating. The solution is not in producing as many graduates as possible, but in ensuring the skills of graduates are well matched with the needs of industry. This touches upon broader themes around skills policy. 5.24 For more HEI evidence please see the Educational Infrastructure Evidence Paper.
HEI collaboration 5.25 There is potential for some HEIs to play a significant role in driving knowledge generation within industry, research institutes and research and development performing businesses. Monitoring HEI engagements with SMEs is a useful measure of knowledge transfer between HEIs and their local economy. It allows us to identify trends in HEI business interaction and to monitor their development. 5.26 According to the Higher Education Business and Community Interaction (HEBCI) survey in 2007/8 there were 165 graduate start-ups established, down significantly from the 254 established in 2006/7. This was the most significant annual decline seen in any region in England. However, it should be noted that this is largely on account of the strong growth (80.1%) in the number of graduate start-ups in the Northwest recorded in the 2006/7 survey compared with 2005/6. 5.27
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Innovation 5.28 The same survey demonstrates that the survival rates of these businesses have also increased. In 2006/7 there were 107 HEI graduate business starts surviving at least three years (11.9% of the England total), while in 2007/8 this number had increased to 162 (14.4% of the England total). At the moment the data suggests that while there are fewer graduate start-ups being established in the Northwest than there are in other regions, chances of survival are better. However, it should be noted that the picture can change relatively quickly, as is seen when comparing survey results over the last three years – for instance, while the Northwest share of graduate start-ups surviving three years increased in 2007/8, it remains marginally below the share recorded in 2005/6. 5.29 A similar pattern holds true when looking at spin-offs with some HEI ownership. The number of such enterprises halved from 25 in 2006/7 to 12 in 2007/8. In England overall the decline was far less severe at 10%, falling to 126 in 2007/8. However, the number of active spin-offs with some HEI ownership that have survived at least three years increased by 4% in the Northwest to 73 companies. At the England level there was a 7% increase. 5.30 When assessing the collaborative research efforts involving both public funding and funding from business, the HEBCI survey found that the value of such research in the NW increased to £92.5 million, a 26% increase over the 2006/7 survey results. This represented the second highest increase of all England regions, after Yorkshire and the Humber. In terms of absolute value of such collaborative research, the value in the Northwest was second only to London (£102.6 million) in 2007/8, and accounted for 18% of the total collaborative research funds across England. 5.31 In 2008/9 there was 851 Full Time Equivalent (FTE) staff in the Northwest employed in a dedicated Business and Community (third Stream) function, up from 810 in 2007/8. This number has increased significantly since 2006/7, when it stood at 695, though the rate of growth has been matched in other regions, and the West Midlands, London and the South East all have a greater share of full time staff dedicated to business and community engagements in England than the Northwest. This indicates that other regions may be providing a greater support for knowledge transfer between HEIs and the business community. The Northwest may not benefit to the same extent as some other regions from associated increases in innovation on account of the knowledge, research and expertise of regional HEIs. However, the importance of this link should not be exaggerated, as what matters more than the sheer number of people involved in knowledge transfer is the quality of the projects they are involved in.
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Innovation 6.
Sources
Innovation Nation, Department for Innovation Universities and Skills (2008)
Organisation for Economic Co-operation and Development (OECD)
Office for National Statistics
The Race to the Top, Lord Sainsbury Review, October 2007
The Innovation Gap, Nesta report, October 2006
NESTA Innovation Index, 2009
What can management do to enhance productivity & performance?, Professor J Haskel, ESRC/AIM
Eurostat
Intellectual Property Office
Intangible Investment and Britain’s Productivity report, 2007, HM Treasury
Innovation in the UK: Indicators and Insights, 2006, Department of Trade and Industry
Annual Business Inquiry
New Industry, New Jobs, 2009, Government paper
Community Innovation Surveys / UK Innovation Surveys
National Business Surveys (Ipsos MORI)
BCVA & Price Waterhouse Coopers Private Equity and Venture Capital Report on Investment Activity 2007
Annual Population Surveys
HESA Destinations of Leavers Dataset
HESA Students Database
Absorptive Capacity and Regional Patterns of Innovations, Department for Innovation Universities and Skills
DTI Occasional Paper No 8. Innovation Trends: Prioritising Emerging Technologies Shaping the UK to 2017 (2007)
European Innovation Scoreboard (2006), Inno Metrics
National Council for Graduate Entrepreneurship Survey (NCGE 2007): Survey of Enterprise and Entrepreneurship in Higher Education
Higher Education - Business and Community Interaction Survey (HEBCI 2004-7)
Haigh, G & Robson, S (2008) First Findings from the UK Innovation Survey 2007 DIUS
Regional Innovation Performance in the UK, BERR
The Knowledge Economy - How Knowledge is Reshaping the Economic Life of Nations, Ian Brinkley 2008
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