Source: Greater London Authority (GLA)
Authros: Nick Ennis and Slawek Kozdras
Extract from Executive Summary
Innovation boosts efficiency and productivity and contributes to economic growth. Innovation is a tricky word to pin down, meaning many things to many people. For the purpose of this paper, innovation is defined relatively broadly as the exploitation of new ideas, but to give the word more meaning, we focus primarily on radical innovations that transform the user experience, as Apple’s iTunes and iPod revolutionised the way people consume music.
Research shows that innovations, especially service innovations, are often invisible, highly customised and contextual, relying heavily on organisational change, training and other intangibles. All of this makes them difficult to analyse and reproduce and near to impossible to measure. Economic literature dating back more than five decades has focused on the role of competition in producing innovations. But in policy circles, innovation has long been synonymous with scientific research and development, perhaps because it is identifiable and measureable, unlike innovations.
One of the key findings of the last decade’s research into innovation is recognition of the wider innovative ecosystem that nurtures and facilitates innovation. The social and economic context in which firms operate can encourage or hinder innovation. Lessons from history make it clear that innovators respond to wider conditions and incentives to be entrepreneurial. The wider conditions approach calls for policy to get the conditions right for innovators to thrive rather than ones that try to pump-prime innovation through investment in research and development.
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