We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
RSS FeedRisk

Companies face 'lost decade' of innovation


Investment in innovation fell by £24 billion since the start of the recession

Article comments

Business investment in innovation fell by £24 billion since 2008, resulting in a “lost decade” of innovation, according to a new report published on Monday.

Investment in innovation fell by 7 percent (or £7.4 billion) between 2008 and 2009 as the recession began and a further 14 percent (or £17 billion) between 2009 to 2011, the latest Innovation Index published by charity Nesta found.

This is largely because businesses are choosing to invest in 'tangible' assets, such as gold and property, rather than 'intangible' assets such as R&D, design, training and innovative skills, software development, branding and organisational innovation, according to the survey of 1,200 businesses.

Nesta said this was a mistake because innovation in intangible assets is one of the most important drivers of sustainable economic growth. Between 2008 and 2009 innovation delivered 63 percent of the UK's economic growth, the charity said.

“Other countries are making investment in innovation a top priority and the UK cannot afford not to do the same,” said Nesta's CEO Geoff Mulgan.

“Our data shows that British business prioritised cash and concrete over investment in future technologies and services, a potentially disastrous decision that now needs to be put right.”

Relative to their size, the biggest innovation investors among the UK's sectors are manufacturing, personal services and financial services. The business services sector's largest investment is in skills and organisational innovation.

Over the next few months, Nesta said it would set out the details of what it calls Plan I – a plan for innovation-led growth – as an alternative to the “increasingly sterile debate” between Plan A and Plan B.

Earlier this month, the European Commission announced plans to invest €1.5 billion (£1.2 billion) in information and communication technologies to support the Digital Agenda's ICT research funding targets and create new growth and jobs.

The funding is part of a wider €8.1 billion investment in research and innovation to support projects and ideas that will boost Europe's competitiveness and tackle issues such as health, the environment, urbanisation and waste management.

“Knowledge is the currency of the global economy,” said European Research, Innovation and Science Commissioner Máire Geoghegan-Quinn. “If Europe wants to continue to compete in the 21st century, we must support the research and innovation that will generate growth and jobs, now and in the future.”

Share:

Comments

Companies face 'lost decade' of innovation
Risk

Energy risk: How data is eating up all the energy

Energy risk: How data is eating up all the energy

Any failure in energy supplies to data servers can result in severe consequencesmore ..


EMEA corporate upgrades outnumber downgrades, says Moody’s

Rating agency notes first such instance since the financial crisis yearsmore ..

World hit by record wave of 'mega' data breaches in 2013

Over half a billion records compromisedmore ..

CFOs bullish on UK growth prospects

Finance chiefs' appetite for risk has doubled that of a year agomore ..

Why BYOD needs to be on every CFO’s agenda

The Software Alliance explains why BYOD can be a legal nightmare for businessesmore ..

Audits key to managing cyber risks

Cybersecurity controls and reporting procedures should be assessed annuallymore ..

Send to a friend

Email this article to a friend or colleague:


PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.



In Depth
How M&A teams can create value by challenging the CEO

How M&A teams can create value by challenging the CEO

A typical “hold” period of nine to 18 months can generate increased sale value more ..

In Depth
What every company needs to do about big data?

What every company needs to do about big data?

In the first of a three part series, Pat Brans explores just how big 'big data' will get? more ..

Advertisement

* *