Promoting Innovation in Industry,

Government and Higher Education

Richard Duggan

INNOVATION, 'the successful exploitation of new

ideas', comes in many shapes and sizes and is as
relevant to people practices as it is to new production
processes or products. Akita Morita, then chairman
of Sony, began the first Innovation Lecture, delivered
to an invited audience at the Royal Society in Feb-
ruary 1991, "Science does not equal Technology does
not equal Innovation". This pseudo-equation holds
true in reverse: Innovation does not equal Technology
does not equal Science. The corollaries of these seem-
ingly obvious statements are, however, not as widely
understood: "the transfer of technology does not
equal innovation" and, in many cases, "innovation
occurs without any significant technological devel-
opment". After intensive study in the UK since 1991,
we have concluded that innovation in its broadest
sense is about creating the climate or culture which
promotes implementation of productive change in
order to improve the wealth creating capacity of
society; implementing a process which maximizes the
chance that new ideas will surmount the hurdles ture or value system. All countries and companies,
between embryo product and successful achieve- therefore, will have different methods of managing
ment; and maximizing the impact of the success. the process of innovation. For the purposes of this
All of this makes the measurement and man- article, I intend to look at some of the work being
agement of innovation peculiarly difficult and the carried out by the Innovation Unit (IU) of the Depart-
identification of global best practice more so. If inno- ment of Trade and Industry (DTI). Its mission, which
vation is about cultural change then it follows that is to identify and promote best practice in innovation,
changes, and the circumstances leading to the adop- is probably as good a vantage point as any to survey
tion and ultimate success of those changes, will take the UK scene, attempting where possible to fit it into
place within unique systems and cultures. One can an international perspective.
draw detailed conclusions about the effects that inno- The UK has always been seen as an inventive
vation has had upon any given system, be it pro- nation, but it is a frequently made criticism that,
duction process, product design and development, or whilst it is good at inventing, exploitation occurs else-
issues relating to the management and development where. Using our definition, we can invent but we
of people. However, it is less easy to predict the conse- cannot innovate. There have been various causes
quences and probable success of attempting to trans- cited for this, ranging from cultural antipathy/
fer those practices onto other systems w h e n they are ambivalence towards industry, through low R&D
implemented without due regard to the existing cul- spending relative to our major competitors, and poor

Pergamon Long Range Planning, Vol. 29, No. 4, pp. 503 to 513, 1996
PII: S0024-6301(96)00042-8 Copyright © 1996 Elsevier Science Ltd
Printed in Great Britain. All rights reserved
0024-6301/96 $15.00+0.00
management, to short-term behaviour by providers of outdated US case studies. In order to overcome this,
capital. What cannot be denied is the effect which and in an attempt to identify what constitutes best
this has had on the UK's position in the world. From practice in the UK, the IU has set up a number of
being the leading country in terms of gross domestic studies in collaboration with the CBI to identify and
product (GDP) per head in the 19th century we have quantify where UK industry currently stands. The
steadily declined so that today we rank 17th, behind first study, I n n o v a t i o n q t h e Best Practice, 1 was con-
countries as diverse as the USA, Japan, Italy, Iceland ducted in 1992-1993 and concluded that only one in
and Australia. According to some estimates, the UK ten companies could be described as truly innovative
will not even appear in the top 30 by the year 2020, as measured against the definition and against a num-
although initiatives in recent years have arrested the ber of criteria, such as speed of growth, time to market,
decline and improved national competitiveness, so overall competitive performance and industry stand-
the forecasts may be unduly pessimistic. ing etc. This was followed in 1994 by a second study,
The analysis is clear, but increasingly people have the Winning report, 2 which sought to identify the
been focusing on identifying the cure. What is it that characteristics of those innovative companies. Using
is required to boost the UK's competitive position? a methodology designed by the Warwick Manu-
How can we move up the international GDP league facturing Group at the University of Warwick, struc-
table? When looking at the number of world-class tured interviews led by IU secondees and supported
companies in the UK, we compare favourably with by officials were held with the senior executives of
Germany or Holland. However, where we fall down 121 companies across the UK. Care was taken to
in comparison with our competitors is the long tail of ensure that there was a suitable mix of company size
companies that perform significantly worse than the and that both the manufacturing and services sectors
international average, and there is a real urgency in were covered. The results were then collated and
ensuring that British companies move much nearer analysed.
to the best performers in the way that they operate. Despite the diverse nature of the companies taking
To help in this process the IU was founded in 1991. part five key messages, applicable to all 'winning'
It presently consists of 15 senior, experienced indus- companies, emerged:
trialists, drawn from a wide range of disciplines,
C3 They are led by visionary, enthusiastic champions
working along side a similar number of full-time
of change.
officials. Secondments to the IU last on average about
Q They unlock the potential of their people, creating
2 years. The mission of the IU is:
a culture in which employees are genuinely
To promote the adoption of market-driven innovation as the key empowered and focused on the customer, invest-
to increased competitiveness and sustained wealth creation. ing in people through good communications and
The strategy to achieve this mission is "to create a training, and flattening and inverting the organ-
climate within which a culture of innovation can izational pyramid.
flourish: [3 They know their customers, constantly learning
from others and welcoming the challenge of
• in industry and business; demanding customers to drive innovation and
• in government; competitiveness.
C3 They constantly introduce new and differentiated
• within the knowledge base; products and services, through a deep knowledge
• within the finance community; of their competitors, encouraging innovation, and
focusing on core businesses, complemented by
• amongst the public and the media;
strategic alliances.
• in education". C3 They win by exceeding their customers' expec-
These are the so-called '6 planks'. tations.
These findings can be summarized in five simple
words:
1. Innovation in Industry and Change - E m p o w e r - Learn - Innovate - Win.
Business--Best Industrial Practice Supporting the earlier work, nine out of ten of the
One of the problems which the IU has had to face is companies which took part in the survey exhibited
that innovation has not been a searchable topic in the the characteristics identified in I n n o v a t i o n - - t h e Best
directory of UK academic and business courses. This Practice. The findings of the survey have been vali-
is symptomatic of the fact that there is no auth- dated not only by those companies which par-
oritative peer group mechanism which distils best ticipated originally, but also by the very many
practice in industry and academia. Some work is done companies and organizations that have subsequently
in innovation management, but this is often based on read the report and sought to adopt its findings.

Promoting Innovation in Industry, Government and Higher Education

Moreover, they underpin the strategic framework that
the DTI is working to put in place with regard to
the relevance and delivery of all its support mech-
anisms for UK industry.
More detailed work has subsequently focused on
the manufacturing sector. Using the same meth-
odology as the Winning report, the 81 Training and
Enterprise Councils (TECs) throughout England and
Wales surveyed 561 companies. The results from this,
written up in the Manufacturing Winners, 3 bore out
the messages of the Winning report. However, sig-
nificant gaps, particularly in areas such as leadership
and competitor awareness, emerged between the
'best' and the rest. At the same time the findings of
the report were supplemented with data drawn from
the 'Best Factory Awards' and obtained from Cran-
field School of Management, When combined with
the more behavioural aspects of the survey they pro-
vide a powerful tool in demonstrating what can be
achieved if the key messages of 'winning' and 'manu-
facturing winners' are adopted. The best performers
are an order of magnitude better than the average
in many criteria: speed of changeover, stock turns,
quality rejects etc. The difference between the 'aver-
age' (and it is important to note that the average is of
those factories which have put themselves forward
for the award rather than the average of all UK fac-
tories) and the best 10% of the same self-selecting
group is startling. The rate of new product intro-
duction is up to 10 times higher in the best, their stock
turn is often double the average and added value per
manufacturing employee is also double. See Figure 1.
To improve the wealth-creating capacity of UK
industry requires a step-change in attitudes and per-
formance of the vast majority of companies. The
research conducted by the IU shows what are the key
ingredients of industrial best practice, and together
with the Cranfield data, illustrates the results of
embedding innovation into the company. The find-
ings are now being incorporated into many of the
IU's activities and underpin the National Bench-
marking Service that the DTI wishes to launch
through Business Links in 1996.
2. Innovation and the Finance
Community
During the 1980s part of the dissatisfaction with Bri-
tain's relatively poor record in translating invention
into innovation was focused on perceived problems
in the relationship between the providers and con-
sumers of capital. These included the difficulties
faced by inventors looking to raise funds for scale-
up, exacerbated by their unwillingness to take loans
conditional on external advice on good business
practice.
For stable companies with sound financial backing
a particular problem was that the high and fluctuating
interest rates made it difficult to make the type of
investment to improve future earning, schemes which
could be easily justified in lower inflation countries.
In recent years this problem has receded but such
investments are still broadly lagging competitive
companies, and can have a cumulative effect on com-
petitiveness.
For smaller companies, a particular problem has
been the funding gap for amounts between £150,000

Process Sector benchmarks Process Sector benchmarks

Average Top Top IC Average Top Top
performance 25% 10% performance 25% 10%
reliability I 88% I 97.5% 99% apacity used for I 8% i 2% 1%
I changeOvers I I
New product introductionl 2% I 7% 55% Average component I 188 I 15 10
over last 5 years (new set-up time (min) I I
product/product range) I I
scrap rate I 5.8% I
/ /
1.3% 0.4% Average assembly ~ ~ ~ - - -6- - - -2-
set-up time (min) I I
Manufacturing added-T 72~ 11 90 140
/ / Training on job (days) I-- - - --1 - - - - - -
value per manufacturing
employee (£000) I I • Existing employees I 4 I 5 lO
/
• New employees I 21 I 30 42
Total stockturns / 1__0 -__
- ~ 11 19
[ Absenteeism t --J
-23-o/oI-1

Long Range Planning Vol. 29 August 1996

and £3 million, where the costs of due diligence on
the part of the venture capitalist were simply too high
in proportion to the expected return and, for quoted
companies, the apparent demands of institutional
investors for dividends at the expense of long-term
investment for future growth. Envious glances were
cast overseas, particularly towards Germany and
Japan, which appeared to have a far more supportive
approach towards industry and innovation. However,
it must be recognized that financial systems are just
as much the product of the unique history and culture
of individual countries as industrial ones, and this
makes it difficult to identify elements of global best
practice in the financial world. Elements of any given
system that are admired need to be seen in the context
of the system in which they flourish. Attempts to
transplant these elements wholesale into another
system, however, usually end in failure because the
cultural issues that gave rise to that practice are
ignored. This is not to say, however, that no effort
should be made to identify funding practices in other
countries that appear to work well. Rather, that when
attempting to introduce them to the UK's system due
regard needs to be paid to the existing structures and
the practices adapted accordingly.
The provision of the correct type and amount of
finance is a key element in the innovation process for
both large and small companies. Arguably one of the
reasons for the superior performance of companies in
Japan and Germany is that they have a better record
at accessing the right sort of finance. Traditionally in
the UK small and medium sized companies have
relied upon banks to provide overdraft facilities for
virtually all of their financing needs, whether this is
suitable or not. This has left companies overly vul-
nerable to interest rate fluctuations in times of econ-
omic downturn. Moreover, as on-demand facilities
they are liable to be reduced or withdrawn by the
banks as levels of bad debts mount in times of
recession. Best practice suggests that companies,
especially small ones, need to be much more alert to
the requirement for the correct mix of finance, be it
debt or equity, when considering their next stage of
growth.
One approach has been pioneered by the Inno-
vation & Growth Unit of the National Westminster
Bank. It has developed its 'wheel of investment' as a
tool to assist companies in determining the correct
financial package. It looks not only at the traditional
banking products such as overdrafts and loans but
also at the various grants available, and the need per-
haps to access equity from external sources, be it a
local 'business angel' or a venture capital fund. The
mix is tailored to the specific requirements of the
company and altered as the company grows and its
needs change.
Finance for start-up companies, especially hi-tech
or bio-pharmaceutical, is fraught with risks that corn-
Promoting Innovation in Industry, Government and Higher Education
mercial banks are understandably reluctant to take.
As noted above, the 'wheel of investment' is one
response to this. In the US the Securities Act has
recently been amended to allow banks to bundle-up
non-government guaranteed loans to small businesses
and through a securitization programme sell them
into the wider investment market. This has two ben-
efits: I. it enables the banks to lend to companies that
w o u l d not normally meet their risk criteria and then
lay this risk off in the market; 2. it frees up banks'
capital to lend more money and thereby support more
growing businesses. Suitably modified there is no
reason w h y such a programme could not work in the
UK.
Unfavourable comparisons are frequently drawn
between London and Frankfurt or Tokyo when it
comes to the provision of long-term finance for indus-
try to fund long-term investments and R&D. The
City's appetite for dividends, compared with our
international competitors, is frequently alleged to be
one of the main causes for the decline of the UK's
engineering and physics based industries. Research
has shown these criticisms to be largely unfounded.
Comparisons with Germany and Japan frequently fail
to take into account the different financial and own-
ership structures, where shareholders' legitimate con-
cerns and returns to them come very low in the order
of corporate priorities. Pension funds in the UK are at
least as long-term as their international counter-parts,
on average holding shares for over 8 years. But the
perceptions matter in that they do influence the
behaviour of management within those companies.
The establishment of models of best practice for com-
panies and their institutional investors in the report
Developing a Winning Partnership 4 sets out how com-
panies and investors should manage their relation-
ship. The emphasis is on full and open dialogue on
both sides, with the companies setting out their long-
term plans for growth and the institutions explaining
their reasons for investing and their expectations of
returns in the light of the companies' strategy.
Through such measures companies can confidently
invest in innovation, knowing they do so with the
backing of their owners.
3. Innovation and the A c a d e m i c -
Industrial Interface
Of the wide role of the universities in society, only
their role in wealth creation is considered is this
article. In this respect 'best global practice' may be
represented by the small group of American univer-
sities, such as Stamford and Massachusetts Institute
of Technology (MIT), which consciously play a role
in wealth creation for the state and the nation. An
estimate by University of Manchester Institute of Sci-
ence & Technology (UMIST) Ventures, which is itself
seeking to emulate the approach of MIT, illustrates
the major contribution of MIT to US industry:
O US$2.4billion net worth
O 100 licences per year
O 20 companies founded per year
O 600 companies founded overall
ClAnnual sales (1992)--$45 billion from businesses
created by alumni or with MIT technology
O Employment--300,000 jobs
O Trend--number of new companies doubling each
10 years
In this sense no British university would claim to be
within orders of magnitude of this achievement; yet
the quality of UK academic thinking and the size of
UK university clusters of appropriate quality is not
dissimilar. In a recent innovation seminar at Swansea,
Professor Gray of MIT offered an explanation of the
difference.
"The Charter of MIT has been directed to wealth creation for the
State of Massachusetts--British Universities have a prime focus
on creation of fundamental knowledge and the training of stu-
dents for high quality academic performance."
In the last few years there has been a major change
in relationships with British academia in which
government policy has been instrumental, the White
Paper Realising our Potential, the subsequent reor-
ganization of the funding councils and the launch of
the "Foresight" exercise all playing helpful roles. A
dilution of the academic excellence of the universities
would be disastrous, but improvement is needed in
the leveraging of knowledge from academia to busi-
ness, particularly small business. A range of recent
initiatives has been designed to improve the linkage
between those producing educated, trained and
skilled people and generating fundamental knowl-
edge, and those employing these people and seek-
ing to exploit the knowledge.
With the diversity of characteristics of the uni-
versities, and the sectors and industries they serve, a
range of best practice models is the most desirable
outcome. The role of universities is defined in a report
to Yorkshire and Humberside Vice Chancellors (1995)
by:
Cl Educate students to standard of excellence in their
chosen profession.
Cl Prepare graduates for research skills to world class
standards.
~3 Add to the stock of fundamental understanding.
~3 Act responsibly as a major regional employer.
Some universities are ideally suited for this focused
role. For others, a wider role is desirable from the
additional 'menu' presented to the Conference of Vice
Chancellors (1995):
~i Play a national and regional role in providing the
advanced skills base for industrial development.
O Enable graduates to acquire an applied skills base
to 'hit the ground running' in smaller industrial
enterprises
0 Leverage knowledge base to provide an engine for
wealth creation on the scale of MIT.
O Be at the forefront in satisfying the evolving need
for 'lifelong learning'.
O Help create the interface to all British industry,
not just the academically literate part.
Most universities, sometimes guided by requirements
for funding, have improved their liaison with indus-
try via joint programmes, teaching company schemes,
sandwich course projects; but there are major weak-
nesses for which new structures or networks are
needed. There are approximately 3million com-
panies in Britain of which only a small proportion
have a graduate R &D resource (see Table 1).
Most university liaison is with the 3% of larger
companies which are 'academically literate'--yet it is
a national priority to leverage knowledge from aca-
demic and world-class companies to raise the stan-
dard of a much larger group of companies and sectors.
In the last few years there have been excellent
initiatives to widen the scope of interaction. The
Teaching Company Scheme, which has arranged 2000
industry-academic partnerships since its inception
in 1975, has steadily expanded and is now focused
on developing links with smaller and medium sized
companies with less than 200 employees. The uni-
versity industrial liaison officers have formed a single
association (AURIL) to focus attention on best prac-
tice. The new universities often have very close links
with industry. Many of the old established uni-
versities are building up links via 'industry clubs',
science park links and student placement. The Vice
Chancellors Group would like industry to give pri-
ority to creating more opportunity for good projects
in industry which would enable a much wider use of
sandwich course schemes.
One major new initiative has been "Foresight".
Academics, industrialists and experts from service,
public and private organizations have worked to-
gether in 15 sectors covering a substantial majority of
the wealth generating base of British society. Over
10,000 people have participated extensively to pro-
duce sector reports forecasting predictable devel-
opment over the next 15 years in areas ranging from
likely scientific capability advances to the potential
implications within society. A "Dephi" exercise has
been used to check that the initial conclusions within
sectors properly accounted for rapid developments in
other areas. While "Foresight" was designed to assist
the focus of academic resource towards areas of
maximum relevance, there are already short-term
spin-off benefits. The level of collaboration between
academia and industry has increased, the dis-
semination process is involving a widening range of
Long Range Planning Vol. 29 August 1996
 No. of
Classification employees Management structure
Small
Small firm 1-20 Individual
Managed firm 20-50 2-3 managers--consensus
Medium
Team led 50-150 Management, functional, direction,
Companies finance, production, sales, marketing,
human resource
Resourced 150-500 As above with R & D, design and training
established
Large
Corporations 500-2000 Full in-house resource
Multi-nationals 2000+
small companies and members of the academic com-
munity, and there is spontaneous pressure for the
initiative to continue and extend.
Overall though, while there is substantial improve-
ment in relations between academia and industry,
there is still much to be done to widen the penetration
of the UK knowledge base into the small and medium
size enterprises (SME) sector of companies in the UK.
Apart from the training role, university liaison
tends to concentrate on technology transfer, yet
wealth creation requires innovation and successful
commercialization, and most failures in moving from
an idea to successful exploitation occur due to lack
of understanding and attention paid to the other
aspects of the business mix; not to unsuccessful trans-
fer of technology.
4. Innovation Project Management
Steering through the stages of an inventive idea to
success in the market place needs high quality inno-
vation project management, and yet this vital applied
discipline is hardly recognized and not taught outside
individual companies and a few industrial-academic
partnerships in the UK. To turn ideas into successful
marketplace outcomes is a difficult task which
requires an ever evolving expertise base managed by
top-class people devoted to identifying, consolidating
and promulgating best practice. The cadre of expert-
ise which is built up by having expertise centres
focused on industrial outcome rather than academic
publication as the prime measurable success was one
justification for the original "Faraday Centre" pro-
posals--and is a benefit of appropriate institutions in
Continental and North American countries.
'Bricks and mortar' Faraday Centres were rejected
at this stage of UK industrial and academic devel-
Promoting Innovation in Industry, Government and Higher Education
Employees Wealth
Cos (%) (%) creation (%)
78 13 11
11 12 17
8 25 24
2 20 25
1 29 24
opment, but there has been encouragement for pro-
jects which embrace Faraday principles. The key
Faraday principles are:
F3 The two-way flow of industrial technology and
skilled people between the science and engin-
eering base and industry.
CI Partnership between the industrial research
organizations and the science and engineering
base.
(3 Core research underpinning product and process
development.
(3 Industrially relevant post-graduate training.
There have recently been noteworthy experiments to
build academic-industrial liaison based on Faraday
principles, e.g. post-graduate training partnership
(PTP) schemes, and the scope of the schemes has
recently been extended. One version which also cap-
tures training on innovation project management and
leveraging knowledge to small companies is Faraday
North West which has the following features:
Cl The overall project reports to the North West busi-
ness leadership team with a board consisting of
the CEOs of many of the regions leading indus-
trialists--hence industrial relevance.
E3 The structure is based on 'link' type master pro-
jects between a competent company and a uni-
v e r s i t y - b u t with the PhD student leading the
project trained in innovation project management
skills.
Cl A cluster of small companies who can benefit from
access to the equipment and knowledge base of
the project but not the 'proprietary knowledge'
outcome are given access to the project, and the co-
ordinator has a responsibility to help solve their
immediate problems via 'clinics' networking and
visits.
Q The network of project managers under the guid-
ance of the Faraday Director can exchange experi-
ence and begin to build a body of best practice
supply expertise which is so lacking in the current
UK system.
Hence the goals of leveraging high quality 'com-
modity knowledge' to a much wider group of UK
industries--developing practical experience in inno-
vation project management and locating the overall
administration within a highly commercially ori-
ented structure--are all addressed.
5. The Role of Universities in
'Lifelong Learning'
The 'half-life' of useful technical knowledge is shrink-
ing, and new strategies for management and staff to
stay up to date for life are required. 'Lifelong learning'
and 'continuous professional development' concepts
seek to meet these needs, and universities recognize
that the characteristics of their 'student' are changing.
Short courses to enable graduates to 'top up', holistic
approaches to industrial training, distance learning
in which the Open University with the BBC hold a
world leadership role and flexible short course study
leading to post-graduate degrees or portable quali-
fications are part of a battery of approaches designed
to meet these customer requirements.
Here best practice is represented by universities
working with individual customers or representative
groups to tailor-make courses to meet customer needs.
Warwick University has been a leader in this area, the
new universities are also well positioned; the
"TEAM" programme involves 15 universities col-
laborating to offer short courses in 60 subject areas,
leading in realistic industrial training timescales to
MBA or MSc qualifications based on 10-12 short
courses with one longer project. In Trafford Park Man-
chester, the five universities, the TEC and six major
companies lead a consortium, "The Trafford Park
Manufacturing Institute (TPMI)" to pool training
resource and offer to any interested company tailor~
made training for a wide range of manufacturing
based training skills--from 'shop floor' behavioural
approaches through to post-doctoral projects. A
manufacturing diploma accredited by the universities
and targeted at experienced manufacturing staff lack-
ing overview on modern technology has been the
product in greatest demand at TPMI.
Many universities have integrated graduate devel-
opment schemes to offer ongoing development to
graduates already in work. The engineering pro-
fessional associations have been particularly pro-
active in encouraging graduate engineers and tech-
nicians to be involved in continuous professional
development.
The rapid improvement in IT and multimedia based
learning strategies make the whole area of top-up
training a rapidly changing scene.
6. The Virtuous Triangle of
Development
An overall problem remaining for Britain to fully
exploit its expertise base, however, is in the close
linkages needed to develop an applied area which
would require a close interactive relationship
between industry, academia and business schools
(see Figure 2). Such a prestigious peer group review
m e d i u m does not exist. However, there are promising
signs.
Among a number of positive research council
initiatives, the ESRC has just developed a framework
for innovation training in collaboration with six lead-
ing business schools, and the innovation programme
of research for ESRC has a joint academic-industrial
steering group to advise on programme selection.
Long Range Planning Vol. 29 August 1996
7. Innovation and the Education-
Industry Interface
Within the overall education process, it is important
for the young citizen to have an appreciation of the
role of wealth creation in contributing to and enhanc-
ing overall quality of life. In an external world which
is increasingly technological, there seems room for
improvement in presenting the issue within the UK
education scene:
[::1 Far fewer children have aspirations to enter indus-
try than in, say, Germany.
[3 A declining proportion, particularly of the most
talented, opt for science or technology courses at
'A' level, so that university departments cannot
fill their available places without relaxing entry
requirements.
O The engineering profession in particular feels that
the relatively poor public perception of the
importance of high quality engineers adversely
affects recruitment.
Within industry, the 'two nations' culture has con-
tributed to a situation in which technological issues
are regarded as 'specialist' in many companies, hence
not within the scope of general management atten-
tion. Industry recognizes that it must play a role in
re-establishing a positive perception: many initiatives
have been taken to provide material to make the topics
interesting and appealing. The Engineering Council
has been particularly proactive with many initiatives
involving engineers working with schools on projects
of real commercial value: "Action for Engineering" is
a programme with major initiatives in the education
area:
[3 To develop more interest among school leavers,
parents and teachers in the merits of engineering
as a rewarding career; stronger industrial links
as part of the curriculum and better publicized
rewards are part of the proposed mechanisms.
O Improve student performance in key topics, par-
ticularly maths.
O Better training and continuous development for
professional engineers and technicians.
O Encouragement to industry to broaden careers for
engineers at an earlier stage.
The Chemical Industry Association has a major out-
reach programme under the banner "Responsible
Care' '--and requires any member to achieve stringent
standards and publicize them via site visits, open
days etc. As a programme more directly focused on
children, it has worked with Halton Borough and
major local companies to provide a m u s e u m of the
chemical industry 'catalyst' where the impact on
society of the chemical industry from the early days
of development to modern times are illustrated. The
Promoting Innovation in Industry, Government and Higher Education
museum, itself an historical chemical industry build-
ing, is located within sight of many of the pioneering
chemical companies of the 19th century. Parties of
school children undertake educational projects at the
museum, and 17,000 were involved in 1994-1995.
~3 SATIS--an arm of the 22,000 strong association of
science teachers--produces material to sup-
plement the National Curriculum for children of
all ages. The material is generated by leading
industrialists and academics and translated into
'childspeak' by experienced child communi-
cators. This material is sold in loose leaf binders
and schools purchasing one set can duplicate
freely without infringing copyright.
O Major companies and trusts and professional
bodies set education's liaison as a key priority for
external affairs.
O The SET week sponsored by the Office of Science
and Technology acts as a focal point for many
events and considerable positive media attention.
Videos and films sponsored by government
departments are shown on Open University chan-
nels for use by teachers.
A natural tendency of companies perceiving a poor
public perception of their value among the young is
to commission 'wonderful material' to inform chil-
dren of their worth. However, there is, in general, a
bewildering Aladdin's cave of such material avail-
able--and best practice resides in initiatives which
help teachers select and deliver such material, recog-
nizing that the demands of the National Curriculum
on their own and their classes' time means they must
be very discriminating.
There is a debate within education on the merits of
the relative degree of specialism required in 'arts' or
'science' subjects in England compared with France,
Scotland or Germany. For example, The Salters Insti-
tute which co-ordinates many groups involved in
education liaison, under the chairmanship of the dis-
tinguished scientist Lord Porter, recently called for
changes to broaden the width of subjects required for
sixth-form training.
One particular issue in the UK is provision of
people qualified in practical as opposed to academic
topics. A recent CEST report concluded that British
and German educational output were similar in many
respects with this one exception: there is no
equivalent in Britain to the qualification of the
"Meisterwerker" in Germany; and this highly prac-
tical expert at or just below graduate level is a key
requirement in many industrial and academic roles.
The NVQ and GNVQ initiatives in the UK may
address this issue in the long term.
While Business Schools are growing in terms of the
number of MBA students and in the variety of courses
offered, relatively few have addressed the issue of
innovation in depth, and there is little interaction
between the management schools and manufacturing
and engineering faculties. American experience indi-
cates that management, technological and entre-
preneurial skills are all required in close partnership
to maximize the value of successful n e w ideas.
New initiatives are underway in this area, as noted
at the end of Innovation and the Academic-Industrial
Interface (Section 3).
8. Innovation and Public
Understanding, Including the
Role of the Media
The importance of innovation--which requires
embracing a culture of constant chance--is not well
understood within a society traditionally insulated
from the rapid pace of development in the more geo-
graphically remote competitor nations. Resistance to
change has indeed been practical policy within many
parts of society, even those involved in training the
generation which must cope with and thrive within
the n e w paradigm.
The media plays a key role in forming an under-
standing of the necessity of change. In the last decade
the importance of innovation has increasingly been
appreciated by the professional business and society
based media. The IU tracks citing of innovation; this
has increased dramatically since first measurements
in 1991, and the tone of the contributing features have
been far more positive.
To command media attention often requires a
'hook' for a story, and there are now well established
'set piece' innovation events:
o The Annual UK Innovation Lecture by a world-
class innovator is now broadcast on satellite TV
to invited audiences nationwide. In 1996 an audi-
ence of over 3000 senior businessmen, academics,
public sector and media staff etc. viewed the lec-
ture delivered simultaneously in 29 locations.
O The R&D Scoreboard--widely analysed in the
major business oriented newspapers--focuses
attention on which companies and sectors are
investing for future innovation. This has an
importance beyond the issue of R & D as it is the
only quantitative indication in the public domain
of the preparedness to allocate resources for the
generation of future profit streams, as well as
delivering short-term results. In some sectors this
has been reported to have had a positive effect
on the quality of discussion between management
and institutional investors.
cl The Innovation Writers Awards promotes the
realization that competent journalism can be
highly effective in translating 'inventions' to
innovations.
Cl At a regional level there are many innovation
awards which raise the awareness of innovation
amongst small companies. Some of these are spon-
sored by major companies which sends a useful
message to their employees, their supply chain
and their customers.
[3 At governmental level the commitment to inno-
w~tion is signalled in Government White Papers,
notably the 1st and 2nd Competitiveness White
Papers, the "Realising our Potential" and "Fore-
sight" initiatives. These publications are followed
by resource allocations and initiatives by many
parts of the civil service and governmental offices,
the TECs and the Business Link structure. The
extensive round of speeches by ministers, pro-
grammes such as "Managing in the 90s", the talks
and presentations by IU industrialists and the
media articles and programmes triggered by these
initiatives all contribute to raising industrial and
public awareness.
Paradoxically, establishing Science & Technology or
even industry itself as a backcloth to normal life as
portrayed within the broadcast media has been less
successful: the architypical scientist is small, balding,
with unruly hair and an Austrian accent--Einstein
has a lot to answer for! Industry is hardly visualized
except as a polluter or corrupt manipulator as a back-
drop to the world of soaps and situation dramas por-
traying normal life. Portraying the wealth creating
arm of society in a realistic way seems an important
goal in achieving more favourable attributes in
society.
In countries with other cultures, the status of tech-
nologists and industrialists is higher, e.g. in Holland
and Germany; but the adverse perceptions of the con-
tribution of industry appear also stronger, e.g. in
environmental areas.
9. Innovation and Government/
Civil Service
In extolling the rest of society to embrace a culture of
constant change and improvement, it is axiomatic that
government departments should practice what they
preach.
There are many real differences between the mis-
sion and purpose of roles in the civil service and
the public sector in general compared with industry;
there are, however, many areas of overlap where
identified 'best industrial practice' is equally relevant
to public sector practice. The intermingling of people
from industry and the public sector happens increas-
ingly, to mutual benefit. Of all areas, it is most appro-
priate that this process is well advanced in the DTI,
which is trying to define and stimulate adoption of
industrial best practice and should therefore be at the
forefront of exploring and encouraging adoption in
Long Range Planning Vol. 29 August 1996
the public sector. An increasing number of indus-
trialists on secondment have been brought in and are
playing a role in changing culture and translating
best industrial practice into civil service approaches.
Departments have applied for the "Investors in Peo-
ple" award. The best practice distilled from the Win-
ning report are used to encourage self-monitoring of
departmental performance: international benchmarks
among the analogue organizations to, for example, the
DTI in other countries are encouraged.
The establishment of the new Government Office-
Training & Enterprise Council-Business Link struc-
ture now provides a m u c h more customer orientated
'route to market' for government initiatives to reach
the smaller and m e d i u m sized companies; and their
views are more effectively translated, distilled and
fed back to government. Again, the lessons from the
Winning report are being used to help improve the
effectiveness and efficiency of this process, including
the design, marketing and delivery of initiatives
and the relationships between the various partner
organizations.
Within the widespread activity in the DTI, the role
of the IU is to use the strong relationships with com-
panies, other organizations and regions, to help
define, codify and prioritize best practice. The mis-
sion is "To work towards the achievement of an
innovative public sector that encourages and exploits
ideas for continuous improvement and that develops
and maintains effective customer focus."
A most important role is to focus on the few issues
which industry, particularly SMEs, identify as of
most importance. Then the IU helps with research to
quantify and validate approaches, it works with other
parts of the DTI and other departments to produce
best practice procedures, helps validation, e.g.
through Business Links and uses the 'multipliers' via
contributions to White Papers, ministerial speeches,
presentations to industrial and other audiences by IU
members, videos, tapes and contact with media to
help promulgate the message.
The major work of dissemination is done through
other parts of the DTI and other departments and
thus good working relationships, mutual respect and
influence are key requirements.
The IU itself must be an exemplary organization
practising the methods and cultures it promotes. The
industrialists play a role in importing latest 'best prac-
tice' expertise, but the officials have a more crucial
Promoting Innovation in Industry, Government and Higher Education
role to play in helping to translate these approaches
into relevant approaches for public sector organ-
izations. To this end the IU is working with the Citi-
zens Charter Unit and contributes to the Civil Service
College.
Key priorities at present include promoting the cul-
ture captured by the Winning report:
t3 Change--Empower--Learn--Innovate--Win.
~3 Supporting the focus on simplification and cus-
tomer targeted dissemination of practices which
have proved most effective in helping successful
growth of companies, particularly smaller com-
panies.
r3 Supporting the widespread movement in the DTI
towards better people and management practices,
including Investors in People.
For industrialists, rules and procedures deriving from
concepts of'public accountability' and 'additionality'
are one of the major differences compared with pri-
vate sector experience, but on all sides there is a will
to overcome barriers and 'move with the times'.
10. Commentary
Innovation is firmly on the agenda in the UK. Com-
pared with the time of m y first exposure to the issue
at a national level as a member of the Government
Advisory Committee (the Innovation Advisory Board
1988--1991), the situation has now changed remark-
ably. Academic attitudes are far more supportive with
m u c h more buy-in to the wealth creation agenda and
the regional importance and responsibilities of uni-
versities. The city-industry relations have improved,
the GO-TEC-Business Link system provides a 'route
to market' for a two-way dialogue for small companies
and public and media attention is m u c h higher. How-
ever, as the current EC Green Paper on innovation
points out, the speed of progress in Asia and America
means that competitively Europe, including the UK,
has to run even harder to do better than stand still.
By fully realizing our potential we can survive and
thrive.
A chapter entitled "Innovation and TechnologyForesight" which
is, in part, based on this material appears in StrategicManagement
of Science &Technoloy, Prentice Hall, EnglewoodCliffs,NJ (1996).
All reports cited in this article are available from The Innovation
Unit, Department of Trade & Industry, 151 Buckingham Palace
Road, London SWlW 9SS, UK.
References
1. Innovation--the Best Practice, Joint study by the Technology Group of CBI and the
Innovation Unit of DTI.
2. How the Best UK Companies are WINNING, Joint CBI/DTI study.
3. Manufacturing Winners, TEC National Council.
4. Developing a Winning Partnership, Joint City-Industry Working Group under the
Chairmanship of Paul Myners of Gartmore plc.

Long Range Planning Vol. 29 August 1996