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Why is Innovation Important?

Thu, 19 November 2015

Contributed by Dan McLaughlin at BIS. The fifth blog of a special Shell LiveWIRE Global Entrepreneurship Week series celebrating innovation and using it to take your business idea and 'Make it Happen!'
The starting point for this short blog is to send a clear message – innovation is important, in fact it is critical to the success of a business and the nation.  Innovation has been, and will continue to be, a crucial driver of UK growth and economic prosperity.  Innovative companies, defined as those that have introduced a new product or process, grow nearly twice as quickly in terms of both employment and turnover as non-innovators [1].
For hundreds of the UK businesses innovation is part of their DNA.  Collectively, they contribute to a formidable innovation ecosystem.  As a nation we must push on as we are not quite the world leader in innovation – but we are very, very close.  The Global Innovation Index 2015 placed the UK as the second most innovative nation in the world, behind only Switzerland. But not everything is perfect. The UK’s GDP share of Research and Development spend is low by international standards, behind the USA, Germany, Japan and France, as well as the averages for the EU. As ever, there is always room for improvement.
It is always exhilarating to see businesses creating and exploiting knowledge and technology.  In recent years, one stand out business that I came across is Polyphotonix founded by Richard Kirk.  Polyphotonix researches the application of light based therapies and also OLEDs for advertising.  It is truly impressive stuff and they have gone on to win numerous awards while also saving the NHS billions of pounds.  But innovation is not just about this end of the spectrum. For me, innovation includes a small firm creating a strategy and business plan for the first time or perhaps improving its internal processes and layout so they are able to do things better, leading to new or improved products and services.   
Government does a lot to support innovation with some world class initiatives.  I confess, however it still might seem a little difficult to identify what support might be helpful to your business.  Fortunately, something has been done about that and as a starting point and I recommend (for English based businesses anyway) taking a look at the Business Growth Service
Innovation is critical, whichever way you cut it – if you aren’t innovating, it might be useful to ask yourself why.

About Dan McLaughlin (Department for Business, Innovation and Skills)

Dan works at the Department for Business, Innovation and Skills.His current role focuses on small businesses.  Until recently Dan ran a children’s nursery and also ran a small business before joining the civil service.
You can follow him on Twitter @Dan2Mac.
[1] The Vital 6%, Nesta.

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