Not my words but NESTA’s though I have used very similar words many times over the last few years.
One of the most depressing reports that I have read for a while is “UK Innovation Index: Productivity and Growth in UK Industries” by Peter Goodridge, Jonathan Haskel and Gavin Wallis (Nesta Working Paper No. 12/09). It shows that there has been a £24bn collapse in innovation investment over the last 3 years. This trend has accelerated with the economic downturn but it began in the good times. There has been a crisis of confidence in the course of this decade with businesses prioritizing cash and concrete over investment in innovation. NESTA describes it aptly as a “lost decade of innovation”.
“Now why should that matter?” some may ask. Well the answer is that innovation accounted for 63% of economic growth between 2000 and 2008. If the British economy is to recover – and there have been some slumps in history from which a country has never recovered – we have to reverse this trend. Otherwise it will be we who will join the third world just as countries like China, India, Brazil and even parts of Sub-Saharan Africa emerge from poverty. The danger is articulated very clearly by NESTA’s Chief Executive Geoff Mulgan:
“Other countries are making investment in innovation a top priority and the UK cannot afford not to do the same. 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.”
The tragedy is that our country does not need to be in this position. The Global Innovation Index 2012 published by INSEAD and the WIPO lists the UK as the 5th most favourable country for innovation, behind Switzerland, Sweden, Singapore and Finland (page xviii). We are ahead of the USA (No. 10), Germany (No. 15), France (No 24) and Japan (No. 25). According to our country profile on page 315 we score well on market sophistication, investment, regulatory sophistication, online creativity and ICT access. It is human capital and knowledge absorption where we do less well.
NESTA has started a campaign for a “Plan I” which Mr. Mulgan calls “a plan for innovation-led growth – as an alternative to the increasingly sterile debate between Plan A and Plan B.” Restoring investment in innovation should be are number one concern. Everything else – the Olympics, Diamond Jubilee and even the shenanigans of bankers and newspaper proprietors are mere sideshows in comparison.