Why harnessing the hidden innovation in high-technologysectors is crucial to retaining the UK’s innovation edge
Innovation is vital to the UK’s future economic prosperity and quality of life. So it is crucial that weunderstand where innovation comes from, who does it, what stimulates it, and how it benets oureconomy and society.In October 2006, we published the rst in a series of reports on what we call ‘hidden innovation’– the types of innovation that tend to be neglected by traditional indicators. We suggested that an‘innovation gap’ had opened up between these indicators, the reality of innovation in the UK, andthe policy intended to stimulate and support it.Much has changed since then: a new UK government department for innovation; a White Paperthat explicitly recognises the importance of hidden innovation; and the announcement of a majornew effort to measure innovation in ways that more accurately reect the UK’s economy andsociety.But much remains to be done. This report, the third in the series, focuses on high-technologysectors such as aerospace and pharmaceuticals. It reveals the increasing importance of hiddeninnovation in these sectors, and the surprising ways in which our most innovative rms haveadapted to technological change and international competition.What is clear is that, in this rapidly changing world, more of us need to be prepared to beinnovative. We need, in particular, to rethink some of our most fundamental and long-standingassumptions about innovation, and to consider new, perhaps unfamiliar ways of responding. Thisis as much a challenge for our politicians and policymakers as it is for our rms and entrepreneurs.We would greatly welcome your views on our proposals, and to hear your own.
NESTA is the National Endowment for Science, Technology and the Arts.Our aim is to transform the UK’s capacity for innovation. We invest in early-stage companies, inform innovation policy and encourage a culture thathelps innovation to ourish.