Britain must learn to innovate or it will stagnate, argues Lord Sainsbury
Lord Sainsbury, The Observer, Sunday 31 October 2004
The UK is facing unprecedented competition in business and intense pressure to deliver quality public services that meet people’s needs and expectations in the 21st century. To rise to this challenge, national performance and prosperity will increasingly depend on the creativity and inventiveness of our people. The DTI’s ambition is to create the conditions where UK industry gains an international reputation for innovation to match our reputation for scientific and technological discoveries.
By more than doubling the science budget, the government is ensuring that the UK remains a leader in scientific excellence. By 2007-08 the science budget will be £3.3 billion, compared with £1.3bn in 1997-08. However, the aim is not simply to increase the volume of pure scientific research. To deliver a new prosperity, we need to maintain our reputation for world-class science and to increase our rate of innovation.
One of the most potent sources of innovation is design. Its impact has been used to transform products, services, systems – entire organisations. Take the Apple iPod. While the technology for its development already existed, what made it such an iconic example of successful innovation was its design. Through understanding and meeting people’s needs and expectations, Jonathan Ive, the British designer behind the iPod, delivered a highly desirable product that was also a system (iTunes) and a service (iTunes Music Store).
Only organisations which think about their customers in this way can expect to succeed. This view is reinforced by a recent study that revealed that the share price of companies which used design well outperformed the FTSE 100 by 200 per cent over the 10 years to 2003.
Unfortunately, UK start-up and early-stage ventures under-use design skills when commercialising technology. Examples such as the WAP mobile phone demonstrate that pushing more and more technology at users will never be the answer. New products must reflect and meet the needs of customers. Successful companies are increasingly using designers and the design process to identify user needs then create products to meet them. At an early stage, technology businesses need to establish what value their products will have in the marketplace before attempting to commercialise them.
The government recognises this challenge and, as a part of the new DTI Innovation Strategy, has tasked the Design Council to deliver national campaigns to enhance innovation through the improved use of design, focusing on the manufacturing and emerging technology sectors. The results from the Design Council’s early work, mentoring a few companies to use design more effectively, demonstrates the potential. For every pound invested by the Design Council, company sales have increased by £14. The goal now is to further develop this support so that it can be delivered through the Manufacturing Advisory Service and other partners across the country. The key policy aim is to get more successful products into the marketplace.
Early work by the Design Council is already resulting in powerful and growing evidence that spending a relatively small amount on design activity in the early stage of scientific or technological development delivers disproportionate benefits – a key one being attracting venture capital.
If design remains a late add-on to new products and innovations, UK business will not fully reap the benefit of innovation. But by encouraging UK businesses to acquire the skills and advice to exploit design at the initial stages, we can give a further boost to innovation, resulting in greater economic performance in an ever more competitive global knowledge economy.
(Lord Sainsbury is Secretary of State for Science and Innovation)