(First published in Jan 2012) We know we are a Creative nation, but one of the main themes of 2012 will be how well we exploit and monetise this. So, how well is Innovation embedded in our wider economy? In the wake of a major new report, we might want to consider if the creative industries have much more to offer the wider economy than previously thought.

It’s widely regarded that innovation is the cornerstone of new economic growth and success, for both the companies that innovate and the countries that tax them.

Although the word shares latin roots with Novelty, Innovation importantly also has roots in innovāre meaning to renew and alter.

It’s no surprise that innovation has become a buzz word of the 21st century rather than its erstwhile cousin novelty. Innovation is about the exploitation of novelty. “Innovation is the successful exploitation of new ideas” defined the UK Department of Trade and Industry Innovation Unit in 2004. Economist Peter Drucker stated “Innovation is the specific instrument of entrepreneurship… the act that endows resources with a new capacity to create wealth”. Framed by these definitions, innovation is the province of entrepreneurs, not your average employer or employee (although they may of course be potential entrepreneurs).

Ironically the term isn’t new. Austrian economist Joseph Schumpeter outlined innovation over 70 years ago as involving the introduction of a new product of higher quality than previously available, using methods of new production; (not necessarily new discoveries but maybe new in context, borrowed from other industrial sectors). He also cited the opening of new markets and new forms of competition that lead to the restructuring of an industry.

Soumitra Dutta, author of Innovating at the Top (2008) sums it up well “New ideas lie at the heart of innovation, but ideas alone are not enough. Innovation requires translating ideas into value-adding products and services. . . . Bridging the gap between an idea and its beneficial result is the crucial step in innovation”.

The implication is the better at innovation a country is, the more economic growth it might generate. Thomson Reuters 2011 report “Top 100 Global Innovators: Honouring the World Leaders of Innovation” makes an attempt to map the global centres of innovation. How do you measure Innovation? Usually these lists aggregate and list the amount of patents registered in each country as a single benchmark- but the Thomson Reuters study goes further, looking at the global reach of those patents and how much of a nation’s patent portfolio is recognised and protected by the biggest patent authorities in the US, China, Europe, and Japan. It also meticulously factored in impact- how often is the patent itself cited in other patents? Lastly, it looked at new inventions or techniques created.

Now we know the creative industries is an area where innovation can’t really be measured by patents, so this chart isn’t measuring creativity per se, but innovation across all industries. It is essentially measuring the invention that goes on. However, whilst not an assessment of the strength of our creative industries, this can be seen as a bellwether indicator of the fertility of each nations soil for innovation- showing how well companies and universities operate in an environment for exploitation of ideas.

INNOVATION: THE RESULTS

The Companies in the Top 100 hail from just 9 countries. You might reasonably guess that the US is number one, with 40% of patents. China, it should be pointed out, isn’t in the top 10 because its patents are inward facing, focusing on the domestic market, and hence doesn’t have international exploitation possibilities. So, you might not be surprised that number two is Japan with 27%. You might also not be too surprised that numbers three to seven in the list are European. The real surprise is that they are led by France (11%), followed by Sweden (6%), Germany (4%), and the Netherlands (3%) which just pips South Korea. Given the geographic footprint of France, its representation in the Top 100 Global Innovator list is impressive.

So where is the UK, with its often praised university research centres and technology and telecommunication companies? It’s not there, beaten by Switzerland (3%) and plucky Liechtenstein (1%) at numbers 8 and 9. Admittedly this result is skewed by scale- a country of approximately 62 square miles and approximately 35,000 people is also home to one of the most innovative companies in the world: privately owned machine manufacturer Hilti Corporation.

Of course, this isn’t the whole story- if you look at the industries represented by those patents, it’s weighted in favour of certain industries that we maybe aren’t so good at. But this in itself might be worrying. 14% of patents were from semiconductor and electronic component manufacturing, 13% from chemical manufacturing, 11% from computer hardware manufacturing, 9% consumer product manufacturing. It seems we are not a nation of inventors any more. However, we  know we are a Creative Industries nation- hugely successful in this respect contributing £133bn to the UK economy and according to the European Audiovisual Observatory, the best exporter of Audiovisual content in Europe, but this report seems to reinforce the idea that we don’t extend, exploit or even protect our ideas in our wider industries. It could be seen as a further extrapolation of that old narrative of how we invented television, the world wide web, jet engine and the telephone and then let others develop, licence and exploit.

WE’RE NOT IN, BUT NOT YET OUT

However it might be worth seeing this situation as an opportunity for the creative industries. If the Thomson Reuters report is right, there is a clear disconnect between our wider industries and a proven successful creative industries sector (5.6% share of GVA in 2008, the largest in Europe, projected to grow to 12.6% in 2016). Maybe our successful creative industries should be seen as exemplars the rest of UK PLC can learn from. Conversely, maybe our creative companies and creative and cultural entrepreneurs can act as consultants, agent provocateurs and mentors to a far wider gamut of companies than previously imagined. If our ‘innovation index’ isn’t great in our manufacturing industries, but simultaneously we have on our doorstep one of the best performing creative industries, it might be that we can foster an environment where successful application of creative industry innovation methodologies and modes of creative thinking could see us climb that chart of global innovators. Promulgating our creative industries’ proven innovative mindset beyond its own sectoral borders could have positive repercussions.  2012 could be the year we start to bring the right and left brained industries together to create unforeseen growth.

IVE HAD AN IDEA….

As an emblem of this idea, it’s just been announced that Jonathan Ive, the Chingford-born chief designer at Apple, has been appointed a Knight Commander of the British Empire (KBE) in the Queen’s New Year’s Honours list. Ive (ex-Northumbria Polytechnic!) said he was “both humbled and sincerely grateful” about the award for services to design. “I am keenly aware that I benefit from a wonderful tradition in the UK of designing and making”. How many of our home grown hi-tech industries could similarly benefit from exploiting our creators, designers, artists, thinkers, to convert creativity into wealth?

The main points of the Thomson Reuters report can be viewed via this infographic here

The creators of the Infographic above are  Column Five