What do attitudes to innovation in the manufacturing industry mean for science and innovation policies in the UK?

Manufacturing work

Source: fotopedia.com/items/flickr-3837312784. CC BY-SA 2.0

EEF, The Manufacturer’s Association, have just published their “Innovation Monitor 2014/15” – capturing manufacturing companies’ views on innovation. They outlined the reports’ key findings at a breakfast event last week, providing a useful snapshot of how these businesses think about innovation. Do they do it? Do they want to? If so, why, when and how?

EEF produce this annual report on the basis of their members’ responses; 95% say they have engaged in some form of innovation in the last 3 years.

Headlines from the report

2013 saw manufacturers engaged in several different innovation activities, but in 2014 innovation activities were more focussed, aimed at meeting the needs of existing customers, as had been more typical in previous years. The 2013 ‘spike’ in breadth of innovation activities was thought to be a recovery strategy, which waned with a return to growth in 2014; companies need capacity to innovate, and this capacity can get eaten up by day-to-day business.

Manufacturers have quite modest plans to increase spending on innovation in the next few years. At the same time, there is growing concern about falling behind competitors due to levels of expenditure on innovation. Even small companies are acutely aware of growing competition from overseas, and barriers such as speed to market are persistent.

The last few years have seen several changes in the Government’s support for innovation, for example through funding for the Technology Strategy Board and the introduction of the Catapult Centres, as well as the strengthening of the R&D tax credit and introduction of the Patent Box. It can take time for companies to get the most from these initiatives, but they have generally been well received.

Government support for innovation

It is an oft-quoted fact about innovation in the UK that business investment in R&D is particularly low in relation to comparator countries. The EEF report gives a useful picture of the reality of R&D investment decisions for businesses in this sector, and it’s interesting to see some overlaps between the EEF’s policy recommendations and what the Royal Society has recently said to the Government, in our joint statement submitted to the Science and Innovation Strategy.

The EEF report calls for increased support for applied research through the Technology Strategy Board, although the national academies are keen to ensure that this does not come at the expense of basic science.

EEF also point out that businesses need more consistency in the support measure in place over time and across Government. This should be supported by an over-arching strategy. The Royal Society has repeatedly called for a more long-term approach to science and innovation funding and policy; stability is important for research wherever it is conducted and whoever it is funded by.

Science and innovation in the UK

In our team, we spend a lot of time thinking about how science and innovation can support growth and society in the UK. When businesses innovate and apply new knowledge they are working as part of a complicated system, which ultimately links them up with the very basic end of academic science.

So how best to support all the parts of this system to achieve the best outcomes? It’s a big and messy question that a lot of people are trying to answer. Understanding the perspective of the manufacturing industry is a useful part of the puzzle when we’re trying to think about the whole picture.