Innovation is one of the main engines of long-run economic growth and structural change. The decisive impact of technology on industrial performance and international competitiveness means that continual improvements in the innovation process are essential for gains in productivity, the creation of jobs, economic growth and higher standards of living. The Innovation Review evidence paper, published alongside this paper, highlights a number of factors that help to explain the UKs innovation performance.
- Customers and Suppliers create the demand for innovative products and services.
- Regulatory environment can create opportunities and incentives for innovation.
- Competition and entrepreneurship competitive pressures spur firms to innovate, while entrepreneurial behaviour is needed to spot opportunities and turn them into profit.
- Access to finance openness to the ideas of others and good access to worldwide sources of technical knowledge.
- Sources of new technological knowledge companies draw on scientific and business knowledge from a range of sources, including academia and research institutions, competitors, suppliers and employees.
- Networks and collaboration firms rely on a variety of types of collaboration and relationships with many partners.
- Capacity to absorb and exploit new knowledge firms have to build the capability to make the most of external sources of knowledge.