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News - 22 January 2006
Innovation - a microscope is not a prerequisite

Lack of innovation stymies UK productivity

Innovation and increased productivity are expected to pull the country into the premier league in the Eurozone but there is little evidence that either is strong enough yet to make a real difference.

In the year to December 2005 UK output per hour worked (productivity) increased by 0.4% - the slowest rate in 15 years.

Unlike America, which has improved its performance year on year by embracing information technology and innovation, Britain has failed to do the same. Apart from these two factors, industry commentators are blaming a variety of others for the poor performance. Regulatory burden is cited by most for increasing costs and diminishing entrepreneurial spirit.

A recent discussion between Brighton & Hove Economic Partnership members highlighted the fact that 75% of businesses in the south-east have no desire to grow beyond ‘lifestyle’ businesses. Meanwhile in the big companies that employ large numbers of people, big pension fund deficits take money away from research and development

Failings in skills and transport add to a dampening mix that is holding the country back but which will require long term measures to correct. In terms of new patents and spending on research, Britain compares poorly with the rest of the Eurozone.


Too many businesses think that ‘innovation’ is something that ICI Chemicals does in a laboratory or Microsoft does with a new piece of software. Innovation is found in every size of business but few businesses actually devote time to thinking about how they can be more innovative.

The Department of Trade and Industry (DTI) has a helpful section on their website which challenges businesses to think about innovation and includes an interactive innovation challenge. For more details click on the link below:

Also see the story on SEEDA's Innovation Advisory Service (IAS) or click on the link below:

Read related items on:
Brighton & Hove Economic Partnership
Department of Trade and Industry

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