The government needs to question its role in driving innovation

November 24, 2012 7:52 am

By Su Maddock

Central government has much to learn from locality leaders who are forging innovation strategies not only in cities such as Manchester and Birmingham, but also in places such as York, Swindon, Bristol, Rotherham and counties such as Cornwall.  Local leaders are increasingly appreciating the need for connectivity across localities and between people’s capacities and business growth.  They are investing in digital connectivity, whole system budgeting, locality procurement networks and third-sector procurement consortia.

By contrast the Coalition’s innovation policy is fragmented, functional and fails to acknowledge the significance of the dynamic relationship between people’s capacity to solve problems and the context in which they live. Society and business depend on each other and we need an innovation strategy that supports both.

Many locality leaders recognise their own failure to connect to the smaller enterprises and Local Enterprise Partnerships are trying to find ways of engaging smaller businesses. One of the strengths of Heseltine’s recent report “No Stone Unturned” is its recommendations for SME growth and local governance. Over 85% of all trading in the UK is by SME and while clearly not all SMEs are innovative, many are active in boundary-spanning networks.

Central to locality innovation strategies are collaborative leaders who think in terms of wider public systems and systemic innovation that could provide the capabilities, connectivity and knowledge exchange between smaller enterprises, companies and public procurers.  Successful international cities, such as New York, also show a systemic approach to innovation

  • Embracing open innovation and creating smart buildings
  • Redesigning  schools, waste and energy systems
  • Creating networks of municipal innovators

By contrast BIS policy is not ‘open’ but focused on fragmented, institutional initiatives and high growth companies which is obscuring the value of locality business clusters and of the necessity of building bridges between small enterprise (SMEs, SE etc) and larger companies and public institutions.

Government needs to question it role in driving innovation. Manchester’s ‘Knowledge Capital’ brought entrepreneurs and business leaders together; however,  Manchester City Council did not stimulate the energy for change this came from creative entrepreneurs, who led, the council followed.  When central government policy–makers assume solutions and fail to acknowledge local context, then, over specification follows.  This is  particularly, problematic for innovation which demands motivated people and porous,  work environments that are open to exchange across sectors.  This is why investing in HE research is not enough – it is incentivising application and the adoption of ideas that is weak in the UK. Government recognises this. Given this, surely the role of public leaders is to create the conditions for innovation and to align funding and policy interventions with that of innovators in any sector.

Locality partnerships are driving a process of renegotiation between local government, business, higher education, the Arts and the Third Sector and collaborative capabilities and new forms of locality governance are emerging in many places.  The government’s recognition of cities has increased, evidenced by their recent announcement for twenty more city deals. However, in spite of this, locality innovation strategies are not visible or mentioned in BIS innovation policy documents.  While local leaders are learning to be more and to collaborate; government lags behind and continues to ignore open and systemic innovation,  which is essential if public governance is to mature and be capable of introducing public values into the growing outsourcing of services.

Public procurement is projected across Europe as the route to innovation uptake, but if policy-makers continue to believe in one-size-fits-all innovation,  this is problematic, especially for personal service innovation. Financial and service innovations are underpinned by very different objectives.  My own research on DWP’s procurement of the Work Programme reveals an assumption by government that a neat procurement model will deliver efficiencies, savings and personal service      innovation simultaneously. This is a mistake when there are tensions and trade-offs involved in the transfer of financial risk from government to companies,  efficiencies and service innovation.  Efficiencies may be delivered through corporate, rationalisation but personal service innovation depends on local inter-agency working and personal connections. Many locality leaders are aware of this and want more honest, debate on the impact of current outsourcing and procurement systems on small businesses and services.

Innovative public governance is urgently needed,   that is capable of scrutinising transactional systems and creating the frameworks for longer term investment and the local connections necessary for both social solutions and sustained business growth.

Su Maddock is a public innovation consultant, Hon Fellow of the Manchester Institute for Innovation Research and a Visiting Professor at UWE. 

This piece was commissioned as part of Jon Cruddas’s Guest Edit of LabourList

  • TomFairfax

    Was this article written using the Plain English Campaign’s gobbledy-gook generator?

    In summary:

    Councils need to find better & cheaper ways of doing things, and it doesn’t help if Whitehall takes a one size fits all approach that isn’t always suitable to all places. Manchester City Council have found a way to things differently, but ‘better’, by not starting by stipulating the answer to the question, or making the solution so all encompassing that it is unnecessarily expensive. Here’s an example…

    And people wonder why the public is turned off by politics.

  • Dave Postles

    How about ‘embracing’ OpenSource IT with inhouse development?

  • http://www.facebook.com/jim.crowder2 Jim Crowder

    Well, with clarity like this it’s no wonder that Labour can’t appeal to the masses. How can someone rise to that level of power and influence without being able to express themselves. Is it a reflection of our education system that she’s a Visiting Professor at UWE?

  • Pingback: From Local Innovation to Growing Global Market Share | Labour Finance & Industry Group (LFIG)

Latest

  • Comment Labour must do more to be a technologically literate party

    Labour must do more to be a technologically literate party

    To know what was going on at the Labour Party Conference you consulted the very pretty and professional conference app. If you preferred things the old fashioned way, then you could look up fringe events and exhibitors in the thick booklet that was handed out.  However if you wanted to search a pdf copy of the booklet for a keyword, or lookup information on the web, then you were out of luck entirely. The stage at the Labour Party Conference […]

    Read more →
  • News Who is the mystery person paying for private polling on Cameron’s holiday plans?

    Who is the mystery person paying for private polling on Cameron’s holiday plans?

    Recently, I was sent some screenshots of an online survey – conducted over the summer – on unfolding events in the Middle East. It appeared to be an attempt to gauge how the British public felt about the government’s handling of ISIS, and what should happen next. There were questions on whether and how Britain should intervene, and on how different international institutions/world leaders (including the Prime Minister) were handling the crisis. One question in particular leapt out though, which […]

    Read more →
  • News Labour will tackle “diversity deficit” in business boardrooms

    Labour will tackle “diversity deficit” in business boardrooms

    Chuka Umunna, the Shadow Business Secretary, will today announce plans to introduce legislation that requires businesses to release information on the racial make up of their workforce, in an effort to improve the number of people from ethnic minority backgrounds in boardrooms. Building on reforms that would make similar requirements of companies about their gender diversity, today’s announcement comes after it was revealed that over half FTSE 100 companies have no non-white directors whatsoever. Umunna said: “At the top of […]

    Read more →
  • Featured 5 thing I’ve learned at Tory conference (so far)

    5 thing I’ve learned at Tory conference (so far)

    I’m almost 24 hours in to my first Tory conference, which is a strange experience for a Labour-supporting blogger. It’s a little like being a Cold War era spy (blending into the background, nodding a lot at things you don’t understand), except the Tory Party know I’m here and I’m wearing a big name badge that says “LabourList”. Here are five things I’ve learned so far: 1. Cheery resignation: If last week’s Labour conference was a bit flat, this week’s […]

    Read more →
  • Comment Featured How the Labour leadership misunderstand two of their biggest problems

    How the Labour leadership misunderstand two of their biggest problems

    Even before Ed Miliband entered the stage last Tuesday afternoon to give his conference speech, a few of us knew there would be no big surprise. A source close to the leader had earlier told a group of assembled journalists and activists that they wanted to focus on the “big six” national goals, not a surprise that would grab all the attention. Understandably, the assembled audience came out disappointed. The media, who needed a fresh story since the six goals […]

    Read more →
7ads6x98y