As the credit crunch bites, there’s a temptation to stick to what you know but CBI director-general Richard Lambert believes that continued innovation is of vital importance.
Speaking at the publication of a new report by the CBI and QinetiQ, he said: “When times get tough, firms may want to stick to what they know best rather than try out new ideas. But the services sector contributes three-quarters of the UK’s economic activity, so its continued dynamism is a matter of vital importance.
“The only good way to find out what works is to listen to people who know best, which is why the CBI and QinetiQ spent time talking with a wide range of firms – from Arup and HSBC to Nike and Newcastle International Airport.
“What these companies said makes sense – that successful innovation comes down to people, not just processes, and that trusting your customers and giving your ideas time to develop is vital. When you act, you must move fast and learn from your failures, but don’t beat yourself – or others – up when things go wrong.”
All the firms in the report were found to invest for the long-term – be it in training staff or buying new technology – to develop new processes or change the culture of the business. This enables them to turn short-term setbacks into part of a learning process, instead of being thrown off course.
Graham Love, chief executive of QinetiQ, said: “Traditionally in the UK, innovation has been synonymous with R&D expenditure. However, with more than 75% of the economy based on a broad base of services, from retailing and financial services to leisure and tourism, it is high time we expand our understanding of what innovation means.
“The last decade alone has seen a rebirth of the travel industry with low-cost travel, the growth of online delivery of public services and a huge surge in online retailing, to name but a few examples.
“With each of these successes, innovation in new technologies, products and processes was combined with radical change to a business model and novel market positioning. This ‘magic recipe’ has given many of the companies in our report a competitive edge – but no-one is saying it’s easy.”
Finding people with the right skills continues to be a major challenge for many businesses, particularly when they require staff to have both technical ability and sales expertise. One firm in the study is working with a number of universities to identify promising graduates to whom they can offer work experience opportunities and possible sponsorship.