NESTA has recently published a report titled ‘Plan I – The case for innovation-led growth’. The report looks beyond the short-term arguments about Plan A vs Plan B, and focuses on a ‘Plan I’ that will deliver long-term growth. The Plan I report sets out 12 recommendations to kick-start sustainable innovation-led growth, and move beyond the typical economic policy that has dominated in the UK for the last decade.
The report argues that the debate over growth is missing a vital point. Fixing the economy in the short term is only half the battle. If we want the UK to return to growth, we need to look at what has gone wrong with the main driver of growth: our capacity to innovate.
We know that innovation is the main source of productivity growth in developed economies like the UK's, so if it is indeed slowing down as detailed in the UK governments own BIS Innovation Survey report 2011, this is a serious problem.
Ratings agency Standard and Poor’s recent assessment of UK economic prospects concluded that ‘…………..structural impediments include low absolute levels of labor productivity, a shortage of workers with technical and vocational education, and insufficient investment in infrastructure and innovation. Addressing these issues will be likely be difficult at a time of fiscal austerity.’
NESTA concludes that since 2008, the UK’s economic debate has largely been about short-term recovery. The argument has focused on which of two options will end the recession: Plan A or Plan B, austerity or stimulus. But neither addresses the UK’s longer-term growth prospects. Growth depends on innovation — our ability to generate and adopt new knowledge and ideas. Decades of research have shown that innovation is the most important driver of long-term productivity and prosperity, and that innovative businesses create more jobs and grow faster. Yet despite the UK’s many strengths as an innovative economy, there are crucial ways that we are losing ground.
The Executive Summary of Plan I may be downloaded from the pdf link below. The full report may be downloaded from the NESTA website.