Exploring the links between design investment, innovation and productivity
Published: 12 September 2018
The case studies and design survey undertaken for the “Design Economy 2018” have suggested the different mechanisms through which design and designers can contribute to firms’ innovation and performance. Here, we use data from the UK Innovation Survey to undertake a causal analysis of the links between design, innovation of different types and productivity. Our analysis draws on data from around 15,000 UK companies which responded to two consecutive waves of the UK Innovation Survey.
The starting point for our analysis is the UK Innovation Survey indicator of whether or not each firm ‘engages in … design activities, including strategic, for the development or implementation of new or improved goods, services and processes’. Are firms which are engaging with design more likely to be innovating? More specifically, we explore whether firms which are engaging with design are more likely to be engaging in product or service innovation, process innovation and organisational innovation. The second stage of our analysis explores the extent to which each of the three types of innovation results in improvements in firms’ productivity.
Productivity and performance
This review considers the existing evidence on the business effects of pandemics, with a particular focus on the impact on small and medium enterprises (SMEs). Evidence from previous pandemics is reviewed, and in addition, we provide an overview of early assessments of the emerging evidence on the business impacts of the COVID-19 pandemic on Chinese firms and other related businesses.
Evidence on the 1918 influenza pandemic in the US suggests higher mortality in urban areas and higher working-age mortality – a very different pattern to COVID-19. Shutdowns did cause significant losses for many businesses, especially those in the service and entertainment industries that suffered double-digit losses in revenue. Other businesses that specialised in health-care products experienced gains in revenue. The 1918 pandemic caused labour shortages in the US as well as longer-term productivity benefits. These were not repeated in other countries. Scenario-based studies for the US and UK have also examined potential pandemic effects and may provide a more robust indication of potential medium-term effects from COVID-19.
Early evidence from the COVID-19 pandemic in China emphasises the severity of the short-term effects on SMEs. In February 2020, 30 per cent reported that, due to a cash shortage, they would be able to sustain their business for no more than three months; 30 percent reported that they would be able to sustain their business for six to twelve months. Furthermore, 30 per cent of firms have seen their income fall by more than 50 per cent, with almost a third reporting a 20 to 50 per cent reduction. Three months after the COVID-19 outbreak in China, many small businesses are not working at full capacity. Many employees continue to work from home, and business owners attempt to fix broken supply chains and look for new domestic and overseas contracts. Estimates suggest that each ten-day period of lost work in the Chinese economy reduces quarterly GDP growth by 0.39 to 0.46 percent.
Published: 16 April 2020
Sustaining growth – the HR dimension HR practices and management and leadership skills of High Growth SMEs
This research set out to investigate human resource management (HRM) practices and leadership behaviours in UK SMEs that represent a small proportion of firms to have achieved long-term growth. We interviewed 30 senior leaders of such SMEs and found that most leaders espouse key high performance work practices such as selective hiring, employee development, open communication, and, to a varying degree, performance management and employee participation. Through flexible informal practices, SME leaders tap into employee’s intrinsic motivation to enhance performance and to develop personal trust and reciprocity. Overall, our research paints a picture of HRM in growth-oriented UK SMEs as a complex phenomenon where a number of formal and informal HR levers interact, guided by a compelling vision, and creating a positive company culture in the process.
Published: 30 June 2016
Published: 9 September 2014
Enterprise Research Centre
Warwick Business School
University of Warwick
Coventry CV4 7AL
Enterprise Research Centre
Aston Business School
Birmingham B4 7ET
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