{"id":34757,"date":"2016-05-19T11:00:49","date_gmt":"2016-05-19T11:00:49","guid":{"rendered":"https:\/\/www.enterpriseresearch.ac.uk\/?p=34757"},"modified":"2022-05-12T12:23:25","modified_gmt":"2022-05-12T11:23:25","slug":"future-productivity-innovation-diffusion-answer","status":"publish","type":"post","link":"https:\/\/www.enterpriseresearch.ac.uk\/future-productivity-innovation-diffusion-answer\/","title":{"rendered":"The future of productivity: Is innovation diffusion the answer?"},"content":{"rendered":"<div style=\"margin-top: 0px; margin-bottom: 0px;\" class=\"sharethis-inline-share-buttons\" ><\/div><p>Recent research by economists at the OECD presents a new perspective on what drives national productivity growth. This presents a challenge to the emphasis of current UK policy on world-leading innovation.<br \/>\nThe OECD start by recognising that in every world economy there are some \u2018frontier firms\u2019 which are internationally competitive and match global high standards in productivity. Most firms \u2013 perhaps 70-80 per cent &#8211; are not in this category. These are what OECD call \u2018non-frontier firms\u2019. Firms which may have a more domestic market orientation, and much lower average productivity.<br \/>\nThe OECD evidence suggests that over the last decade productivity growth in frontier firms has been significantly more rapid than that in non-frontier firms leading to an increasing productivity gap. The figures below illustrate the trend over the last decade for the OECD countries. Productivity growth in the frontier firms has been around 3.5-5.0% pa compared to -0.1 to 0.5% in non-frontier firms.<br \/>\nProductivity growth in frontier and non-frontier firms: OECD countries<\/p>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-tt6kpx-db14502c9a0dc6c590fe7804759be158\">\n.avia-image-container.av-tt6kpx-db14502c9a0dc6c590fe7804759be158 .av-image-caption-overlay-center{\ncolor:#ffffff;\n}\n<\/style>\n<div  class='avia-image-container av-tt6kpx-db14502c9a0dc6c590fe7804759be158 av-styling- avia-align-center  avia-builder-el-0  avia-builder-el-no-sibling '  itemprop=\"image\" itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/ImageObject\" ><div class=\"avia-image-container-inner\"><div class=\"avia-image-overlay-wrap\"><img decoding=\"async\" class='wp-image-34765 avia-img-lazy-loading-not-34765 avia_image' src=\"https:\/\/www.enterpriseresearch.ac.uk\/wp-content\/uploads\/2016\/05\/bloggraph-2-300x161.jpg\" alt='' title='bloggraph 2'  height=\"161\" width=\"300\"  itemprop=\"thumbnailUrl\" srcset=\"https:\/\/www.enterpriseresearch.ac.uk\/wp-content\/uploads\/2016\/05\/bloggraph-2-300x161.jpg 300w, https:\/\/www.enterpriseresearch.ac.uk\/wp-content\/uploads\/2016\/05\/bloggraph-2-768x412.jpg 768w, https:\/\/www.enterpriseresearch.ac.uk\/wp-content\/uploads\/2016\/05\/bloggraph-2-705x378.jpg 705w, https:\/\/www.enterpriseresearch.ac.uk\/wp-content\/uploads\/2016\/05\/bloggraph-2-450x242.jpg 450w, https:\/\/www.enterpriseresearch.ac.uk\/wp-content\/uploads\/2016\/05\/bloggraph-2-1000x541.jpg 1000w, https:\/\/www.enterpriseresearch.ac.uk\/wp-content\/uploads\/2016\/05\/bloggraph-2-500x268.jpg 500w, https:\/\/www.enterpriseresearch.ac.uk\/wp-content\/uploads\/2016\/05\/bloggraph-2.jpg 1008w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/div><\/div><\/div>\n<p style=\"text-align: center;\">Source: \u2018The Future of Productivity\u2019, OECD, 2015, Figure 2.2.<\/p>\n<p>As the OECD comment the \u2018productivity slowdown is not so much a slowing of innovation by the world\u2019s most globally advanced firms, but rather a slowing of the pace at which innovations spread through the economy: a breakdown of the diffusion machine \u2026 the gap between those high productivity firms and the rest has risen\u2019.<br \/>\nThe implication is that raising national productivity is not so much about the small group of frontier firms but instead about improving the take up of new innovations by the vast number of non-frontier firms. Think about our use of smart phones. The great gains came not from the first lead users but when there was widespread use.<br \/>\nThis emphasises the spread of innovations throughout the economy and the importance of \u2018me-too\u2019 or \u2018new-to-the-firm\u2019 innovation. It is not only new-to-the-market innovation which matters for productivity.<br \/>\nInnovate UK recently published a new Delivery Plan which has a strong focus on supporting world-leading innovation. This will help to strengthen productivity in the UK\u2019s frontier firms. To maximise the productivity gains we will also need to\u00a0think again about how we can accelerate the diffusion of innovations to other non-frontier firms.<\/p>\n<p><strong><a href=\"mailto:Stephen.roper@wbs.ac.uk\">Stephen Roper<\/a> <\/strong><\/p>\n<p>&nbsp;<\/p>\n<p><strong><em>Please\u00a0noted that the \u00a0views expressed in this blog belong to the individual blogger and do not represent the official view of the Enterprise Research Centre, its Funders or Advisory Group.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Recent research by economists at the OECD presents a new perspective on what drives national productivity growth. This presents a challenge to the emphasis of current UK policy on world-leading innovation. The OECD start by recognising that in every world economy there are some \u2018frontier firms\u2019 which are internationally competitive and match global high standards&#8230; <a class=\"moretag\" href=\"https:\/\/www.enterpriseresearch.ac.uk\/future-productivity-innovation-diffusion-answer\/\"><strong>Read more<\/strong><\/a><\/p>\n","protected":false},"author":15,"featured_media":33587,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[74],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.enterpriseresearch.ac.uk\/wp-json\/wp\/v2\/posts\/34757"}],"collection":[{"href":"https:\/\/www.enterpriseresearch.ac.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enterpriseresearch.ac.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enterpriseresearch.ac.uk\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enterpriseresearch.ac.uk\/wp-json\/wp\/v2\/comments?post=34757"}],"version-history":[{"count":9,"href":"https:\/\/www.enterpriseresearch.ac.uk\/wp-json\/wp\/v2\/posts\/34757\/revisions"}],"predecessor-version":[{"id":45328,"href":"https:\/\/www.enterpriseresearch.ac.uk\/wp-json\/wp\/v2\/posts\/34757\/revisions\/45328"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.enterpriseresearch.ac.uk\/wp-json\/wp\/v2\/media\/33587"}],"wp:attachment":[{"href":"https:\/\/www.enterpriseresearch.ac.uk\/wp-json\/wp\/v2\/media?parent=34757"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enterpriseresearch.ac.uk\/wp-json\/wp\/v2\/categories?post=34757"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enterpriseresearch.ac.uk\/wp-json\/wp\/v2\/tags?post=34757"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}