{"id":39728,"date":"2019-06-11T10:45:30","date_gmt":"2019-06-11T09:45:30","guid":{"rendered":"http:\/\/www.enterpriseresearch.ac.uk\/?p=39728"},"modified":"2022-05-12T12:23:22","modified_gmt":"2022-05-12T11:23:22","slug":"innovation-and-productivity-how-strong-is-the-connection","status":"publish","type":"post","link":"https:\/\/www.enterpriseresearch.ac.uk\/innovation-and-productivity-how-strong-is-the-connection\/","title":{"rendered":"Innovation and productivity: How strong is the connection?"},"content":{"rendered":"
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Innovation and productivity: How strong is the connection?<\/strong><\/p>\n

\u2018Innovation\u2019 is a much used (and abused) term employed to describe everything from flea collars for dogs[1]<\/a> to electric cars. As a result, measuring innovation can be tricky, particularly in service sectors where firms\u2019 relationships to customers are often individual and bespoke.<\/p>\n

Fortunately, the kind people at the Organisation for Economic Cooperation and Development (OECD) have developed rules for what is an isn\u2019t an innovation. In their terms, an innovation is \u2018a new good or service or a significantly improved good or service with respect to its capabilities, such as quality, user friendliness, software or subsystems\u2019. This definition is used globally to measure firms\u2019 innovation activity and benchmark countries and local areas.<\/p>\n

Applying this definition to local areas in England using the most recent data available from the UK Innovation Survey (for 2014-16) suggests that levels of innovation vary significantly between areas. The most innovative areas form an arc North of the M25 and including Oxfordshire, the South East Midlands and Greater Cambridge & Peterborough. By contrast, more rural and peripheral areas of England \u2013 Cumbria, the North East, Cornwall \u2013 tend to have lower levels of innovation. The differences between areas can be quite stark with 38 per cent of firms in Buckinghamshire-Thames Valley reporting innovation compared to only 21 per cent in Cumbria and Lincolnshire. This local geography of innovation has also been pretty consistent over recent years \u2013 the more innovative areas have tended to retain their lead.<\/p>\n

Figure 1: Percentage of innovating firms: Local Enterprise Partnership areas in England<\/strong><\/p>\n\n