DIUS: Planned Science & Innovation Strategy

THE GOVERNMENT’S PLANNED SCIENCE AND INNOVATION STRATEGY FOR 2008

Ideas and recommendations from the Young Foundation
 

Introduction

The new Department for Innovation Universities and Skills has committed itself to producing an overview statement of government policy on innovation. For the first time a major government department has signalled that it wants to see innovation in the round.

We welcome this. Past innovation policy was dominated by hard science and investment in physical things, and by a small number of well-connected companies that took the majority of public resources. Yet the UK’s economy is now predominantly a service economy, and the public sector is even more dominated by services.

In this submission we set out some of the new policies and programmes that are needed to underpin the newer parts of innovation strategy – focused more on services, and on the public and voluntary sector.  We argue in particular that a new institutional landscape is needed. Traditional technology based R&D has very strong institutions, ranging from research councils and the Technology Strategy Board to bodies like the Royal Society.  Social and public innovation by contrast lacks any comparable institutions, but needs them for the same reasons that they are needed in science and technology: to guide funding allocations and strategy; to improve methods; and to improve the state of knowledge.

Relevant research and experience

Over the last two years the Young Foundation has published a series of reports and research studies drawing on UK experience, our own history of successful innovation, as well as on best practice around the world.   We have attempted to synthesise what’s known – but also shown how relatively underdeveloped this field is and why innovation needs to be taken more seriously in the public sector and in the third sector.

A network of over 200 organisations worldwide involved in the field launches early this year (the Social Innovation Exchange – SIX), with events planned in Europe, Asia, north America, Australia and Africa.  We are also worked with a range of governments around the world on how to raise their game in this area – including Australia, Canada, Denmark, Portugal, China and Scotland.

We want to encourage DIUS to use the opportunity of the statement on innovation to signal a change of direction that would put the UK in the front rank of nations seeking to adapt innovation strategy to the priorities of the 21st century.   We believe that the innovation strategy needs to clearly be about services as well as manufacturing, and to address public and social innovation as well as innovation for the economy.   Shifting gear in this way is a 10 year process and it will take time to build new institutions and new habits. But it has the potential to underpin the UK’s success over the next few decades – not just in the economy but also in responding to major social and environmental changes, from ageing to climate change. 

Business – service campuses and business engagement in growth sectors

Some modest progress has been made in recent years in adapting innovation policy to service – for example through reforming the R&D tax credit to incorporate design, and a growing understanding of the links between creativity, design and business performance.  Business is also beginning to understand the importance of social innovation – ahead of a period when the largest sectors in terms of employment and value added will be health, education and probably care.

But although the UK has some very innovative services, it lacks a strong infrastructure to support innovation in services.  60 years ago the Young Foundation under Michael Young created the Consumers Association, and 30 years ago it created the National Consumer Council. But standards of private sector service remain very uneven.  In addition to the many issues of law and regulation these issues pose, we believe there is a major gap in relation to support for service, and it’s one that DIUS is well placed to fill. At present no major HEIs are dedicated to service. We have proposed that a small group of universities should be encouraged to become ‘Service Campuses’, dedicated to promoting service through research; training (for public service professionals such as doctors and police as well as the private sector); improving the theory and practice of service design; supporting new applications of mature and maturing technologies; consultancy; and demonstration. There is no shortage of courses and centres for leadership, but no institutions are dedicated to service (although there are many courses provided by FE colleges and others). Several existing HEIs are interested in moving in this direction – but they need a strong push and support from DIUS for this to happen.

Changing the public sector

Within the public sector we have set out a series of proposals (including recent evidence to the Darzi review on the NHS), and have shown the useful practice underway in countries including Singapore, Denmark, Finland, Iceland, Canada and Australia.

DIUS itself has relatively limited powers over public services. Its role must therefore be in part to champion new approaches, but also to persuade the central departments – No 10, Treasury and Cabinet Office – to take innovation more seriously.

• A first challenge is to establish stronger norms and expectations for Whitehall departments. At present few take innovation seriously – and none can identify what they spend (other than traditional R&D), or how it is managed, or how it links to broader strategy and implementation processes. Within a typical department we would expect to see: visible leadership from the top and recognition of successful innovators; some dedicated funding for innovation (around 1-2% of turnovers would be a typical target); a board level champion for innovation; governance processes that manage innovation in the same way that issues such as finance or HR are overseen; engagement with ideas from front-line staff and users; and a coherent strategy for supporting skills for innovation.

• For public service departments, there is a strong case for establishing or supporting intermediary bodies to develop innovative new models, using their arms length status to take risks and act creatively. The Young Foundation’s Launchpad model in health and education is a particularly promising approach (which involves funds and teams to establish new ventures, working closely with public agencies). New York’s Center for Court Innovation is another model that’s achieved considerable success. Where appropriate, departments should also establish both formal and flexible partnerships with localities and local government; and pooled innovation collaboratives with other governments facing similar issues (rather as groups of cities already collaborate on issues such as urban transport or cutting carbon emissions).  

• A second challenge is to provide a modest but effective institutional base for innovation within government. We propose the creation of a fairly small Council for Public Service Innovation (on the model of the Council or Economic Advisers or the new Council for Social Action), either within, or linked to, the Cabinet Office or Treasury, or with a secretariat in DIUS.  Like the CfSA this could be formally chaired by the Prime Minister, with a senior Cabinet Office or Treasury Minister as a deputy.  It would be primarily charged with ensuring that departments and agencies are sufficiently focused on innovating to address future challenges, and also providing them with advice on the design of pilots, pathfinders, trials, incubators.  It could be charged by the Prime Minister or Chancellor with regular ‘pipeline reviews’ to assess the body of projects in development within departments and to see which ones have the potential to be fast-tracked. It should also encourage the spread of exchanges to connect innovators to commissioners and funders (like the Innovation Exchange supported by OTS). Critically too its work should feed into spending reviews and policy reviews and ensure that where there are major problems, strong evidence of policy failure or of likely future problems or cost pressures, systematic innovation takes place to ensure a wider menu of options for the future. Much of this work would need to be done in collaboration with local government, the NHS and the police.

• One reason why a new body is needed is that no one within central government assesses major policy frameworks through an innovation lens.  A particularly important one is the new National Improvement and Efficiency Strategy for local government, and the cluster of reforms around Comprehensive Area Assessments and Local Area Agreements. These have the potential to allow for much more flexibility in testing out new approaches. However for this potential to be realised careful attention will need to be applied to funding, regulation and measurement. Moreover local government needs to establish its own structures to promote innovation, and to build the field of intermediaries and methods that will be vital for making the most of local creativity.  One route which we favour is for departments to license greater freedom in some areas as a spur for innovation. The use of zones as a policy tool has been sporadic – but some undoubtedly achieved significant advances (such as Employment Zones), and in every major policy area (from criminal justice to eldercare) the UK as a whole stands to benefit from some areas experimenting with potentially higher risk but higher impact approaches.

• Third, there is an urgent need for an institution to improve skills and methods, ideally at one remove from government. Our research has found dozens of competing methods for innovation in the public and third sectors, each with articulate advocates, but no serious assessments of their relative worth. It appears to be largely a matter of chance which method is used for which problem. Moreover there is no dedicated centre for supporting skills in and around innovation. We therefore recommend establishing an Innovation Academy to serve as a centre of expertise and skills for the public sector and beyond, and in particular for innovation in the areas of overlap between sectors (for example in fields like e-government or eldercare). This should ideally be a joint venture between government and others, including foundations (as with the various initiatives with Wellcome). One of its roles should be to become a focus for assessing and improving the many methods in use in and around innovation (coming from fields as diverse as public policy, peer learning, technology, design, the arts, social entrepreneurship). It should also aim to take on a wider European role, promoting best practice in public and service innovation in and with other EU members.

• Fourth, for the civil service as a whole more systematic work is needed to encourage a culture of innovation, to bring innovators into the public sector, and to reward and incentivise existing innovators. This should include innovation training through the National School of Government and any new academy; innovation should also be included in SCS competences, and appraisals. A particular priority is to support commissioners in learning how to commission for innovative projects, with health and criminal justice as priority fields where some work already underway needs to be accelerated and embedded.

• Fifth, audit and inspection models for public services need to adjust so that these assess future readiness as well as current and past performance – just as private sector analysts would look to the pipeline of products in a technology company rather than solely judging their current share performance. This is under discussion with the NAO and Audit Commission and will be critical to encouraging a culture in which positive risks are not discouraged.

• Sixth, new metrics and research – a more systematic programme of research is needed to better understand the dynamics of service innovation and innovation in the public and third sectors. Work needs to be done with the OECD and statistical offices on metrics of innovation, alongside more rigorous assessments of patterns of growth and development.

The Science and Innovation Strategy is a great opportunity for government to signal a vision and approach that sustains the best of UK science and R&D, but also extends the methods that have worked well in those fields into the bigger territory of service and social change.

For more background reading see Young Foundation papers on:

Public sector innovation

Social innovation (published by Said Business School Oxford)

Growing social innovations (published by NESTA)  
 
Transformers: how local areas innovate to meet social needs (published by NESTA 22 January 2008)
 
Methods for innovation (to be published in steps during 2008, culminating in an on-line comprehensive guide)

Social innovation and VET innovation in OECD countries (to be published by the OECD in early 2008)

Embedding Effective Innovation in Scotland (to be published by the Scottish Government in early 2008)

Contacts:

Geoff Mulgan, Simon Tucker, Rushanara Ali