Month: June 2019
Opening keynote: ISCF & the Social Sciences in Wave 3 – Dan Hodges, Deputy Director, Strategy – Innovate UK
After opening the event and introducing the Innovation Caucus, Tim Vorley welcomed to the stage Dan Hodges, Deputy Director – Strategy at Innovate UK, to deliver the first keynote speech. Dan set the scene by providing an overview of UKRI, Innovate UK and the Industrial Strategy landscape. He explained that there are opportunities for social scientists to contribute across all four Industrial Strategy Grand Challenges, including looking at cultural change, business models, diffusion and adoption, as well as potential negative social impacts and how these can be mitigated.
Dan explained that the government’s Industrial Strategy aims to boost productivity by focusing on five foundations: ‘Ideas’; ‘People’; ‘Infrastructure’; ‘Business Environment’; and ‘Places’. Innovate UK works across these five foundations and all are key to the ISCF challenges. Dan believes that social scientists have the potential to play an important role in advancing our understanding of all of these. Dan presented the ISCF challenges in waves 1, 2 and 3 and set the tone for the rest of the day by explaining the vital role of social science in implementing the Industrial Strategy:
“If the social sciences haven’t been embedded into the ISCF challenges, then they haven’t been set up right to achieve societal impact”.
Dan’s speech was accompanied by lots of positive tweets and followed by questions from the floor. Dan’s presentation slides are available here.
Panel 1: How the Social Sciences can add value
We had a fantastic line-up of speakers for our first panel session, expertly chaired by Melanie Knetsch, Deputy Director of Innovation and Impact at the ESRC. Mel was joined by panel members, Rob Saunders, Industrial Strategy Challenge Director (Energy Revolution) from Innovate UK; Sarah Hodgetts, Deputy Director at BEIS; Ed Hobson, Head of Design & Innovation at the Knowledge Transfer Network; and Adam Luqmani, Senior Portfolio Manager from the ESRC.
Rob Saunders talked about the Energy Revolution and the potential role of social science in advancing our thinking about the ‘complex system’. This challenge involves developing future smart energy, providing cleaner, cheaper, more resilient energy systems and demonstrating their use at scale.
Sarah Hodgetts referred to the role of the Industrial Strategy Council, chaired by Andy Haldane, which has been set up to assess progress on delivering the Industrial Strategy. Sarah also emphasized the importance of the social sciences in solving the UK’s ‘productivity puzzle’.
Ed Hobson talked about the potential for social scientists to help develop better design solutions and how a social science perspective can change how people think about and address Industrial Strategy challenges.
It was great to hear from Adam Luqmani about how he is advocating social science in the wave 3 business cases, embedding it into the DNA of the ISCF. Social scientists need to work out how to ‘sell’ themselves to businesses and other partners to take advantage of these opportunities. Adam said:
“We need to get the acceptance and adoption piece right. This is where we need to see social science led projects”.
A key message from the first #CatchingTheWave panel was that social scientists need to recognise the valuable insights they can bring to the Industrial Strategy and identify how best to promote their unique capabilities to businesses and other stakeholders.
Round table discussions: What might the Social Science offer look like & how can it be articulated?
Of course, the value of attending events is not just from listening to expert speakers and panel members, but also from interacting with other attendees. This session incorporated round table discussions, with the opportunity for delegates to focus on the Grand Challenge of most interest to them (AI & data, Ageing Society, Clean Growth, or Future of Mobility). Round table discussions were interspersed with polling questions, conducted as a plenary, to gather live audience feedback. This session worked really well, balancing quick fire polling questions with more in-depth interaction. Professor Katherine Runswick-Cole tweeted: “Loving the use of pollev.com to capture disciplines and institutions represented here”.
Delegates comprised mostly social science academics, but also included circa 25% knowledge exchange professionals. Around 50 different disciplines / specialisms were identified as being present in the room, including: business / management; innovation / entrepreneurship; economics; sociology; political economy; psychology; information systems; geography; design; law; construction management; town planning; engineering; and advanced manufacturing.
The majority of delegates reported feeling relatively confident about relating to the ISCF priorities and drivers, with only 21% “still unsure”. Almost half were already engaging with other disciplines than their own, either with other social scientists or with non-social science disciplines. In terms of non-academic partners, public sector engagement came out higher than engagement with businesses or third sector partners. “Conceptual” knowledge came out top, in terms of what delegates could primarily bring to the ISCF (47%), followed by “Empirical” knowledge (27%) and “Methodological” knowledge (24%), with only 2% answering “None really”.
The top skills that social scientists could bring were felt to be “Analytical” (32%), followed by “Problem-solving” (22%) and “Boundary-spanning” (20%) (with “Visionary” and “Others” each on 13%).
This level of engagement and interdisciplinary working was felt to be very encouraging. Tim Vorley tweeted “The world’s problems do not divide up along disciplinary boundaries”; and “If @CSkidmoreUK was in #Sheffield today I’m sure he’d be impressed by the engagement and commitment of #SocialScientists with the #IndustrialStrategy and #ISCF”.
Final keynote: Business Engagement Vision – Social Science as the Golden Thread – Melanie Knetsch, Deputy Director, Impact & Innovation – ESRC
Tim welcomed Mel back to the stage to give our final keynote speech. Mel shared her vision and insights about social science engagement with business and about moving from research on and about business to research with business (i.e. collaboration). She discussed the opportunities for social science in relation to the ISCF, emphasizing that “It isn’t all about new technologies!”. Social scientists can help to frame problems in new ways, by asking challenging questions and rethinking assumptions. Mel highlighted some of the key ways in which social scientists can contribute, including:
- Understanding the role of industry in driving growth and understanding regional variation (place)
- How to ensure adoption of new ideas, technologies, services and approaches, including ethical considerations
- New skills that are needed by companies
- How business models can be evolved to capture more value and make companies fit for the future
- How customers can drive product innovation
- How businesses can develop new methods
- How they can design better products, services, processes, methods and practices
- How workforces can engage with change
- Identifying new ways of measuring the hard-to-measure – e.g. productivity, business-to-business partnerships, impact
- Offering excellent understanding of data and digital innovations
- Helping to understand bias, ethics, employees, managers, and customers
- Working closely with regulators, government and policymakers.
There were lots of positive comments on Twitter, for example, Dr Vicki Belt from the Enterprise Research Centre tweeted: “Insightful talk by @Mel_Knetsch of @ESRC on #SocialScience and business engagement. Barriers exist but there are so many benefits”. Mel’s presentation slides are available here.
Panel 2: Experiences of ISCF & the Industrial Strategy
Our final panel was very ably chaired by James Wilsdon, Professor of Research Policy in the Department of Politics at the University of Sheffield. James was joined on the stage by: Professor Jacqueline Glass (UCL); Professor Lucy Kimbell (UAL); Professor Simon Collinson (University of Birmingham); and Professor Katy Mason (Lancaster University).
This was a practical conversation, involving academics sharing their experiences from the coal face on issues such as finding partners, developing and implementing proposals. A few highlights and top tips from panellists included:
Jacqui Glass advised that the Transforming Construction Challenge is massive and academics are seen as a conduit. “It’s a rewarding space but stakeholder engagement is key”. Also, “Don’t underestimate your hours! You have to accept the short timescales – these are dense programmes of work, but these investments are not about reaching end points: they’re part of a trajectory”.
Lucy Kimbell highlighted the potential of conducting design-led, co-produced research and shared her experiences in relation Next Generation Services, exploring the potential of AI in relation to business models, data and ethics. Lucy’s top tips were to “Pick partners who are different; be open to learning and therefore transformation. Go out of your comfort zone!”.
Simon Collinson talked about his experiences as Director of City-REDI, emphasizing that we need to continue to demonstrate legitimacy and the added value of social sciences. He advised that “These aren’t quick fixes and early wins: you need to look at pathways to different forms of impacts”.
Katy Mason discussed some of the challenges of ”learning by doing” as a researcher and bringing innovation to the research process as it takes place. Gantt charts are helpful, but flexibility is needed around challenges and to respond to new opportunities as they arise. “Evaluation frameworks need to be iterative and re-looked at over the lifetime of projects.” Katy also offered this positive note on which to end: “There’s an opportunity to have real fun again with research – the thrill of being out there dealing with real research problems is really exciting”.
Following the Panel 2 Q&As, it only remained for Tim to thank everyone for attending and for their contributions – especially our speakers, panellists and facilitators, for sharing their insights and stimulating lots of thought-provoking discussions throughout the day.
Professor Palie Smart and Dr Sara Holmes (University of Bristol) and Professor Miranda Wolpert (UCL) have completed a scoping study examining criteria by which Innovate UK can assess funding priorities according to social impact. The project contributes to the commitment of Innovate UK to deliver economic and social impact through its investments. Following a review of social impact measures, the project developed a framework based on the Sustainable Development Goals to help inform the prioritisation of future funding programmes. Whereas Innovate UK has historically evaluated funding priorities based on four economic criteria, this work will inform ongoing efforts to incorporate social, societal and environmental impact into future assessments.
The framework is underpinned by the UN Sustainable Development Goals (SDGs), a set of 17 interconnected objectives aimed at tackling global social and environmental issues. Agreed by world leaders in 2015, they are part of the 2030 Agenda for Sustainable Development. All signatories to the SDGs are expected to contribute to them internationally and deliver them domestically. The project identified 6 priority SDGs for Innovate UK based on a content analysis of the most recently available Annual Report and Delivery Plan. The 6 priority SDGs are those which Innovate UK activities impact most directly and can be used as a starting point for societal impact evaluation. These are:
- End hunger, achieve food security and improved nutrition and promote sustainable agriculture
- Ensure healthy lives and promote well-being for all at all ages
- Ensure access to affordable, reliable, sustainable and modern energy for all
- Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- Build resilient infrastructure, promote inclusive & sustainable industrialization and foster innovation
- Make cities and human settlements inclusive, safe, resilient and sustainable
The project also identified a set of societal impact evaluation criteria which could enable Innovate UK to examine the potential social, societal and environmental impacts of future programmes in greater detail. These criteria were drawn from the Impact Management Project, a multi-stakeholder initiative convened by four recognised bodies in impact investing: the Global Impact Investing Network; Global Reporting Initiative; Global Steering Group for Impact Investment; and the International Finance Organisation. This project consulted widely with stakeholders to develop a common framework which could be used and understood by organisations in all parts of the impact investment ecosystem. A summary version of the suggested evaluation criteria is below.
Categories Dimensions of evaluation Evaluation criteria
Scale of impact Numbers of people affected Few ↔ Many
Depth of impact Extent of societal impact Limited ↔ Extensive
Timescale Time expected to take effect Short term ↔ Long term
Societal attention How well addressed issues are Under-served ↔ Well-served
These components can be incorporated into a 2 stage evaluation template. The first stage involves identifying the potential applications of an innovation or technology research area and aligning these with priority SDGs. The second stage involves applying the above societal impact evaluation criteria. All SDGs have an associated set of more specific, measurable targets. Therefore the second stage of the evaluation process could consider whether the application can be related to delivering a specific SDG related target.
A potential next step would be to trial the proposed framework against a sample of emerging technologies that might receive future Innovate UK funding.
Research Aims and Focus
This pilot research for Innovate UK examined the role played by knowledge transfer and knowledge absorption mechanisms as processes in understanding rates of innovation activity in small and medium-sized enterprises (SMEs), by place and economic sector. Pilot research was undertaken on SMEs in 3 economic sectors (manufacturing, high tech and services) based in 4 locations representing different types of local economies: Cornwall; Cumbria and North Lancashire; Edinburgh; and Essex including parts of East Anglia.
Research Questions and Methods
The study focused on 3 key research questions:
- What role does knowledge management and absorptive capacity play in innovation activity within SMEs?
- To what extent does innovation activity vary across different places and economic sectors?
- How does our understanding of variations in innovation activity by place and economic sector help contribute to a more targeted innovation policy for SMEs?
This study investigated SMEs for 3 key reasons: (i) limited coverage of SMEs in knowledge transfer and innovation research (ii) private sector predominance of SMEs in all places (iii) SMEs are a key focus of business development policies, including the Industrial Strategy. This exploratory study compared the ability of micro businesses and SMEs to recognise knowledge, capture it and successfully absorb it into their business models.
The research used two survey instruments: a questionnaire followed by in-depth interviews. The questionnaire was designed to capture a range of information about knowledge transfer and knowledge absorption. Focusing on examples from participants’ own experiences of implementing innovation in their companies, the interviews provided a follow up to the survey and explored 4 stages of absorptive capacity: (i) acquisition, (ii) assimilation, (iii) transformation and (iv) exploitation.
Summary of Key Findings
- Conceptualising innovation: many study participants, particularly those in the ‘high tech’ sector, chose to focus the discussion on product development and new technology. Some also interpreted innovation to be about service innovation. A small number of respondents, particularly micro-businesses, viewed innovation very broadly, relating it to their business model to ‘do things better’ and as essential for business sustainability.
- Acquisition: firms acquire knowledge mainly through collaborations and communications with external partners and some via internal creative capacity development. Study participants identified a wide range of sources of knowledge including: customers, suppliers, internal team members and industry networks. The use of more formal networks and groups was mentioned by several participants and a few had acquired knowledge from universities.
- Assimilation: knowledge assimilation appears to be an inclusive process, with evaluation and decision making about new knowledge being carried out by internal employees. Medium sized firms adopt more formal procedures describing a ‘stage and gate’ process, looking at the fit with company product portfolio. Micro and smaller sized firms preferred informal processes to assimilate new knowledge. Many described a need to be inclusive in this process, involving a range of stakeholders, including customer consultations to obtain feedback on early ideas.
- Transformation: knowledge is transformed either through trial, error and experimentation, or by adopting a systematic approach. Product development in high tech companies was often based on a structured process of prototyping, testing and experimentation. Two businesses noted help from universities at this stage as either a follow-up to knowledge acquisition or to access new specialist resources. In a small number of cases, participants indicated that the knowledge transformation process was not needed as the knowledge was already in a usable form.
- Exploitation: success in going through the other three stages of absorptive capacity leads to effective exploitation. Participants in all the SMEs reported largely positive outcomes, namely: (i) objectives were achieved (e.g. new product or service launched and profitable); (ii) outcomes not yet achieved, had been modified or the project had changed direction; and (iii) successful and there were further unintended benefits.
- Perceived aids to innovation: a number of success factors were identified that enabled innovation, combining informal stakeholder relationships with formal development processes. Other innovation enablers included: good engagement with customers and knowledge of the market; an innovation culture that accepts failure and risk-taking; and clear decision-making and accountability structures.
- Perceived barriers to innovation: obstacles included: time constraints, competing priorities, and being distracted by customer suggestions that do not ‘fit their roadmap’. Application processes for grant programmes were often perceived to be difficult and bureaucratic. This was noted as a key barrier in accessing funding for innovation.
- Place-based innovation: unique resources linked to specific geographical locations can be beneficial for innovation. In this study, the location of the business was of less importance to high tech and manufacturing businesses, which tended to collaborate internationally more than locally. In rural areas, access to skills was cited as an important issue. Many companies in rural areas had chosen their location for social reasons (e.g. quality of life, closeness to family, etc.). Some of these companies deliberately constructed their business around available rural assets.
- Sector and place in the Industrial Strategy: the study found that sector plays a more important role than place in explaining the innovation output of the firms in our sample set. Service sector firms are relatively less innovative than those in the manufacturing and high-tech sectors. There was recognition by certain companies that the regional environment constrained growth, with some unable to access resources, skills and knowledge within their locality. Establishing a business in a specific location or region is therefore not sufficient to produce innovations: instead sectoral activity plays a critical role.
- Factors explaining innovation capacity: employees’ training has no statistically significant impact on the number of innovations. Instead, mechanisms that encourage employees’ participation in knowledge creation and sharing activities make a substantial contribution to innovation output. These mechanisms differ significantly among the four regions. Implementation of policies and procedures (to codify, absorb and redeploy the external knowledge) notably contribute to the innovation output.
- Knowledge absorption across regions: there were no major differences across regions in this regard, except for the participatory mechanisms of employees. This is due to firms with higher knowledge management and absorption capabilities being able to understand, assimilate and utilise knowledge, regardless of their location. Absorption from sources outside the regional boundaries (including global market influences) compensates for the regional disparity, triggering higher innovative performance in some firms.
Conclusion and Future Research
The intention of this study was to undertake pilot research to explore attitudes to innovation, knowledge transfer and absorption in SMEs, to investigate differences in sectors, regional variations and types of place (rural or urban). More innovative firms are better able to acquire, assimilate, transform and exploit knowledge. Industry structure plays a crucial role, since different industries provide different opportunities and challenges for growth and innovations. Hence industrial policy should focus on the role of industry structure alongside place in the growth of a local economy. This study begins to understand those SMEs which are ‘innovation followers’ and those with a sustainability orientation. There is scope to examine the questions in much more depth, with a more comprehensive study, using these preliminary findings as a basis for further discussion with funders and policy makers.
This research was led by: G. Shaw, with support from A. Marshall, D. Murphy, A. Rosiello and V. Sena and research assistance from C. Carr, O. Golra and S. Hickman.