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Are We Really the Most Innovative?

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It's a fairly well-known fact that recessions are usually followed by a period of expansion and elevated innovation. This is due to the simple fact that constrained times inspire a number of forward-thinking businesses, institutions and individuals to try to do more with less. Then, when more favourable conditions return, they find themselves very well positioned compared with their peers. On the basis of this logic, I think it's fairly safe to guess that over the coming months and years, there will be plenty of exciting success stories (and, I'm sorry to say, plenty more unpleasant failures).

This week, I came across the Global Innovation Index, (GII) a study from Cornell, INSEAD and the World Intellectual Property Organisation that ranks economies in terms of their levels of innovation. The study looks at both whether the country has a conducive environment for innovation and how this environment manifests itself in terms of tangible innovation outputs. Imagine my surprise when I noticed that the UK is currently in third place, ahead of the USA and other innovation darlings such as Finland and Singapore.

Why might I be surprised? Well, firstly because if you live in the UK or have a regular exposure to the British media, you would think that the country is more or less finished - in every sense. Secondly, because the high profile innovation success stories of the last decade or so have predominantly come from Silicon Valley and other similarly exotic, palm-fringed hotspots. Okay, perhaps I'm being a bit dramatic - we have Silicon Fen and that roundabout in East London, AKA Tech City. But even so, most of the innovation that takes place here in the UK happens below the radar. If this study is right, and we are indeed the third most innovative economy in the world, then we need to be on the front foot. The UK Government's GREAT campaign has gone some way to readdressing the balance, but there is a long way to go before our reputation overseas is significantly impacted.

Before I go and get too excited about this study, I remembered that there are quite a few other innovations rankings out there. In particular I recall the Fast Company Most Innovative Companies list that's published every year. The 2013 iteration came out this summer, and a quick glance at the top 50 reveals not a single British contender. Curious given our GII ranking, I'm sure you'll agree. Foster + Partners, Arup, the BBC and Burberry all make it into the overall rankings, but those were the only UK brands I could see. So, either I missed a few (entirely possible), the GII methodology is flawed, or our businesses are not great at telling the world about their innovation pedigree. I suspect the latter.

The most innovative company in the world this year, according to Fast Company, is Nike. No great surprise there, but their write-up makes for even more impressive reading than I'd expected. Who would have thought that in a few years, Nike, a sportswear company, would have become the digital force that it now is. Remarkable. These types of congratulatory articles often talk about the products of success, but rarely investigate how the success actually came about. If you dig a bit deeper into Nike, what comes across is an interesting culture that seems to inspire innovation. From day one, the business has positioned itself as a competitive underdog. This appears to come from its deep-rooted sporting heritage where outcomes are hard to predict and competitors must train hard for each and every competitive interaction. Nike, it seems - like the athletes it supports - never takes success for granted, and that seems to serve as sufficient stimulant to keep the competition at bay.


Many other businesses have this underdog philosophy, Apple being the most obvious example. Few, however, have managed to sustain this culture for more than three decades. So I guess the learning for me is that if the UK really is in the middle of an innovation renaissance, we need to be putting some serious thought into how we can institutionalise this culture. So that - like Nike - it continues to be at the core of Britain's competitive advantage for the foreseeable future.

In addition to the cultural element, we need to ensure our innovations spread quickly, rather than just being restricted to our own back yard. I really enjoyed an article from this week's New Yorker exploring this issue. The author is a surgeon, Atul Gawande, who uses a series of fascinating medical examples to show that great innovation is one thing, but getting it out there and used is quite another. The traditional way to change behavior is just to put the innovation out there and ask people to change their behavior on the basis of the merits of the product or service. Then there is the legal route, and more recently we have seen the emergence of the incentives-based, 'nudge' approach. Gawande suggests that, actually, none of these approaches work in the long term. The only way to be sure that your innovation gets taken seriously is to work backwards - by understanding people's existing norms and barriers to change. His primary point is that, to get people to change their behaviour, ultimately you have to understand what's currently getting in their way. And this is where most innovators fail - they are great at innovation but not necessarily at the art of persuasion.