Innovation

Presentation to Digital Content

Industries

29th September 2004

David Hughes FREng

Director General Innovation Group, DTI

Competing in the Global Economy:

The Innovation Challenge

Innovation

Our world is changing

Healthcare in an Aging Society

Global Security

Intelligent & Connected World

Our impact on the Environment

Technology: Driver &

Solution

Innovation

Dramatic Change in Life Cycle

Conventional

Vo

lum

e

Intro-duction Ramp-up Maturity

End of life

Development Dramaticend of life

Shorter time to market

Fas

t ra

mp

-up

Demand fluctuation

Higherpeak

New Digital Consumer

3-5 years 1 year

Source: Dr Tsugio Makimoto - Hitachi/Sony

Innovation

Source: US Department of Labor

Increasing intensity of global competition

0

5

10

15

20

UK Hong Kong SAR Taiwan

Hourly compensation costs, 2001, for production workers in manufacturing in US dollars

Innovation

The economic message

UK Businesses will only achieve long-term success in global markets by focusing on greater value added as their competitive edge.

Innovation is the key to achieving this.

And Businesses need to keep innovating to stay ahead of the competition.

InnovationGovernment strategy - The Innovation

Report

‘Competing in the global economy – the innovation

challenge’ Published in December 2004

http://www.dti.gov.uk/innovationreport/index.htm

“The challenge ... is to create the conditions where all our firms put innovation at the centre of their strategies for the future.”

Rt. Hon. Tony Blair, Prime Minister

Innovation

What can government do to improve innovation performance?

Set an encouraging framework – macroeconomic stability, competition, IP framework, standards.

Strategic investments

– science, government R&D, infrastructure.

Support innovative businesses – exploitation of science base, advice, partnerships, access to finance, incentives (e.g. R&D Tax Credit).

Ensure that procurement and regulation create opportunities for

innovation – not barriers. Align efforts at national and regional/Devolved Administrations.

Innovation

Intellectual Property: Awareness

Business Advice Open Dayshttp://www.patent.gov.uk/about/marketing/thinkkit/index.htm

Innovation

Intellectual Property: Crime and Enforcement

                                              

Patents Act 2004 2004 Chapter 16

Scoping Study:

Report of the Patent EnforcementProject Working Group.

- June 16th 2004

ME A Michael Edwards & AssociatesConsultants in intellectual propertymanagement and protection.

Innovation

SMEs and Entrepreneurship

• Business Link support for Innovation

• Upgrading SME management skills

• Improved support for women’s enterprise

“I’ve gained a lot of confidence from all the support I’ve received”

Katieca Smith, Partner in Architectural Practice

Innovation

HEIs/SET Base BusinessBusiness

RDAs

ResearchCouncils dti

TechnologyStrategy

ResearchPriorities

Culture change neededfor better exploitation

Science andIndustry Councils

Businesssupport

Higher levelSET skills

Regional Innovation

Innovation

New approaches to Procurement

• £109bn pa goods/services purchased by Government in 2001/2002

• Strong Ministerial interest in joined up work across government

• Capturing Innovation guidance for policymakers

• Reinvigoration of Small Business Research Initiative underway

• Joint DoH/DTI seminar on Innovation in the NHS for suppliers and buyers

Innovation

…… additional boost for technology

Competing in the Global Economy – the Innovation Challenge, Dec 2003

Increase Business Demand for New & Emerging TechnologiesThe Technology Strategy & Programme

Science & Innovation Investment Framework 2004-2014, July 2004

InnovationDetermining Strategic Technology

Priorities

BUSINESS/USER NETWORKS•Sector based networks e.g. IGTs, IAP•CBI•Chambers of commerce•Trade associations

SEB NETWORKS•Research Council networks•Academic groups•Professional Institutes•RTOs•Technology Brokers

TECHNOLOGYSTRATEGIC PRIORITIES

MIXED NETWORKS•OGD strategies e.g. MoD, DoH•Faraday partnerships •Foresight

REGIONAL/DEVOLVED ADMINISTRATION NETWORKS• Science Industry

Councils

Networks are fundamental to ensuring that the Technology Strategy reflects the demands and needs of

business.

Innovation

TECHNOLOGY TECHNOLOGY PROGRAMMEPROGRAMME

Collaborative R&DKnowledge Transfer

Networks

CUSTOMERS

CUSTOMERS BI-ANNUAL BI-ANNUAL

CALLS FOR CALLS FOR PROPOSALSPROPOSALS

TECHNOLOGY TECHNOLOGY STRATEGYSTRATEGY

IDENTIFICATION AND JUSTIFICATION

OF TECHNOLOGY PRIORITIES

NETWORKNETWORKSS feed into decision making

Technology Strategy & Programme

Innovation

Value added by knowledge based services and IndustriesG7 comparison, 2000Per cent of total value added

01020

304050

Germany UK France Japan US Canada* Italy

Finance, insurance, other business services, community, social and personal services

Communication services

High and medium-high tech

Source: OECD

The innovation challenge – create value in a knowledge

economy …

Innovation

Source: Creative Industries Economic Estimates, July 2003

Contribution of creative industries %

GDP, 2001

00.5

11.5

22.5

3

Softw

are

Publ

ishi

ngRa

dio,

TV

Des

ign

Adve

rtis

ing

Arch

itect

ure

Mus

ic &

arts

Vide

o, fi

lms

Craf

tsD

esig

nerfa

shio

nArt

, ant

ique

Software, computer games and electronic publishing …… the largest of the creative industries

Innovation

‘Value added’ Opportunities - Health Care

Education for patients using medical devices

• Medical devices not used correctly

• Results in little or no benefit from device, maintenance

costs, adverse events and negligence claims

• Training on how to use correctly is needed

• Opportunity for digital content industries

Digital Content ‘Users’

Innovation

More ‘Value added’ Opportunities

• Convergence of games/films- Machinima.com

• E-learning Market

- Language-engineering technology • Development of next generation broadband

- BSG’s new initiative

Digital Content ‘Users’

Innovation

• Active involvement of your sector in April competition for funding for Inter-Enterprise Computing

• Now preparing for the November competition for funding

• How can you be more engaged in the process?

Challenges -- Technology Strategy

Innovation

•Using public procurement to facilitate innovation:

Latest figures show £125bn goods and services procured per year

Around 55% of all spend in the UK on IT services and systems is in the public sector

Best practice guidelines for procuring broadband-type content and applications being drawn up

•What are the big opportunities for DCI in Government procurement and how can we engage further?

Challenges -- Procurement

Innovation

Measuring our success

Businesses see more value added from goods and services

Economy sees more productivity (e.g. output per hour).

Better public services - - Improved quality of life

Innovation

Presentation to Digital Content

Industries

29th September 2004

David Hughes FREng

Director General Innovation Group, DTI

Competing in the Global Economy:

The Innovation Challenge