More than just science and KT? Alternative models of innovation and what HE might contribute to

them.

Ewart KeepSKOPE, Oxford University

2 models of innovation:

1. Traditional science-led model, where innovation = R&D, scientific research, universities and specialist research institutes, patents, intellectual capital, knowledge transfer, technology adoption, etc. The driving force is HE and public investment therein

2. A broader model that encompasses 1, but also contains other elements.

Drawbacks to Model 1

• Works well for hi-tech sectors, but fails to engage with large parts of the mass market, especially medium and low-tech manufacturing, and the service sector.

• Relies on the skills of only a small scientific elite – research scientists, knowledge transfer experts, senior managers. The rest of the workforce are simply grateful recipients of advances made by others.

Lord Heseltine – No Stone Unturned:

“It is tempting to focus on a few, select, top-end sectors and on high growth companies. The fashion changes, but at the moment it is high tech and exports to new markets that are paraded as the easy solutions. They are important, but ultimately they are not enough to ensure a broad-based competitive economy. We cannot ignore the performance and growth potential of the mass of business across all sectors, including construction, logistics, retail, hospitality and health and social care…..”

Productivity improvement across the whole economy is desperately needed:

“In the medium-term, productivity growth – doing more with less – is the key determinant of income growth. Our shared prosperity depends on it”

Mark Carney, Governor, Bank of England. 2015.

Innovation Model 2

Takes as its starting point acknowledgement that there are two modes of innovation:

1. STI – science, technology and innovation mode (recognised by English policy)

2. DUI – innovation through doing, using and interacting (ignored by policy).

Balancing science and other issues:

The concept of innovation and policy activities is notlimited to industrial, scientific and technical innovations;the innovations can also be social or organisational. If newtechnologies are to be adopted successfully, changes will also be required in working, organisational andmanagement systems. Because the various organisationalcomponents (technology, strategy, organisation,management) need to be mutually supportive, abalanced emphasis on technological and socialinnovations is required.(Ramstad, 2009b: 2)

Advantages:

• Addresses a much wider range of firms

• Involves a much wider range of staff

• Reflects the way that the bulk of innovation actually happens – most innovation is incremental process or product innovation, rather than a novel scientific breakthrough.

Bottom up innovation:

Research shows that a great deal of innovation within organisations in all sectors (public and private) occurs at or very close to the productive process itself. It is concerned with ‘shop floor’ or front-line staff being able (i.e. empowered and sufficiently skilled) and willing to make incremental adjustments in the quality, specification, design and/or utility of the good or service that is being delivered, or within the productive process through which the good or service is delivered, in order to improve productivity or quality.

Model 2 underpins:

The Nordic economies’ success in making high-waged but medium and low-tech) sectors operate at advanced levels of quality, innovation and productivity (for example, forestry, agricultural machinery, fish farming, fertiliser and fish food manufacturing, specialist ship building, furniture design and so on. As Lundvall et al, (2002) observe:One of the interesting aspects of the Danish system is that its relative wealth has been built in spite of a specialisation in low technology sectors….Supporting innovation in low technology areas will remain an important priority for industrial policy. In the light of the ‘new economy’ discourse there might be a risk to forget about the renewal of competence in traditional sectors, including service sectors.

Policy initiatives:

The Nordic countries have developed a substantial, publicly-supported infrastructure to provide organisations with the expert help needed to reconfigure work organisation, job design and production processes and technologies to enhance their capacity to engage in workplace innovation . A prime example would be the Finland’s Tekes programme, but there are many others. In some instances, HEIs and other educational institutions have been encouraged and supported to develop the capacity to provide expert help and advice to firms to support organisational and workplace re-design via publicly-subsidised consultancy services.

Broader context:

This broader model of innovation does not take place in a vacuum. It exists within a labour and product market environment where routes to low cost, low skill, low wage competition have largely been closed off by the presence of strong trade unions, high wages and associated social provision costs, and economic and cultural expectations that mean that most firms have little option but to take the high road to competitive advantage. Given the general need to compete as much on quality and product/service specification as on price, there is a strong incentive for firms to deploy workers’ skills to maximum productive effect, and to pursue innovation as a means of survival.

The way we configure work is sub-optimal if we want Mode 2 to flourish

• Many workplaces continue to design work in ways that stresses routine and repetitive processes.

• This makes poor use of employees’ skills.

• Bottom up workplace innovation is weak

Some findings from a Microsoft survey of UK office workers

• The average office worker will spend across a working lifetime 90,000 hours at work.

• Process driven tasks dominate many workers’ lives. 71% thought ‘a productive day in the office’ meant clearing their e-mails.

• 51% of 18-25 year olds believe that attending internal meetings signifies ‘productivity’.

• When asked, ‘when was the last time you felt you made a major contribution to your organisation?’, 23% responded that they believed they had never managed this. Only 8% thought they had made a major contribution in the last year.

And……..

• 54% of office workers admitted to working at the weekends.

• This amounted to about 2 billion hours a year of unpaid overtime.

• Only 1 in 7 felt inspired by their job. 22% agreed that ‘I typically am not excited by my work – it is just something that I do’.

Innovation absent

• 45% said they had less than 30 minutes a day to think without distractions

• 41% did not feel empowered to think differently• 42% did not think they had the opportunity to

make a difference at work• 38% said, ‘the business is very process-driven

and spends little time on doing things differently or being innovative’.

SOURCE: Microsoft, 2013 The Daily Grind

How work is structured really matters

We know that certain configurations of work organisation, job design and people management practices support and embed:1. Better on-the-job learning (expansive

learning environments)2. Better skills utilisation3. More workplace innovation4. Potentially higher levels of productivity

Workplaces that allow discretionary learning are required, but…

Discretionary learning workplaces:Portugal 26% of employees coveredSpain 20%UK 35%Netherlands 64%Denmark 60%Sweden 53%Finland 48%Germany 44.%SOURCE: OECD, 2010

Instead the UK has a lot of ‘lean’ workplaces

These ‘lean production workplaces’ have lower opportunities for learning and innovationUK 40.6% of employees Netherlands 17%Denmark 22%Sweden 18.5%Germany 19.6%

Employee-driven innovation

“employee learning in the workplace – in terms of new knowledge, expertise and problem solving skills – constitutes the raw material for employee-driven innovation. Basically, employee initiatives and autonomy, on the one side, and the structure and conditions of work, on the other side, are important for innovation….innovation….is not conceptualised as separate units, but as embedded in daily work activities and job enactment and social processes in the organisation”Hoyrup, 2012.

Attributes of a ‘learning workplace’, where innovation is possible:

• Confidence and trust in managers and colleagues• Mutual learning and support• Giving and receiving feedback without blame• Learning from experience, positive or negative• Learning from colleagues, clients and visitors• Locating and using knowledge from outside sources• Attention to the emotional dimension of work• Discussing and reviewing learning opportunities• Reviewing work processes and opportunities for quality

improvement

And……..

• Management that sees beyond a competitive strategy based on the delivery of standardised, low specification goods or services, and that wants to pursue incremental product, service and process innovation.

• A management that believes that workers at all levels in the organisation can contribute to this agenda, and which organises work and management systems in ways that facilitate this objective.

The Scottish government’s skills utilisation policies recognise this:

“Making more effective use of skills is of fundamental importance in leading Scotland back to a higher level of productivity and sustainable growth. This encompasses many elements including how well learning is transferred to the workplace setting, job design, organisational ambition and workplace organisation”.

Scottish Government, 2010

Piloting a broader model of innovation through HE and FE

• SFC skills utilisation projects.

• Family of 12 projects, all different, some run by HE, some by colleges, some by a consortium (building on existing college/university ‘articulation’ links).

• Overall budget, from 2009, over 3 years £2.9 million (front-loaded).

Range of approaches adopted:

• Some of the projects are essentially about trying to ensure that the outcomes of learning match needs inside the workplace more closely. They address a relatively traditional ‘employability’ agenda.

• Most attempt to facilitate a change inside employers’ workplaces around process and product/service innovation, work organisation and job design – a radical development.

Varying degrees of intervention in the workplace

1. Matching learning to existing jobs and future-proofing (development & progression)

2. Making workforce learning and capabilities visible to managers (skills audit)

3. Modifying work allocation, work organisation and job design to make fuller use of skills, and/or developing/improving goods and services.

4. Organisational development and innovation

Examples:

• Glasgow School of Art – using creativity techniques to help vertical slices of the organisation re-think processes and products

• Open University working with care home managers to re-design the supervisory role.

The College or University role:

1. Auditor (what are the skills of the workforce and how are they being used?)

2. Challenge function (is existing practice as good as it could be?)

3. Catalyst for reflection and change4. Co-designer/re-designer of workplace and work“I try to open up a subtle dialogue but in a non-threatening

way…I will say to them do you want to manage this organisation where you are holding the reins all the time. That opens up all sorts of stuff around power, responsibility, delegation”

Tutor OU social care project

Lessons:

1. Demands a lot from college/HEI staff2. Needs to be flexible and start with the needs of

the businesses that are being worked with3. Requires building up relationships and trust

with employers, and using their language.4. Need to be able to offer benefits to firms up

front5. Time consuming and labour intensive6. Dependent on interests and ambitions of

colleges and HEIs

What happens next?

• In England, almost certainly nothing. BIS’s Innovation policy will remain wholly science-centric. Broadening it is regarded as some form of zero-sum game, whereby new forms of innovation activity detract from the importance of science.

• In Scotland……who knows?