Innovation in the UK Retail Sector - Nesta

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Innovation in the UK Retail Sector 8. Recommendations to stimulate and support innovation in retailing 8.1 Understanding the sources of information and methods of co-operation conventionally employed by the retail sector in relation to innovation provides a useful backdrop to the development of recommendations of ways in which Government might stimulate and support innovation in the sector. The Community Innovation Survey identifies four broad sources of support and co-operation: • Internal to the firm, • Market-related (including customers, competitors and suppliers), • Institutional (including government and university sources) and • Other (which include conferences, industry associations and scientific journals) Figure 8.1. Sources of information & co-operation for innovation Institutional sources Other sources Internal Market sources Technical, industry or service standards Professional and industry associations Scientific journals Conferences, trade fairs, exhibitions Government or public research institutes Universities or other HEIs Consultants, commercial labs, private R&D institutes Competitors Clients or customers Suppliers Within your enterprise or enterprise group Source: Community Innovation Survey (CIS4), 2005. Base: all innovation active 0% 10% 20% 30% 40% 50% per cent 60% 70% 80% 90% 100% Not used Low Medium High 8.2 Predictably, retail innovators appeared most reliant on market sources for their information with over 50% of both customers and suppliers identified as relevant to innovation (and 19% of innovation active firms suggesting that customers were ‘very important’ to their innovation activities). These sources were well ahead of consultants or private R&D resources. Competitors comprised useful information resources, partly because much customer-facing innovation in retailing is inherently visible (even if not easily capable of emulation). All these sources comprise excellent examples of retailers exploiting so-called ‘open innovation’, as well as providing evidence to support our notion of retailers acting as ‘innovation hubs’. 14 A smaller proportion of firms (42%) claimed to make use of internal sources, whilst of ‘other sources’, attendance at conferences and trade fairs appeared to be most highly regarded. Finally, only a small minority (between 10-11% of firms) considered any institutional sources of information 14 Open innovation is defined as ‘the exploitation of ideas generated from outside the traditional enterprise unit’. Page 54
Innovation in the UK Retail Sector or stimulation to have been at all important; and – notably - no single respondent felt that government played a ‘highly important’ role in this regard. 8.3 It is important to put these findings into context in a number of ways. First, in line with earlier analysis, retailers appeared to rely less on any single source of information than UK firms on average, apart from their particular interest in conferences, trade fairs & exhibitions. Whilst low levels of importance are also attributed both to universities and to government by firms in general, such institutional sources appeared less than half as important for the retail sector (Figure 8.2). Secondly, it has been suggested by the sector that more recently, the largest retail firms have engaged more extensively with universities and other research institutions, although such evidence is necessarily anecdotal. For example, in 2006 five leading fashion retailers came together in a joint initiative with Government to fund the Fashion Retail Academy 15 under the auspices of the University of the Arts London, and in 2007 Tesco announced a £25mn Sustainable Consumption Institute (SCI) at the University of Manchester 16 . Finally, the position in the UK is not universally reflected elsewhere in Europe. The European level data from the Community Innovation Study suggests, for example, that service firms in Nordic countries have more extensive links with Government and HEI sources than is the case in other markets. Figure 8.2. Sources of information & co-operation for innovation: retail sector and all sector comparison (weighted data) Institutional sources Other sources Internal Market sources Technical, industry or service standards Professional and industry associations Scientific journals Conferences, trade fairs, exhibitions Government or public research institutes Universities or other HEIs Consultants, commercial labs, private R&D institutes Competitors Clients or customers Suppliers Within your enterprise or enterprise group 0 50 100 150 200 250 300 350 400 450 Importance of source of innovation (weighted, max = 1,000) Source: Community Innovation Survey (CIS4), 2005. Base: all innovation active. Note: weighted data. High importance=*10, medium importance=*5, low importance=*1; not important=0 8.4 Governments around the world have recognised their responsibility for supporting and stimulating innovative activity by firms. Similarly, however, many governments have also historically shared a preoccupation with the manufacturing sector over services, and support for technological over non-technological forms of innovation. In the Netherlands, for example: 15 See http://www.fashionretailacademy.ac.uk 16 See http://www.manchester.ac.uk/aboutus/news/archive/list/item/index.htm?year=2007&month=september&id=123544 Retail trade All sectors Page 55
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Report for NESTA December 2007 Inno
Page 3 and 4: Contents Innovation in the UK Retai
Page 5 and 6: Innovation in the UK Retail Sector
Page 9 and 10: 2. The nature and contribution of r
Page 23 and 24: v. Retailers’ reverse innovation
Page 41 and 42: Vignette 5.3: Currys customer recyc
Page 43 and 44: 6. What are the barriers to retail
Page 47 and 48: 7. What are the measures of retail
Page 49 and 50: . Types of Measures Innovation in t
Page 53: Innovation in the UK Retail Sector
Page 65 and 66: . Promoting innovation in sustainab
Page 69 and 70: Conclusion/Next Steps: Innovation i
Page 73 and 74: Recommendation 4: Innovation in the
Page 77 and 78: Appendix 1 Research Methodology 350
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Innovation in the UK Retail Sector - Nesta

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