Innovation in the UK Retail Sector - Nesta

Innovation in the UK Retail Sector
“a bias remains towards supporting technological innovation in mainly manufacturing firms.”
(den Hertog, Segers and van Ark, 2003).
This has led to a number of initiatives at both international and national levels to remedy
the perceived imbalance (CEC, 2007, Forfás Ireland, 2007). The Council of the European
Union reached broad-ranging conclusions in its deliberations on competitiveness in
November 2007, highlighting the increased role of services and:
“the importance of supporting all forms of innovation including non-technological innovation” (Council
of the European Union, 2007)
The present UK Government initiative into Innovation in Services forms part of this
broader response.
8.5 It has been suggested that existing Government policies towards innovation can be
adapted to the needs of service sector firms in three particular ways:
• Deepening of existing policy
(by making innovation policies more ‘service-friendly’);
• Broadening of existing policy
(by recognising that innovation within the service sector are more likely to span firms
as well as whole value chains); and
• Horizontalisation of existing policy
(by recognising that other policies not explicitly designed to stimulate innovation may
– indirectly – improve the climate for service sector innovation. Such initiatives
include those in relation to human capital (training and development) and
deregulation (den Hertog et al, 2003)).
8.6 If the UK Government is perceived to do less in stimulating innovation in services, or
existing policies fail to recognise the distinctive characteristics of the sector, then this
might serve to explain why the retail sector extensively discounts Government’s influence
on firms’ thinking in this area. In practice, Oxford’s research reveals that the Government
is engaged in a significant number of activities with varying degrees of relevance to retail
innovation. This section reviews in summary what Government already does that is
relevant to stimulating and supporting innovation in retailing. The review is not designed
as an exhaustive catalogue of Government services, but a prioritised appreciation of
current activity, which can be seen in three distinct areas:
• Provision of support mechanisms for retail innovation;
• Promoting innovation in sustainability by the retail sector; and
• Fostering skills and organizational innovation in the retail sector.
8.7 Alongside this review, it makes recommendations for those areas in which the
Government might better focus and communicate existing activity, in addition to
potentially providing new stimuli which might matter particularly to retailers. For each
recommendation, the report follows a standard structure:
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