The UK government has set challenging targets for R&D investment and improving the UK’s record on innovation and commercialisation.
Key to achieving these targets and maximising the social and economic benefits from future R&D and related investments will be the effectiveness of the UK’s national innovation system (NIS).
In this paper we briefly examine the capabilities of the UK NIS relative to that of our main international competitors and identify relative strengths and development opportunities. The concept of the national innovation system was initially introduced by Freeman (1982, 1987) and summarised by Metcalfe (1995, p. 38) as the: ‘Set of distinct institutions which jointly and individually contribute to the development and diffusion of new technologies and which provides the framework within which governments form and implement policies to influence the innovation process. As such it is a system of interconnected institutions to create, store and transfer the knowledge, skills and artefacts which define new technologies’.
This emphasises that innovation and technological progress results from a complex set of interactions between system participants, including businesses, universities and government research institutes (Freeman, 1995; Lundvall, 1992; Lundvall, 2007; Nelson and Winter, 1993; Godin, 2009).
This suggests that ‘individual institutions’ contributions are not considered in isolation, but with how they communicate with each other as components of a collective structure of information formation and use and how they interact with social institutions (e.g. principles, standards, legal frameworks)’ (OECD, 1999 p. 24).
Through its role in shaping policy, regulations and incentives government can play a key role in ensuring the effectiveness of national innovation systems.
Section 2 of the review provides a data based view of the UK NIS using a series of international comparisons.
This emphasises the consistently low level of investment in R&D in the UK relative to our international competitors and the growing investment gap. It also emphasises the market and curiosity-driven orientation of the UK’s national innovation system.
Section 3 of the document focuses on the strength of the various ‘pathways’ through the innovation system, drawing on analogies with natural eco-systems.
Section 4 looks forward to some emerging challenges.
