Soft Innovation assesses the importance to the UK of aesthetic, or 'soft', innovation.

Key findings

• Soft innovation is a concept that reflects aesthetic changes
• To concentrate only on technological innovation while ignoring soft innovation provides only a limited and biased account of total innovation
• There are high rates of soft innovation in the creative industries, though it is significant outside the creative industries too
• The commercial benefits of soft innovation may be very high; government intervention could be justified, especially when it comes to intellectual property rights as an area for policy
• However, government policy must embrace all innovative activity, not just technological or scientific

In this report, the economist Paul Stoneman uncovers a picture of rapid innovative change of an aesthetic nature – what he terms ‘soft innovation’. He argues that current government policy distorts the economy by supporting innovation of a technological and functional nature, and neglecting innovation of a 'soft' kind.

In the creative industries, Professor Stoneman points to estimates suggesting very high and increasing rates of soft innovation: for example, about one-half of the titles in the UK Top 40 album chart change each month. And the bestselling video games now spend on average less than three weeks at the No. 1 position.

This report argues for an overhaul of innovation policy to recognise soft innovation alongside innovation of a technological nature.