This report examines how innovation happens in six ‘low innovation’ sectors, and what this means for government policy.

Key findings: 

• ‘Hidden innovation’ refers to innovation activities not reflected in traditional indicators such as investment in R&D or patents awarded. It is underexplored and vital to the future development of the UK.
• Four types of hidden innovation were identified in six sectors seen as having low innovation rates. Measuring rates of such innovation is possible, and important. 
• Innovation policy should be at the heart of government. 
• Innovation differs greatly depending on sector, as does the policy required to support it. Government should therefore call for evidence on how innovation happens in the most critical sectors of the UK economy.

Innovation is essential to ensuring the UK's future economic competitiveness and social wellbeing. But in our October 2006 report The Innovation Gap, we identified a gulf between how innovation happens and how policy supports it.

Hidden Innovation attempts to bridge this gap by analysing the innovation systems of six sectors that are seen as having low levels of innovation: oil production, retail banking, construction, legal aid services, education and the rehabilitation of offenders.

It examines whether these sectors are truly lacking in innovation, or whether traditional measures of innovation – such as investment in R&D – are failing to capture all of the innovation that takes place.

Author:

Nesta