Nudging innovation suggests that Innovation services provided by creative firms can improve the innovation performance of firms in the wider economy.
- This paper argues that creative innovation services provided by creative businesses help firms innovate by addressing behavioural failures, such as risk aversion, status quo bias and myopia.
- They may do this by, for example, creating connections to consumers through communities and mediated identities or making use of social network dynamics.
- Nesta will run an innovation vouchers pilot to test hypotheses related to this theory, and whether the shift to fifth generation innovation processes induces demand for these types of creative services.
This research sets out an argument that behavioural biases and habits can make it difficult for small and medium-sized firms to adopt innovation processes that are necessary to become more competitive.
Nudging Innovation suggests that innovation services provided by creative businesses can help address habitual behavioural failures to improve the innovation performance of firms in the wider economy.
The theory suggests a number of hypotheses that will be tested by Nesta's proposed creative credits pilot. More generally it suggests that credits or vouchers can be used on a one-off basis to 'nudge' firms towards increased use of innovation services.
Dr Jason Potts and Kate Morrison