Our work in innovation policy
The challenge: Innovation is essential to our future prosperity. How can governments better enable innovation to fuel growth and societal wellbeing?
We do research and create new analytical tools to build knowledge and evidence about innovation and how to support it. We test and spread new and more effective ways of supporting innovation through programmes and capacity building. We shape public debate and influence decision-makers through events, provocations and collaboration.
What we want to see
Innovation policies that are smarter, more inclusive and more dynamic.
- Smarter… Government efforts to encourage innovation – from subsidies to science parks – have often been selected on little evidence of what works best, and poorly tested and adapted to new contexts. Decisions have been based on outmoded data that fails to capture the real nature of innovation activity. This risks poor policy choices, inefficient spending and badly targeted interventions.
- More inclusive…. While trends in technology, business and globalisation present enormous opportunities, they have also exacerbated inequality. Policymakers struggle to balance economic growth and global competitiveness with achieving equity. Investments in innovation have not prioritised solving the most pressing social problems. The innovative potential of large swathes of society and business still goes untapped.
- More dynamic…. New ideas and models in innovation policy don’t emerge and mature fast enough. Innovation policies need to more effectively anticipate and support future industries, jobs and technologies, and help the UK compete in and shape a rapidly changing global innovation system.
We never work alone
We’ve worked extensively within the UK innovation system, and with partners in over 30 countries: the UK government, and the devolved administrations of Scotland, Wales and Northern Ireland; national governments in the UAE, Chile, Canada, India, Malaysia, Denmark, the Netherlands, Australia and Finland; Innovate UK; Tech City UK; the European Commission; the OECD, the World Bank and the Inter-American Development Bank; Manchester, Oxford and Cambridge Universities; UK Research Councils; the Kauffman Foundation; Bloomberg Philanthropies; Pearson; Google; KPMG; the Lisbon Council; and 100%Open.
We see new opportunities and challenges
Measuring what matters
Our research has provided cutting edge insights into the way that innovation should be measured and understood by policymakers - such as shining a light on the innovation activity hidden from traditional measures like Research and Development Statistics. Our Innovation Index, championed a new way of measuring innovation investment in ‘intangibles’ like business model innovation or creative experiences. The work has influenced governments and accountancy practices around the world and culminated most recently in the publication of bestselling business book Capitalism without Capital.
Mapping and visualising innovation
Following the success of projects like Tech Nation, the most comprehensive analysis of the UK’s digital tech industries to date, we’ve embarked on an ambitious effort to exploit the potential of big data, new data science and interactive visualisations to transform innovation policy. After developing Wales’ first innovation policy dashboard, we are now partnering with governments and foundations around the world. For example, EURITO is a 3 year EU funded project to develop new indicators for research and innovation policy based on big data. In contrast, in the Startup Europe partnership we’ll be using experimental mapping of corporate startup collaborations as part of an effort to encourage more people to start and scale businesses across Europe.
Building evidence and experimentation in innovation policy
We are seeding a culture of experimentation in innovation and growth policies around the world through our Innovation Growth Lab. Working with Manchester University, we created the Compendium, a foundational resource on the use of evidence in innovation policy making, now referenced by governments, academics and international institutions alike. The Vital 6% showed that a small number of high-growth firms are responsible for a disproportionate share of employment growth and helped shift government policy to support scale-ups. And with Creative Credits we ran a randomised control trial evaluation of an innovation voucher intervention (helping small businesses access expert advice).
Creating the conditions for innovation to flourish
We make it our job to understand the best conditions for innovation, in the UK and abroad. Nesta launched the European Digital City Index (EDCi) - an index for startups, scale-ups and policymakers comparing how well different cities support digital entrepreneurship. We’ve also undertaken extensive research on the skills needs of innovative businesses: the Model Workers report found that creating value from data requires a new mix of skills - including analysis, coding, business sense and creativity. And How Innovation Agencies Work draws lessons from across the world about how to design institutions to support innovation.
Finding and analysing new innovation methods
We are always on the look out for valuable new ways to innovate, to support innovation, and to analyse innovation. Our work on emergent innovation methods, such as crowdfunding, seed accelerator programmes, frugal innovation and development innovation, has been influential in a range of ways. For instance our work on crowdfunding and alternative finance helped measure the market potential, hone early platform models and shape the policy environment for peer-to-peer finance.
The result is more and better funding alternatives for entrepreneurs with good ideas. Our early research into seed accelerator programmes to help startups grow more quickly helped codify the method to enable important further research on effectiveness. We’re currently exploring cutting edge approaches being used to make better policy, including how simulation helps policymakers to test out the impact of their decisions, and how regulators can adopt a more anticipatory approach to regulating new technologies.
Futures and explorations
We explore emerging technologies such as the application of artificial intelligence or the internet of things. For example, our report Machines that Learn in the Wild looked at how governments could make the most of advances in machine learning in sectors such as health.
We spark creative solutions from many sources
Challenge prizes: One of a family of ‘open innovation’ methods tested and refined by Nesta, these help organisations tap brains far beyond their own boundaries. Nesta’s Challenge Prize Centre formulates prizes to stimulate the development of new solutions - often opening up problem-solving to a wider pool of innovators. These prizes range from the Inclusive Technology Prize for products, technologies and systems that help disabled people, to the Open Up Challenge transforming banking services for entrepreneurs and small business with open data.
The Flying High Challenge will collaborate with up to five cities across the UK to shape the future of drones and drone systems. Run by Nesta’s Challenge Prize Centre, in partnership with Innovate UK, it is the first programme of its kind to convene city leaders, regulators, public services, businesses and industry around the future of drones in cities.
We shape the most promising ideas so that they can work in practice
Practical resources and guidance: Nesta creates research-based resources, such as the Innovation Policy Toolkit, the experimental toolkit, and Winning Together - A Guide to Successful Corporate-Startup Collaboration, for innovation policymakers. We also hone the skills of policymakers around the world through the Nesta-led Global Innovation Policy Accelerator: a suite of development programmes for senior innovation policymakers across 14 countries.
Convening and campaigning for better innovation policymaking: For example, Nesta is behind Readie which connects leading digital policymakers across Europe. In 2016 the Readie Policy Summit in Berlin brought together over 100 ministers, state secretaries, policy units and elected representatives from 23 countries, who are shaping digitalisation strategies across Europe. Nesta’s annual Global IGL conference brings together 250 policymakers and researchers from around 30 countries to understand how to improve evidence and practice in innovation and growth policies.
We shift systems in a new direction
Shaping public debate and influencing decision-makers: We shape opinion on strategic issues such as how to prepare for the jobs of the future. We’ve published comprehensive manifestos for innovation policy, like Plan I, and holistic policy agendas for the creative industries, while also advocating specific ideas like testbeds for driverless cars or the creation of a Machine Intelligence Commission to help govern the future of artificial intelligence. This work and our proposals around anticipatory regulation for emerging technologies were influential in the Autumn 2017 budget announcements for a new £9m Centre for Ethics and Data and a Regulators’ Pioneer Fund.
Emphasising the importance of innovation policy for social wellbeing and showing how policymakers can respond: Our work on social innovation community and successive projects on digital social innovation have engaged practitioners and policymakers across Europe in thinking about how policy can better support social innovation. Meanwhile, Next Generation Internet Engineroom, a 15-month EU-funded project on next-generation internet and digital technologies, explores how to create a more ‘human-centric’ web which better reflects European values of openness and digital inclusion. This will help to steer the design and funding of future EU policies.
Not everything we’ve done or supported has worked...
Not all our innovation policy proposals have been taken up. For example, we didn’t manage to persuade government to adopt all the proposals in Plan I - our 12 point plan to kick-start innovation-led economic growth. We’ve learned that it’s critical to work with policymakers to help them to adopt, experiment, adapt and rigorously test new policies and programmes for innovation support. This is one of the reasons we set up the Innovation Growth Lab.
Nesta is a UK charity but we work globally to understand and influence better innovation policy. Our innovation policy work is highly international.
We draw insights from the way other countries approach innovation. For example we have studied innovation systems from India and China to Mexico and Chile. We search for emerging ideas on innovation across the world and compare what works - for example Rethinking Smart Cities from the Ground Up looks at how different countries encourage citizens to work together to make their cities more innovative.
We also support partners in other countries to learn from the UK, and work with them to develop new approaches to supporting innovation for public benefit. We do this through practical, applied research projects (like piloting different models to encourage ‘open innovation’ in the São Paulo health system) and by running learning programmes like the Global Innovation Policy Accelerator.
Our goals: By 2021, Nesta will have…
demonstrated how to support innovation in ways that are smarter, more inclusive and more dynamic.
We will have enabled governments to make smarter policy choices, and to better target innovation policy interventions by:
- Improving the poor evidence base, seeding a culture of rigorous policy experimentation and learning from around the world through our Innovation Growth Lab grants programme and conference
- Using our investment in innovation mapping to pioneer new ways of measuring and visualising innovation activity, demonstrating why others should invest in these too, and how to do it well
More inclusive: We will have demonstrated that innovation policy has an important role to play in creating prosperity and wellbeing for everyone by:
- Increasing participation in innovation processes ourselves through methods like challenge prizes, and through encouraging others to do so, such as via our research on the benefits of corporate startup collaborations
- Championing creative ways to involve the public in decisions about innovation, from setting priorities for public spending to debating the tradeoffs of innovation
- Exploring how innovation policies can be better targeted to promoting social wellbeing and addressing social challenges, and how to ensure the benefits of innovation reach those communities who need it most.