1. MBS CENTRE FOR SERVICE RESEARCH UNIVERSITY OF MANCHESTER 22 APRIL 2009
Service Innovation and Performance: What is the Role of Government?
Allan Mayo
Service Policy Unit
BERR

2. Two initial hypotheses
(i) Innovation intensity in services depends on
Size of the market opportunity or threat
Flexibility/openness of the regulatory & business framework, which incentivises innovation
A network of informed suppliers and buyers
Access to an advanced ICT infrastructure
Rate of change of underpinning technologies
Strategic, management, and workforce skills to handle change
Availability of capital

3. Two initial hypotheses
(ii) Individual Business success depends upon:
Market Identification
Speed of Response/Flexibility
Availability/Scalability
Quality/Price
Credible Business/Revenue Model

4. Size of the market opportunity
Not difficult to identify the most important areas or the ones where Government has a clear role…………

5. Societal challenges - Environment
“Climate change is the world's greatest environmental challenge”

6. Societal challenges - Population

7. Societal challenges – “Moving people and things”

8. Societal challenges – the built environment

9. Services Sector GVA and GVA/Job, 2006

10. Developments in Technology, particularly ICT, a key driver of innovation

11. Informed consumers lie behind the explosion in innovation

12. Size of the market opportunity

13. Government creating new opportunities

14. The emerging global middle class
Millions

15. But typically public services are highly complex services at the end of complex value chains………….

16. Disparate policy interventions
Regulations
Standards
R&D
&
technology
Market information
Skills
Develop, disseminate
best practice
Public procurement

17. The challenge Services perspective into policy
IiS implementation is integrated with wider policy initaitives bringing that servcies perspective – it is part of implementation arrangements for the DIUS-led Innovation Nation White Paper and BERR’s own Enterprise Strategy.
In more specific areas:
Defra Ministers have told us they see it as taking forward part of the Government’s response to the CEMEP report, addressing the role that services might play in transition to a low carbon, resource efficient economy
We worked with BERR colleagues on Manufacturing Strategy, now liaising with them on initial steps towards the preparation of the Low Carbon Industrial Strategy
Contributing to the Shareholder Executive led assessment of Trading Funds and possible greater economic benefit data they collect could provide for the economy – rwll opportunities for new services
European engagement with the Commission… [aborted Communication on a services strategy]
..Collaborative – implementation action plan engages a large range of delivery partners and stakeholders, inclnuding of course, business..
…Central Govt, DIUS, OGDs, Defra, HMT, Cab O, DfT, imporantly a reginal dimension – RDAs, Govt delivery agencies in various area, from Skills Council s=smionsregional
As w

18. How to “pull it all together”?
Develop, disseminate
best practice,
R&D
&
technology
Regulations
Standards
Market information
Skills
Public procurement

19. Assisted Living Innovation Platform 2007 - 2012
Knowledge
KNOWLEDGE TRANSFER AND STANDARDS
ALIP KT (running)
OBJECTIVE:
Large scale
New technology
Demonstrator
Standards?
SHORT TERM R&D
Home based systems & UCD (running)
SCDE (running)
LONG TERM R&D
Business & Economic modelling
Social and Behavioural studies
EXTERNAL to ALIP: Whole Systems Demonstrators
2007
2008
2009
2010
2011
2012

20. The power of roadmapping
A roadmap to where? clear objectives
Guided by whom? leadership/ownership
Barriers to progress?......Consider Options/Innovation
Priorities for action by whom?.....accountability and dependencies
Key points en route…………clear milestones/timelines
Who says so? transparency/debate
PROVIDES THE BASIS FOR A CO-ORDINATED APPROACH

21. The power of demonstration
Large Scale Demonstrators are the Laboratory of the Service Economy

22. Demonstrators inform Government Procurement
clear joint objectives
mutual understanding
developing ongoing relationship
appropriate risk sharing
opportunities for innovation
flexibility

23. A new “industrial activism”
A strategic vision for UK
economic recovery:
Adapt, strengthen general
competitiveness policies
Influence market in new,
more strategic way
New approach to targeted
interventions: high growth areas,
major technological change

24. Conclusions
If my 2 hypotheses are right, the role of Government is to:
provide a high speed, reliable ICT infrastructure and ensure UK firms have access to latest technological developments/applications
provide a framework which brings together the different stakeholders and facilitates a shared perspective, particularly where Government is a key actor
promote better understanding of the challenges we face and potential solutions through demonstration, and then follow up with procurement
ensure openness and flexibility of markets, not only through competition policy but also standards
encourage development of relevant skills for an i-enabled, service oriented economy
improve the availability of funding to support innovation and risk
AND IF EUROPE WISHES TO REMAIN COMPETITIVE THEN WE NEED TO CONSIDER THIS ON A EUROPEAN SCALE

25. For further details: http://sigs.intelligus/ portal/site/sigs/?mode=0