End of an era for innovation

The ESRC's five-year innovation programme ended in September. Caroline Davis examines its impact on research.

Whisky, manhole covers and periscopes were among the subjects studied in a recent Economic and Social Research Council programme.

The five-year ESRC Innovation programme drew to a close in September. It was set up to respond to Realising our Potential , the 1993 science white paper, and was concerned with innovation as the successful exploitation of new ideas. Although the Confederation of British Industry and the Department of Trade and Industry ran innovation research programmes in the 1980s, they were user-based with a practical focus. The ESRC programme was driven by the need for a rigorous academic underpinning for innovation.

Fiona Steele, previously head of technology and innovation at the CBI, headed the programme. Most ESRC programme directors are academics, but Steele's experience with business proved invaluable when selecting projects and making sure their findings would be communicated back to businesses. She went to industry and sought a wish-list for the research, and then set up an industry review team on top of the academic peer review.

Steele invited David Rose, who runs his own business, Innovation Associates, to join the review team. Their task was to appraise the grant applications, decide what were the relevant business issues and set research priorities. They were also charged with helping academics present their research to the business community. Most of the research projects had informal relationships with industry, brokered either by the researcher or Steele.

Rose, like many of those who were involved, believes the programme was a success. "It brought the talent in UK business schools out of the woodwork," he comments. "Before that, they lived in the shadows of American business schools. It put the UK's rigorous academic management research on the map."

He says the programme delivered new UK material that he has found successful with his clients. Most importantly, he says it brought companies together in a network, where they could exchange ideas and discuss the big problem: how to make it work in practice.

Management research often runs into difficulty securing public funding. Funders tend to ask why they should support a project that is so closely related to a particular company. One researcher, Frank Blackler, from the University of Lancaster's management school, received his ESRC grant on condition that he work with an advisory committee to ensure the work was relevant to other companies. Steele helped him gather together people involved in high-tech companies. They met twice a year, when Blackler would present his work. "It put on the pressure to produce usable output for other people," he says.

Blackler also believes that being wholly funded by the ESRC allowed his researchers to get more involved in the workings of a company than they would if they had been funded by the company. "It gave us a cushion in the business, as they didn't worry if they weren't getting immediate results," he says. "We weren't costing the company, so they were inclined to be more trusting and tolerant of work that didn't look immediately relevant."

Another issue is how to transfer the findings from academia into businesses and industry. "That is often the weakness with these research projects," according to Andrew Pettigrew of Warwick Business School. "There are high expectations of the quantity and quality of the dissemination, but the funding doesn't pay for it. The research councils see funding ending with the end of the research."

At the beginning and end of the programme, dissemination events were held where projects presented their work to each other. However, it was the partnerships they developed with industry that became the main channel for knowledge transfer.

When the programme came to an end in September, the majority of the research projects were complete, but many wanted to continue the momentum. "There was genuine disappointment when the programme ended as there was no obvious successor," says Rose. This meant that the intellectual property developed and the networks built would not be carried forward.

"The research council should at least keep the network together, so we can continue to share ideas," he adds.

"I've put in a proposal to the ESRC to continue the research," says Steele. "But I think it should go forward with consortium funding from the sectors involved."

A further innovation research programme would need a new focus, Pettigrew says. For example, the new economy of dotcoms and e-business that has arisen since the ESRC programme began in 1995.

If Steele's bid is successful and another Innovation project is launched, she will not be in charge. In December she takes up her post as head of the ESRC's Evidence Based Policy and Practice Centre.

KEY PROJECTS

Innovation processes in high technology organisations (Jan 96 - Dec 97)
Frank Blackler, from the University of Lancaster's Management School, received ESRC funding to place two researchers in a high-tech UK defence company.

Pilkington Optronics faced competition from a giant US defence firm and was being forced to innovate to survive. An attempt to re-organise the company ran into difficulties and the board took an active interest in the study and worked more closely with the researchers. The team was allowed to study high-level strategy development teams working to re-invent the company.

The new internal network organisation: process and performance (March 96 - Jan 00)
Andrew Pettigrew, from Warwick Business School, embarked on the biggest project of the programme. He had help from eight universities internationally and the project was co-funded by PriceWaterhouseCoopers.

The project's main aims were: to see how far new organisational forms were being implemented; to look at the effects on performance; and identify the managerial processes involved. The key finding of the research was that to implement innovation most effectively, organisations need to change structures and processes and company boundaries - ie the company needs to adopt a holistic attitude to change. He went on to study how companies acquire the capacity to deliver change.

The manufacturing of workplace innovation in the Scottish spirits industry (Jan 96 - Dec 97)
Paul Thompson, then at the department of business studies at Edinburgh University, investigated two rival distillers as they responded to competitive pressures through innovation.

The research focused on the changes Allied Distillers and United Distillers were making to their work and employment practices.

They found United Distillers' strategy was holistic, considering cultural change as important as technical change, developing teamwork and investing in employees to motivate them to accept change. Allied's strategy was cost-driven and not organisation-wide. Its programme did not prove as successful as its rival.