By Daniel Hunter
With the UK back in recession, a new study of UK boardrooms shows that more than half (57%) of business leaders believe economic pressures are forcing British companies to be more innovative and think more creatively to drive growth and get ahead of the competition.
Simon Walker, Director General of the Institute of Directors (IoD), welcomes the research, commissioned by Invest in Cornwall, but stresses that in today’s environment businesses have to go further than ever to innovate.
Invest in Cornwall, the inward investment service of Cornwall Development Company, worked in partnership with the IoD to investigate the impact of recession on business innovation in Britain by surveying the opinions of UK business leaders.
Creativity comes in small packages
Businesses with between 10 and 100 employees are most likely to capitalise on innovation and this is something the majority of respondents (54%) put down to the freedom to think creatively and less rigid structure this size of business benefits from. Businesses with over 250 employees are expected to be the least creative despite their larger talent pools and budgets.
However, smaller firms do not realise the advantage they have over their larger rivals when it comes to innovation. It is those working for businesses with more than 500 employees who are most likely to recognise the link between growth and creativity with 73 per cent of this group making the connection compared to 61 per cent of directors with less than 10 employees. Youth is also seen by the UK’s business leaders as a catalyst for creativity with four fifths (79%) of companies under four years old rating themselves higher in terms of creativity than older businesses.
“Innovation is absolutely crucial for companies looking to get through these tough times," Simon Walker, Director General of the IoD, said.
"The pace of technological change in particular means that there are a lot of opportunities to find new efficiencies, develop new products and sharpen up services.
"This is a challenging period for most firms, and understandably a lot of directors are exploring every possible angle to help ride out the storm. Businesses, and the economy as a whole, always thrive on innovation, but the wider climate is pressing people to look even further than they normally would.”
Competing on an international stage
When it comes to competing on the international stage, it is encouraging that most business leaders (67%) consider that UK plc measures up well internationally when it comes to creativity and innovation.
The USA was regarded by 41 per cent of business leaders as the main competition, followed by China, rated by 21 per cent as the UK’s key competitor. Both countries have also seen significant growth in recent months — China as a key BRIC country embracing new opportunities while the USA economy recovers post-recession.
Apple, and UK-based Virgin and Dyson, were ranked as the top three global leaders in business innovation. Four-out-of-ten (42%) ranked Apple in the top spot, citing the iPad, iPhone and iCloud as some of the best examples of creativity in action.
As these three firms demonstrate, strong business leaders are a valuable creativity driver even for global organisations. Nearly all (96%) of those asked think an individual leader’s own personality has a great influence on a company’s decision-making process when looking at new ideas. A willingness to take risks and diversify into new markets were also cited as key characteristics of creative businesses.
The IT, communications and technology sectors, including social media, are seen as leading the innovation charge, followed by the energy & environment industry and aerospace & engineering — the sectors commonly feted to be driving the UK’s knowledge-based and high-skill economy.
The education & skills, healthcare and financial services sectors are viewed as the least innovative with less than a fifth (16%) of those surveyed believing these sectors are deploying creativity to drive growth compared to two-thirds (60 %) who believe this to be true for the IT sector.
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