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Innovation and Research Strategy for Growth


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Smith, K and Estibals, A 2011 , Innovation and Research Strategy for Growth.

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The UK, and the world economy generally, continue to confront serious
challenges. Europe as a whole is threatened by financial instability, and
countries face risks and trade offs as they seek to accelerate recovery. Against
this background, the UK Government aims not only to raise potential output
but to generate sustained growth. This is necessary not only to tackle the
effects of the recession, but also to remove longer-term weaknesses in UK
development. These include sectoral imbalances, high household debt, weak
investment, persistent trade deficits and constrained public spending. Growth is
the connecting thread as we seek to solve these problems. The only viable way
to build a strong, sustainable and balanced economy is to develop new sources
of growth. Innovation in all its forms is at the heart of this.
Innovation is the engine of long-term economic development because it is the
channel through which improved knowledge is applied to economic processes.
This paper opens by showing that economic growth theories and models
converge in giving a central role to innovation. Growth rests ultimately on
innovating firms. Empirical research shows that innovation, in the form of
performance improvements in products, processes, services and systems, is a
core condition for both for business competitiveness and the wider growth of
the economy. Innovation is not costless: it requires investment and resource
commitment. Investments in tangible and intangible innovation assets – such
as research, design, training and skills, intellectual property, organisational
and managerial abilities etc. – are needed to underpin the productivity growth
that drives both GDP growth and wider welfare. A central component of this
is investment by government in scientific and informational infrastructures, in
education and training, and in public procurement.

Item Type: Report (Other)
Authors/Creators:Smith, K and Estibals, A
Publisher: Department for Business, Innovation and Skills UK
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