Firms ignore ideas on innovation

October 11, 1996

Small and medium-sized firms are not taking advantage of innovative ideas from universities, patents and trade fairs, according to a survey of 1,000 companies.

The finding suggests that government initiatives to link small and medium enterprises with sources of information on innovation are failing. Universities were cited in just 0.3 per cent of responses as an important source.

The survey covered firms employing one to 500 people in manufacturing and business services. Based at Cambridge's Economic and Social Research Council Centre for Business Research, the research looked at sources of innovation and technology transfer.

The purchase of equipment is the most important way new technologies are acquired. Most new technologies come from within the United Kingdom. An encouraging find was that a high proportion of firms, particularly larger ones, are engaged in research and design on a continuous basis.

The research team said firms that failed or were failing in 1990-95 clearly had less money to innovate. But these companies were also much less likely to have introduced a industrial process innovation in the period 1986-90 than firms which survived until 1995. There is some evidence that innovation in 1993-95 was higher than in 1986-90. Firms employing fewer than 50 people account for 99 per cent of all businesses in the UK.

The Changing State of British Enterprise: Growth, Innovation and Competitive Advantage in Small and Medium Firms 1986-95.

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