Growth mission research: understanding innovation and investment in DCMS sectors
Research by the National Center for Social Research (NatCen) and the Behavioural Insights Team (BIT) into understanding investment, innovation and productivity in DCMS sectors.
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Kickstarting economic growth and raising living standards is the number one mission of the government. Investment and innovation are core pillars of this mission, intrinsically linked to boosting productivity and driving economic growth. Investment fuels innovation by providing the resources and skills for research and development, but the UK lags behind every other G7 country when it comes to business investment as a share of our economy. Innovation, in turn, drives productivity gains by creating more efficient processes and technologies, building on UK strengths in science and innovation.
DCMS (Department for Culture, Media and Sport) sectors are critical contributors to the government’s growth mission and we have commissioned two research projects to understand how investment and innovation drive growth in DCMS sectors.
Innovation and Productivity in DCMS sectors
DCMS commissioned the National Center for Social Research (NatCen) to explore the role of innovation in boosting productivity gains in DCMS sectors. This involves identifying the components and drivers of productivity, analysing where strong performance exists, and understanding how technological adoption and innovation can be better utilised to drive economic growth across the UK.
Key findings:
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Innovation in DCMS sectors leads to productivity gains through two mechanisms, streamlining processes and improving efficiencies and boosting engagement, sales and revenue by creation of new or enhanced products and services.
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Three categories of factors can facilitate or hinder productivity enhancing innovation practices within DCMS sectors: individual and organisational attitudes; access to finance and funding; and access to knowledge, skills, and training.
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Crucial to innovation is how organisations adjust and integrate new technologies, processes, or ideas into their existing systems and operations. Across DCMS sectors, these can be categorised in terms of technological, organisational, and skills adaptation.
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The research identified a set of thematic policy approaches which could address barriers to innovation, such as supporting the role of local ecosystems in promoting collaboration and knowledge-sharing to overcome barriers to innovation.
Exploring behavioural barriers to investment in DCMS sectors.
DCMS commissioned the Behavioural Insights Team (BIT) to explore the behavioural barriers to investment in DCMS sectors. This involves exploring the importance and prevalence of different hindering factors to investment decisions, understanding how these vary by business type and sector and creating a framework and classification approach for embedding this into policy making.
Key findings:
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To guide the research, a bespoke framework was developed. This was necessary because existing evidence on investment barriers in DCMS sectors was limited in quantity and varied in quality, often overlooking behavioural aspects.
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Behavioural barriers were found to be relevant and impactful barriers to firms making investment decisions in all DCMS sectors. These barriers varied significantly by firm characteristics - such as sector and business size, which should be considered when targeting policy decisions which aim to address these barriers.
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Business leaders face a range of barriers throughout the investment process, from the intention to invest, to implementing an investment decision. These include, but are not limited to, limited understanding of investment and its value, perceived uncertainty and risk aversion, and lack of skills to evaluate, implement and monitor the outputs of investment decisions.
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These barriers often impact the effectiveness of policies and programmes which aim to stimulate investment and policy makers should address these to enable these interventions to be more successful.