This is a response to the Welsh Government Consultation on an Innovation Strategy for Wales

1. July 2012
Response to consultation on the
development of an Innovation
Strategy for Wales
Ecodesign Centre
not for circulation, any content from this document needs to be cited as work of authors

2. We make ecodesign happen
through collaborative projects
with design-led companies,
policy-makers, industry
associations, research
centres, educators and social
enterprises.

3. Consultation on the development of an Innovation Strategy for Wales
Innovation has always been a cornerstone of national strategies for growth
and competitiveness but there is a growing emphasis in policy, business and
academia on how the innovation system responds to the grand challenges of
society. Some of these grand challenges include emerging technologies, climate
change, new domains of health care, ageing population, global poverty, material
security and resource efficiency.
This consultation on the development of an Innovation Strategy for Wales
provides and excellent opportunity to rethink and redesign innovation in light of
these grand challenges.
01. In what ways do you •driving social innovation in key areas
think innovation can help such as public health, social inclusion,
improve the economic and active ageing 4
prospects and well being of •bring innovation into the functioning
the people of Wales? of government and Improve the delivery
of public services 5
Innovation can help improve the
economic prospects and well being •providing sustainable mobility and
of the people of Wales by tackling transport 6
these grand challenges and enabling
sustainable development. Innovation It must be stressed that these grand
can enable a sustainable Wales by; challenges mentioned above change
the context of innovation. For example,
•facilitating ecodesign and sustainable the last decade alone has witnessed
consumption and production (products a combination of transformations in
and services)1 economic, geopolitical, societal and
technological and ecological systems
•addressing climate change and clean that have driven a greater level of
energy 2 economic and social interdependency.
These deeper interdependencies have
•contribute to a “circular economy” given rise to risks that are challenging
by improving resource efficiency, existing systems of innovation
conserving raw materials and reducing governance (e.g. norms, standards,
the business risk of critical materials 3 policies) and existing approaches to
1 http://www.orangebox.com/responsibility/no_green_bull 4 http://www.participle.net
2 http://thecleanrevolution.org 5 http://www.mind-lab.dk
3 http://www.interfaceflor.com/default.aspx?section=3&sub=4 6 www.wbcsdmobility.org

4. Consultation on the development of an Innovation Strategy for Wales
innovation. The recent financial crisis 02. What would a more
is a potent example of this issue of risk innovative Wales look
and complexity. like?
Global companies are already A more innovative Wales will incentivise
integrating sustainable and responsible the production of more sustainable
business practices. For example, in July products and services, create and
2011 McKinsey surveyed over 3200 deliver value through new sustainable
executives from a wide range of regions, business models and social innovation.
industries, company sizes and functional
specialities on attitudes and actions A more innovative Wales will develop
related to sustainability and corporate lead markets for sustainable products
social responsibility. and services through better public
procurement.
They found that, compared with
the previous year, a larger shares of A more innovative Wales will bring
executives say sustainability programs innovation into the functioning of
are making a tangible positive government to improve the delivery of
contribution to their companies’ short- public services through co-production
and long-term value. Some of the key and service innovation.
drivers for this have been the need to
protect businesses reputation and brand A more innovative Wales will be
equity but also to improve processes less wasteful and develop a ‘circular
and drive business growth. economy’ by designing out waste and
viewing any waste that is generated as a
The study identifies three different resource.
levers that companies can use to create
value. These are growth, return on A more innovative Wales will build on
capital and risk management. existing strengths and future potential
to provide;
According to Mc Kinsey, a growth
strategy may involve innovation •Effective partnerships between public,
and new products or reaching new private, third sectors and academia to
customers and markets, a strategy of co-create a better place to live and work
improving returns on capital might
feature increasing environmental •more resilient private and third sectors
performance and a risk management
strategy could entail regulatory or •a better understanding of assets,
reputational management. resources, value
•an attractive place to work and live

5. Consultation on the development of an Innovation Strategy for Wales
with flexible working practices and •a focus on technological innovation
flexible living environments at the expense of design and social
innovation
•robust and internationally recognised
creative industries •perceived lack of structured
coordination of existing research
Resulting in; programmes (e.g. framework
programmes)
•better quality of life and livelihoods
•relatively low levels of ecodesign and
•reduced overall inequality and sustainable innovation research (outside
increased well-being of the built environment and energy)
•better opportunities for entrepreneurs •demand side measures (e.g.
and spin-out businesses procurement) not driving innovation
03. What are the •weak ties between current research,
barriers preventing society and the market
Wales becoming more
•governance problems related to
innovative? What needs to innovation for sustainability and
be done to overcome these competing policy rationales
barriers?
•difficulty in providing and accessing
One of the biggest barriers to Wales appropriate finance
being more innovative is how we
currently define innovation. There is a •unfavourable global conditions for
need to broaden our understanding of innovation (emerging market dynamics)
innovation in terms of how we enable
it, measure it and what we expect the •imbalance of sustainability capabilities,
outcomes of innovation to be. There is including within policy, intermediary
a need to better understand innovation organisations and existing supply chains
in terms of strategy, inputs, process,
outputs and outcomes. Key barriers for businesses in Wales
In addition to the above we identify a •lack of resource (finance, capabilities,
series of broad barriers; skills) within the enterprise
•a low level of understanding or •(Apparent) low levels of collaboration
appreciation of the pivotal role design with regional and transnational research
plays in bringing innovations to market institutes and universities

6. Consultation on the development of an Innovation Strategy for Wales
•lack of external financing for 04. What experience do
sustainable innovation you or your organisation
have of the initiatives that
•insufficient or restricted access to and
poor uptake of existing subsidies and
support innovation? How
fiscal incentives accessible and effective
are the various forms
•existing regulations and structures not of innovation support
incentivising sustainability programmes?
•transition and technological lock-ins We have developed and delivered
(e.g. technologies and infrastructure) ecodesign initiatives and have
experience in working with SMEs.
•limited access to external information
and knowledge regarding sustainability We are also involved in a number of
European funded projects including FP7
•limited access to well-developed and Interreg so we have good insights
sustainability support services into the initiatives in other parts of
Europe.
•uncertain return on investment or
too long a payback period for some Wales has had a series of interventions
technologies focussed on but there has been issues in
supply and demand side coherence. This
•risk averse culture with an is evidenced in the following;
unwillingness of actors to embrace
change •smilar cohorts of companies applying
to programmes – possibly related to
•lack of confidence, low trust in absorptive capacity
government and academia and poor
empathy across sectors •a focus on traditional innovation or at
least innovation in incumbent sectors
•low levels of investment in R&D and and not enough support for sustainable
by extension innovation of actors do or responsible innovation
not view innovation as something they
should do - exclusive nature/element •a focus on input additionality at the
expense of behavioural additionality
•a relatively narrow, regional focus of
some activities

7. Consultation on the development of an Innovation Strategy for Wales
05. How should innovation •ensure all levels of education provide a
in Wales be better deeper range of innovative capabilities
supported in the future? e.g. responsible innovation
What should be the role of •support the nurturing of an
Government? entrepreneurial and innovative mindset
from as early an age as possible.
We believe that all innovation needs to
contribute to sustainable development •measure behavioral additionality
and that Wales can lead but needs to from interventions alongside input and
learn from other regions. In developing output additionality – this will require
this strategy the Welsh Government improvements in monitoring and
should; evaluation
•evaluate Wales’ Innovation system •disincentivise irresponsible innovation
characteristics (strengths, weaknesses,
problems, development potential) •incentivise multi-disciplinary, cross
sector collaboration
•define focus and the topics for action
(agenda setting) •innovation policy in Wales needs to
be build on the innovations systems
•support stakeholders/actors to co- perspective
ordinate their activities in and beyond
their policy field (horizontalisation) •build capacity in the design sector
•learn from previous experience
06. What facilities or
e.g. from evaluation results and
international best practice resources exist which may
help differentiate Wales
•enhance interventions by taking into and provide a potential
account the richness and complexity of competitive advantage?
innovation processes
•size of country and existing natural
•create innovative platforms for resources e.g. bio-economy, large
the open sharing of knowledge and coastline with potential for sustainable
experiences e.g. living labs 7 energy, eco-tourism etc.
•facilitate interactive learning (policy •sustainable development already
learning, inter-firm learning, education) in constitution and SD Bill under
development
•relatively high levels of transparency
7 http://www.openlivinglabs.eu

8. Consultation on the development of an Innovation Strategy for Wales
between government and business comments you would
like to make or are you
•strong third sector, network of co- aware of any information
operatives and existing culture of
mutualism
which might be useful to
the Welsh Government
•some internationally recognised in formulating a new
designers, design-led businesses and Innovation Strategy?
design organisations
We have provided a supporting
07. What should be the role position paper with this consultation
and we recommend you review this for
for knowledge transfer
additional information.
from Higher and Further
Education and the use of The Ecodesign Centre is engaged in a
intellectual property in number of European funded research
supporting innovation? projects – e.g. FP7 and Interreg with
partners ranging from the Fraunhofer
Typically, industry has not regarded Institute, universities across Europe
universities as an important source and large comanies such as Philips.
of information for innovation 8.
These statistics could tell a few We also regularly engaging with the
stories. The initial assumption is that TSB, Knowledge Transfer Networks,
universities are under-performing in British Council, United Nations
terms of knowledge exchange and and other internationally focussed
applied research. It may also suggest organisations.
that companies have relatively low
absorptive capacity leading to a lack of We can share experiences on these
knowledge on the various knowledge specific activities if required.
inputs to the innovation systems.
There should be a continued focus on We can also provide case studies and
knowledge exchange (i.e. 2-way) but examples of ecodesign in companies,
through an innovation culture which is social innovation projects, and wider
open, transparent, focuses on sharing sustainable innovation activities if
and has co-creation embedded requested.
08. Do you have any other
8 http://www.bis.gov.uk/assets/biscore/science/
docs/f/12-p107-first-findings-uk-innovation-survey-2011

9. Position Paper on links between proposed SD Bill and proposed Wales Innovation Strategy
for more information
Ecodesign Centre (EDC),
Cardiff Business Technology Centre,
Senghennydd Road,
Cardiff,
CF24 4AY,
United Kingdom
Web: www.edcw.org
Telephone: +44 (0)29 2064 7034
Fax: +44 (0)29 2064 7009
Email: info@edcw.org