Design and innovation management

an introduction to critical and creative thinking activities that can develop creative thinking behaviors
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Published Date:15-07-2017
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Skills in Creativity, Design and Innovation November 2009 Executive Summary Introduction Ireland is at a cross-roads in terms of its economic development. The current recession has only accentuated the need for innovation and productivity growth. This is recognised in the Government 1 plan Building Ireland’s Smart Economy - A Framework for Sustainable Economic Renewal one of the key pillars of Ireland’s response to the current economic difficulties. One of the main action areas within this is “Building the Ideas Economy – Creating the ‘Innovation Island’”. However, turning the intention to innovate into international competitive advantage and renewed economic growth will be challenging, as Ireland is facing a competitive squeeze from overseas competitors. While Ireland is investing heavily in boosting productivity through investing in skills, research, infrastructure and company development, most other countries are behaving similarly. Countries that we now think of as low cost competitors, such as China, India and Brazil, are not aiming just to occupy the low and medium value added positions in the world economy that Ireland and other developed countries are vacating. They are aiming to develop much the same sort of high- added value knowledge economy that we are. In the past, Ireland’s outstanding economic performance has come out of a very distinctive positioning relative to other countries – with a strong supply of skills, English language, low corporate taxation and low costs relative to other politically stable participants in the global economy. Now, we are jostling for space in a global economy in which all developed and actively developing participants are aiming for much the same broad positioning. In a world in which innovation is critically important, we can derive advantage from competing on our differences, whether these are cultural, or result from superior insight into particular markets, or from a particular expertise in applying technologies, or from specialist scientific, technological or business expertise. Ireland’s unique economic, cultural and social history has given us a fund of differences that we can leverage into superiority in creativity and innovative capability in many product-market niches if we make the effort, and invest in the capabilities and skills we need. Much of Ireland’s strategy for driving innovation has already been mapped out, through actions across a broad range of policy areas, summarised by the Department of Enterprise, Trade and Employment and Forfás in Innovation in Ireland (2008), and this report builds on that work. In addition, the Expert Group have already commented on the skills needs of specific industries and specific occupations – in particular, the Expert Group has regularly reported the need to enhance the stock of people with skills in science, engineering and technology, and on the need for skills in a range of business areas. In the main, these are the key specific specialist skills required for innovation. The Expert Group has also put forward its views on generic skills, upskilling and lifelong 2 learning, all of which contribute to creativity and capability to be innovative . 1 Department of An Taoiseach, 2008 2 Tomorrow's Skills: Towards a National Skills Strategy, EGFSN, March 2007 Skills in Creativity, Design and Innovation 3 November 2009 This report takes the need for both skills in the specialist areas addressed by earlier reports, and for lifelong learning, as established, therefore, and addresses: ƒ The complementary skills needed by people with specialist skills to enable them to be creative, and to perform effectively as innovators; ƒ The skills in design that are required, whether among professional designers, or among people from other specialisms; ƒ The contribution that other specialist skills in the arts, humanities and social sciences can make to creativity and innovation; and ƒ Further measures required to develop the skills required for innovation in the workplace. While skills relating to specific occupations and industries are often important for innovation, this report looks at cross-cutting skills that apply across broad swathes of occupations and across many industries. The scope of this study is limited to the requirements of the enterprise sector but the Expert Group is fully conscious that there are many ways in which the application of creativity, design and innovation are equally essential if the public sector is to be responsive to current service delivery needs. This study makes reference to the significance of a user-centred approach throughout, and the Expert Group notes that the OECD review of the Irish public sector has similarly pointed to the need for a ‘citizen-centred’ approach to service delivery. The implementation of the OECD review recommendations may provide a timely opportunity to take into account some of the relevant findings of this study. Report Structure This report is laid out in four main chapters, each of which is summarised briefly below. Chapter 1 outlines exactly what the Expert Group mean by the terms creativity, design and innovation, and examines the relationship between CDI and productivity. Ireland’s performance under a number of internationally measurable metrics is also considered. Chapter 2 outlines how the concepts of creativity, design and innovation can actually be related to definable skills and competencies. This chapter also provides an overview of the sectors and occupations where such skills are required. Chapter 3 provides an overview of how CDI skills are developed in Ireland through both the formal education system and through enterprise-based learning. Finally Chapter 4 sets out the Expert Group’s conclusions in relation to Ireland’s need for CDI skills and proposes a number of recommendations designed to address this need. Chapter 1: Context This report is concerned with creativity, design and innovation in a business context, and so it uses definitions that are relevant to the business context. Throughout this report, the Expert Group understands creativity, design and innovation to mean the following: ƒ Creativity is imagination applied to the purpose of creating economic value. Most creativity is about finding ways to combine existing ideas to do something new. Skills In Creativity, Design and Innovation 4 November 2009 ƒ Design is the process of moving from an initial creative idea to developing a new or changed product, service or process that can be brought to market or implemented internally within a business. ƒ An innovation is change that creates economic value. This is generally through creating a new or improved product or service; improving the way a business operates internally; or changing the way the business relates to the business system of which it forms a part to bring greater value to its customers. CDI and Productivity Skills in creativity, design and innovation are key drivers of productivity improvement – significant productivity improvement arises from new or improved products, services and business processes, which allow businesses to create more value out of the efforts of each worker. Innovative capability is certainly not the only driver of productivity growth. Other factors, such as infrastructure, competition, labour market flexibility and access to capital also play a role. However, it would appear that a highly innovative economy may experience productivity growth of 1 percent to 2 percent per annum above that experienced by economies that are significantly less innovative. Over time, advantages of this magnitude turn into major gains in competitiveness, and significantly greater economic well-being. Complementing the general economic impact of creativity, through improvements in innovation and hence productivity growth, creative industries offer particular significant potential for economic benefit. Irish exports of creative services totalled 871m (€712m), with just over half made up of R&D services in 2005, compared with imports of 4,550m (€3,720m), almost entirely made up of R&D 3 services . This primarily reflects fees for intellectual property. Internationally, there is also an increasing policy focus on leveraging design as a driver of innovation. Experience shows that the development of a design function allows jobs to be retained in developed countries, offsetting the effect of high costs. This is, for example, reflected in the UK’s Cox Review of Creativity in Business (2005) and the UK Government’s subsequent report, Creative Britain – New Talents for the New Economy (2008). It is also reflected in an increasing focus on design in countries as diverse as Denmark (generally recognised as a design leader), Australia, Taiwan and China. Ireland has made some limited moves in this direction, with support for design now being a frequent feature of Enterprise Ireland’s company development supports, and with the recent establishment of the Centre for Design Innovation, based at Sligo Institute of Technology. These appear to be positive first steps towards developing an effective design strategy for Ireland. 3 United Nations, Creative Economy Report 2008 Skills in Creativity, Design and Innovation 5 November 2009 Irish Innovation Performance Ireland actually performs strongly under a number of innovation headings. In the most recent period for which comparable statistics are available, Ireland ranked 7th in the EU for the share of its 4 companies engaged in innovation . Ireland also performs well on a number of other fronts, and is notable for having: ƒ A high incidence of innovation generally; ƒ A high incidence of organisational innovation; ƒ Heavy public investment in assisting firms to innovate; ƒ Substantial technology exporting industries, which include significant Irish-owned operations, and significant innovative activity, but in which exports are primarily based on the transfer of innovations to Ireland, much more than on Irish-based innovation; and ƒ Fairly good levels of youth education. However, while the prevalence of innovation in Ireland is relatively high, broader measures of Irish innovation capability indicate that the country is actually fairly average, and that Ireland cannot be considered an innovation leader amongst other developed countries. In particular, Ireland performs poorly in terms of: ƒ Low adoption of product innovations invented by others (while being fairly typical on adoption of product innovations invented in-house); and ƒ Low business investment in ICT. Chapter 2: Skills in Creativity, Design and Innovation Skills in Creativity It can be difficult to think of creativity, or “applied imagination”, as a skill. However, while the spark of creativity itself is difficult to pin down in skills terms, it is surrounded by identifiable and definable skills that are necessary for creativity. Moreover, while creativity itself cannot be taught as a simple procedure, it is possible for people to learn to do it better. There are six types of learning required in order to engender creativity in an organisation, and these are illustrated in Figure E.1 below. 4 CSO, Community Innovation Survey 2004-2006. Skills In Creativity, Design and Innovation 6 November 2009 Figure E.1 Six Types of Learning Required for Creativity Expert Expertise: ise: Dept Depth h & & Di Div ve ersit rsity y Capa Capabilit bility y Inn Inno ovat vatiio on n to to Wo Wor rk k M Ma ana nag ge em me ent nt wi wit th h Other Other Expert Expertise ise Generi Generic c Skil Skills ls To Tool ols s f for or Pr Pract actiisi sin ng g Cr Cre ea ativ tivi ity ty Cr Cre ea ativ tivi ity ty Each of the skills shown above is explained in greater detail in the main report, however in summary: ƒ Generic Skills are required to enable people to be meaningfully creative in a business context. Skills in areas such as problem solving, information processing and critical thinking are fundamental to exercising creativity. Skills in areas including communication, teamworking and working with others are necessary because business creativity is usually the outcome of an interactive process. ƒ Expertise allows individuals to contribute to thinking clearly about a problem, and to contribute to generating and evaluating ideas about solutions. ƒ Capability to work with other sources of expertise is important since it is very unusual in a business context for a single person to be the most expert in the domain, the relevant technologies and the business aspects of a problem. Prospects for a creative solution are usually enhanced by interaction with others who have relevant expertise. ƒ An understanding of the Tools for Creativity or the techniques that offer people frameworks to help them think through a problem, and processes to go through to generate creative ideas are the fourth element of a creative skill set. ƒ Practising Creativity is the fifth prerequisite for business creativity - the more practice that people have at being creative, the more creative they are likely to be. ƒ Innovation Management is the sixth and final requirement for business creativity. The approach that businesses take to managing innovation has a major impact on the creativity of their staff, individually and in total. Skills in Creativity, Design and Innovation 7 November 2009 Skills in Design In the interviews undertaken for the study, a variety of views were expressed as to what skills and qualities are central to the role of a designer. The description here is a composite based on these interviews. ƒ Almost all designers need a range of technical skills that are appropriate to their design discipline; ƒ All designers need an understanding of the language of the area in which they are working, a language which is usually more about the visual and physical expression of ideas than about verbal or written communication; ƒ All designers need a high level of creativity; ƒ A strong emphasis on understanding the user experience, and applying this to design, is important; ƒ An understanding of the market for what is being designed is critical. Design is a close-to-market discipline, in which people have to understand the market for the product or service they are designing, or the market for their own services, or both; 5 ƒ Design is a profession in which T-shaped skills , allowing its practitioners to work effectively with others, are important; and ƒ In some cases, the role of the designer goes beyond being an effective team worker, to a leadership role. Skills in Innovation There are four main types of innovation that directly create value: ƒ New and improved products, once they are bought by customers; ƒ New and improved services, once they are bought by customers, either by themselves or bundled with products; ƒ Changes in the way the company relates to the business system of which it forms a part that bring greater value to the business from its customers; and ƒ Changes to internal processes and other characteristics within a business that improve its economic performance, whether through creating greater value for customers in terms of products, services and business system, or through increasing internal effectiveness and efficiency. The first three of these rely on customer behaviour. If customers do not respond, no value is created, and no innovation has taken place, no matter how great the internal upheaval within the business. The fourth relies on internal changes within the business. If the business does not change in a way that makes it more valuable, then, again, no innovation has taken place. 5 The vertical leg of the T refers to having an in-depth knowledge of an area. The horizontal bar of the T refers to having the capability to work with other sources of expertise. Skills In Creativity, Design and Innovation 8 November 2009 There is a strong tradition, in Ireland and internationally, of associating innovation with disciplines in science, engineering and technology, to the exclusion of other disciplines. However, there is an increasing international acceptance that this oversimplifies matters, and that disciplines in the arts, humanities and social sciences also have important roles to play. The literature places a particular emphasis on the role of design, but a broader range of disciplines from the humanities, arts and social sciences can also contribute. Skills in business disciplines are particularly important. Occupations and Industries The report reviews what skills in creativity, innovation and design are required across different types of occupations, and across different industries. It establishes a two-dimensional framework, based on five types of occupation and five types of industry. Seen from an innovation perspective, we observe five broad types of occupational role: i. Creatives are designers, artists, copywriters, photographers, architects, film occupations, illustrators, performers, writers, composers and people in similar roles. It is primarily designers who cross over to contribute to innovation outside the creative industries. ii. Professional innovators are those people whose core job is to contribute to innovation. They include engineers, technologists and scientists working on design, development and research. They also include many people in business roles concerned with innovation including product managers, strategy professionals, business analysts, business leaders, and many marketers, as well as behavioural scientists involved in innovation. iii. Sporadic innovators are the large number of people in managerial and professional roles who have a core job that take most of their time which is more about keeping things running than about innovation. As a part of this, they engage in creative problem solving from day to day, the cumulative effect of which is usually to drive progressive improvement. In an organisation that innovates effectively, they will also have bigger responsibilities to innovate within their own domain, and to work for innovation with others across the organisation, but their engagement with this is likely to be sporadic, rather than constant. Sporadic innovators often have difficulty in carving out enough time to contribute to innovation, in the face of day-to- day operational pressures. iv. Creative problem solvers are people in roles that are mainly about diagnosing problems and troubleshooting. Typical occupations include test laboratory scientists, many computer operations roles, engineers and technicians responsible for keeping production lines going, medical clinicians and quality assurance staff. v. Innovators through work organisation are people whose core job is routine, and who might not have had a role in innovation in the past. Increasingly, however, businesses seek to get these employees involved in innovation through structured improvement processes, ranging from suggestion schemes to highly organised team-based improvement initiatives. For these people, their contribution to innovation tends to come mainly through participative forms of work organisation, such as those now being promoted by the National Centre for Partnership and Performance. Skills in Creativity, Design and Innovation 9 November 2009 In addition to being relevant across all occupations, innovation is relevant across all industries. As with occupations, in a relatively short study such as this, it is not feasible to analyse every industry for the innovation-related skills it requires. Instead, we look at groupings of industries. Seen from an innovation perspective, we observe five broad types of business: i. Creative businesses, whose outputs range from fairly pure cultural expressions such as film, television and art, through the application of cultural expression for other business purposes, such as with advertising, digital media, and most graphic design and architecture, to deep involvement in innovation in other sectors, such as with product design businesses; ii. Businesses whose outputs are largely customised, relying on specialist skills to produce customised outputs (consultancy and investment banking, for example); iii. Businesses whose outputs are largely customised, but where the customisation is largely systematised, or dependent on other industries for creativity and design (e.g. construction); iv. Businesses producing largely standardised outputs, in which professional innovators account for a substantial share of all employment (software companies and pharmaceutical companies, for example); and v. Businesses producing largely standardised outputs, in which professional innovators account for a modest share of all employment (most retailing and some manufacturing industry, for example). Of course, the boundaries between these classifications are blurry, but they form a useful basis for discussion of skills needs. At company level, an innovative company is one that develops, and successfully brings to market, new and improved products and services. It also continually improves its internal working processes in both small and big steps. To achieve all of this, a company must: ƒ Have a clear strategic vision of what it is trying to achieve, where it can attain and sustain competitive advantage, and broadly what it needs to do to achieve this. ƒ Be good at innovation management, empowering, resourcing and rewarding its employees to be creative and innovate in ways that further the company’s objectives. ƒ Involve most or all of its employees in innovation, in one way or another. ƒ Bring a diverse range of backgrounds and experiences together to solve problems and to innovate, cutting across organisational boundaries. It is good at bringing together business, technology and user perspectives to creative ideas for innovation, to turn them into inventions, and to commercialise inventions into innovations. ƒ Be open to the world outside the business; is good at understanding user needs and wants; and is good at finding, absorbing and leveraging ideas created elsewhere. ƒ Have deep expertise that gives it a base of understanding that it needs to be creative and innovate. Skills In Creativity, Design and Innovation 10 November 2009 The sort of people an innovative company needs are: ƒ Leaders who are good at setting a strategic direction, can establish an innovation-friendly culture, and who are good at innovation management; ƒ Employees at all levels who have strong generic skills, particularly in communications, teamworking and problem solving, and who more generally have the skills required to cooperate with others who have complementary skills; ƒ People with a good understanding of how to apply relevant technologies, with skills in application of information technology being required almost universally, and skills required in other technologies depending on the specific nature of the business; ƒ People with a good understanding of the market, both in broad aggregate terms, and in terms of the specific needs and wants of users of the product or service; and ƒ People with a strong grasp of business: how to commercialise a product or service, and how to leverage this to build a strong, profitable and sustainable business. Chapter 3: Developing CDI Skills in Ireland The skills of the Irish workforce in creativity, design and innovation are innate to an extent, but are also heavily influenced by their educational and working background, and their life experiences. This chapter provides an overview of the manner in which CDI skills are imparted to people in Ireland through participation in education and workplace learning. Primary Education Based on the interviews undertaken for this study, and from the Review of the Primary Curriculum, it is generally believed that Irish primary education is essentially on the right track to prepare students to be creative and innovative. Overall, the primary system is seen as being good at opening students’ minds, developing their creativity, preparing them to work collaboratively and teaching them to learn independently. Some interviewees highlighted resourcing issues that they say impact negatively, such as limited access to ICT resources, and by slowing the adoption of new teaching approaches. Second Level Education There are serious problems with the way in which second level education impacts on the creativity and innovation capability of Irish students. These problems have a history of being quite intractable because of the influence of public examinations. The National Council for Curriculum and Assessment (NCCA) appears to have grasped the extent of the challenge that this poses, and is moving forward with what appears to be a coherent strategy to tackle it. The NCCA deserves support on this, and it is important that the process should not be allowed to be slowed by defence of the status quo, by an excessively tight approach to funding of initiatives, or by over-reaction to any of the stumbles that are most likely inevitable in ambitious transformational initiatives such as those that are now underway. Specifically from a design perspective, the launch of the new course in Design and Communication Graphics is very welcome. The introduction of the new Leaving Certificate curriculum in Art is urgently required. Skills in Creativity, Design and Innovation 11 November 2009 Further Education and Training Courses that are taught in small groups ensure that there is a sufficient quantity of teaching resources to teach in ways that promote creativity and develop innovative capability. However, in many cases there are obstacles: ƒ In many areas, the need to teach courses in this way has not been clearly identified by teaching staff or the organisations for which they work; ƒ While FETAC has improved matters significantly by requiring that courses include generic skills modules, there is a need to go further by specifying that these should be linked tightly to the main subject matter of the course, and that teaching methods for at least some other modules on each course should be designed to promote creativity and innovative capability; and ƒ As with any change in teaching methods, there is a teaching skills issue. There will be a need to diffuse good practice to teaching staff through training and other methods. Taught Higher Education The extent to which taught courses in the Irish higher education system develop creativity and capability to innovate among students is very uneven, so there is considerable room for improvement. Examples of good practice visible within the system demonstrate that addressing this is not purely a matter of resourcing, although the availability of teaching resources is one of the constraints limiting progress in the area. Aside from the force of persuasion and good example, there are two existing sources of leverage that could perhaps be used to promote good practice in developing creativity and capability to innovate among students, given a relative minor recalibration of their focus. ƒ Any future cycles of the Higher Education Authority’s Strategic Innovation Fund could more explicitly ask for proposals that address this need; and ƒ Quality assurance processes in the higher education sector could place a higher system-wide priority on creativity, which is already recognised appropriately within the National Framework of Qualifications. Key practices that should be promoted include: ƒ Widespread use of cross-disciplinary project work, bringing together students from complementary disciplines; ƒ More project work in general; and ƒ Increased use of problem-based learning and inquiry-based learning approaches. There is a need for a degree of balance in how this is approached. Any attempt to force all participants on all courses into a single good practice model will cause problems. On the other hand, there is a general need to push academics and students who are comfortable in a single-discipline environment into broadening their horizons, even if this means some discomfort. It is up to higher education institutions, funding bodies and quality assurance agencies to find the right way to strike this balance. Skills In Creativity, Design and Innovation 12 November 2009 Higher Education by Research The initiatives taken by the higher education system to add professional development courses and modules to PhD research programmes are very positive from a creativity and innovation perspective. There is, however, a need to go further, to tackle a disconnect that exists between science, engineering and technology (SET) disciplines on the one hand, and business on the other. This is necessary in order to develop the mutual empathy and understanding between business graduates and research SET graduates that is required if Irish research is to become more successful at spinning out start-up businesses. One very promising measure that could be taken would be to develop a system of joint coursework projects for PhD researchers and postgraduate business students. Other possible developments include increased use of industry placements for PhD researchers, and greater use of part time PhD study by people in employment. As in taught programmes, there is a need for balance in how this is approached (between using a single practice model only on the one hand, and, on the other, the need to broaden horizons among academics and students). Finally, there is a need to boost research activity in management practice and in art and design, in order to develop capabilities to underpin increased innovation in Irish industry. Developing Workplace Skills in Creativity, Innovation & Design The optimal mechanisms to be used in delivering training that generates creativity, design and innovation are likely to be: ƒ Continuing the delivery of most Enterprise Ireland client services, including training, as at present; ƒ A much greater use of networks, whether formally designated as learning networks in the case of Skillnets training networks, or as innovation networks in the case of Enterprise Ireland networks; ƒ Responses by higher education institutions to perceived demand for part time education in areas related to creativity, design and innovation; ƒ A web-based open access initiative in creativity, design and innovation; and ƒ Creative, design and innovation skills have been recognised by the Management Development Council as integral to the successful management of companies. There is a need, therefore, to ensure that management development programmes incorporate modules into their offerings that enhance the CDI capabilities of Irish managers. Chapter 4: Recommendations Introduction The recommendations that follow complement the Expert Group’s existing findings and recommendations on skills and learning needs, which are relevant to building an economy based on creativity and innovation. They focus on those specific actions which the Expert Group believes are realistically achievable in current circumstances, and will contribute most to strengthening our creative and innovative capabilities. Each recommendation has a serious of associated actions to be undertaken by key actors and stakeholders in order to facilitate implementation. Skills in Creativity, Design and Innovation 13 November 2009 The EGFSN is keenly aware of the resource constraints on implementing bodies in making the recommendations below. The implementing bodies are asked to action cost neutral recommendations as soon as possible; recommendations with resource implications as soon as resources are available; and to use opportunities in the redesign of programmes to implement the spirit of the recommendations. Recommendation 1: The main responsibility for levelling up performance at third and fourth levels lies with colleges themselves. All Irish higher education institutions should set objectives in developing creativity and capability to innovate among their students as a part of their strategic plans and should regularly review progress against those objectives. Other bodies can contribute to this, and indeed can provide an impetus to drive this change throughout the higher education sector. ƒ The Higher Education Authority should explicitly specify student creativity and capability to engage in innovation as an objective to be pursued under future Strategic Innovation Fund cycles. It can be used to drive, inter alia: greater use of team-based project work; inter-disciplinary project work with students from complementary disciplines; problem-based learning and inquiry- based learning; and flexibility for students to take some courses outside the main discipline they are studying. ƒ HETAC should review its policies on course descriptors and learning outcomes to ensure that the specifications for all courses thoroughly reflect the Framework requirement for competence in creativity. It should ensure that all reviews of courses and institutions give adequate weight to this requirement, and where possible are carried out by people capable of giving constructive criticism in the area. ƒ The Irish Universities Quality Board should look at issuing a Good Practice Guide in the area, similar to guides it has previously published on other topics. It should give the topic adequate weight in external quality reviews of institutions, and should ensure that it is well reflected in internal quality reviews. ƒ The Department of Education and Science should take account of the resourcing requirements of teaching approaches that promote creativity and innovative capability among students when reviewing funding and resourcing of higher education institutions. It should particularly support small group teaching where this demonstrably produces positive outcomes in creativity and innovative capability, and should seek to protect it when making decisions on funding of higher education institutions. Implementing bodies: Department of Education and Science, HEA, HETAC, IUQB Recommendation 2: Higher Education Institutions should make a major effort to break down the disconnect between SET and business disciplines. They should start by piloting a system of joint coursework projects for PhD researchers and postgraduate business students. Institutions and funding bodies should also look at establishing industry placements for PhD researchers, and greater use of part time PhD study by people in employment. Strategic Innovation Fund, Programme for Research in Third Level Institutions and any Skills In Creativity, Design and Innovation 14 November 2009 future Graduate Research Education Programme funding should be focused on initiatives in these areas. Implementing bodies: HEA, higher education institutions Recommendation 3: The Expert Group supports the thrust of the work of the National Council for Curriculum and Assessment in reforming second level education. Subject to the developments described in chapter 3 working successfully, they should be rolled out widely across the full range of subjects. More specifically: ƒ Subject to successful evaluation of its early implementations, it is important that Project Maths should be rolled out nationally at a reasonably fast pace. ƒ The Department of Education and Science should devote adequate resources to the continuing training of teachers, to underpin the effective implementation of curriculum reform. ƒ The recommendations of the Task Force on the Physical Sciences, which address many of the key issues in creativity and innovation specific to the delivery of Chemistry and Physics curricula, should be implemented. ƒ The Department of Education and Science should approve the launch of the new curriculum in Art urgently. Implementing bodies: Department of Education and Science, secondary schools. Recommendation 4: To assist Irish businesses in assessing their skills in creativity, design and innovation using the frameworks presented in this report, and material from other sources, and to help them to respond to opportunities and deficiencies that they identify, an audit tool for this purpose should be developed. This can then be made available to firms through multiple channels by relevant bodies and agencies. In the first instance, the development of the audit tool should be put out to tender by the Department of Enterprise, Trade and Employment. Implementing bodies: Department of Enterprise, Trade and Employment, development and training agencies. Recommendation 5: Skillnets and its stakeholders should place an increasing emphasis on funding networks that target skills in creativity, design and innovation. ƒ To encourage applications, Skillnets should consider establishing a fifth pillar to its strategic framework, focused on skills in this area, and should publish guidance and case studies to inform prospective networks. Skillnets should investigate the potential for virtual networks in creativity, design and innovation, based largely online. ƒ Enterprise Ireland should continue towards launching its Innovation Networks Programme, and should expand it if successful. Implementing bodies: Skillnets and its stakeholders, Enterprise Ireland. Skills in Creativity, Design and Innovation 15 November 2009 Recommendation 6: While continuing to develop and promote the use of standard modules in personal development across different subject areas, FETAC should encourage providers of further education and training to adapt the content to the subject matter of each course. FETAC should look at introducing a requirement that courses contribute to developing creativity and innovative capability, particularly at Level 6 where it is explicitly a part of the National Framework of Qualifications, but also at other levels. It should integrate this into evaluation processes. This would impact on continuing education and training, as well as on initial education and training. Implementing bodies: FETAC, FETAC course providers. Recommendation 7: Organisations such as Enterprise Ireland, industry representative bodies and relevant higher education institutions should consider introducing a placement programme for Product Design graduates, broadly similar to the existing Export Orientation Programme. As design is a market-facing discipline, it is likely that graduates participating would engage in some overseas travel, but the programme would not include an extended overseas placement similar to that in the EOP. The programme would ideally lead to an academic award, as the EOP currently does. Implementing bodies: Enterprise Ireland, IBEC, higher education institutions. Recommendation 8: Agencies including Enterprise Ireland and the Higher Education Authority, as well as higher education institutions, should support the development of a strong design skills development infrastructure, building organically on the existing infrastructure. Key areas where skills-related developments are required from this infrastructure are in: ƒ Connecting undergraduate design education, particularly in industrial and product design, to industry through work placements; ƒ Developing postgraduate design education, at both taught masters and research degree level, with more students, tighter connections with industry and with other disciplines, and ideally a national cross-institutional Graduate School Programme in Design; ƒ Continuing education programmes, targeted on designers, on engineers and technologists, on marketers, and on managers requiring design thinking skills; and ƒ Extending an in-company service similar to that provided by the Centre for Design Innovation6 across the country. Implementing bodies: Enterprise Ireland, HEA, higher education institutions. 6 The Centre for Design Innovation runs interactive workshops to help companies understand how to apply a design-led approach to innovation. Following each workshop, participants apply the new skills to their own organisations with the help of a Design Associate. Design Associates have cross-disciplinary experience within multiple business sectors and design disciplines. This facilitation and mentoring is key to integrating new skills and participants can request strategic expertise when needed. Companies receive five days of face-to-face time over the course of the programme and the continuous support of the Centre. Skills In Creativity, Design and Innovation 16 November 2009 Chapter 1 Context 1.1 Introduction This report addresses Ireland’s need for skills in creativity, design and innovation. While skills relating to specific occupations and industries are often important for innovation, this report looks at cross- cutting skills that apply across broad swathes of occupations and across many industries. The scope of this study is limited to the requirements of the enterprise sector but the Expert Group is fully conscious that there are many ways in which the application of creativity, design and innovation are equally essential if the public sector is to be responsive to current service delivery needs. This study makes reference to the significance of a user-centred approach throughout, and the Expert Group notes that the OECD review of the Irish public sector has similarly pointed to the need for a ‘citizen- centred’ approach to service delivery. The implementation of the OECD review recommendations may provide a timely opportunity to take into account some of the relevant findings of this study. The report complements existing work by the Expert Group on the skills needs of specific industries and specific occupations. It builds on existing work by the Expert Group on generic skills, upskilling and lifelong learning, all of which contribute to creativity and capability to be innovative. In its treatment of creativity and design, the report focuses particularly on their role as drivers of innovation. This chapter defines creativity, design and innovation, and describes how skills in these areas are key drivers of productivity growth. It demonstrates the connection between innovation and productivity, and reviews Ireland’s performance on each. It addresses the economic impact of the “Creative Economy” – industries driven by specifically creative skills. It goes on to describe the economic role of design. The chapter reviews the international competitive context, and demonstrates the importance of innovation in this context. Finally, it summarises Ireland’s strategy for innovation, and puts this report in the context of that strategy. 1.2 Defining Creativity, Design and Innovation This report is concerned with creativity, design and innovation in a business context, and so it uses definitions that are relevant to the business context. ƒ Creativity is imagination applied to the purpose of creating economic value. Most creativity is about finding ways to combine existing ideas to do something new. ƒ Design is the process of moving from an initial creative idea to developing a new or changed product, service or process that can be brought to market or implemented internally within a business. ƒ An innovation is change that creates economic value. This is generally through: creating a new or improved product or service; improving the way a business operates internally; or changing the Skills in Creativity, Design and Innovation 17 November 2009 way the business relates to the business system of which it forms a part to bring greater value from its customers. 1.3 Skills in Creativity, Design and Innovation as Drivers of Productivity Skills in creativity, design and innovation are key drivers of productivity improvement. Most productivity improvement comes out of new or improved products, services and business processes, which allow businesses to create more value out of the efforts of each worker. Some of this productivity improvement flows from improvements in public infrastructure. Some flows from shifts in industry mix in favour of industries that add more value, usually enabled by increasing levels of qualification in the workforce, or from specialised skills in particular areas. But a large share of productivity improvement arises, not so much from the assemblage of infrastructure and qualifications, so much as the capability to apply imagination to creating new value out of the knowledge, skills and resources to which businesses have access. It is skills in this messy, hard-to-pin-down area that this report seeks to address. Just because the topic has not been an explicit focus of policy in Ireland does not mean that skills in the area are weak. By many measures, Ireland rates quite well on innovation and on productivity improvement, and this could not have come about without genuine strengths in creativity and innovative capability among the workforce. Even so, the report identifies major opportunities for improvement that have the potential to drive a positive shift in the rate at which Irish productivity improves. “Skills in creativity design and innovation are key drivers of productivity improvement.” 1.4 Connection between Innovation and Productivity The connection between innovative capability and productivity is well established. It is illustrated quantitatively in Figure 1.1, which plots innovative capability against productivity growth for 29 countries, using the Global Summary Innovation Index (prepared by Pro-Inno for the European Commission) as the measure of innovative capability. Countries fall into three groups: ƒ A group with low innovative capability and low productivity growth, for which productivity growth has largely stalled, made up of a number of southern European countries plus Mexico; ƒ A group of countries with higher innovative capability and higher productivity growth, for which there is an approximately linear relationship between innovative capability and productivity growth, ranging from countries such as Luxembourg and The Netherlands with medium innovative capability and productivity growth around 1 percent per annum, to countries such as Finland and Sweden with high innovative capability and around 2 percent productivity growth per annum; and Skills In Creativity, Design and Innovation 18 November 2009 ƒ A group of countries that have historically lagged behind leading economies, and for which much of the growth in productivity can be attributed to catching up with more developed economies. Ireland and Korea are positioned between the two latter groups, as countries which have historically lagged behind leading economies in development, but have largely caught up, and are becoming reliant on innovation to drive productivity growth. Figure 1.1 Relationship between Innovative Capability and Productivity 0.8 Productivity Driven Finland by Innovation Sweden Switzerland Japan 0.7 US Germany Denmark 0.6 Can NZ France UK Korea Belg Norway Australia 0.5 Austria Ireland Lux Netherlands Productivity Driven by 0.4 Czech Catching up Republic Spain Hungary Italy Slovak 0.3 Republic Greece Portugal Turkey Productivity 0.2 Mexico Stalled Poland 0.1 0 -1% 0%1% 2% 3%4%5% Average annual increase in labour productivity in years 2001 to 2006 Sources: Labour productivity based on data from OECD Economic Outlook. Global Summary Innovation Index from Pro-Inno Europe, a composite index based on 12 indicators, organised under 5 headings: Innovation Drivers; Knowledge Creation; Diffusion; Applications; and Intellectual property. Finland and Sweden are rated highly in the Global Summary Innovation Index mainly through their heavy investment in research, their highly qualified labour force and their success in obtaining patents. However, as the range of indicators included in the Index is narrow, it is reasonable to think that their success in driving labour productivity arises from a broader range of factors of which research, design, skills and intellectual property form an inseparable part. These include strong industry cluster infrastructure, effective integration between industry and research activities, and strong commercialisation capabilities. Of the two, Sweden is particularly well known for design, and is home to many strong design-focused businesses, including IKEA, Volvo and H&M. Innovative capability is certainly not the only driver of productivity growth. Other factors, such as infrastructure, competition, labour market flexibility and access to capital also play a role. However, Skills in Creativity, Design and Innovation 19 November 2009 Global Summary Innovation Index 2020-25 2015-20 2010-15 2005-10 2000-05 1995-00 1990-95 1985-90 1980-85 1975-80 1970-75 it would appear from Figure 1.1 that, for developed countries not recovering from a historical deficit in economic development, a highly innovative economy may experience productivity growth of 1 percent to 2 percent per annum above that experienced by economies that are significantly less innovative. Compounded over a period, advantages of this magnitude turn into major gains in competitiveness, and significantly greater economic well-being. 1.5 Trends in Irish Productivity ESRI’s Medium Term Review projects productivity growth of around 2 percent over the five year period to 2010, rising to 2.5 percent over the following five years, driven partly by a decline in low productivity construction employment. Projected productivity growth is lower than past averages largely because of a strong ongoing shift in the sectoral mix of employment towards market services, where productivity growth is generally lower than in manufacturing industry by several percentage points. The projections factor in heavy ongoing investment in human capital. Figure 1.2 Irish Labour Productivity Growth per Annum – Historical and Projected 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% Industry Market Services GDP at Factor Cost GNP Source: ESRI Medium Term Review, 2008 According to the Review “if policies could be found to bring about a higher rate of productivity growth than in the Benchmark scenario this could have a significant beneficial impact on the living standards of all of the population”. As innovative capability is one of the main drivers of productivity growth, it is therefore also a key driver of Irish living standards. 1.6 Business Impact of Innovation and Design Innovation - change that creates economic value – is important to every business, and is the main driver of value creation for many businesses. It may be completely new, new to the industry, or new to individual business. Here are some examples of innovation and design, based on real businesses operating in Ireland. Skills In Creativity, Design and Innovation 20 November 2009 ƒ An Irish hairdressing salon introduced a card index to record details of colouring work done for each client, to ensure that it could be repeated reliably on each visit. The system improved consistency, and increased repeat business, and reduced the problems with continuity that occurred when a colourist left. ƒ A group of convenience stores in Ireland introduced a noodle dish offering at the hot food counters of some of its branches, inspired by observations on a study visit to Japan. ƒ Ireland has developed a strong and growing automation industry, which specialises in helping Irish and international process industries (particularly pharmaceuticals and food) to innovate by improving their production processes, increasing efficiency, improving quality, and ensuring regulatory compliance. ƒ A medical device company replaced visual inspection of products by human quality controllers with an automated machine vision inspection system. The number of products found to fail to meet specification post-inspection fell significantly. The quality control staff was retrained in quality assurance techniques, which they used to further improve quality and reduce waste, and to identify ways to make products easier to manufacture. ƒ In 1993, UCD formed a joint venture with a UK firm to develop diagnostic tests and vaccines for animal diseases. Research relating to BSE was carried out at UCD, leading to the development of Transmissible Spongiform Encephalopathy diagnostic technology. This was licensed to Enfer Scientific Ltd., which subsequently developed a rapid test for BSE using the technology. As a result, Enfer is now one of the major international vendors of BSE testing technology, and UCD 7 earns significant royalty income. ƒ Almost every software company’s products are innovative, different in a range of respects from those of competitors. Business applications software products typically encapsulate business process innovations, and are licensed or bought by customers as a shortcut to business process innovation. For example, an Irish software company developed software to enable banks to support business customers in shifting low value purchases to credit cards. This gave the banks’ customers greater control over their purchases, while reducing their administrative costs. It increased bank revenues, and gave customers another reason to stay with their bank. While the company had competitors globally, it developed a strong position in Europe by specialising in serving the specific needs of European customers. ƒ Java Republic, the Irish coffee supplier, uses packaging design as a key element of the branding that has allowed it to build a successful business. ƒ Ireland has a history of success in innovating in mobile telephony services, with Aldiscon having played a key role in the emergence of text messaging, and with a significant cluster of companies now in place, many of them important international players. One of these is Changing Worlds, a spin-out from research at UCD, which has technology that allows more than 50 mobile telephony operators globally to offer search services to their customers. ƒ Moffat Engineering, of Co. Monaghan, was founded to produce the Moffat Mounty, the first forklift truck designed to be carried on the back of a goods vehicle to load and unload the cargo. When the company was taken over, its Director of Engineering developed the world’s first engine-powered, all wheel drive, multi-directional forklift, and established Combilift to manufacture it. This innovative 7 See, for example: http://www.ucd.ie/nova/news/newsarchive/2004/novanewstitle,14613,en.html Skills in Creativity, Design and Innovation 21 November 2009

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