HOW CAN FIRMS IN THE UK BE ENCOURAGED TO CREATE MORE VALUE?

This paper investigates how firms in the UK might be encouraged to create more value through strategic innovation.Our approach is an integrative one, drawing on both the extant literature - covering the value chain, innovation andthe low skill/low quality equilibrium debate - and the two systematic reviews completed by the AIM Scholars -covering promising practices and networks. In the paper we argue that there are three basic strategies that firms canadopt to create more value through strategic innovation:Increasing efficiency and effectiveness through the adoption of better practices;Innovating to produce products or services that generate more revenue — through either higher prices or largervolumes — but realised while remaining at the same position in the value chain.Fundamentally changing position in the value chain and moving to a position where the products and services thatare being delivered inherently generate more value.We contend that increased value is likely to be created if firms adopt one or more of these three strategies. However,adoption is likely to represent significant challenges to management. Such challenges are linked to the levels of firmcompetency and their ability to construct, acquire and communicate knowledge during the innovation andsubsequent implementation process. Addressing these challenges form the basis of our policy and researchimplications.[...]