The knowledge-based economy: Exploit ideas, not your staff

Britain must take advantage of its intellectual riches if it is to thrive commercially, the DTI insists

IN THE knowledge-driven economy, firms that rely on outdated processes, or try to compete against global competition by forcing down the pay and conditions of their staff, will be left behind. Successful companies are those that innovate, invest heavily in the skills of their people and seek out new ways of doing business.

Firms must build on their own capabilities and exploit links with the UK's world-beating science and technology base. This base is excellent at generating new and innovative ideas. What the UK needs is more businesses prepared to exploit these ideas, develop links with the universities and take advantage of novel opportunities.

Where this does happen, the benefits can be huge. Autosmart, which produces vehicle-maintenance products, developed links with its local universities through the Government's Teaching Companies Scheme (TCS). The TCS encourages universities to co-operate with firms to transfer technology and knowledge. Autosmart has seen a pounds 1m increase in sales and has already embarked on a second TCS project. Sophie Atkinson, its finance director, believes that by utilising the UK's science base, her company will enjoy a sustainable advantage over competitors.

The most successful companies in the modern economy know that their biggest asset is in the knowledge embodied in their staff. They know that if the skills, capabilities and ideas of their staff are harnessed, then all will benefit. Anglian Water realises this and has developed a University of Water to share knowledge across the business.

The key to exploiting the UK's capabilities is for management to be more innovative, outward-looking and entrepreneurial. By spotting new opportunities, entrepreneurs can generate wealth for themselves and for the UK. Already, changes in the economy have allowed a new wave of young entrepreneurs to take advantage of these trends. Covent Garden Soup Company, now captained by Simon Bell, created a whole new market in chilled soups. Through extensive investment in branding and advertising, the company has established itself as the clear market leader with 41 per cent of a market worth pounds 55m.

But being entrepreneurial does not just mean establishing new products. Devising new ways to sell traditional products can lead to huge rewards. The use of brands, advertising and marketing can generate genuine value. Bushra Ahmed and her brother Shami of Joe Bloggs clothing, have used innovative marketing to propel their firm to success in a highly competitive market. Throughout the economy, firms are missing out on opportunities to grow, create jobs and wealth simply by being unaware of the most modern and up-to-date ways of doing business. By getting together with other firms, swapping tips on best practice and sharing knowledge, all firms within an industry or region can prosper.

Participants in the Society of Motor Manufacturers and Traders Industry Forum have experienced the benefits of such collaboration. By getting together and sharing experience, wasteful activities can be identified and new opportunities developed. In the case of the motor seat manufacturer, Isringhausen GB of Wrexham, advice provided through the Forum resulted in a 20 per cent increase in output.

The benefits of collaboration can be spread throughout the supply chain. If purchasers and suppliers can agree to share their knowledge about new demands and processes, they can cut waste and improve their productivity. The engineering group South Wales Forgemasters, has seen its turnover increase 15 per cent in the last 18 months as a result of networking through the supply chain.

The changes bringing about the knowledge-driven economy are also generating new forms of competition. Globalisation means that firms can no longer hide from the forces of competition. But competition is manifesting itself in ever more subtle ways. Firms are competing on quality, on innovation, on having the best ideas first. The development of e-commerce changes the competitive advantage of existing companies.

Already worldwide electronic commerce trade is valued at $12bn (pounds 7.1bn) and this is set to reach $350bn-$500bn by 2002. The numbers are impressive, but what does the e-commerce revolution mean for UK business? US experience provides some clues. In a traditional retail trade such as book-selling where physical presence was the key to success, e-commerce has transformed the market., the internet bookseller, has already come from nowhere to take a large slice of the bookselling market. Enhanced competition provides incentives, opportunities and rewards to innovators.

Even in something as traditional as the manufacture of equipment for ice-cream parlours, the knowledge-driven economy has transformed businesses.

Brian Tomkins, of Arden Supplies put his business online. This thrust his highly seasonal business into a 365-day-a-year global operation that has drawn orders from as far afield as India and Tanzania.

Smart firms are investing in their people, in research and development, and in marketing and brands. They are looking at new areas of businesses and new ways of doing business. They are generating profits for themselves, and jobs and prosperity for people throughout the UK.

They are providing consumers the world over with products they want to use. Successful business people already know that the knowledge driven economy is here.

Life and Style
“What is it like being a girl?” was the question on the lips of one inquisitive Reddit user this week
peopleDave Legeno, the actor who played werewolf Fenrir Greyback in the Harry Potter films, has died
Arts and Entertainment
Armando Iannucci, the creator of 'The Thick of It' says he has
tvArmando Iannucci to concentrate on US show Veep
Life and Style
Luis Suarez looks towards the crowd during the 2-1 victory over England
Life and Style
Swimsuit, £245, by Agent Provocateur

Diving in at the deep end is no excuse for shirking the style stakes

German supporters (left) and Argentina fans
world cup 2014Final gives England fans a choice between to old enemies
Arts and Entertainment
A still from the worldwide Dawn of the Planet of the Apes trailer debut
peopleMario Balotelli poses with 'shotgun' in controversial Instagram pic
A mugshot of Ian Watkins released by South Wales Police following his guilty pleas
peopleBandmates open up about abuse
Basketball superstar LeBron James gets into his stride for the Cleveland Cavaliers
sportNBA superstar announces decision to return to Cleveland Cavaliers
Javier Mascherano of Argentina tackles Arjen Robben of the Netherlands as he attempts a shot
world cup 2014
Arts and Entertainment
The successful ITV drama Broadchurch starring David Tenant and Olivia Coleman came to an end tonight
ebookA unique anthology of reporting and analysis of a crucial period of history
Four ski officials in Slovenia have been suspended following allegations of results rigging
sportFour Slovenian officials suspended after allegations they helped violinist get slalom place
14 March 2011: George Clooney testifies before the Senate Foreign Relations Committee during a hearing titled 'Sudan and South Sudan: Independence and Insecurity.' Clooney is co-founder of the Satellite Sentinel Project which uses private satellites to collect evidence of crimes against civilian populations in Sudan
Arts and Entertainment
Balaban is indirectly responsible for the existence of Downton Abbey, having first discovered Julian Fellowes' talents as a screenwriter
tvCast members told to lose weight after snacking on set
Life and Style
More than half of young adults have engaged in 'unwanted but consensual sexting with a committed partner,' according to research
Life and Style
A binge is classed as four or more alcoholic drinks for women and five or more for men, consumed over a roughly two-hour period
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business


£50000 - £70000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

Programme Support, Coms, Bristol, £300-350p/d

£300 - £350 per day + competitive: Orgtel: My client, a leading bank, is curre...

(Junior) IT Systems Administrator / Infrastructure Analyst

£28000 - £32000 per annum + pension, 25 days holiday: Ashdown Group: A highly ...

Finance Officer

Negotiable: Randstad Education Birmingham: Randstad Education are seeking a Fi...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice