Expert insight: Developing skills for innovation and business growth in the West Midlands

Professor Anne Green, Professor of Regional Economic Development and Co-Director of City-REDI, University of Birmingham, is a commissioner for the Business Commission West Midlands.

She has been supporting with engagement in the region’s business community and the creation of the final ‘Roadmap for Business Growth’ report.

Anne reflects on her role in the commission and the next steps for business growth in the Midlands in this blog.

Skills for Innovation

The Business Commission West Midlands (BCWM) surveyed local businesses to ask about their perspectives on business activity over the coming 12 months. These survey findings supplemented submissions from businesses and evidence hearing sessions.

As a new West Midlands Mayor and a new Government embark on implementing strategies for economic development regionally and nationally, the BCWM’s final report provides timely information on unblocking business growth across the West Midlands.

The Commission identified five key levers for growth. One of these is AI and digitisation - which is becoming a more integral part of business strategies and activities and of everyday lives.

The rapidly changing nature of AI poses challenges of how to incorporate it in business plans. Indeed, the legal frameworks surrounding AI lag behind the latest technological developments.

Likewise ongoing developments mean that education and training providers are confronted with the ongoing task of ensuring that course content keeps abreast of digital skills requirements.

In turn, this means training and retraining for (potential) workers, especially as what were once intermediate digital skills come to be regarded as basic digital skills and new advanced digital skills emerge.

The demand for such skills is clear. Analysis presented in PWC’s AI Jobs Barometer highlights that growth in jobs that require AI specialist skills nationally have grown 3.5 times faster than all jobs since 2016.

These are live issues locally, with the BCWM finding that:

• 52 per cent of firms were expecting to increase their investment in technology ad AI over the next 12 months; and
• 64 per cent of firms felt it was important to cultivate closer relationships between education institutes and employers.

With regard to innovation – another of the five key levers of growth highlighted in the BCWM Final Report:

• 36 per cent of firms were expecting to increase their involvement in innovation/ research & development over the next 12 months; and
• 58 per cent of firms were planning on diversifying their products and services over the next 12 months.

People and skills are a key enabler here:

• 75 per cent of firms felt that it was important to cultivate closer relationships between education institutes and employers.

Together these levers and enablers of growth highlight the importance of innovation skills and training for innovation. Yet research on innovation often pays more attention to technology than to people.

Researchers at City-REDI at the University of Birmingham sought to remedy this gap in a recent workshop hosted in April on Skills for Innovation. Some of the key messages emerging included:

• Advanced digital skills are crucial for innovation. But for virtually all jobs a threshold level of digital competence is required.
• Looking ahead, AI is likely to play an ever greater role in innovation.
• Universities can play a key role as connectors – across people, research, skills, innovation and place – alongside intermediaries facilitating networking and providing innovation support.

Importantly, having a mix of skills is what matters most for innovation. There is a need for different skills and knowledge to come together for innovation. It is not just technical skills that matter. So-called soft skills – including communication, confidence, creativity, adaptability, etc. – are crucial too.

This is highlighted in the work of the Innovation Skills Framework developed by the Innovation Research Caucus. The Framework identifies five categories of innovation skills:

1. Conceptual skills - constituting an individual’s capacity to generate, process, and engage with ideas
2. Evaluative skills - shaping an individual's capacity to find, select, and use information
3. Implementation skills - technical skills associated with the active planning and undertaking of innovation execution and management
4. Relational skills - interpersonal and social skills associated with the effective interaction and management of human resources
5. Critical self-reflection skills - intrapersonal skills underpinning the development of positive self-concept and affect how one relates to oneself as an innovator and/or leader

Unlocking growth requires co-ordinated local, regional and national action as set out in BCWM’s Final Report.