Mike Harris’s credentials as a business innovator are pretty solid. He was the founder of two pioneering banking brands: First Direct, which popularised telephone banking in the UK, and Egg, which led the way on internet banking.
Yesterday he was speaking at the British Council for Offices conference in Edinburgh, telling builders, owners and occupiers of office space how they can beat the recession, as long as they are prepared to “relentlessly” search for new ideas.
His message was clear, and just as relevant to economic development professionals as to people who build offices.
First, according to Harris’s credo, innovation is not something that occurs unpredictably as a result of individual flashes of genius. Instead, he says, “innovation can be methodological, reliable and low-risk”.
Second, it’s wrong to imagine that recession creates poor breeding grounds for innovation. “People said the oil shock of 1972-74 was the end of capitalism,” he says. “But no-one told Bill Gates, Steve Jobs or Richard Branson [all of whom founded pioneering new businesses at that time]”. Hence, he says, at the current time it is more important than ever for businesses to identify their customers’ unmet needs and satisfy them in ways that beats the competition.
I asked him how effective he thought public sector economic development agencies were at fostering innovation. His verdict was mixed.
He said that the public sector had played a valuable role in providing seed capital to some potentially valuable businesses that that private sector backers had ignored.
But he complained that public sector money was still too hard for these companies to obtain. This was because it was handed out in large chunks, he said, making the agencies involved very cautious about who they gave it to. Instead, he said, the public sector should make smaller grants, but ensure that they were more readily accessible.
He also said that it should be made easier for young entrepreneurs to win public sector work. At the moment, he said, this was far easier in the US than the UK. In America, he said, “they are not going to ask you for 25 references, and they are aware that the money that they put into a new company’s first project might not come back”.