The Innovation Index
The role of Innovation in the Professional Services Industry
The professional services industry is a key component of the UK economy. London is the global home of professional services, but, in a constantly evolving environment, what may have earned this status initially is not necessarily enough to retain it.
The Innovation Index is a project undertaken by FTI Consulting in conjunction with London First to identify the role of innovation in the professional services industry, London’s role as a hub, and the attributes that are seen to drive and hinder innovation. The index delivers perceptions of the industry by the industry. It identifies the importance of innovation in ensuring professional services firms remain competitive on a global stage and explores the elements which threaten to destabilise London’s fragile innovation ecosystem.
Innovation is about anticipating clients’ needs, adopting new technologies and becoming the authority on an issue or doing business in a market. It is multi-dimensional.
London Managing Partner, DLA Piper LLP
For the purpose of this report we have undertaken a series of in-depth interviews with senior executives and conducted a poll of over 500 business decision-makers across five vertical sectors-property, legal, creative, financial services and accountancy - within the professional services industry.
At a time when popular opinion has swung in favour of increased regulation and a desire for a more conservative approach to risk taking in business, the study found that London needs to be brave and draw on its ability to evolve and innovate to ensure its survival as a hub for professional services. 95% of our respondents agree that innovation is crucial to remaining competitive in their sector. However, 49% identify regulation as a barrier to innovation. There is also a clear call for more government support (93%) in the form of initiatives that encourage investment in innovation and entrepreneurialism.
In spite of a growing culture of risk adversity, clients are still demanding innovation from their advisors, with 94% of respondents citing it as essential to attracting and retaining clients. 87% acknowledge that risk taking is necessary and 90% feel a culture that allows for mistakes is central to achieving innovation. However, there is a misconception that risk taking implies recklessness. Our study has found that calculated risk taking, executed in a controlled manner, can deliver fresh ideas without threatening the quality of service.
Truly innovative brands start with truly innovative people. According to our study, innovation is an inherent quality (93%) in an individual – you either have it or not. Innovation cannot be taught (73%). London’s ecosystem thrives on the diversity of it talent pool; 90% cite London as providing this talent. This is affected by 85% seeing the London lifestyle as an attraction for global talent. Despite these strengths, London cannot be complacent, nor can its professional services firms. Having a large talent pool is not enough; it is how you motivate and foster it (43% of respondents note this as key to innovation). London needs to be mindful of upsetting the chemistry that encourages global talent to locate here. This chemistry allows innovators to create great companies and in turn great brands.