Hidden Wealth concludes that STEM is deeply embedded within the UK service sectors and has an extensive impact on service innovation processes, which is often hidden. Although STEM is important in services sector innovation now, it is also likely to play an important part in the future of services, as many services are on the cusp of a transition to more personalised and interconnected systems, which will require significant advances in STEM.
The report makes a number of key recommendations, which are highlighted below:
- A need for greater engagement between the academic services community and services forms, in order to ensure that opportunities to exploit STEM in services are properly recognised, and to align research and market opportunities. We recommend that the Technology Strategy Board (TSB) and Research Councils initiate services-related Grand Challenges to address these issues.
- The Sector Skillls Councils should undertake a large-scale exploration of STEM skill needs in services sectors to inform the development of more suitable undergraduate and postgraduate courses that better meet the needs of service sectors. This should be overseen by the UK Commission for Employment and Skills.
- An increase in the scale of knowledge exchange between services organisations and the academic STEM community through the creation of specific services Knowledge Transfer Partnerships by the TSB.
With regards to financial services:
- The creation of world-leading centres of modelling and risk assessment that are relevant to and actively engaged with financial services institutions.
- The Bank of England, Financial Services Authority and the Research Councils should explore ways for the science base to contribute to more effective modelling of systemic risk in financial services.
- The Financial Services Authority and the Financial Services Skills Council should institute and mandate competency levels for those with managerial roles in the understanding of mathematical modelling and risk in complex systems.
- Finally, the Funding Councils should review the contents of financial engineering and related courses in the UK and, in association with Higher Education Institutions, ensure the provision of appropriate curriculum elements such as considerations of risk, safety tolerances, testing, adherence to published standards, wider understanding of economic contexts, and also any ethical considerations.
- Improving the understanding of services and service innovation models supported by STEM by policymakers, researchers and funders through the development of a greater body of academic research into services innovation. This initiative should be led by the Economic and Social Research Council, with other research funders providing additional support.
- With regards to public sector innovation, the Cabinet Office and the Department for Business, Innovation, and Skills (BIS) should establish a team to undertake detailed work on how STEM can be exploited more successfully to foster public sector innovation.