The recent demise of HMV, that much loved (but insufficiently well visited) high street icon, made me think again about innovation and what it takes to keep abreast of change in today’s dynamic world.

The last 12 months have been particularly volatile for the UK economy and retailers especially have been on a rollercoaster ride. Unfortunately, HMV is just one example of many established brands that were unable to survive. A victim of the new online world order, HMV failed to adapt as the retail landscape shifted and right now, I am sure there are many speculating about how things could have been done differently.

Faced with a seemingly unrelenting pace of market, economic and technological change we tend to think of our age as incredibly innovative. Indeed, today we have a seemingly endless array of technological innovations such as smartphones and supercomputers, big data and nanotechnologies, gene therapy and stem-cell transplants. However, we also read many articles that talk about the continued imperative for organisations to innovate or die.

What can this mean when we appear to be awash with new technology? After all, governments, universities and firms together spend around $14 trillion a year on R&D, more than at any other point in history. Innovation, however, is more than bringing out new technologies or the money spend on R&D; crucially, it’s also about the ability to create the culture that allows ideas to flourish and develop, as well as an organisation’s ability to anticipate and adapt effectively to market change.

It is interesting to look back at the pace of innovation in comparison to today. While it might feel like our heads are spinning with the amount of technological change, it is also true that modern science has failed to make anything near the same impact as the innovations made in the late 19th and early 20th century.

The industrial revolution was seen as our most innovative time ever. So what are the implications for the future well-being of our economy? Is innovation in fact slowing down? And how important is our ability to keep up the pace of innovation?

The answers to these questions are very important because economies generate growth through innovation. Innovation creates jobs, investment and education opportunities. For a sustained increase in economic output, which is necessary to raise incomes and welfare, we must leverage our know-how, assets and raw materials in better ways, and this requires us to continually innovate.

This is easier to achieve in smaller, more nimble companies but harder to achieve in larger or public sector organisations. To overcome this, large corporate and public sector organisations must try to be more entrepreneurial. Bigger companies will have processes that need to be adhered to but there are still ways to create an entrepreneurial culture such as creating smaller teams, smaller projects and fast paced challenges.

I also think it is also important to be externally focused. Organisations must spend time out in the community to really understand what is driving change. They must also be a voice for the future. For example, we should look to promote our own Thames Valley Silicon Valley and London’s Tech City to the world at large more vocally. There are some really exciting things happening in the UK and I am concerned that not enough is being done to raise the profile of our home grown talent. British ingenuity has shaped our world and we shouldn’t lose sight of this.

But how do you develop a culture for innovation? Well, to fully embrace innovation, I believe that businesses must become true learning organisations where individuals are allowed to experiment and where it is okay for ideas to fail – providing there are fast feedback loops on the reasons for failure and that lessons learned are embraced in order to seek success in other initiatives.

In other words, organisations need to become resilient to change (rather than robust, which implies breakable) and create an atmosphere that accepts failure as part of the learning process and path to success, rather than a finger pointing or blame culture. Such a process will help management to identify and back the winning ideas that will enable us to differentiate and compete in the new world order, maintaining the UK as a hotbed of innovation. As Woody Allen once said: “If you are not failing every now and again, it’s a sign you’re not doing anything very innovative.”