'NHS staff have a wealth of ideas and a number of these could be translated into tangible benefits, not only for the patient, but also for the organisation'

Encouraging signs are emerging in the NHS that suggest we are beginning to put innovation into practice. Through innovation, the NHS has an opportunity to 'think nationally and act or interpret locally'.

In order to.interpret policy.locally, trusts.need to develop a local entrepreneurial spirit. A good example of this is Odstock Medical - one of the first companies to be launched by a.trust. The company.has built a business around inventions that assist patients with motor disorders..

NHS staff have a wealth of ideas and a number of these could be translated into tangible benefits, not only for the patient, but also for the organisation, in terms of productivity, efficiency, motivation of staff and long-term financial gain.

The greater local freedom given to foundation trusts brings with it the responsibility to work to a business plan and fixed budgets to obtain best value in commissioning. The trend of supplementing.allocated central funding with carefully selected income generation opportunities is likely to increase.

Creative hubs

The establishment of the nine local innovation hubs in England with counterparts in Wales, Northern Ireland and Scotland began in 2003. The hubs are now co-ordinated by the National Innovation Centre, part of the NHS Institute for Innovation and Improvement..

Until the hubs were established, NHS employees had nowhere to go with good ideas, which often lead to a leakage of intellectual capital. The hubs' primary focus is on identifying potential innovations and advising on intellectual property and commercial routes. These routes could create income for the trust by setting up a spin-out company or agreeing licensing deals that would generate royalty income.

The hubs achieved considerable success in 2006. More than 1,000 registered ideas were assessed, including medical devices, diagnostics and therapeutics. Three-quarters of trusts now have a board-approved intellectual property.policy and many projects involve academic collaboration. The number of licenses and level of royalty income are growing substantially and four spin-out companies have been.set up.

These are clear signs of progress. Promoting innovations that improve patient care and capitalise on NHS intellectual property and know-how makes sound business sense for any trust, particularly for foundation trusts.

Culture of innovation

Understandably, the demand to become a healthcare business will be of more concern for a foundation trust's.chief executive.than developing a culture of innovation throughout the organisation. But by.failing to do so, trusts risk losing out on benefits not only to patients and inventors, who receive a share of the rewards from a marketable new idea, but also to their own organisations.

Odstock Medical, owned by Salisbury foundation trust, is a prime example of the win-win for patients, inventors and trust. The formation of the company enabled a life-changing intervention for people with dropped foot syndrome to be made available to thousands more patients. Sixty-eight per cent of the company's.shares are owned by the trust, while its inventors and other trust staff have a 12 per cent share in the company.

Spinning out a company is likely to be a lengthy journey and requires a rigorous business plan and a dedicated management team, but encouraging signs are beginning to emerge that trusts, particularly foundation trusts, are using their much vaunted financial freedom to adopt a more innovative approach to patient services.

Dr Maire Smith is executive director of technology and product innovation at the NHS Institute for Innovation and Improvement and heads the National Innovation Centre, www.nic.nhs.uk.