Almost all high-growth UK businesses surveyed (94%) believe the Government’s Industrial Strategy could do more to support innovation, according to BDO research.
The finding highlights concern that policy is not keeping pace with the ambitions of some of the UK’s most innovative companies.
The findings come despite a strong commitment to innovation from UK businesses with 90% of respondents to BDO’s survey saying they expect their innovation spend to increase over the next two years.
Meanwhile 91% reported ‘worthwhile’ to ‘excellent’ returns on what they have already invested.
However, high-growth businesses continue to face significant barriers to innovation. The three most commonly cited were financial constraints, skills gaps and regulatory barriers.
The findings appear in BDO’s Innovate to Grow: Unlocking the UK’s Power to Innovate report, released this week, which draws on the insights from 500 senior executives in UK businesses, including CEOs, CFOs, COOs and Heads of Tax from five of the sectors identified as having high growth potential in the UK’s Industrial Strategy.
Just 6% of business leaders felt the UK Industrial Strategy effectively supports innovation – while the vast majority (94%) suggested there was room for improvement.
When asked how the Government could provide better support, half said they would welcome greater support for innovation and R&D, closely followed by 46% who said more targeted skills and workforce development policies. Some 42% said they’d like to see a stronger focus on their sector, meanwhile better access to finance and investment incentives was an ask from 40% of the cohort.
Mark Sykes, BDO partner and Head of Consulting, said: “There are many UK businesses already investing in innovation and seeing a positive return. They are, in many respects, the poster children for UK innovation, and their experiences highlight what is possible. But they also report real barriers to their continued progress: financial constraints, skills shortages and difficulties accessing government support.
“That 94% feel the UK Industrial Strategy could do more to support innovation is not a fringe view; it is a near-unanimous signal from the businesses best-placed to judge.
“This raises important questions. What more should the Government be doing to support innovation in the economy – and how much more growth could be achieved if innovators could overcome these barriers? And what can other businesses still striving to scale learn from those already making it work?”
The report also highlights the vital role of the mid-market in the UK’s innovation future. These businesses generate more than 40% of private sector revenues and employ 11.1 million people, representing more than one in three UK private sector jobs.
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