To boost UK productivity and growth we know we need to get more businesses innovating. The Department for Business, Energy and Industrial Strategy’s (BEIS) UK Innovation Survey published last month provides a snapshot of how we’re doing, with data on business innovation from 2018-20, cross-referenced with previous surveys since 2014. It also gives insight into businesses’ drivers and barriers for innovation, offering a steer on where government and businesses can do more to ensure innovation levels continue to increase.
Headline statistics
- 45% of UK businesses were innovation-active in 2018-20 (engaged in product, process or business model innovation), a 7% increase from the previous survey but still well below a peak of 53% in 2012-14.
- 58% large businesses were innovation-active in 2018-20 compared to 44% of SMEs.
Partnership
Partnerships are key facilitators of innovation, allowing businesses to share ideas and expertise, and access skills, facilities and resources not available internally.
- 58% of broader innovator businesses reported having co-operation agreements for innovation, compared to 49% in the last survey.
- Levels of partnership increased across all types of collaboration, with partners from supply chains to public research institutes.
- A notable increase was in collaboration with competitors or other businesses in the same sector; 45% of broader innovator businesses reported these pre-competitive collaborations compared to just over 30% in 2014-16.
Check out the CBI's new Big Fish Little Fish toolkit for advice on building successful innovation partnerships between larger businesses and innovative start-ups and scale-ups.
Drivers and barriers
COVID-19 had the largest impact on business innovation activities over the survey period, with 37% of innovating businesses, rating it an important barrier. However, it was also the second biggest driver for innovation over the period, named as important by 35% of broader innovators. This figure likely includes innovation drives to directly address the pandemic, as well as a significant increase in businesses investing innovation spend in computer hardware and software, (3- and 2-fold increase respectively since 2014-16), as many businesses pivoted to more online/digital operations.
This shows that even in the face of significant headwinds, businesses can and will continue to invest in innovation if the right support is available. As businesses now face a barrage of new challenges: skyrocketing inflation, a cost of living crisis, and rising energy bills, innovation may seem a low priority for many. However, innovation creates an opportunity – to pivot, to tackle problems creatively, and invest for longer term growth.
Other key statistics on drivers and barriers include:
- Regulatory standards – meeting regulatory standards was an important driver for innovation, named by 34% of broader innovator businesses compared to 26% in 2014-16. But UK regulations were a barrier to innovation for an increasing number of businesses (13% of broader innovators), suggesting that the government isn’t always getting regulation right.
- Being more green – reducing environmental impact is an increasingly important driver for innovation for many businesses, and named by 22% of broader innovator businesses compared to 15% in 2014-16. To find out how your business can kickstart your green innovation journey, check out our Be More Green
Have a look at our resources to support your innovation journey, or get involved and help shape upcoming policy to facilitate UK business innovation. For example see here our recent response to the House of Lords Science and Technology committee inquiry on the UK research and innovation system.