UK Small businesses report boost in innovation

Small businesses in the UK are seeing their biggest boost in innovation since 2010, according to the government’s department for Business, Innovation and Skills.

The new report found 53% of small and medium enterprises more innovative-led between 2012 – 2014 compared to 45% in the previous two years.

‘Innovation’ has been described by the report as introduction of new or revamped products, services or processes, new and improved forms of business practices, organisation and marketing approaches, engagement in creative projects, and investment activities.

Over 29,000 enterprises were surveyed for the report with the majority citing increased range of goods and services (29%), increased market share (26%) and increased value-added product offerings (24%) as their main reasons for innovating.

The government welcomes the report findings in the wake of setting out plans to make the UK a world leader in new ideas and innovation.

Business Secretary Sajid Javid says: “From new disruptive business models to driver-less cars, innovation can not only revolutionise the way we live our lives, it can bring real opportunities for businesses to tap into and grow.

“That is why we are determined to make the UK the best place in Europe to innovate and start a company.

“And these figures show that businesses throughout the UK are already leading the way, delivering exciting opportunities across the nation.

“The number of companies innovating and coming up with new, dynamic ideas is on the rise – up 8% between 2012 and 2014, with over half of businesses now developing new products and services, some with the potential to revolutionise their industries.”

Despite the positive results, reasons such as availability of finance (17%), cost of finance (14%) and excessive perceived economic risks (14%) are noted as the main factors threatening innovation.

The Forum of Private Business has highlighted key areas where they want the government to support SME companies – A reduction in the cost of doing business, improving access to finance, encourage investment and cutting of the red tape costs.

They want the Chancellor to address these in his next budget announcement on 16th March.

Ian Cass, the Chief Executive of the Forum commented, “We would like the Chancellor to do all he can to improve confidence, encourage investment, and make it simple and more profitable to run a small business.

“UK small businesses are a vital part of our overall economy, he said, “and we are keen that the Chancellor seizes the opportunity now, as we exit the recession, to make the environment one in which businesses can genuinely thrive and grow.”