94% of the UK’s fastest-growing firms say the government’s growth plan isn’t working
Key Points
- 94% of 500 high-growth UK business leaders surveyed by BDO said the Industrial Strategy could do more for innovation
- Only 6% felt the strategy effectively supports innovation
- 90% expect to increase innovation spend over the next two years, and 91% reported worthwhile to excellent returns
- Financial constraints, skills gaps and regulatory barriers were the top three obstacles cited
- Half of respondents want more government support for innovation and R&D
Almost all (94%) of the 500 high-growth UK business leaders surveyed by accountancy firm BDO said the government’s Industrial Strategy could do more to support innovation.
Just 6% of the executives felt the Industrial Strategy effectively supports innovation, according to BDO’s Innovate to Grow report, which the firm released this week.
The finding comes despite a strong commitment to innovation from the businesses themselves, with 90% of respondents expecting their innovation spend to increase over the next two years.
Some 91% reported returns ranging from “worthwhile” to “excellent” on the money they have already invested in innovation.
The firm surveyed senior executives, including CEOs, CFOs, COOs and heads of tax, at businesses in renewables, fintech, life sciences, advanced manufacturing and the creative industries, five of the sectors the Industrial Strategy identifies as having high growth potential.
Every participating business either generated more than £10 million in annual UK revenue or had raised more than £10 million in investment.
Respondents named financial constraints, skills gaps and regulatory barriers as the three biggest obstacles to innovation.
When asked how the government could provide better support, half said they would welcome greater backing for innovation and research and development.
A further 46% asked for more targeted skills and workforce development policies, while 42% wanted a stronger focus on their own sector.
Better access to finance and investment incentives was the preferred fix for 40% of the group.
“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,” said Mark Sykes, Partner and Head of Consulting at BDO.
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, he added.
“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 pointed to the role of mid-sized businesses in the UK’s innovation future, noting that they generate more than 40% of private sector revenues and employ 11.1 million people, more than one in three UK private sector jobs.
