The UK is open for business – and it is time to step outside this vicious circle that is driving confidence down to an all-time low. Whether it is businesses leaving the UK or complex customs arrangements, the worse the headlines, the more negative business leaders feel. So how can the tide be turned? The truth is that 5.4 million UK SMEs are not going to throw in the towel; they are going to continue to form the backbone of the UK economy. But to succeed they need support – and that means investment and the creation of a culture predicated on innovation.
Successful economies take Research & Development incredibly seriously – it is built in to their DNA. And the UK needs to adopt the same approach. In addition to the Government’s commitment to raising R&D investment in the UK from the current 1.6% of GDP to 2.4% by 2027 – which is a fantastic start – we need to better celebrate our successes in innovation.
The future of the UK economy will depend on the creation of an environment that enables SMEs across the country to innovate and succeed. As Adam Kene, Managing Director, Kene Partners, and Danny Lopez, Non-Executive Director, Innovate Finance and member of the Kene Partners Advisory Board confirm, the UK now has a chance to put a flag in the ground, to build on a strong innovation foundation and look forward to a bright future.
Attitudes and Culture
Pundits may be divided on the UK’s future post Brexit, but one fact is absolutely key: the response of businesses of every size must be proactive. It is time to innovate, to look for new markets and take the fight to the competition.
Key to this approach is a cultural shift – a willingness to explore new opportunities, to invest in innovative ideas and build stronger links between business and academia. This is not new: while the UK may not have the same level of R&D investment as other countries, we have an extremely strong track record in technology and innovation – as well as a foundation of government tax incentives and investment.
The foundation is there; the fundamental requirement now is to place innovation at the centre of every business’ agenda – and to ensure that every company, irrespective of size or market focus, not only understands but actively explores the innovation led investment opportunities available.
R&D Tax Credit
The UK’s government’s target of raising R&D investment in the UK from the current 1.6% of GDP to 2.4% by 2027 is bullish – although it falls far short of the 4.25% in Korea and 2.9% in Germany. Clearly private sector investment will form a key component – but the government is looking to lead from the front, with plans to increase the rate of R&D Tax Credit to 12 per cent and invest £725m in the new Industry Strategy Challenge Fund programmes to capture the value of innovation.
R&D Tax Credits have been in place for 19 years, yet just 42,000 UK businesses applied for and received funding last year, and the vast majority were first time claimants.They are available for any company that develops new products, processes or services or enhances pre-existing ones. These tax credits can either complement or act as an alternative to innovation grants and are accessible to companies of all sizes and sectors.
In this post Brexit world, it is essential that the UK is seen as open for business. As a nation we also need to address our well documented productivity issues. And we need to be proactive about gaining access to new international markets to compete on a global stage. We also need to celebrate our successes, and continually reinforce the quality of skills, infrastructure and resources in this country – as well as favourable tax models – to ensure inward investment in the future.