UK businesses call for targeted support to drive R&D growth

Posted by Admin January 16, 2025 Bussiness

The current government is looking to stimulate direct investment. Credit: Sutthiphong Chandaeng/Shutterstock.

A survey of 200 business leaders by innovation funding consultancy Ayming, highlights a call for urgent, targeted government support to drive innovation and economic growth in 2025.

The consultancy’s third UK Innovation Barometer indicates that financial constraints are impeding research and development (R&D) activities.

The survey found that 56% of UK companies are relying on their own finances to propel R&D.

It further shows that only 39% of firms are taking advantage of them, with eligibility requirements preventing 37% from accessing this critical funding.

The report shows a decline in the prioritisation of innovation among SMEs, with only 14% considering it a top priority, a drop from 31% in the previous year.

Nevertheless, UK businesses are reported to be adopting a forward-looking stance on R&D.

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Nearly half (44%) have put in place innovation strategies that extend over the next ten years, indicating a commitment to long-term development.

The government has recognised innovation as a priority, with the Prime Minister emphasising the need to attract global capital through “crowding in investment” at the International Investment Summit.

The survey shows that the focus is on regional regeneration to bridge the economic divide across the nation.

However, there are concerns that without making innovation funding more accessible across the country, regional disparities will continue.

Experts suggest that Capital Expenditure (CapEx) grants, covering 50% of costs to de-risk projects for private investors, could boost investment in underserved areas.

In addition, the current government is looking to stimulate direct investment.

With nearly £22bn earmarked for carbon capture projects in Teesside and Merseyside, and a £500m green infrastructure grant for Wales, the Chancellor is advocating for sustainable investments as a means to drive job creation and economic growth in these regions.

“UK companies are aligning their innovation roadmaps with government green and regional priorities, but they need reliable support to get there. It’s not just about reducing economic disparities; it’s about positioning the UK as a global leader in green tech and sustainable industrial development.

“As the Government reshapes its innovation policy, expanding grant funding could prove to be the linchpin of the UK’s competitiveness. This is the time to make decisive investments in the UK’s future as an innovation leader, ensuring that the transition to a greener economy not only meets net-zero goals but fuels national and regional growth in tandem.”