Many small and medium sized enterprises (SMEs) are not accessing available resources for funding innovation and research and development activities (R&D).
According to a new survey by Clydesdale and Yorkshire Banks (CYB) of more than 750 UK-based SMEs, less than 1 in 3 (31%) businesses have accessed government incentives such as R&D tax credits. 34% plan to do so in the next 12 months.
Financing innovation has been mixed with 42% of SMEs not having a set budget for R&D, compared to those that do (42%). In particular two thirds of manufacturing businesses and 58% of IT businesses invest money towards R&D.
However more businesses are investing in creative skills to improve growth.
52% of the businesses surveyed said that the right people and skills are important factors for creative innovation. 1 in 4 (24%) considered having the right idea is the most important.
CYB say the research points towards SMEs prioritising training and development over other investments in the last 12 months, with many having further plans to invest in the future.
New equipment and technology were also identified as key areas in improving business growth.
Business leaders were asked whether the UK economy has the rights skills to foster creativity and innovation. 54% of businesses feel that the economy fosters innovation, while 66% believe the economy has the necessary creative skills for growth.
Paul Shephard, director of business and private banking at CYB, said:
“Innovation comes in many forms, not just cutting-edge technology or design. For many service-led industries this could mean being innovative and creative to meet customer demands, or approaching the market in a different way to competitors.
“What is important is that businesses continually review their performance and how they serve customers to ensure they are on top of their game.”