Share of innovative UK businesses falls by 19 percentage points in a decade
The share of UK businesses classed as innovation-active fell to 34% in 2022-24, deepening concerns about a long-term decline in business innovation and the country’s future competitiveness. This figure compares to 53% just a decade earlier, a drop of 19 percentage points.
The National Centre for Universities and Business (NCUB) warns that the trend threatens the UK’s growth prospects at a time when productivity and investment remain under pressure.
The latest figures build on evidence that UK innovation activity had already fallen to a decade low. Despite growing political emphasis on science and technology, fewer businesses are engaging in innovation, highlighting persistent barriers to R&D investment and the commercialisation of research.
Rosalind Gill, director of Policy at NCUB, said: “A shrinking base of innovative businesses is a serious concern. Innovation is not confined to a handful of frontier sectors or high-growth companies. It depends on businesses across the economy investing, adapting and bringing new ideas, products and services to market.
“The UK has many strengths. We continue to produce world-class research, generate promising discoveries and collaborate effectively across institutions. Innovation is not created by research alone, however. It depends on businesses investing in R&D and innovation, shaping demand, adopting new technologies and working with the research base to solve real-world challenges. The UK has made significant progress in strengthening these connections over recent decades, but there remains considerable scope to do more. At a time when economic growth is a national priority, we need to be even more ambitious about how we translate our research strengths into business investment, commercial activity and economic impact.
“It is therefore encouraging that government has now placed growth and innovation at the centre of its economic agenda. Significant reforms are already underway across the UK’s research and innovation landscape, including changes to UK Research and Innovation (UKRI) and the development of a new Industrial Strategy.
“When we speak to business leaders, they consistently highlight the importance of clearer long-term priorities, stronger pathways from research to market, reduced complexity across the research and innovation system, and greater confidence that the UK is a place where innovative firms can start, scale and succeed.
“That is why the future role of UKRI is so important. We should be thinking carefully about how it can help strengthen the pathways between research and economic impact. The prize is both a stronger research system and a stronger innovation economy.”