CBI calls on UKGOV to do more to support Innovation (Source Pixabay/Jarmoluk)
CBI calls on UKGOV to do more to support Innovation

The UK is in danger of falling behind the rest of the world. That is the stark warning portrayed in the CBI Innovation Survey 2016 results report published today. The good news is that British firms are looking to invest more following Brexit. THe bad news is that the UK is curently ranked only 10th globally for investment. That equates to a mere 1.7% of GDP spent on R&D by the private and public sector, well below international benchmarks. According to the International Research Institute 2016 funding foorecast report, South Korea tops the GDP spend with just above 4%. It places the UK 16th on the list for 2016, below even the CBI’s rating.

British firms are investing though

The good news is, that despite the market uncertainty, or perhaps because of it firms are investing. The survey revealed that 17% plan to increase innovation spending with only 7% planning to reduce it. The remaining firms spending remains unchanged. What isn’t known is whether the survey of 818 respondents took account of inflation. While these figures are low they could be viewed in a different light if the volume of increase and reduction was known.

There is some positive news about the innovation environment. The UK is seen as a global leader when it comes to access to scientific research. It also provides tax incentives to support investment. There are issues that need addressing. Businesses in the UK find it difficult to build partnerships with external companies. Grant funding is also seen as low. The CBI is therefore calling on the government to help boost innovation spending, in the autumn budget, with a long term goal to achieve a 3% combined public and private spend on R&D.

What should the government do

According to the CBI the government should also aim to double the budget of Innovate UK. It wants a roadmap to show how investment currently covered by EU money will be replaced post Brexit. The last target was vague with the CBI calling on the government to: “Make good on the commitment to a modern industrial strategy. Businesses and government must work together to ensure the most promising technologies are developed and adopted across our key sectors and in all regions”. How it intends for the government to achieve this was not stated though.

The survey also revealed some areas that firms felt the government should address following Brexit. These included access to skills (66%), tariff-free access for goods (41%) and keeping common regulatory standards (38%). The access to skills is one area that is a great concern for the technology and especially cyber security industry. Seven in ten businesses saw universities as possibly providing the answer to the skills shortage. However, what they are looking for from graduates was not determined by the survey. This is a shame. Higher education is delivering well qualified graduates. Unfortunately they are not always in the subjects or have the knowledge that companies actually look for.

Innovation good for UK

Carolyn Fairbairn Director-General at CBI (Confederation of British Industry) (Source LinkedIn)
Carolyn Fairbairn Director-General at CBI (Confederation of British Industry)

Carolyn Fairbairn, CBI Director-General is no doubt that innovation is good for the UK. She commented: “Spending on innovation generates jobs and economic growth across the country, offering solutions to the challenges we face today and in the years ahead from improving healthcare and mobile technology to a new generation of autonomous vehicles. While the UK has many innovation strengths to build on, businesses are worried that the country is too much of a follower in the global economy, with the lack of access to technical skills a grave concern for ambitious firms. “

The survey was carried out by Deloitte and Hays. It revealed that customer service (24%) and product development are two areas ripe for innovation. There is a strong belief that automation increases productivity (44%) , improves products or services (24%) and delivers greater customer satisfaction (15%). There is a mixed feeling about jobs lost due to automation, with a surprising 20% feeling that jobs will be lost as a result. 49% believe that automation will replace some roles while 48% see automation requiring a higher skilled workforce.

David Sproul, chief executive of Deloitte UK, said: “Britain has a real opportunity to be a world leader in innovation and we should be ambitious in our vision for what can be achieved. It is promising that businesses recognise the need to prioritise investing in new technologies. However, while our country excels in ideas generation, it has a less successful track record to date of businesses adopting innovative approaches to boost productivity. We have an opportunity in the new post Brexit world to change that; Britain has world leading universities, but still has more to do to raise its record on secondary education, strengthening vocational routes to work and increasing the focus on skills for the future.”  


This survey seems to reflect the wider consensus of other surveys such as a lack of skilled workers. It is ironic that businesses also want to retain access to a greater pool of skilled workers that the EU provides access to. It also wants free trade across borders. Concerns are mounting at what Brexit will mean for UK businesses. The intricate relationship between EU and the UK is one that will take time to sort out. Businesses do not appear to want to unravel all of the threads that ties the nation with the continent and only time will tell how successful the negotiations are.

As for innovation, the call to double funding for innovate-UK is welcome. However, it would be good to see what success that body has had. If the CBI was able to evidence what innovation has achieved it would make the argument even more compelling.


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