The 2021 Innovation Survey has just been released. This report reviews innovation carried out between 2018 and 2020, comparing this to other 3 year periods.

One headline figure is that between 2018 and 2020, 45% of businesses were innovation active, which is a 7% increase on the 38% recorded in 2016 to 2018.

In 2018 to 2020, 58% of large companies (over 250 employees) were innovation active, whereas only 44% of SME’s were.

What % of businesses are innovative in their sector?

We have seen increases in nearly all sectors in 2018 to 2020 compared to 2016 to 2018. The only area that has seen a decline is Motion picture and video production.

The below table shows the percentage of businesses in each sector who have been carrying out innovative activity.

2016 – 2018 2018 – 2020
Production and Construction Industries
Manufacture of electrical and optical equipment 63% 69%
Manufacture of transport equipment 58% 64%
Fuels, chemicals, plastics, metals or minerals 47% 60%
Food, clothing, wood, paper, publishing and printing 45% 56%
Other manufacturing 51% 53%
Mining or quarrying 38% 47%
Construction 30% 42%
Electricity, gas, water supply 32% 41%
2016 – 2018 2018 – 2020
Distribution and services Industries
Financial intermediation 41% 50%
Real Estate, renting and business activities 44% 49%
Wholesale trade (including motor vehicles) 40% 43%
Transport, storage and communication 33% 42%
Retail trade (except motor vehicles/cycles) 34% 41%
Motion picture and video production 42% 34%
Accomodation and Food services 24% 32%

What are the trends that are driving businesses to becoming innovation active?

The below table shows the percentage of businesses rating each factor as ‘highly important’ with regards to trends in motivation for businesses engaging in forms of innovation.

2016 – 2018 2018 – 2020
Improving quality of goods or services 43% 39%
Issues related to Covid-19 pandemic 0% 35%
Meeting regulatory standards/requirements 32% 34%
Replacing outdated products / services 37% 34%
Increasing value added 32% 29%
Increasing range of goods/services 30% 27%
Increasing market share 29% 26%
Improving production flexibility 23% 25%
Improving health and safety 22% 255%
Improving production capacity 23% 24%
Reducing costs per unit produced 24% 23%
Reducing environmental impact 20% 22%
Entering new markets 23% 18%

It’s always worthwhile considering whether you are within one of the industries mentioned in this report or whether you have actively been involved in amending any processes within your organisation for the above list of motivating reasons. If you have, you may have been undertaking R&D activity.

If you are involved in a business that has been engaging in innovative activity and want to know more about how you can benefit from R&D Tax Creditsplease do not hesitate to get in touch

Click here to read the full Innovation Survey Report.

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Marketing Consultant

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