UK mid-sized businesses to drive innovation in 2015
Mid-sized firms in the UK will increase their research and development (R&D) expenditure in 2015.
The latest Agents of Growth report from Grant Thornton suggests that 2015 will see UK mid-sized businesses (MSBs) as the drivers of innovation.
British firms that employ between 50 and 499 staff will become the nation’s largest investor in new technologies over the next year, as almost a quarter (23 per cent) of UK MSBs expect to increase their investment, according to the report.
Indeed, it seems that MSBs will look to build upon last year’s growth, where research and development (R&D) expenditure expanded by 2.7 per cent, outpacing that seen by both larger and smaller companies.
Faster growth for MSBs anticipated in 2015
“Innovation lies at the heart of leadership and the UK has for generations been looked at as a leader in developing new technologies, processes and ways of thinking,” said Dominic Preston, head of innovation at Grant Thornton.
In fact, the UK’s MSB population predicts that 2015 will bring with it faster growth in turnover, exports, capital investment, and employment, more so than other businesses.
However, while the MSB sector shows growth, it appears the UK is falling behind when compared to other nations and risks its edge as an innovative leader to “economies which are proactively offering their business communities more support and encouragement to invest in R&D”.
The OECD ranks the UK at 19th in terms of R&D expenditure out of 34 members of the organisation.
MSBs well placed for innovation
Current statistics show that there are currently 34,100 MSBs operating in the UK and these firms contributed £270 billion to the UK economy in 2012, a significant amount. It’s a testament of the sector’s importance to UK growth, as it equates to the combined worth of the entire financial services and real estate sectors.
However, while the UK has often been a leader in the development of new technologies, it appears that not enough is being done to promote MSBs.
“No other segment of the business community is as well placed as the UK’s MSBs to deliver cutting edge technologies, innovative ideas and transformative operational processes – all they need is just a bit of extra support and encouragement from the government to do so,” said Mr Preston.
The hope for MSBs is that the government should provide more support to smaller firms while they transition into MSBs and further invest in the sector to ensure the UK maintains its competitive edge.