Britain’s reservoir of ideas is drying up as manufacturers’ spending on innovation fell for the third successive year, according to the Confederation of British Industry innovation trends survey published this week.
The CBI said the fall mirrored declining business optimism.
Describing the results as ‘disappointing’, Dr Philip Wright, senior policy adviser on the CBI technology group, said they tracked the CBI three-month rolling average of business confidence since 1991.
‘When the going gets tough the most innovative companies compete more effectively. Cutting back on innovation can be counter-productive,’ he said.
The survey showed that the majority of firms spend less than 50% of the average.
Predictably, the strongest drivers of innovation were customers and competition.
The survey calls into question the common belief that the UK is good at coming up with creative ideas but bad at exploiting them. One of the most important constraints on innovation cited by respondents was the lack of promising ideas to exploit.
Further analysis by the Centre for Research on Innovation and Competition at the University of Manchester and Umist identified four styles of innovation: exploitation of novel technology; process innovation; supply chain integration; and a broad innovation strategy.
Foreign-owned companies based in the UK were more likely to pursue the technology or process-led routes. UK-owned international firms tended to favour supply-chain integration. Wholly domestically-based UK firms were negative about all four innovation styles.
Full survey results are on the CBI’s website, accessible via www.theengineer.co.uk