UK innovation slumps: 9% drop in active businesses raises concerns

UK innovation has fallen to its lowest level in over a decade, according to new data released today. The percentage of businesses actively engaged in innovation dropped by 9 percentage points from 45% in 2018-20 to 36% in 2020-22. This decline, coupled with a recent fall in private research and development (R&D) investment, raises concerns about the UK’s ability to compete in the global innovation landscape.

Rosalind Gill, Head of Policy and Engagement at the National Centre for Universities and Business (NCUB) said: “Today’s new data paints a worrying picture. The proportion of innovation active businesses is at its lowest level since 2008-10. This decline is impacting sectors across the board, and businesses of all sizes.”

“This data, coupled with evidence that private R&D expenditure has dropped in real terms, suggests the UK is missing out on attracting and building the innovative companies that are crucial for economic growth and resilience.”

Gill concluded: “If the Government is truly serious about regaining the UK’s status as a science superpower, we need a transformative step change in private R&D investment and its translation into tangible innovation outcomes. We need a new vision for R&D and innovation, with commitment from all stakeholders – businesses, universities, and the government – working together as partners in the R&D ecosystem.”