Innovation – the introduction of new products, services and ways of doing business – will be a critical element of the UK’s post-pandemic recovery. However, firms with less financial slack and wider concerns about weaker or more volatile market demands might hinder incentives for businesses to properly invest in R&D.
The importance of innovation to future economic recovery has been recognised by the UK Government through a new £1.25bn financial support package for our most creative companies. Fast-growing, equity backed firms have access to £500m matched loan funding. The remainder of the support package will be shared among a thousand additional companies through new Innovate UK grant funding. This targeted initiative will help support innovation in what the OECD calls ‘frontier firms’.
The pandemic is also accelerating structural changes to innovation methodologies. Leading firms like Dyson and F1 have showcased, through the ventilator challenge, how effectively their R&D processes deal with ambiguity to solve the most complex of conundrums. There’s much to learn from their collaborative efforts, achieved at pace, using the UK’s sovereign supply chain capabilities. Many of the frontier firms who will benefit from UK Government backed financial support for their R&D initiatives have an unprecedented opportunity to create more, with less, in a much shorter time.