UK innovation needs SMEs to drive growth
The UK stands at a critical juncture in its innovation journey. Research quality and university-industry collaboration remain strengths, ranking us fourth in the Global Innovation Index 2023, yet the landscape is complex.
Innovation levels in UK firms are declining. The 2024’s ‘State of Innovation’ report showed that almost half (46%) of businesses blame external factors as barriers to innovation activity, while national and local government interventions focus on university R&D, licensing and spin outs.
Leadership, not technology, is key to tackling these innovation challenges and supporting wider economic growth. This insight inspired the launch of Novel, a leadership programme created to stimulate and enable the next generation of innovation leaders in Liverpool City Region.
The programme’s inaugural session – at the Shakespeare North Playhouse in Prescot – brought together leading innovation thinkers. Speakers including Simon May and Jim Dawton from Impeller Ventures, Jim Shaw, former BDO of Bentley Motors and Stuart Hetherington, CEO of Holovis International, dissected the UK’s innovation ecosystem.
A new chapter in innovation
The UK ranks first globally for research quality among top universities, according to the QS World University Rankings 2024. If this research excellence can be mobilised to support our SME business, we have a robust foundation for businesses growth and economic development. And so, Novel focuses on innovation as ‘the successful commercialisation of a novel ideas’, resonating with the UK’s research capabilities.
Stuart Hetherington highlighting this shift in interpretation, from innovation being an activity, to being embedded within organisations as a mindset.
This cultural transformation is bearing fruit – the UK has produced 144 tech unicorns as of 2023, third only to the US and China. A new generation of business leaders understands that innovation isn’t just about technology – it’s about creating sustainable value.
Novel connects business leaders with experts and R&D support from organisations like the Virtual Engineering Centre – as well as other public sector decision-makers. This distinctive approach reflects a new approach to business-led innovation and industrial strategy because the data shows us that regions with strong public-private partnerships typically experience 2-3 times higher innovation success rates.
We need to challenge our existing assumptions about innovation. We must move beyond traditional thinking and focus on leadership and delivering growth from SME innovation. This requires an innovation mindset that permeates every level of business and government, allowing sustainable, long-term innovation to flourish.
Novel is more than just an initiative – it is a blueprint for how we can collectively unlock the UK’s extraordinary innovation potential.
Andrew Borland, is Chief Innovation Officer at VEC, the Virtual Engineering Centre at the University of Liverpool. Novel is funded by the UK Shared Prosperity Fund (UKSPF), as part of the existing Horizons project.
