BREXIT: Investment in innovation never more necessary for UK businesses, says expert

Clare Murray of Pinsent Masons, the law firm behind Out-Law.com, said UK businesses should not be distracted from investing in innovation despite having to deal with political uncertainty.

There are an increasing number of businesses looking to access and harness the latest digital technologies, such as big data analytics and increasingly autonomous smart systems, with collaboration arrangements with other organisations proving a popular route to innovation, she said.

Murray was commenting after a new survey of 818 companies by business lobby group the Confederation of British Industry (CBI) found that 70% of UK businesses intend to "increase or maintain their innovation spending following the vote to leave the EU". Just 7% of the respondents said they plan to reduce such investment. UK businesses spent nearly £21 billion in total on innovation last year, the CBI said.

"Recent events have provided greater momentum to the change demanded by digital disruption," Murray said. "Now more than ever business must drive innovation and change. We see organisations readying for change. Having stripped out costs and driven efficiencies following the financial crises, they continue to be under further pressure to streamline business operations and offer creative solutions to meet demands. They are investing in innovation, collaboration and digital ventures. They are reviewing their global strategies and footprints."

"Business cannot afford to watch and wait. There is a great deal of uncertainty and anticipated disruption brought by Brexit, Trump’s election and upcoming elections in France, Germany and Italy. The one constant is change," she said.

According to the CBI's survey, the UK is viewed as "a world-beater" in the area of scientific research and in provision of tax incentives to support investment. However, it "lags behind" other countries in some areas of innovation, including in "partnering with external companies". The top priority for businesses in achieving more effective innovation is to "increase collaboration and partnership", though, according to the CBI's survey results.

UK board executives give strong support to innovation in general, according to the survey. It found that 88% of respondents agree that their board "back innovation". However, more than a third of companies said staff at their business "don’t have enough time to innovate".

The survey found that many businesses believe customer service and product development are areas that "would benefit from greater innovation". Nearly half of the respondents also said that "more highly skilled staff" are needed to cope with increased automation forecast over the next decade.

Carolyn Fairbairn, CBI director-general, said: "Spending on innovation generates jobs and economic growth across the country, offering solutions to the challenges we face today and in the years ahead from improving healthcare and mobile technology to a new generation of autonomous vehicles. While the UK has many innovation strengths to build on, businesses are worried that the country is too much of a follower in the global economy, with the lack of access to technical skills a grave concern for ambitious firms."