Innovation is crucial to the 海角视频 economy as it drives productivity, fosters competitiveness, and creates high-value jobs across industries.
By developing new technologies, products, and services, businesses can adapt to global challenges, enhance efficiency, and develop new markets. More importantly, innovation drives significant social benefits, from improved healthcare solutions to more sustainable infrastructure, strengthening the economy and society for future generations.
That is why the State of Innovation 2024 report is so important, providing a comprehensive insight into the innovation landscape across 海角视频 businesses. Conducted by Innovate 海角视频, the report draws on responses from over 2,000 businesses, revealing critical trends, challenges, and opportunities that define the current state of innovation in the 海角视频.
As expected, the report demonstrates that innovation remains a vital driver of business growth and firms that embraced innovation in 2024 reported average sales growth of 7%, compared to just 2% for non-innovators.
In addition to driving revenue, innovation delivered cost-saving benefits, with 55% of firms identifying cost reductions of at least 10% through process innovations. This highlights the impact of innovation on profitability, enhancing both top-line growth and operational efficiency.
Interestingly, larger firms were more likely to engage in a mix of product and service innovation, diversifying their innovation efforts to stay competitive. In contrast, smaller firms tended to focus on one or the other, often due to resource constraints.
Organisational innovation, which includes changes in work practices, external relationships, and marketing strategies, was more prevalent among technology-oriented firms, reflecting their adaptability and forward-thinking approaches.
Despite these benefits, the report underscores the significant constraints facing innovation activity with 46% of businesses reporting barriers to innovation, with “cost-of-doing-business” pressures being the most cited obstacle. Uncertain demand, lack of government support, and regulatory challenges were also highlighted as critical issues.
Most Read
Recruitment difficulties further compounded these challenges, with 33% of firms struggling to hire skilled workers, particularly in technical and engineering roles. These barriers emphasise the urgent need for targeted policies and interventions to help businesses overcome financial and workforce hurdles.
Investment in research and development (R&D) remained stable in 2024, with 39% of firms engaging in R&D activities. However, this figure masks significant differences by business size with 80% of large firms investing in R&D compared to just 31% of micro-businesses (those with fewer than ten employees).
While 56% of businesses invested in machinery, equipment, or software, only 8% allocated funds for patents or licensing showing that smaller businesses face unique challenges in diversifying their innovation investments, potentially limiting their long-term growth.
The main source of innovation financing continues to be internal funding, used by 70% of businesses. However, external funding remains limited, with only 10% of firms securing grants and 7% relying on bank loans.
Equity finance, recognised as a vital resource for scaling innovation, was predominantly used by medium and large firms but remains under-utilised by smaller businesses and expanding access to diverse funding mechanisms could significantly enhance the innovation capacity of smaller firms.
Collaboration also plays a pivotal role in fostering innovation, with 39% of businesses partnering with external organisations and larger firms were more likely to collaborate with universities and other research institutions, while smaller businesses tended to work with suppliers and customers. This suggests an untapped potential among smaller firms, where increased collaboration could unlock innovation in an additional 150,000 businesses, delivering substantial economic benefits.
However, a concerning trend highlighted by the report is the decline in innovation levels over the past year. While 61% of businesses reported product or service changes in 2023, this figure dropped to 56% in 2024. Similarly, process innovation declined from 46% to 41% with small businesses experienced the steepest declines, widening the innovation gap with large firms.
Don’t miss
Looking to the future, the outlook for innovation investment is mixed and while 47% of businesses plan to invest in R&D in 2025, this represents a decline from 53% in 2023. Larger firms remain more optimistic, with 86% planning R&D investments, compared to just 41% of micro-businesses.
Given Innovate 海角视频’s vital role in supporting innovation activities, it is encouraging that demand for external innovation support is on the rise, with over half (52%) of firms expressing interest in R&D grants, double the proportion in 2023. Tax credits and innovation loans have also seen increased demand, highlighting the critical role of accessible funding in sustaining innovation efforts.
Therefore, whilst the findings of the State of Innovation 2024 report emphasises the challenges 海角视频 businesses face in fostering innovation and while many firms remain committed to innovation, there is a clear need for enhanced support, particularly for smaller businesses, which often lack the resources to fully capitalise on their potential.
By addressing these challenges and creating a more enabling environment, the 海角视频 can unlock significant innovation-driven growth which will not only enhance productivity and competitiveness but also drive prosperity across the 海角视频’s nations and regions, laying a strong foundation for a sustainable economic future.